2005 Victoria County CAFR

COUNTY OF VICTORIA, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT

For the year ended December 31, 2005

Prepared by: County Auditor's Office Judy McAdams, CPA

Victoria County Auditor

I

COUNTY OF VICTORIA, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the year ended December 31, 2005

TABLE OF CONTENTS

INTRODUCTORY SECTION County Auditor's Letter of Transmlttal. ........................ ..................................................... ............ .. Certificate of Achievement for

Excellence in Financial Reporting . ................... , ........ " .... ,', .... , ............................ , .. ,',., .. ,., ................ ,' v Organizational Chart ..... , ...... , ........................ , ............................................ ,........................................... vi Olractory of Principal Officials ....................................................................................... ,........................ vii

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 3 Statement of Activities . .......... ...... . . ............ ............ .................. ......... ..... ..... ........ ................. 15

Fund Financial Statements Balance Sheet .. Governmental Funds ................................. ....... ........................ ......... ... 17 Reconciliation of Total Governmental Fund Balance to Net Assets of

Governmental Activities ............ .. , ............ , ................. ,.,',................................................. 1 8 Statement of Re\lenues, Expenditures, and Changes in Fund Balances -

Governmental Funds ... . . ........ ... , ............................................ , ................................... ,..... 19

Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Statement of Activities .. ....... ........................... ......... 20

Statement of Net Assets - Proprietary Funds .................................... ............. ..................... 21

Statement of Revenues, Expenses, and Changes in Fund Net Assets -Proprietary Funds ..... ............... .... , ............................................ , ............................. ,........ 22

Statement of Cash Flows - Proprietary Funds................. .................................................... 23

Statement of Fiduciary Net Assets - Fiduciary Funds ....... .................................................. 25 Statement of Changes in Fiduciary Net Assets - Fiduciary FundS ... ... ............. .. . . . . . ............ 26 Statement of Net Assets Component Units...... . . . . . . . . . . . . . . . . . . . . ..................... . . . . . . . . . . . . . . . ......... 27 Statement of Activities· Component Units .......................................................................... 28

Notes to Financial Statements................................................................................................. 30

Required Supplementary Information

Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - General Fund ................................... . ....... . . . ........................... ...... . . .... 70

Notes to Required Supplementary Information . ....... ............................................ . . . ................ 71

Combining and Individual Fund Statements and Schedules

Governmental Funds

Combining Statements Combining Balance Sheet - All Nonmajor Governmental Funds .... . . ........ . . . ............ ... . . . ..... 72

FINANCIAL SECTION - (Continued)

TABLE OF CONTENTS (Continued)

Combining and Indlvldyal Fund Statements and Schedules - (Continued)

Governmental Funds - (Continued) Combining Statements - (Continued)

Combining Stalement of Revenues, Expenditures, and Changes in Fund Balances - All Nonmajor Governmental Funds.... ......... . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . ...... .. . . . . . . . . 73

Nonmajor Special Revenue Funds ....................... .... . . . . . . . . . . . . . ....... ..... ..... . ................ ..... . . . . . . . 74 Combining Balance Sheel- All Nonmajor Special Revenue Funds ...... . . . .. . . _ _ _ _ . _ _ _ _ . . . _ _ ... 78 Combining Statement of Revenues, Expenditures, and Changes

in Fund Balance - All Nonmajor Special Revenue Funds ..... . . . . . . ... . . .......... . ..... . . ... . . . .. . . 79 Combining Balance Sheet - Nonmajor Road and Bridge Special Revenue Funds ___ _ _ _ ... 80 Combining Statement of Revenues, Expenditures, and Changes

in Fund Balance - Nonmajor Road and Bridge Special Revenue Funds . . . . . . . . . .. .. _ _ _ _ _ _ _ _ 82 Combining Balance Sheet· Nonmajor Other Special Revenue Funds ____ ........ . . ... . . . ... . ... 84 Combining Statement of Revenues, Expenditures, and Changes

In Fund Balance -- Nonmajor Other Special Revenue Funds . . . . . . . . ...... _ _ _ _ _ _ .... . . . .. . . . . . . .. . . 90

Nonmajor Debt Service Funds ...................................................................... ....................... 96 Combining Balance Sheet -- Nonmajor Debt Servioe Funds .... . . ... . .. . . . . . . . ................. ....... 97 Combining Statement of Revenues, Expendilures, and Changes

in Fund Balances - Nonmajor Debt Service Funds . . . . . . . .. . . . . . . .................... . . . . . . . . . . . . . ...... 98

Individual Statements and Schedules General Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget (Non-GAAP Basis) and ActuaL . .......... ... __ . . . . __ .............. . ................... 99

Nonmajor Speoial Revenue Funds Road and Bridge Preo inct No. 1

Schedule of Revenues, Expenditures, and Changes In Fund Balance - Budget and Actual. . . . . . . . . . . . . ................ . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .................. . ... . .. 107

Road and Bridge Precinct No. 2 Schedule of Revenues, Expenditures, and Changes In Fund

Balance - Budget and Actual ..................... . . ........ . . . . ..... .. .. ................. _ _ _ _ _ _ _ _ _ _ .... .......... 108 Road and Bridge Precinct No. 3

Schedule of Revenues, Expenditures, and Changes In Fund Balance - Budget and Ac!ual... ............................. ______ ................ . ...... ....... __ . . . _ _ _ _ _ _____ . 1 09

Road and Bridge Precinct NO. 4 SChedule of Revenues, Expenditures, and Changes in Fund

Balance - Budget and Ac!ual. _ _ _ _ _ _ _ _ _ _ _ _ _ _ ............ ........ . . . ..... ... . . . __ ................... .. .... . . ...... . 110

FINANCIAL SECTION - (Continued)


Combining and Individual Fund Statements and Sohedules - (Continued)

Governmental Funds, (Continued) Combining Statements - (Continued)

Nonmajor Debt Service Funds Road Bonds Sinking Fund

Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and ActuaL. _____ .... ... . . . . ............ ...... . . , . . . ____ . _ _ _ _ . __ ,_ ... . ............. . .. . .. . _ , 111

Jail Bonds Sinking Fund SChedule of Revenues, Expenditures, and Changes in Fund

Balance - Budget and Actual.... . . . . . . . . .. . . . . . . ..................... ........ . . ....... . ................ . . . . . ..... 112 Courthouse Restoration Bonds Sinking Fund

Schedule of Revenues, expenditures, and Changes in Fund Balance - Budget and ActuaL . . . . . . . . . . __ .. , . . .. ... . . . ................... _ _ _ _ _ _ _ _ _ . . .. ... .... . ...... .... . . . . . . . . 113

Bridge Street Annex Sinking Fund Schedule of Revenues, Expenditures, and Changes In Fund

Balance· Budget and ActuaL ... _ .... . ....... . . . . . . . . . . ... . . . . . . . . . . . ..... ______ ....... . . ... . . . . . . . . . . . . . . . . . . . 114 Fiduciary Funds

Agency Funds ......................... : ......... _ .. . __ ...... .. . . . . . ..... . . . ..... . . . . .... ' ____ " _ _ _ . _ _ _ _ . . . "....................... 115 Combining Statement of Changes in Assets and Llabilrties _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ........ . ........... ......... .......... _ .... __ ...................................... _____ . ____ _______ . .. . 116

STATISTICAL SeCTION (UNAUDITED)

General Governmental Expenditures by Function - Last Ten Fiscal Years ..................................... _. ___________ ...... .............. . ..... . .. ............. . __ . ... _ ..... ... . . . . . . . . . . . . . . . . . . . . . . . . _ _ _ .. __ . _ _ _ _ _ _ . . 119

General Governmental Revenues by Source- Last Ten Fiscal Years .... _ .. ______ .. __ . __ ............. . . ..... .. . ...... 121

Estimated Actual Value and Assessed Value of Taxable Property •

Last Ten Fiscal Years ... . . . _. ____ ... ____ ................. ....... .............. .......... , ........................................ __ .. ,, __ . ____ . 123

Tax Rate Distribution - Last Ten Fiscal years., .................. . . . . ................. .......... ,................................... 124

Property Tax Levies and Collections - Last Ten Fiscal Years . ........ ... .. . . . ....... .... . . . .. . . ... .. _ _ _ _ _ _ _ _ _ _ .. _ _ .. .. . . . . 125

Direct and Overlapping Tax Rates - Last Ten F iscal Years ................................... " .... __ ....................... 126

Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita - Last Ten Fiscal Years ... ........ ........ .............. ......... ...... , .. __ ............. ............ 126

Computation of Legal Debt Margln ........... . ......... . ____ ..... _ . . . . . . . .. .............................. _ ..... __ ....... ........ . ... . . . . .. 130

Computation of Direct and Overlapping Debt ........................................ ... ................ ...... . ..................... 131


STATISTICAL SECTION (UNAUDITED) - (Continued)

Ratios of Annual Debt Service Expenditures for General Bonded Debt to Total General Expenditures - Last Ten Fiscal years... . . . . . . . . . . ............................. . . . . . . . . . . . . . . . . . . . . 1 32

Principal Taxpayers .. . .............................. ... .. ... ...................................................................................... 133

Sales Tax Revenue... . ... ............... .................. ....... .. ..... .. . . .............................. . . .. . . . .. . . . . . . . . ....................... 134

Salaries and Surety Bonds of Principal Officials ........................ ... . . . . . . ..... ....... ................................ ...... 1 35

Demographic Statistics .......................................................................................................................... 136

Miscellaneous Statistical Data ...... ............ ...... . . ..... ....... . . . . . . ..... ...... ..... ........ . .................... ...................... 137

SINGLE AUDIT SECTION

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit Of Financial Statements Performed in Accordance With Government Auditing Standards.......... .................................. .......................... ............... ........... ............................................. 1 38

Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 ...... ....................... ........... ............. ......... ............................................................... 139

Schedule of Expenditures of Federal and State Awards ... . . ..... . ........ .. . ... . .... .. .......................... ...... ...... 141

Notes to Schedule of Expenditures of Federal and State Awards....................................... ................. 145

Schedule of Findings and Questioned Costs ........ . ... ................... ... . ... .......... ........ ... . . ... ........................ 146

Schedule of Prior Audit Findings ...... ................................................ .... ..................................... . ........... 147

INTRODUCTORY SECTION

il JUDY McADAMS, CPA

COUNTY AUDITOR VICTORIA COUNTY, TEXAS

115 N, Bridge, Room 122 Victoria, Texaa 77901

Honorable District Judges Honorable County Judge Honorable County Commissioners County of Victoria Victoria, Texas

June 12, 2006

Tel: (361 )6764461 F",,: (361 )673-0$36

The County Auditor's Office is pleased to present the Comprehensive Annual Financial Report (CAFR) of the County of Victoria, Texas, (the 'County") for the year ended December 31, 2005. Responsibility for both the accuracy of the presented data and the completeness and faimess of the presentation, including all disclosures, rests with the County. We believe the data, as presented, is accurate in all material aspects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the County as measured by the financial activity of its various funds and that ali disclosures necessary to enable th e reader to gain the maximum understanding of the County's financial affairs have been included. This report was prepared in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants, and is in compliance with V.T.CA, Local Government Code Section 114.025.

The County's financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information have been audited by Harrison, Waldrop and Uherek, L.L.P., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County, for the year ended December 31, 2005, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unqualified opinion that the County's financial statements for the year ended December 31, 2005, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report.

The CAFR was pre pared in accordance with the Government Accounting Standards Board Statement Number 34, and is presented in the following four sections: 1) The Introductory Section includes this transmittal letter, the government's organiZational chart and a directory of principal officials. 2) The Financial Section is composed of the independent auditor's opinion, management's discussion and analysis, the basic financial statements (including notes), required supplementary information and the combining and individual fund financial statements and schedules. 3) The Statistical Section provides various financial, economic and demographic data about the County generally presented on a multi-year basis. 4) The Single Audit Section contains the independent auditor's reports on the internal control struoture and compliance with applicable laws and regulations, along with the schedule of expenditures of federal and state awards.

Honorable District Judges Honorable County Judge Honorable County Commissioners County of Victoria

June 12, 2006

The independent audit of the financial statements of the County was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards goveming Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements. but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on Internal controls and legal requirements involving the administration of federal awards.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of management's discussion and analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The County·s MD&A can be found immediately following the report of the independent auditors.

PROFILE OF VICTORIA COUNTY

The County is located in southeastern Texas on the Coastal plain about midway between the southern and eastern extremities of the Texas Gulf Coast. The County was created in 1836 from a Mexican municipality named for Mexican President Guadalupe Victoria. The County encompasses an area of 892 square miles and serves a population of 65,646.

The County is a publiC corporation and political subdivision of the State of Texas. The general governing body of the County is the elected five-member Commissioners' Court in accordance with Article 6, Paragraph 16 of the Texas Constitution. Commissioners serve four-year staggered terms, two members elected every two years. The County Judge is elected at large to serve a four-year term.

The Commissioners' Court sets the tax rates, establishes polices for County operations, approves contracts for the County and develops and adopts the County budget. The Commissioners' Court is also responsible for development of policies and orders, approving financial commitments and apPOintment of various department heads. The management and leadership provided by members of the Commissioners' Court and the elected and appOinted officials of other key County offices is crucial to the success of the County in financial management and growth.

The County Auditor has responsibilities for prescribing the systems and procedures for handling the finances of the County and "examining, auditing and approving" all disbursements from County funds prior to their submission to the Commissioners' Court for approval .

The County provides a full range of services. The County provides many services not ordinarily provided by any other entity of government and provides additional services in cooperation with other local governmental units. A primary service is the administration of justice, which includes the civil and criminal county and distnct courts, justices of the peace, constables, district attorney, investigators, clerks Of the courts, sheriff, jail, security and emergency management and grand jury bailiffs Other functions performed by the County include the construction and maintenance of roads and bridges, either independently or in cooperat ion with other entities; administration of publiC health services: assistance to indigents; and the provision of juvenile, health, education and welfare services involving the care and correction of dependent or delinquent children as well as property tax collections for multiple agencies.

The annual budget serves as the foundation for the County's financial planning and control. Budget hearings are posted annually in July and August by the County Judge, with the final budget approved by the Commissioners' Court following the hearings. The final budget includes contingency line items. Most appropriated budgets are prepared by fund, department and category. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is established at the line-item level within an individual fund. The original budget may be amended by Commissioners' Court under conditions prescribed by Texas Local Government Code, Section 11 1.010. BUdget-to-actual comparisons are provided in this report for each governmental fund for which an appropriated budget has been adopted.

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Honorable District Judges Honorable County Judge Honorable County Commissioners County of Victor ia

June 12, 2006

Various potential component units were evaluated to determine whether they should be included in the County's reporting entity because of the significance of their operational and financial relationship with the County. Based upon standards established by the Govemmental Accounting Standards Board (see Note 1 to the financial statements), three component units have been included in this year's report: the Victoria County Navigation District, the Victoria County Child Welfare Board, and Citizens Medical Center. These entities are discretely presented and are not considered part of the primary government of the County, This reporting method was used because, while the entities are financially accountable to the County, they do not have substantively the same governing body as the County nor do they provide services exclusively to the County.

FACTORS AFFECTING FINANCIAL CONDITION

The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the County of Victoria operates .

Local Economy - The County is one of the leading regional economies in the seven-county Golden Crescent region. The County has developed into a primary business center with growth in services and retail employment. The County's principal economic activities include petrochemical and industrial chemical plants, plastiCS manufacturers, heavy steel fabrication, pre-stressed concrete, oil and gas exploration, medical services, professional and financial services, retail trade, and higher education. Although the oil and gas petrochemical industries remain a vital component of the area employment base, diversification within these industries into production of ancillary goods and plastics has reduced economic vulnerability to energy price fluctuations.

The County records reflect modest debt levels, rapid principal amortization, and acceptable reserve levels that have benefited from sound fiscal management practices. The County practices conservative budgeting and sets general fund reserve targets at 8% to 10% of annual expenditures, In the past fiscal year the County incurred a significant increase in the general fund unreserved fund balance as a result of additional revenues and reducing general fund expenditures. The County's General Fund reserve target is based on the County's policy of deferring ad valorem property taxes, The resulting unreserved fund balance does not include $3.5 million in ad valorem taxes collected in October, November and December of 2005, and are instead reported as deferred revenues,

Long-Term Financial Planning - The County of Victoria has identified severel long-term issues that need to be prioritized and funded by the Commissioner's Court. These priorities include upgrading software for all courts, the Sheriff and the Tax Assessor/Collector office, adding an additional courtroom for the increasing case load of jury trials and resolving inadequate parking around the Courthouse complex. The County Airport has Identified many aging buildings that also need to be demolished, The Airport Traffic Control Tower needS to be refurbished and plans are to bring it into service in 2007, which will significantly increase the possibility of the award of a Government fueling contract. The County continues to fund a percentage of the local Texas Department of Transportation road projects, such as the expansion of Loop 463 from Salem Road to U.S. Highway 59.

Cash Management - The Commissioners' Court has adopted a formal investment policy for the County consistent with State statutes governing the investment of County funds and has deSignated the County Treasurer as the County's investment officer. The policy is updated annually. The general objectives set forth in the policy provide for financial security and optimum liquidity of County funds while achieving the maximum yield on funds invested and maximum levels of invested funds. Authorized investments are consistent with those investments authorized by State law for Texas counties. Generally, the County has limited its investments to various U,S, Government obligations and mortgage-backed instruments.

Risk Management - The County has risk exposure in various areas including general liability, worker's compensation, automobile liability, and property damage, To reduce its risk exposure in these areas, the

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Honorable District Judges Honorable County Judge Honorable County Commissioners County of Victoria

June 12, 2006

County purchases commercial insurance policies from a private carner. The related policies carry various deductibles and aggregate maximum loss totals.

The County is also exposed to risk of loss in the area of employee health coverage. In this area, the County bears all risk of loss up to $85,000 per participant per year. Co-insurance through a private insurance carrier assumes all risk for individual participants past that level. Please refer to the notes to the financial statements for a complete discussion of the County's employee health insurance opera tions.

Pension And Other Post Employment Benefits - The County provides retirement, disability and death benefits for all of its full-t ime employees through a nontraditional defined benefit pension plan in the statewide Texas County and District Retirement System (TCDRS). Specific plan provisions are adopted by the County within the options available In the state statutes governing the TCDRS. Benefi ts amounts are determined by the surn of the employee's contributions to the plan. with interest and employerfinanced monetary credits. The level of these monetary credits is adopted within the constraints imposed by the TCDRS Act so that the resulting benefits can be expected to be adequately financed.

AWARDS AND ACKNOWLEDGEMENTS

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to Victoria County, Texas, for its comprehensive annual financial report (CAFR) for the fiscal year ended December 31, 2004. This was the twelfth consecutive year that the government has received this prestigious award. In order to be awarded a Certificate of Achievement. the government published an easily readable and effic ie ntl y organized CAFR. This report satisfied both GMP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehenSive annual financial report continues to meet the Certificate of Achievement Program's requirements. and we are submitting it to the GFOA to determine its eligibility for another certificate.

The preparation of the CAFR could not have been accomplished without the efficient and dedicated efforts of the staff of the County Auditor's Office. We express our appreciation to all the members of the office who assisted in and contributed to its preparation. We would also like to thank the accounting firm of Harrison, Waldrop & Uherek, L.L.P. for sharing their knowledge, and extending their cooperation and support to the County Auditors Office. Appreoiation must also be expressed to the County Judge, members of the CommiSSioners' Court, the County Treasurer and all other offiCials of the county for their assistance in planning and conducting the financial operations of the County in a progressive and responsible manner.

Respectfully submitted,

9dur;�� Judy McAdams, CPA Victoria County Auditor

iv

Certificate of Achievement

for Excellence in Financial Reporting

Presented to

County of Victoria, Texas

For its Comprehensive Annual Financial Report

for the Fiscal Year Ended

December 31, 2004

A Certificate of Achievement for Excellence in Financial Reporting is presented by the Government Finance Officers

Association of the United States and 'Canada to government units and public employee retirement

systems whose comprehensive annual financial reports (CAPRs) achieve the highest standards in government accounting

and fmancial reporting.

President

�/.� Executive Director

v

I District

Atto.ney

VICfORIA COUNTY ORGANIZATION

I COUNTY VOTERS I

I I I I I Four Tax

Fire Four lllStite. of TNasurer Sheriff -Marshal Constables the Peace Collector

I I AIIministrirtive City-County

Veteran 5emce:l Emergoncy

Service Flood Plain

V"tcIDria RegIODilil Airport

§J Judge

I

MaIIagament Onice. AdmWlistrator

DireclDr

atizens Medical center

• lUVENlLE BOARD

lwoCounty Courts-.at-

Law Judges

I

�� Judges Clerk

I

luvenih!: , .... nl. Probation _0.

I F .... r County

Comrnlssionws Judge

� I

Commissicmers Court

VIctDrIa aty-eounty

Health Deportment

T.,.., Slate

Health DeparbMnt

1 I County TwoCoonq Clerk Courts-at-

Lawl...,.

I I

Probate Judges

I I InlOnnll!io. .uiklln, Technology Mltl'ntenance

I I Distrid: Dkstrfd: - Covnty

C.rk ludges AtJ:ditor

Elec;tion � Administrator Director

Agriculturilll !:d:snslon

SoMce

,.

Texas A.M

UlilversitJ

COUNTY OF VICTORIA, TEXAS DIRECTORY OF PRINCIPAL OFFICIALS

Donald R. Pozzi

Chris Rivera Robert J. Nobles Gary Burns

NAME

Wayne D. Dierlam

M.P. "Dexter" Eaves

Val D. Huvar

Cathy Stuart

Cathy Bailey

Rena Scherer

T. Michael O'Connor

Laura A Weiser Juan Velasquez, III

Joseph P. Kelly K. Stephen Williams, III Juergen "Skipper" Koetter, Jr. Robert C. Cheshire

Annie Ramos Carolyn Milam (appointed 9106/05) Bealrlz Gonza lez Tom Eastland

Javier O. Duran James E. Calaway Kenneth Easley, Jr. John G. Miller

NAME

Judy McAdams, CPA Warren Kyle Young

ELECTED OFFICIALS

POSITION

County Judge

Commissioner, Precinct # 1 Commissioner, Precinct # 2 Commissioner, Precinct # 3 Commissioner, Precinct # 4

Criminal District Attorney

County Clerk

District Clerk

County Treasurer

County Tax Assessor-Collector

County Sheriff

Judge, County Court-ai-Law # 1 Judge, County Court-at-Law # 2

Judge, 24th Judicial District Judge, 135th Judicial District Judge, 267th Judicial District Judge, 377th Judicial District

Jusllce of the Peace # 1 Justice of the Peace # 2 Justice of the Peace # 3 Justice of the Peace # 4

Constable, Precinct # 1 Constable, Precinct # 2 Constable, Precinct # 3 Constable, Precinct # 4

APPOINTED OFFICIAL

vii

POSITION

County Auditor County Fire Marshal

FINANCIAL SECTION

HARRISON, WALDROP & UHEREK, L.L.P.

HWU CERTIFIED PUBLIC ACCOUNTANTS 101 S. MAIN, sum- 4W VICTORIA. TEXAS 77901-81.42

INDEPENDENT AUDITOR'S RI:PORT

The Honorable County Judge and Members of the Commissioners' Court


STEPHEN W. VAN MANEN, CP� HAMILTON H. REDMON, CPA

DENNIS C. CIHAL, �M e, eRuCE WOO�SON. CPA

EIiI IC L. KUCERA, CPA CLAYTON F. VAN F'ELT, CPA

ROBERT w. SCHAAR. CPA MELISSA M, TERRY, CPA

VOICE: (361) 573-3255 FAX: P61) 573-9531

We have audited the accompanying flnandal statements of the govemmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of County of Victoria, Texas (the "County") as of and for the year ended December 31 , 2005, which collectively comprise the County's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the County's management. Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the financial statements of the Citizens Medical center, which statements reflect total assets of $155,762,965 as of June 30, 2005, and total revenues of $11 4,41 7,283 for the year then ended, We also did not audit the financial statements of the Victoria County Child Welfare Board, which statements reflect total assets of $142,385 as of December 31, 2005, and total revenues of $73,153 for the year then ended. Those statements were audited by other auditors whose reports have been furnished to us, and our opinions on the financial statements, insofar as it relates to the amounts included for the Citizens Medical Center and the Victoria County Child Welfare Board in the component units' column, is based solely on the reports of the other auditors.

We conducted our audit in accordance with auditing standards and standards generally accepted in the United Stales of America applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of material misstatement. The financial statements of the Citizens Medical Center and the Victoria County Child Welfare Board were not audited In accordance with Govemrmmt Auditing Standards. An audit includes examining, on a test basis, eVidence supporting the amounts and disclosures In the financial statements. An audit also Includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of other auditors provide a reasonable basis for our opinions.

In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the govemmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the County as of December 31, 2005, and the respective changes in financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The management's discussion and analysis and budgetary comparison information on pages 3 through 12 and 70 through 71, are not a required part of the basio finanoial statements but are supplementary Information required by accounting prinCiples generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information, However, we did not audit the information and express no opinion on it.

MEMaeRSQI' AMel:!rCAN INSTITUTE OF CERTIFIEO PuBLIC ACCOUNTANTS

fEXAS SOCIETY OF CERTIFIeD F'lIB-lIC ACCOUNTANTS

The Honorable COlJllty Judge and Members of the Comm iss ioners' Court


In accordance with Government Auditing Standards, we have also Issued our report dated May 5, 2006, on our consideration of the County's internal control over financial reporting and on our tests of Ks compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of Internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction wfih this report in considering the results of our audit.

Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The introductory section, combining and Individual major and nonmajor fund financial statements and schedules, statistical data, and schedule of expenditures of federal and state awards (as required by the U.S. Office of Management and Budget Circular A-133, Auditing of States, Local Governments, and Non-Profit Organizations) are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual major and nonmajor fund financial statements and schedules and the schedule of expenditures of federal and state awards have been subjected to the auditing procedures applied in the audit of the basic financial statements and, In our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and statistical data have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on them.

May 5, 2006

2

COUNTY OF VICTORIA, TEXAS MANAGEMENT'S DISCUSSION AND ANAL YS/S December 31, 2005

The discussion and analysis of the County of Victoria's (the "County") financial performance provides an overview of the County's financial activities for the year ended December 31 , 2005. The discussion and analysis should be read in conjunction with the accompanying transmittal letter, the basic finanoial statements and the accompanying notes to those financial statements. The discussion and analysis includes comparative data for the prior year.

FINANCIAL HIGHLIGHTS

• The assets of the County exceeded its liabilities at the olose of the year ended December 31 , 2005 by $33,278,033. Of this amount $10,1 89,219 is available 10 meel the County's ongoing obligations to citizens and creditors.

• At December 31, 2005, the County's governmental funds reported combined ending fund balances of $ 1 1 ,544,323. The amount available for governmental discretion (unreserved fund balance) Is $10,904,819.

• At December 31, 2005, unreserved fund balance for the General Fund was $8,1 39,621 or 36. 1 1 % of total General Fund expenditures.

• The County's general obligation debt netted a decrease of $1,225,000. The key factor in this decrease was debt payments made during 2005.

OVERVIEW OF THE FINANCIAL STATEMENTS

The new financial reporting model instituted by Governmental Accounting Standards Board Statement 34 seeks to improve operational accountability by highlighting an overall picture that was lost in the detail of fund accounting. Instead of focusing on aggregations of similar individual funds, GASB 34 Introduced governmentWide financial statements, which present the government as a single unified entity.

This discussion and analysis is intended to serve as an introduction to the County's basic finanCial statements. The County's basic financial statements are comprised of four components: 1 ) government-wide financial statements, 2) fund financial statements, 3) component unit financial statements, and 4) notes to finanCial statements. This report also contains other required supplementary Information in addition to the basic financial statements.

Organization and Flow of Financial Section Information

Independent Auditors' Report Provides the opinion of Ihe Independent AudItors on the fair

presentation of the basic financial stetement8.

Management's Discussion and Analysis This supplementary information is required for state and local government financIal stetements, and /s Intended to provide a nalTativB introduction,

and analysis.

Paaes 3 to 12

Government-wide Financial Fund Financial Statements Component Unit Financial Statements Provides informlltion on Ih$ Statements

Provides information on financial position of sp$Cific flmds Provides information on the governmental and business-type of the primary govemments. County's component units

activities of the primary government.

Peaes 1 3 10 16 Peaes 17 to 26 PaQes 27 to 29

Notes to I'lnaneial Statements

Provides !J summary aI significant accounting policies and related d/sc/osurss. Pages 30 to 69

3

OVERVIEW OF THE FINANCIAL STATEMENTS - (Continued)

Government-wide Financial Statements. The government-wiele financial statements, which consist of the following two statements, are designed to provide readers with a broad overview of the County's finances, in a manner similar to a private-sector business.

The statement of net assets presents information on all of the County's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the County is improving or deteriorating.

The statement of activities presents information showing how the government's net assets changed during 2005. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regarelless of the timing of relateel cash flows. Thus, revenues and expenses are reported In this statement for some items that will only result In cash flows In future fiscal periods (e.g" uncollected taxes and earned but unused vacation leave).

Both of these financial statements distinguish functions of the County that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their cost through user fees and charges (business-type activities). The governmental activities of the County include general government, public safety, highways and streets, culture and recreation, and public health. The business-type activities of the County include the airport, Navarro proJect, and other (commissary).

The government-wide financial statements include not only the County itself (known as the primary government) but also the component units of Victoria County Navigation District, Victoria County Child Welfare Board, and Citizens Medical Center. These component units are not included as part of the primary government.

The government-wide financial statements can be found on pages 1 3-16 of th is report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements , All of the funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Govemmental funds. Governmental funds are used to account for essentially the same functions reported as governmental actiVities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term Inflows and outflows of spendable resources, as well as II balance of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes In fund balances provide a reconciliation to faCilitate this comparison between governmental funels and governmental activities.

The County maintains several Individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, which is considered a major fund. Data from the other governmental funds are combined Into a single, aggregated presentation. Individual fund data for each of these nonma jor governmental funds is provided in the form of combining and individual statements and sohedules following the required supplementary information.

4

OVERVIEW OF THE FINANCIAL STATEMENTS - (Continued)

The County adopts an annual appropriated budget for its General Fund, road and bridge special revenue funds and debt service funds. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with this budget and is located on pages 99-106 of this report. Budget comparisons are presented for the road and bridge special revenue funds and the debt service funds on pages 107-1 1 4 of this report.

The basic governmental fund financial statements can be found on pages 1 7-20 of this report.

Proprietary funds. The County maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses enterprise funds to account for Its airport, Navarro project, and other enterprise activities (commissary). Internlll service funds are an accounting device used to accumUlate and allocate cost internally among the County's various functions. The County uses an internal service fund to account for its employee health insurance services. Because this service predominantly benefits governmental rather than business-type functions, it has been included within governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the airport and for the Navarro project, both of which are considered to be major funds of the County, and other (commissary).

The basic proprietary fund financial statements can be found on pages 21 -24 of this report.

Fiduciary fundS. Flduoiary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the reSOurces of those funds are not available to support the County's own programs. The acoounting used for fiduciary funds is similar to proprietary funds.

The basic fiduciary fund financial statements can be found on pages 25-26 of this report.

Notes to financial statements . The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to financial statements can be found on pages 30-69 of this report.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary Information concerning the County's General Fund's budgetary comparison schedule. Required supplementary information can be found on pages 70-71 of this report.

The combining statements referred to earlier in connection with nonmajor governmental funds and nonmajor enterprise funds is presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 72-1 1 4 of this report.

5

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlier, net assets may serve over time as a useful indicator of a government's financial position, In the case of the County, assets exceeded liabi lities by $33,278,033 at the close of the year ended December 31 , 2005,

County of VIc:tQ[I!!. T!xas Net Assets

GIMIrnrnentaI Bu!II� AGUvftlGS Adlvltfes Total

2005 2004 2005 2004 2005 2004

Current and other assets $ 3I),92B,165 $ :/8,461,129 $ 437,154 $ 494,554 $ 31,365,319 $ 28,002,233 capital assets (net) 24,057,485 24,l!!1!,518 9,757,485 8258,129 i!i!,81�970 32.561,647

Total Assets 54,985,660 52,771,247 10,194.g 8,752,663 6S, 1SJ,a 61,5Zl.930

Current and other liabil�ie$ 19,046,665 17,978,457 459,381 164,713 19,5011,046 18,163,170 Long-temJ lIabilfties 11,229,B13 ,� 111,1111 1,100,397 '=,589 1;1,:l96,210 14,;J§!,776

Total Liabilfties 30,276,478 3U)Il9,644 1 ,625,778 1,437,302 31,002,256 32,526,946

Nel Assets; Investment In capital assets,

net at related debt 14.144,366 11,0513,694 8,564,567 7,020,823 2<',728,953 le.o79,517

Res1ricted 359,1181 357,245 J59,E'S1 357.245 Unrestricted 10.i1!l:!,945 10,265,664 (15,ml 294,558 10,169,219 10,660GGG

Tatal Net Assets $ 24,709.172 $ ZI ,681 1603 ! aooa,E'S1 $ 7,315,361 i i!i!,im.OO3 $ 2!l,Ii96,9il4

The largest portion of the County's net assets (68,30%) reflec\$ its investment in capital assets (e,g" land, buildings, improvements, machinery and equipment), less any related debt used to acqu ire those assets that is still outstanding, The County uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending, Although the County's Investment in its capital assets is reported net of related debt, It should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities,

The County has restricted net asse\$ of $359,861 , which represent resources that are subject to external restrictions on how they may be used, The remaining balance of unrestricted net asse\$ ($10,1 89,219) may be used to meet the government's ongoing obligations to citizens and creditors,

6

GOVERNMENT -WIDE FINANCIAL ANALYSIS - (Continued)

At the end of the current year, the County is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental and business-type activities.

REVENUES

Program revenues:

Charges for services $ Operating grants & contributions

Capital grants & contributions

General revenues:

Property taxes

Other taxes

Other

Total Revenues

EXPENSES

General governmental

Public safety

Highways and streets

Culture and recreation

Public health

Interest on long-term debt

Airport

Navarro project

Other

Total Expenses

Change in net assets before special

items and transfers

SpeCial item-loss on refunding

Transfers

Change in net assets

Net assets - January 1 , 2005

Net assets - December 3 1 , 2005 $

Count� of Victoria, Texas

Changes in Net Assets

Governmental

Activities

2005 2004

1 0, 1 1 7,054 $ 1 0,978,232 $ 3,227,144 3,280,496

695,671 509,910

15 , 1 80,030 1 4,234,749 6,221 ,442 5,813,423 1 ,408,398 1 ,21 0,468

36,849,739 36,027,278

1 4 , 1 52,292 1 3,237,845 9,929,954 9,333,043 4,232,306 3,255,108 1 ,293,663 1 , 195,419 3,653,066 3,584,444

430,889 446,612

33,692,170 31 ,052,471

3,1 57,569 4,974,807

(1 30,000) (238,457)

3,027,569 4,736,350

21 ,681,603 1 6,945,253

24,709, 1 72 $ 21 ,681 ,603 $

7

Business-type

Activities

2005 2004

2,1 76,879 $ 2 , 1 34,441

1 ,773,31 1 1 ,323,954

23,499 1 5,330

3,973,689 3,473,725

2,295,210 2,328,426 481,568 466,392

73,431 80,541

2,850,209 2,875,359

1 , 1 23,480 598,366

1 30,000 238,457

1 ,253,480 836,823

7,31 5,381 6,478,558

8,568,861 $ 7,31 5,381

Total

2005

$ 1 2,293,933 $ 3,227,144 2,468,982

15,180,030 6,221 ,442 1 ,431 ,897

40,823,428

14,1 52,292 9,929,954 4,232,306 1 ,293,663 3,653,066

430,889 2,295,210

481,568 73,431

36,542,379

4,281,049

4,281 ,049

28,996,984

$ 33,278,033 $

2004

1 3 , 1 1 2,673 3,280,496 1 ,833,864

1 4,234,749 5,81 3,423 1 ,225.798

39,501,003

1 3,237,845 9,333,043 3,255,108 1 , 1 95,419 3,584,444

446,612 2,328,426

466,392 80,541

33,927,830

5,573,173

5,573,173

23,423,811

28,996,984

GOVERNMENT-WIDE FINANCIAL ANALYSIS - (Continued)

Governmental activities. Governmental activities increased the County's net assets by $3,027,569, thereby accounting for 70,72% of the total growth in the net assets of the County,

Expenses and Program Revenues - Governmental Activities

16,000,000

1 4,000,000

12,000,000

1 0,000,000

8,000,000

6,000,000

4,000,000

2,000,000

10 Expenses . Program revenues I

General Public safety Highways Culture and Public health Interest on

government

Revenues by Source - Governmental Activities

Sales taxes 1 7%

Property taxes 41%

and streets recreation

Other 4%

8

Charges for services

27%

Operating grants and contributions

9%

grants and contributions

2%

long-term

debt

GOVERNMENT-WIDE FINANCIAL ANALYSIS - (Contin ued )

Business-type activities. Business-type activities increased the County's net assets b y $1 ,253,480, thereby accounting for 29.28% of the total growth in the net assets of the County.

Expenses and Program Revenues - Business-type Activities

10 Expenses . Program revenues I 3,500,000 ,--------------------------,

3,000,000

2,500,000

2,000,000

1 ,500,000

1 ,000,000

500,000

Airport

Revenues by Source - Business-type Activities

Capital grants and contributions

45%

9

Navarro Roject

Charges for services

54%

Other

1 %

FINANCIAL ANALYSIS O F THE GOVERNMENT'S FUNDS

As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of the County's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the County's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

As of the end of the current year, the County's governmental funds reported combined ending fund balances of $1 1 ,544,323, an increase of $1 ,433, 127 in comparison with the prior year. Of the total fund balance, $1 0,904,819 constitutes unreserved fund balance and is available for spending at the County's discretion. The remainder of fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1 ) to pay debt service ($252,772), and 2) for a variety of other restricted purposes ($386,732).

General Fund. The General Fund is the chief operating fund of the County. At the end of the current year, unreserved fund balance of the General Fund was $8, 1 39,62 1 , while total fund balance reached $8,526,353. As a measure of the General Fund's l iquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 36. 1 1 % of total General Fund expenditures, while total fund balance represents 37.83% of that same amount.

The fund balance of the County's General Fund increased by $2,552,850 during the current year, this increase is due to certain revenues coming in higher than expected and expenditures coming in lower than expected.

Proprietary Funds. The County's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.

Unrestricted net assets of proprietary funds at the end of the year amounted to:

Fund Airport Navarro Project

Other

Total

2005 2004 U n restricted U n restricted Net Assets Net Assets

$ 275,264 $ 422,649 (347,1 00) (1 92,942)

80,009 64,851

$ 8, 1 73 $ 294,558

Other factors concerning the finances of these funds have been addressed in the discussion of the County's business-type activities.

GENERAL FUND BUDGETARY HIGHLIGHTS

Differences between the original budget and the final amended budget were relatively minor, resulting in an increase of $888,304 and can be briefly summarized as follows:

• $356,608 in miscellaneous increases in general governmental activities, due to increases in utility costs, additional capital outlay projects and increases in personnel.

• $402,71 0 in miscellaneous increases in public safety activities, due to vehicle purchases and jail repairs and maintenance

• $ 5,859 in miscellaneous increases in culture and recreation activities, due to relocation of the office. • $123,127 in miscellaneous increases in public health activities and operating transfers out, due to

increases in operating expenses.

Of this increase, $732,260 was to be funded out of miscellaneous increases in intergovernmental revenues, fines and forfeitures revenues and other miscellaneous revenues. The remaining $1 56,044 was to be funded from an excess of revenues in the original budget.

1 0

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital assets. The County's investment in capital assets for its governmental and business-type activities as of December 31 , 2005, amounts to $33,614,970 (net of accumulated depreciation). This investment in capital assets includes land, buildings, improvements, and machinery and equipmenl. The lotal increase in the County's investment in capital assets for the current year was 3.85% (a 1 .01 % decrease for governmental activities and a 1 8.16% increase for business-type activities). This increase was due to ongoing Improvements to the airport.

Countll of Victoria, Texas �i!Diml !:lam

(Net of Depreciation)

Governmental Business-type Activities Activities Total

2005 2004 2005 2004 2005 2004

Land $ 1.365,758 $ 1 ,365,756 $ 149.433 $ 149,433 $ 1,515,191 $ 1 ,51 5,191

Buildings 12,136.461 12,21lS,764 1 , 1 1 3,167 1 ,234,243 13,249,628 1 3,523,007

Improvements 6,865,324 6,900,689 8,330,496 6,664,132 15,21 5,820 1 3,564.821

Machinery and equipment 3,669,942 164,389 210,321 3,834,331 3,968,628

Total $ 24,057.485 $ 24,303,518 $ 9.757,485 $ 8,258,129 U�!oq14,970 § 32,561,647

Additional information on the County's capital assets can be found in Note 5 of th is report.

Long-term debt. At the end of the currenl year, the Counly had total bonded debt outstanding of $ 1 1 ,565,000. Of this amount. $10,330,000 comprises debl backed by the full faith and credit of the government and $1 ,235,000 secured solely by specific revenue sources (I.e., revenue bonds).

Certificates of obligation General obligation bonds Revenue bonds

Bond discount Total

County of Victoria, Texas General ObligatIon and Revenue Bonds

Governmental Activities

2005 2004 $ 4,385,000 $ 4,700,000

5.945,000 6,855,000

$ 10,330,000 $ 1 1,555,000

$

Business-type Activities

2005 2004 $

1 ,235,000 1,305,000 _--,(",3,5 .. 6:J./1l __ ..,(3""8",7,,,,1)

$ 1 ,231 ,439 $ , ,301! 129

Tollil 2005 2004

$ 4,385,000 $ 4,700,000 5,945.000 6,655,000 1 ,235.000 1 ,305,000

__ -"(3",,5,,,6,-,,') (3,871)

$ 11,561,439 $ 12,856,129

The County's total debt decreased by $1 ,295,000 (10.07%) during Ihe current year, this was due to debt repayment.

The County maintains an "A+" ratin9 from Standard & Poor's and an "AA" rating from Fitch for general obligation debt.

Additional infOrmation on the County's long-term debt can be found In Note 1 1 .

1 1

CAPITAL ASSETS AND DEBT ADMINISTRATION - (Continued)

Et::onomie Factors and Next Year's Budgets and Rates

The annual budget is developed to provide efficient, effective and controlled use of the County's resources, as well as a means to accomplish the highest priority objectives. Through the budget, the Commissioners' Court sets the direction of the County, allocates its resources and establishes its priorities,

The final 2006 budget was adopted by Commissioners' Court on September 19, 2005. The property tax rate was set at $0.3986 (39.86 cents) per $100 assessed taxable valuation, which reflects no change from the 2004 tax rate. The budget included cost of living salary increases of 3%.

Request for Information

This financial report is designed to provide a general overview of the County's finances for all those with an interest in the government's finances. Questions concerning any of the information provide in this report or requests for additional financial information should be addressed to the County Auditor's Office, 1 1 5 N. Bridge, Room 122, Victoria, Texas 77901 .

1 2

Basic Financial Statements

COUNTY OF VICTORIA, TEXAS STATEMENT OF NET ASSETS December 31- 2005

Governmental Activities

ASSETS

Current assets Cash and cash equivalents $ 1 1 ,504,059 Cash and cash equivalents-

restricted Investments 2,349,738 Receivables (net) 1 4,929,321 Internal balances 364,897 Due from other governments 1 ,642,239 Due from external parties 35,000 Inventory Prepaid e)O;penses

Total current assets 30,825,254 Noncurrent assets

Capital assets Land and other assets not being depreciated 1 ,365,758 Buildings, Improvements, and equipment (net) 22,691 ,727

Issuance costs (net) 1 02,911 Restricted assets

Cash and oash equivalents Investments

Total noncurrent assets 24,1 60,396 Total assets 54,985,650

Primary Government

Business-type Activities

$ 475,054

1 36,256 3.407

(364,897) 1 09,482

1 9,31 1

378,61 3

149,433

9,608,052 58,541

9,816,026 1 0,1 94,639

13

$

Component Total Units

1 1 ,979,1 13 $ 43,843,566

2,316,907 2,485,994 2,470,600

14,932,728 1 3,427,281

1 ,751 ,721 9,1 26 35,000 19,31 1 2,1 1 2,144

1 28,476 31,203,867 64,308,100

1 ,515,191 14,685,863

32,299,779 00,808,022 161 .452 2,365,956

4,776,275 23,191,785

33,976,422 1 1 1 ,827,901 65,180,289 176,136,001

Primary Government

Governmental Business-type Component Activities Activities Total Units

LIABILITIES Current liabilities

Accounts payable $ 933,1 85 $ 327,1 75 $ 1 ,260,360 $ 1 ,626,680 Accrued e)(penses 390,012 1 5,284 405,296 8,307,728 Accrued interest payable 145,381 23,899 1 69,280 . 1 ,051,775 Due to other governments 301 ,41 3 301,413 2,214,933 Claims payable 21 7,557 217,557 Unearned revenue 14,961 ,674 14,961 ,674 1 ,450,187 Accrued compensated absences 1 8,023 1 8,023 Current portion of long-term

obligations 2,097,443 75,000 2,1 72,443 2,525,000 Total current liabilities 1 9,046,665 459,381 1 9,506,046 1 7, 1 76,303 Noncurrent liabilities

Noncurrent portion of long-term obligations 1 1 ,229,613 1 ,166,397 1 2,396,21 0 39,725,000

Total nonourrent liabilities 1 1 ,229,613 1,166,397 12,396,210 39,725,000 Total liabilities 30,276,478 1 ,625,778 31,902,256 56,901,303

NET ASSETS Invested In capital assets, net of

related debt 14,144,366 8,584,587 22,728,953 45,754,565 Restrioted for:

Debt service 359,861 359,861 1 ,524,554 Unrestricted net assets 1 0,204,945 (15,726) 1 0,1 89,219 71 ,955,579

Total net assets $ 24,709,172 $ 6,568,861 $ 33,27a,033 $ 1 1 9,234,698

The accompanying notes are an integral part of this statement.

1 4

COUNTY OF VICTORIA, TEXAS STATEMENT OF A CTIVITIES For the year ended December 31, 2005

Function/Programs Primary Government

Governmental activities General government Public safety Highways and streets Culture and recreation Public health Interest on long-term debt

Total governmental activities

Business-type activities Airport Navarro Project Commissary

Total business-type activities

Tolill primal)' government

Component Units

Expenses

$ 14,152,292 9,929,954 4,232,306 1 ,293,663 3,653,066

430,889 33,692,170

2,295,210 481 ,568

73,431 2,850,209

$ 36,542,379

� 105,414,560

The accompanying notes are an Integral part of this statement.

1 5

Program Revenues

Operating Capital Charges for Grants and Grants and

Services Contributions Contributions

$ 4,589,676 $ 984,681 $ 672,794 3,401 ,404 1 98,308 1 ,750,489 167,962

375,485 1 ,876,193 22,877

1 0, 1 1 7,054 3,227,144 695,671

1 ,559,650 1 ,773,31 1 535,960

81 ,269 2, 1 76,879 1 ,773,31 1

$ 12,293,933 $ 3,227,144 $ 2,468,962

$ 1 1 3,343,992 $ 67,131 $ 1 78,868

General revenues: Taxes:

Property taxes, levied for general purposes Property taxes, levied for debt service Sales taxes Other taxes

Grants and contributions not restricted to specific programs

Unrestricted investment earnings Gain on sale of capital assets Miscellaneous

Transfers

Total general revenues and transfers Change in net assets

Net assets - beginning

Net assets - ending

Net (Expense) Revenue and Changes in Net Assets

Primal1 Government Busines$-

Governmental type Component Activities Activities Total Units

$ (7,905,141) $ - $ (7,905,141) $ (6,330,242) (6,330,242) (2,31 3,855) (2,31 3,855) (1 ,293,663) (1 ,293,663) ( 1 ,378,51 1 ) (1 ,378,51 1 )

(430,889) (430,889) (19,652,301) (1 9,652,301 )

1 ,037,701 1 ,037,701 54,392 54,392

7,838 7,838 1 ,099,981 1 ,099,981

(1 9,652,301 ) 1 ,099,981 (18,552,320)

8,1 75,431

1 3,510,567 1 3,51 0,567 1 , 105,941 1 ,669,463 1 ,669,463 363,653 6,005,658 6,005,658

215,784 21 5,784

1 24,1 1 8 1 24,1 18 585,776 23,499 609,275 1 ,869,224 235,488 235,488 463,016 463,016 25,866

(1 30,000) 130,000 22,679,870 103,499 22,833,369 3,364,684

3,027,569 1 ,253,480 4,281 ,049 1 1 ,540, 1 1 5 21,681,603 7,31 5,381 28,996,964 1 07,694,583

$ 24,709,172 $ 8,568,861 $ 33,278,033 $ 1 19,234,698

1 6

COUNTY OF VICTORIA, TEXAS BALANCE SHEET

GOVeRNMeNTAL FUNDS

December 31, 2005

ASSETS Current assets

Cash and cash equivalents Investments Receivables (net) Due from other funds Due from other governments Advance to other funds

Total assets

LIABILITIES AND FUND BALANCES Liabilities

Accounts payable Accrued expenditures Due to other funds Due to other governments Deferred revenue

Total liabilities

Fund balances Reserved for:

Debt service Advances Adult Probation

Unreserved, undesignated reported In: General fund SpeCial revenue funds Capital project funds

Total fund balances

T Qtal liabilities and fund balanc:es

General

$ 7,970,771 1 ,599,578

1 1 ,794,537 1 ,325,91 1

581,515 362,219

$ 23,634,531

$ 307,172 285,259

301 ,413 14,214,334 1 5,108,178

362,219 24,513

8,1 39,621

8,526,353

$ 23,634,531


1 7

Other Total Governmental Governmental

Funds Funds

$ 3,533,288 $ 1 1 ,504,059 750,160 2,349,738

2,41 5,732 14,210,269 268 1 ,326,179

1 ,060,724 1 ,642,239 362,21 9

$ 7,760, 172 $ 31 ,394,703

$ 625,01 5 $ 932,1 87 1 04,753 390,012 528,756 528,756

301,413 3,483,676 1 7,69a.o12 4,742,202 19,650,360

252,772 252,772 362,21 9

24,513

8,1 39,621 2,460,438 2,460,438

304,760 304,760 3,01 7,970 1 1 ,544,323

$ 7,760,172 $ 31,394,703

COUNTY OF VICTORIA, TEXAS RECONCILIATION OF TOTAL GOVERNMENTAL FUND BALANCE TO NET ASSETS OF GOVERNMENTAL ACTIVITIES December 31, 2005

Total governmental fund balances

Amounts reported for governmenta/ activities in the statement of net asseis are diff8rent because:

The internal service fund is used by the County to charge the cost of health insurance to individual funds. The assets and liabilities of Ihe Internal service

fund Is included in governmental activities in the statement of net assets.

Property taxes receivable will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds.

Because the focus of governmental funds is on short-term financin9, some assets will not be available to pay for current-period expenditures. Those assets (for example, receivables) are offset by deferred revenues in the governmental funds and thus are not included in fund balance.

Capital assets used in governmental activities are reported as expenditures In governmental funds when purchased or constructed. The cost of these assets is $43,296,251 and the accumulated depreciation is $19,238,766.

Other noncurrent assets (for example, bond issue costs) used in governmental activities are not financial resources and therefore are not reported in governmental funds. The cost of these assets is $162,872 and the accumulated amortization is $59,961.

Long-term liabilities are not due and payable in the current period and therefore are not reported as liabilities In the funds. Long-term liabilities at year-end consist of:

Bonds payable Capital leases payable Rebatable arbitrage earnings Accrued Interest on the bonds Compensated absences

Net assets of governmental activIties


18

(10,330,000) (1,930,790)

(3,867) (145,381)

(1 ,062,599)

$ 1 1 ,544,323

(259,248)

1 , 184,047

1,552,291

24,057,485

102,911

(1 3,472,637)

$ 24?09,172

COUNTY OF VICTORIA, TEXAS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the year ended December 31, 2006

• l-

REVENUES Taxes Fees of office and user fees Intergovernmental Fines and forfeitures Investment Income Licenses and permits Contributions Miscellaneous Total revenues

EXPENDITURES Current

General government Pu blic safety Highways and streets Culture and recreation Public health

Capital outlay Debt service

Principal retirement Interest and fiscal charges

Total expenditures

Excess (deficiency) of revenues over expenditures

OTHER FINANCING SOURCES (USES) Sale of assets Transfers in Transfers out Total other financing sources (uses)

Change in fund balances

Fund balances at beginning of year

Fund balances at end of year

The aooompanying notes are an integral part of this statement.

1 9

ather Governmental

General Funds

$ 17,893,072 $ 3,339,106 1 ,690,3 1 1 781 ,976 4,343,01 3 5,487,261 1 ,353,619 1 10,007

409,202 1 76,540 33,524 6,424 9,661

766,879 1 01,053 26,496,044 10,005,604

12,024,366 2,253,765 9,222,105 61 ,268

4,337,766 1 ,234,324 6,734

58,756 3,653,967 643,352

1 ,225,000 41 7,093

22,539,551 12,598,945

3,956,493 (2,593,341 )

293,939 10,036 307,273 1 ,784,091

(2,004,855) !32O,509) (1 ,403,643) 1 ,473,618

2,552,850 (1 ,1 19,723)

5,973,503 4,1 37,693

$ 8,526,353 $ 3,01 7,970

Tota l Governmental

Funds

$ 21 ,232,1 78 2,472,287 9,830,274 1 ,463,626

585,742 33,524 16,085

867,932 36,501,648

14,278,131 9,283,373 4,337,766 1 ,241,058 3,71 2,723

643,352

1 ,225,000 41 7,093

35, 1 38,496

1 ,363,152

303,975 2,091,364

(2,325,364) 69,975

1 ,433,1 27

1 0, 1 1 1 , 196

$ 1 1.544,323

COUNTY OF VICTORIA, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITies For the year ended December 31, 2005

Total net change in fund balanoes • governmental funds

Amounts reported for governmental activities in the statement of activities are different because:

The internal service fund is used by the County to charge the costs of health Insurance to individual funds, The net Income of the Internal service fund is reported with governmental activities.

The net effect of various transactions involving capital assets (I,e" sales and trade-Ins) Is to decrease net assets.

Current year capital outlays are expenditures In the fund finanCial statements, but they should be shown as increases in capital assets In the government-wide financial statements. The net effect of removing the 2005 capital outlays is to increase net assets.

Depreciation is not reoognized as an expense on the governmental funds since it does not require the use of current financial resources. The net effect of the current year's depreciation Is to decrease net assets.

Current year payments on long-term debt are expenditures in the fund financial statements, but they serve to reduce long-term liabilities in the government-wide finanCial statements. In the current year, these amounts consist of:

Bond principal retirement Capital lease principal retirement

Because some property taxes will not be collected for several months after the County's fiscal year ends, they are not considered "available" revenues and are deferred in the governmental funds. Similarly, other revenues are not currently available at year end and are not reported as revenue in the governmental funds.

Property taxes Other revenues

Some items reported in the statement of actiVities do not require the use of current financial resources and therefore are not reported as expend itures in governmenlal funds. These activities consist of:

Increase in compensated absences Decrease in accrued interest Decrease In issuance costs

Change in net assets of govemmental activities


20

1 ,225,000 569,270

1 52.523 @S,S53)

(185,454) 14,542

(28,338)

$ 1 ,433, 127

1 32,885

(68,487)

1 ,463,252

(1 ,640,798)

1 ,794,270

1 1 2,570

(1 99.250)

COUNTY OF VICTORIA, TEXAS S TA TEMENT OF NET ASSETS

PROPRIETARY FUNDS

December 31, 2005

Business-!}'De Aotivities Governmental

Activi ties-Navarro Internal Service

Air!:!ort Prolect Commissa!1 Total Fund

ASSETS Current assets

Cash and cash equivalents $ 387,81 1 $ 3,786 $ 83,457 $ 475,054 $ Investments 1 36,256 1 36,256 Receivables (net) 3,407 3,407 71 9,D52 Due from other governments 109.482 109,482 Inventory 1 9,31 1 1 9,31 1

Total current assets 520,01 1 140,042 83,457 743,510 719,052

Noncurrent assets Capital assets

Land and other assets not being depreciated 1 49,433 149,433

Buildings, improvements, and equipment (net) 6,563,283 3,035,931 8,838 9,608,052

Bond issue costs (net) 58,541 58,541

Total noncurrent assets 6,563,283 3,243,905 M38 9,816,026

Total assets 7,083,294 3.363,941 92,295 10,559,536 71 9,052


Accounts payable 203, 122 122,608 1 ,445 327, 1 75 996 Accrued expenses 1 3,602 687 995 1 5,284 Accrued interest payable 23,899 23,899 Due to other funds 2,337 1 66 1 75 2,678 759,745 Advance from other funds 362,219 362,21 9 Claims payable 21 7,557 Accrued compensated absences 16,544 942 537 1 8,023 Current portion of bonds payable 75,000 15,000

Total current liabilities 235,605 585,521 824,278 978,300

Noncurrent liabilities Accrued compensated absences 9,1 42 520 296 9,958 Bonds payable, net 1 , 1 56 ,439 1,1 56,439

Total noncurrent liabilities 9,142 1,1 56,959 296 1,1 66,397

Total liabilities 244,747 1 ,742,480 3,448 1 ,990,675 978,300

NET ASSETS Invested in capital assets,

net of related debt 6,563,283 1 ,988,567 8,838 8,560,688 Unrestricted net assets 275,264 !347, 1 00) 80,009 6,1 73 !259,248)

Total net assets $ 6,838,547 $ 1 .641 ,467 $ 66,647 $ 6,568,861 $ (259,248)

The accompanying notes are an integral part of this statement. 21

COUNTY OF VICTORIA, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS For the year ended December 31, 2005

8usiness-�j:le Activities Governmental

Activities-Navarro Internal Service

Airj:lort Project Comm lssat:l Total

OPERATING REVENUES Charges for services $ 852,201 $ $ 81 ,269 $ 933,470 $ 2,251,071 Rents 703,069 535,960 1 ,239,029 Miscellaneous 4,360 4,380 Total operating revenues 1 ,559,650 535,960 81 ,269 2,1 76,879 2,251,071

OPERATING EXPENSES Airport operations 1 ,668,876 1 ,668,876 Commissary operations 66,985 66,965 Lease operations 1 97,563 1 97,563 Health services 2,222,220 Depreciation and amorti,ation 626,334 208,299 6,446 841,079 Total operating expenses 2,295,21 0 405,862 73,431 2,774,503 2,222,220

Operating income (loss) before nonoperating revenues (expenses) and contributions and transfers (735,560) 1 30,098 7,838 (597,624) 28,851

NONOPERATING REVENUES (EXPENSES)

Investment income Interest 1 6,826 8,037 2,970 27,833 34 Net increase (decrease) in the fair

value of Investments (4,334) (4,334) Interest and debt costs (75,706) !75,706)

Total nonoperating revenues (expenses) 1 6,826 !72,O03) 2,910 (52,207) 34

Income (loss) before contributions and transfers (718,734) 58,095 1 0,608 (649,831 ) 28,885

Contributions and transfers Capital contributions 1 ,773,31 1 1 ,773,31 1 Transfers in 1 30,000 130,000 104,000

Total contributions and transfers 1 ,903,31 1 1 ,903,31 1 104,000

Change in net assets 1 , 184,577 58,095 10,808 1 ,253.480 1 32,885

Total net assets at beginn ing of year 5,653,970 1,583,372 76,039 7,315,381 '392,1 33)

Total net assets at end of year $ 6,838,547 $ 1 ,641A67 $ 88,847 $ 8,568,861 $ (259,248)


22

COUNTY OF VICTORIA, TEXAS STATEEMEENT OF CASH FLOWS

PROPRI£TARY FUNDS

For the year ended DElClilmber 31, 2005

Elusiness-!l!(!e Activities Governmental

Activities-Navarro Internal

Ai!:Eort Project Commissa� Total Service Fund CASH FLOWS FROM OPERATING ACTIVITIES

Cash received from customers $ 1 ,568,998 $ 535,960 $ 61 ,269 $ 2,186,227 $ 2,251,071 Cash pa id to suppliers for goods and services (1 ,028,733) (162,961) (14,1 57) ( 1 ,205,851 ) (3,143,445) Cash paid to employees for services (647,731) (35,543) (51 ,884) (735,1 58)

Net cash provided (used) by operating activities (1 07,466) 337,456 1 5,228 246,218 (892,374)

CASH FL.OWS FROM NONCAPITAL FINANCING ACTIVITIES Borrowing (repayments) to other funds (651) 64,445 (1 1 0) 63,664 759,745 Transfers in from other funds 1 30,000 1 30,000 104,000

Net cash provided (used) by noncapital financing IIctlvltles 129,349 64.445 (1 10) 193,684 863,745

CASH FLOWS FROM CAPITAL AND ReLATED FINANCING ACTIVITIES Capital contrlbvted by federal government 1 ,694,896 1 ,694,896 Acquisition and construotlon of capital assets (1 ,800,232) (263,249) (2,096) (2,065,577) Principal paid on bonds (70,000) (70,000) Interest paid (76,598) (76,598)

Net cash provided (used) by capital and related financing activities (1 05,336) (409,847) (2,096) (51 7,279)

CASH FLOWS FROM INVESTING ACTIVITIES Investment income 16,826 8,037 2,970 27,833 34

Net cash provided (used) by Invastlng activities 16,826 8,037 2,970 27,833 34

Net Increase (decrease) in cash and cash equivalents (66,627) 91 15,992 (50,544) (28,595)

Cash and cash equivalents at beginning of year 454,438 3,695 67,465 525,598 28,595

Cash and cash equivalents at end of year $ 387,81 1 $ 3?86 $ 83,457 $ 475,054 $

23

COUNTY OF VICTORIA, TEXAS STATEMENT OF CASH FLOWS PROPRIIETARY FUNDS For the yei!lf ended December 31, 2005

RECONCILIATION OF OPERATING INCOME

TO NET CASH PROVIDED BY OPERATING

ACTIVITIES

Operating income (loss)

Adjustments to reconcile operating income to net cash provided by operating activities Depreciation and amortlzallon Changes In assets and liabilities

(Increase) decrease In accounts receivable (Increase) decrease In Inventory Increase (decrease) In accounts payable Increase (decrease) In accrued expenses Increase (decrease) In compensated absences Increase (decrease) in claims payable

Total adjustments

Net cash provided (used) by operating activities

NONCASH INVESTING ACTIVITIES

Decrease in fair value of investments

Business-lype Activities

Navarro Airport "'reject Commissary Total

Governmental Activities.

Internal Service Fund

$ (735,560) $ 130,098 $ 7,838 $ (597,624) $ 28,851

626,334

9,348 2,623

(19,341) 3,341 5,789

628,094

208,299

(1 ,234) 21

272

207,358

$ (107,466) $ 337,456 ill

6,446

457 27

460

7,390

841 ,079

9,348 2,623

(20,1 18) 3,389 6,521

842,842

(518,725)

(104)

(402,396)

(921,225)

15,228 $ 245,218 $ (892,374)

::,.$ __ ,.;;- $ 4,334 :!!,$ __ .....:.. $ 4,334 :!!,$ __ .....:.

The accompanying noles are an integral part of this statement.

24

COUNTY OF VICTORIA, TEXAS STA TEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS December 31, 2005

Private Purpose Agency

Trust Funds ASSETS

Cash and cash equivalents $ 58,828 $ 7,461 ,578 Receivables (net)

Other 69,744 Due from other governments 8, 1 38 Seized assets 6,886

Total assets 58,828 7,546,346

LIABILITIES Liabilities

Accounts payable 1 2, 1 29 4,270,238 Accrued expenditures 236 Due to other funds 35,000 Due to other governments 3,275,872

Total liabilities 47,129 7,546,346

NET ASSETS Unrestricted net assets $ 1 1 ,699 $


25

COUNTY OF VICTORIA, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the year ended DeC8mber 31, 2005

ADDITIONS Investment income

Interest Miscellaneous

Participants' contributions

Total additions

DEDUCTIONS General government

Participants' withdrawals

Changes in net assets

Net assets - beginning

Net assets · ending


26

$

$

Private Purpose

Trust

1 .067

1 56.403

1 57,470

1 60.806

(3,336)

1 5.035

1 1 .699

COUNTY OF VICTORIA, TEXAS STATEMENT OF NET ASSETS COMPONENT UNITS December 31, 2006

Victoria Victoria County County Citizens

Navigation Child Welfare Medical District Board Center Total

ASSETS

Current assets Cash and cash equivalents $ 5,029,285 $ 1 32,734 $ 38,681 ,547 $ 43,843,566 Cash and cash equivalents-restricted 2,31 6,907 2,31 6,907 Investments 2,470,600 2,470,600 Receivables (net) 1 ,207,621 125 1 2,219,535 1 3,427,281 Due from other governments 9,126 9,126 Supplies inventory 2, 1 1 2,144 2,1 1 2,144 Prepaid expenses 400 1 28,076 128,476

Total current assets 8,707,506 142,385 55,458,209 64,308,1 00 Noncurrent assets

Capital assets Land and other assets not being depreciated 8,539,31 7 6,1 46,546 14,685,863

Buildings, improvements, and equipment (net) 2,91 7,730 63,890,292 66,808,022

Bond Issue costs (net) 66,098 2,299,858 2,365,956 Restricted assets

Cash and cash equivalents 4,776,275 4,776,275 Investments 23,191 ,785 23,191 ,785

Total noncurrent assets 1 1 ,523,145 1 00,304,756 1 1 1 ,827,901

Total assets 20,230,651 1 42,385 1 55,762,965 1 76,1 36,001


Accounts payable 124,777 2,742 1 ,499, 161 1 ,626,680 Accrued expenditures/expenses 1 ,529 8,306,199 8.307,728 Accrued interest payable 33,265 1 ,018,510 1 ,051 ,775 Due to other governments 2,21 4,933 2,21 4,933 Unearned revenue 1 ,450,1 87 1 .450,187 Current portion of long-term obligations 265,000 2,260,000 2,525,000

Total current liabilities 1 ,873,229 4,271 1 5,298,803 17,1 76,303 Noncurrent liabll�ies

Noncurrent portion of long-term obligations 2,480,000 37,245,000 39,725,000 Total noncurrent liabil ities 2,480,000 37,245,000 39,725,000

Total liabilities 4,353,229 4,271 52,543,803 56,901 ,303

NI!T ASSETS

Invested in capital assets, net of related debt 8,781 ,145 36,973,420 45,754,565 Restricted for:

Debt service 226,157 1 ,298,397 1 ,524,554 Unrestricted net assets 6,870,120 1 38,1 1 4 64,947,345 71 ,955,579

Total net assets $ 15,877.422 $ 1 3811 1 4 $ 1 03,2191162 $ 1 1 91234,698


27

COUNTY OF VICTORIA, TEXAS STA TEMENT OF ACTIVITIES COMPONENT UNITS For the year ended December 31, 2005

Function/Programs

Component Units Victoria County Navigation District Victoria County Child Welfare Board Citizens Medical Center

Expenses

$ 1 ,61 5,388 82,903

103,71 6,269

Charges for Services

Program Revenues

Operating Grants and

Contributions

$ 558,500 $ 2,91 0

1 1 2,762,562 67, 1 31

Capital Grants and

Contributions

$ 1 72,453

6,41 5

Total component units $ 1 05,414,560 $ 1 13,343,992 $ 67,131 �$ _...!1.!,.:78�,8::::6�8


26

General revenues: Taxes:

Property taxes, levied for general purposes Property taxes, levied for debt service

Unrestricted investment earnings Miscellaneous

Total general revenues Change in net assets

Net assets - beginning Net assets · ending

Victoria County Navigation

District

$ (884,435)

(664,435)

1 , 1 05,941 363,653 236.097

25,595 1 .733.286

848,851 1 5,028.571

$ 1 5,877,422

Net (Expense) Revenue and Changes in Net Assets

Component Units

Victoria County Citizens

$

$

Child Welfare Medical Board Center

$ (1 2.862)

9,072,728

(12.862) 9,072,728

2.641 1 .626.266 271

3,1 12 1,628,286 (9,750) 10.701.014

147,864 92,518,148 1 38,1 1 4 $ 103,219,1 62

29

$

$

Total

(884,435) (12.662)

9.072.726

8,1 75,431

1 ,1 05,941 363.653

1 .869.224

3,364,684 1 1 .540,1 1 5

107,694,583 1 1 9,234.696

COUNTY OF VICTORIA, TEXAS NOTES TO FINANCIAL STATeMeNTS December 31, 2005

INDEX

1 Summary of Significant Accounting Policies... . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. . . . .. 31

2 Stewardship, Compliance, and Accountability .. . . . . . . . . ...... ... . . ... . . . . . . . . . . . . . . .. . . . . ... . . . . . . . . . . . . . . . . . .. . . . .. 38

3 Deposits and Investments.... . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . ................ 39

4 Receivables....... . . . . ..... . . . . . ........ . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . ............................. . . . . . . . . . . . . . . . . . . . . . . . . . 40

5 Capital Assets . . . . . . . . . . . . . .. . . . .... .. . . ........... . . . . .. .... . . . . . . .. . . . . . . .. . . . . . . . . . . . . . . . . . . . " . . . . . . . . . ......... . . . . . .. ... . . . . . . . , 41

6 Employees' Retirement Plan, . . . . . . . . , . . . . " . . . . . . . " . . . , .. . . . . . . . . . . " , ................. , . . . . . . . . . . , . . . . , . . . . . . . . . ..... . ..... 42

7 Other Post Employment BenefiI8 . . .................................... .. . . . . .. . . . . . . . . .. . . . .. . . . . . . . . . . . . .. . . . ..... ... . . . . , 44

8 Employees' Health Insurance Fund . . . . .. . . . . . . . .. . . . . . . . ...... . . ... ....... . . ....... . . ... . . . . . . . . .. . . . . . . .. . . . . . . . . . . . . . . . 44

9 Deferred Compensation Plan .. . . , ... , ............................................ " .. " .. , . . . . " . . . . , . . . . . . . ,................ 45

1 0 Risk Management ............... . . ...... . . . , . . . . . , . . . , ... " . . . , ..... " ....... " . . . ..... , .................... . . . . . . . . . . . . , . . . . . . . . . . 45

1 1 Long-Term Debt . . . . . . . . . . . ... . . ... . .. . ...... , ......... , .... , ... , . . . . . " . . . , . . . , ........ " . . " .. ,............... ..................... 45

1 2 Prior Year Defeasance of Debt. . . . . . . . . . . . . . . . . . . . . ........................... . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

13 Inlerfund Receivables, Payables and Transfers .... . . . . . . . . . . . . . . . . . . . . . ........................................... 48

14 Related Party Transactions , . . " " ................................... , ...... , ....... , . . . . . , ........... , ....... , . . . . . . . ,........ 49

1 5 Contingencies ... . ....... . , . . , ..... . ......................... , . . . . , . . . . . " . . " . . . . . , . . . . , ....... , . . ...... . . . . ....................... , . 49

1 6 Subsequent Event .. . . . . . . . . " . . . , . " . . . , . . . " ......... , ...... " . . . . . . . ............ .......................... , . . . , . . . . " . . . , .. " " , . 49

1 7 Victoria County Navigation District . .. . . . . . . . . . ............................. . . . . . . . . . .. . . . . . . . . . . . . . . . ... . ... . ............. 50

1 8 Victoria County Child Welfare Board . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................. . ...... . . ............ ..... . . 54

19 Citizens Medical Center , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... . ... . . . ... . . . ... . . .. . . . . . . . . . ..... ....... . .............. ..... ...... .. 56

30

COUNTY OF VICTORIA, TEXAS NOTES TO FINANCIAL STATEMENTS December 31, 2005

NOTE 1; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The County of Victoria, Texas (the 'County") is a political subdivision of the State of Texas, The County is governed by the Commissioners' Court, composed of four (4) County Commissioners and the County Judge, all of whom are elected officials,

A Reporting Entitv

In evaluating how to define the government, for financial reporting purposes, the County's management has considered all potential component un�s, The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in GASB Statement No, 14, The Financial Reporting EntNy, and as amended by GASB Statement No, 39, Determining Whether Certain Organizations are Component Units, Under these gu idelines, the reporting entity consists of the primary government (all funds of the County), organizations for which the primary government is financially accountable, organizations for which the primary government is not finanCially accountable, organlzatlons that raise and hold economic resources for the direct benefrt of the primary government, and any other organization for which the nature and Significance of their relationship �h the primary government is such that exclusion could cause the County's financial statements to be misleading or Incomplete, Entities other than the primary government that are Included in the primary government's financial statements are called component units, The component un� discussed in this note are included in the County's flnanclal statements because of the significance of their financial relationships with the County and the County's ability to impose � will on the organizations,

ComQ!lnent Unjts

The component units column In the financial statements includes the finanoial data of the County's three component units, They are reported in a separate column to emphasize that they are legally separate from the County,

Victoria County Navigation District - Established to oversee and regulate the maintenance and operations of the Victoria Barge Canal. The District is governed by a Board of CommiSSioners, each member of which is apPOinted by the Commissioners' Court of the County, The Commissioners' Court of Victoria also reviews and approves its annual budget, This entity is considered a Governmental Fund Type for the County's reporting purposes and uses the same fiscal year as the County,

Victoria County Child Welfare Boand - Established to provide various child protective services to residents of the County, The Commissioners' Court of the County apPOints each member of the entity's board of directors and reviews and approves its annual budget. The programs of the Board are jointly financed by the County and the State of Texas, This entity is considered a Governmental Fund Type for the County's reporting purposes and uses the same fiscal year as the County,

Citizens Medical Center - A 36B-bed acute care hosp�al owned by the County and established to provide medical services to the residents of the County and surrounding areas, The Medical Center is governed by a board of directors, each member of which is appointed by the Commissioners' Court of the County, This Court also reviews and approves the annual operating budget of the Medical Center, C�izens Medical Center operates on a fiscal year ending June 30 of each year, The amounts reported for the Medical Center in the financial statements are as of June 30, 2005, The Medical Center is reported as a Proprietary Fund Type in the accompanying financial statements.

31

NOTE 1 : SUMMARY OF SIGNIFICANT ACCQUNTING POLICIES - (Continued)

A. Reporting Entity - (Continued)

Complete financial statements for each of the above noted component units may be obtained by contacting their respective administrative offices at the following addresses:

Victoria County Navigation District 1 15 North Bridge, Room 241 Victoria, Texas 77901

Victoria County Child Welfare Board 1502 E. Airline Road Victoria, Texas 77901

CItizens Medical Center 2701 Hospital Drive Victoria, Texas 77901

B. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and the statement of changes In net assets) report information on all nonfiduciary activities of the County and its component units. For the most part, the effect of Interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes, and intergovernmental revenues are reported separately from bUSiness-type activitiEls, whioh rely to a signtficant extent on fees and charges for support. Likewise, the primary government is reported separately from its legally separate componenl units.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment Program revenues include 1) charges to customers or applicants who purchase, use, or direclly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and oontributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, discretely presented component units, and fiduciary funds, even though the laiter are excluded from the government-wide financial statements. Major individual governmental funds and major Individual enterprise funds are reported as separate columns In the fund financial statements.

C. Measurement Focus, Basis of Accounting. and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduoiary fund flnanclal statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are reoognized as revenue as soon as all eligibility requirements im posed by the provider have been met

32

NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

C. Measurement Focus. Basis of Accounting and Financial Statement Presentation - (Continued)

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose. the County considers revenues to be available if they are collected within 60 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment Is due.

Property taxes. fines. and interest associated with the current period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the County.

The 2005 tax levy is dedicated to pay for expenditures of the 2006 budget. The entire 2005 tax levy has been recorded as deferred revenue as of December 31 , 2005.

The County reports the following major governmental fund:

The General Fund is the County's primary operating fund. It accounts for all financial resources of the general government. except those required to be accounted for in another fund.

The County reports the following major proprietary funds:

Enterprise Funds are used to account for operations; 1 ) that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses. including depreciation) of providing goods or services to the general publio on a continuing basis be financed or recovered primarily through user charges; or 2) where the governing body has decided that periodic determination of revenues earned. expenses incurred , and/or net income is appropriate for capital maintenance. public policy, management control. accountability, or other purposes.

The Airport Fund. an enterprise fund, accounts for the operations of and Improvements to the County Airport.

The Navarro Project Fund, an enterprIse fund. accounts for the operation of a large office complex which was purchased and renovated by the County for the primary use of the County Health Department. The building is also currently leasing space to other entities unrelated to the County.

Additionally. the County reports the following funds:

The Internal Service Fund accounts for the financing of goods or services provided by one department or agency to other departments or agencies of the County, or to other governments. on a cost·reimbursement basis. The County maintains one Internal Service Fund: Employee Health Insurance Fund.

33

NOTE 1; SUMMARY OF SIGNIFICANT ACCOUNTING eOLlCIES • (Continued)

C. Measurement Focus. Basis of Accounting and Financial Statement Presentation - (Continued)

The Private Purpose Trust Fund, or the Flexible Benefits Plan, is used to account for amounts withheld from employee paychecks before FICA and withholding taxes are computed. All resources of the fund. including any earnings on invested resources. may be used to benefit parties outside the County. All the above is according to the plan document. The fund is excluded from the government-wide financial statements.

The Agency Funds account for resources held by the County as an agent for various governments and individuals. These resources include ad valorem taxes collected and to be distributed to other local governments, pass-through grants, various fines and fees to be distributed to other governments, etc. The funds are excluded from the government-wide financial statements.

The Special Revenue Funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.

The Debt Service Funds account for financial resources accumulated and payments made for principal and Interest 011 long-tenn general obligation debt of governmelltal funds.

The Capital Project Funds account for financial resources to be used for the acquisition or construction of major oapital facilnies I.e. improvements to various County highways (other than those financed by proprietary funds and trust funds).

Private-sector standards of accounting and financial reporting issued prior to December 1 , 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The County has elected not to follow subsequent private-sector guidance.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between Various functions of the County. Elimination of these charges would distort the direct costs and program revenues reported for the various fUnctions concerned.

Amounts reported as program revenues include 1) charges to customers or applioants for goods. services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, Including special assessments. Internally dedloated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating Items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenueS of the County's enterprise funds and internal service fund are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenseS not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the County's policy to use restricted resources first. then unrestricted resources as they are needed.

34 ·

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . (Continued)

D. Budgets and Budgetary Accounting

The County Judge is, by statute, the budget officer of the County. After being furnished budget guidelines by the County Judge and Commissioners' Court, the County Auditor prepares an estimate of revenues and a compilation of requested departmental expenditures. Department officials appear before the County Judge and the County Auditor for departmental budget review. A proposed budget is prepared by the County Auditor, then submitted to the Commissioners' Court. Before determining the final budget, the Commissioners' Court may increase or decrease the amounts requested by the various departments. Amounts finally budgeted may not exceed the County Auditor's estimate of revenues and estimated cash balance at January 1 of the budgeted year.

Budgets are adopted for the General Fund. some of the Special Revenue Funds and Debt Service Funds by the first regular session of the Commissioners' Court in September. All budgets adopted by the County are on the cash basis of accounting rather than In conformity with generally accepted accounting principles (GMP). Under the budgetary basis, revenues are recognized as collected and expenditures when paid.

When the budget has been adopted by the Commissioners' Court, the County Auditor is responsible for monitoring expenditures to keep them from exceeding budgeted appropriations and for keeping the members of the Commissioners' Court advised of the condition of the various funds and accounts. The level of control (the level on which expenditures may not exceed appropriations) for each legally adopted annual operating budget is on a line--item basis. Any amendments above the line-Item level must have the approval of the COmmissioners' COurt before implementation. The line--item level of control is defined by the basic categories of salaries, fringe benefits, operating expenditures, other services and charges, capital outlay, and debt service.

Budget revenue amendments made during the year in the County's governmental funds netted an increase of $1,136,904. Budget expenditure amendments in these funds netted an increase of $2,424, 196.

Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed by the County as an extension of formal budgetary Integration. Encumbrances outstanding at year-end are not reported as reservations of fund balances. All encumbered appropriations lapse at the end of the fiscal year. Enoumbered appropriations are reappropriated in the ensuing year's budget.

E. Deposits and investments

The County's cash and cash equivalents are considered to be cash on hand, demand deposits, and shortterm investments with original maturities of three months or less from the date of acquisition. Investments for the County are reported at fair value.

The County may Invest its excess funds in any Instruments authorized by the Public Funds Investment Act of Texas. Investments authorized under this Act include, but are not limited to, the following: Obligations of the United States or its agenoies and instrumentalities; direct obligations of the State of Texas or Its agencies and instrumentalities; collateralized mortgage obligations directly issued by a federal agenoy or instrumentality of the United States, the underlying security for which Is guaranteed by an agency or instrumentality of the United States; other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and Instrumentalities; certificates of deposit issued by a state or financial InstituUon domiciled in the State of Texas which is guaranteed or insured by the FDIC or othelWlse secured; and certain repurchase agreements.

The COmmissioners' Court has adopted a written investment polioy regarding the Investment of its funds as defined by the Public Funds Investment Act of 1995. The Investments of the County are In compliance with the Commissioners' Court's investment policies.

35

NOn: 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

F. Receivables and payables

Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds' (I.e., the current portion of interfund loans) or 'advances tolfrom other funds" (i.e., the non-current portion of Interfund loans). All other outstanding balances between funds are reported as "due to/from other funds". Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances: Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not e)(pendable available financial resources.

All trade and property tax receivables are shown net of an allowance for uncollectibles.

G. Inventorv

Inventories of supplies held by the Airport Fund, an enterprise fund. are valued at the lower of cost (first-in, flrst-out) or market. Estimated cost is used when actual cost figures are not available.

H. Capital Assets

Capital assets. which include property, plant. equipment, and infrastructure assets (e.g., roads, bridges, sidewalks. and similar Items), are reported in the applicable governmental or business-type activities columns in the government-wide statement of net assets. The County defines capital assets, other than Infrastructure assets, as assets with an initial, Individual cost of more than $5,000 and an estimated useful life in excess of one year. The County reports infrastructure assets on a system basis. Accordingly, the amounts spent for the construction or acquisition of infrastructure assets are capitalized and reported regardless of their amount. In the case of the inilial capitalization of general infrastructure assets, the County ohose to include all such items acquired on or after January 1 , 2003. The County will report infrastructure assets aoquired prior to January 1, 2003 beginning in year ending Deoember 31 , 2007.

As the County constructs or acquires capital assets each period, they are capitalized and reported at historical cost. Donated capHal assets are recorded at estimated fair market value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and Improvements are capitalized as projects are constructed. Interest Incurred during the construction phase of capital assets of business-type activities Is not included as part of the capitalized value of the assets constructed.

Property, plant, and equIpment of the primary government is depreciated using the straight line method over the following estimated useful lives:

� Buildings Improvements other than buildings Infrastructure Machinery and equipment Office equipment and fixtures

36

Years

10-50 10-50

40 5-15 5-10

NOTE 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

L Com pensaled Absences

Vacation benefits are accrued by County employees according to guidelines set In the County's personnel policy. This policy states that after completion of one year of service, each employee will thereafter accrue vacation according to the number of years of continuous service. Upon termination of employment, if the employee has completed one year of service, he or she will be paid for accrued but unused vacation leave. The payment of unused vacation may not exceed 80 hours. All vacation is accrued when incurred in the govemment-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements.

Employees are credited with sick leave according to the number of years of continuous service. Sick days may be accumulated up to a maximum of 60 woridng days (480 hours). County personnel policies state that unused sick leave benefits will not be paid to employees upon termination, therefore, no Sick leave benefits are accrued.

J . Long-Term Obligations

In the government-wide financial statements, and In proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities In the applicable governmental actiVities. business-type activ�ies, or proprietary fund type statement of net assets . Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued Is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

K. Fund Equity

In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance, if any, represent tentative management plans that are subject to change.

L Use of Estimates

The preparation of the government-wide and fund financial statements in conformity with generally accepted accounting principles requires the County to make estimates and assessments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenditures during the reporting period. Accordingly, actual results could differ from those estimates.

37

NOTE 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILI!'l

A. Deficit Fund Equity

As of December 31 , 2005, the following funds had deficit equity balances:

Nonmajor Governmental Funds Special Revenue Funds

Health Department

Internal Service Fund Employee Health Insurance

$

Fund Balancel Net Assets

1 28,800

259,248

Steps will be taken to eliminate these deficits in the upcoming fiscal year.

B. Budgetary Compliance

Budgetary compliance is monitored at the line-item level in all budgeted governmental funds. For the year ended December 3 1 , 2005, the County over-expended appropriations at the following line-item levels:

Department/Fund

General Fund Building maintenance

Operating expenditures Parks and recreation

Salaries

NOTE 3: DEPOSITS AND INVESTMENTS

Amount

$ 3,987

3

As of December 31 , 2005, the County had the following Investments:

Investment Type

U.S. Government Securities

Total

Interest Rate Risk

Fair Value

$ 2,485,994

$ 2.485.994

Weighted Average Maturity (Months)

38

In accordance with the County's investment policy, the County manages its ellposure to declines In fair values by limiting the weighted average maturity of its investment portfolio for investments to less than fIVe years from the time of purchase. Specifically, investments of operating funds must have stated final maturities of three years or less and investments In capital project funds must have stated final maturities that do not exceed the expected completion date of the project for which the bonds were sold.

38

NOTE 3: DEPOSITS AND INVESTMENTS - (Continued)

Credit Risk

It is the County's polley to limit its investments to those with ratings of not less than A or its equivalent. The County's investments in the U.S. Govemment SeourHies had AAA ratings from both Standard & Poor's and Moody and Fitch.

Concentration of Credit Risk

The County's investment policy requires that the investment portfolio shall be diversified in terms of investment instruments, maturity scheduling. and financial Institutions to reduoe the risk of loss resulting from over conoentration of assets in a specific class of investments. specific maturity or specific user. At year-end. the County was not exposed to concentration of credit risk.

Custodial Credit Risk - Deposits

In the case of deposits, this is the risk that in the event of a bank failure, the County's deposits may not be returned to it. The County's investment policy requires that deposits at financial institutions be insured by the Federal Deposit Insurance Corporation ("FDIC') and/or collateralized by securities pledged to the County by the depOSitory in an amount equal to at least 110% of the carrying value of depoSits held. As of December 31. 2005. $1 7,748,757 of the County's bank balance of $20.462.575 was exposed to custodial credit risk because it was uninsured and collateralized with securities held by the County's depository.

Custodial Credit Risk - Investments

For an investment, this is the risk that. in the event of the failure of the counterparty, the County will not be able to recover the value of its investments or collateral seourities that are in the posseSSion of an outSide party. The County's investment polley requires that securities be held in the name of the County or held on behalf of the County and that all securities are purchased using the delivery versus payment method. As of Deoember 31, 2005, and for the year then ended, the County was not exposed to any oustodial cred it risk.

Please see Notes 17. 18 and 19 for discussions relative to the cash deposits of the County's three component units.

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NOTE 4: RECEIVABI.ES

Receivables at December 31 , 2005 for the County's individual major funds and nonmajor, internal service, and fiduciary funds in the aggregate, including the applicable allowances for uncollectible accounts are as follows:

Nonmajor and Other

General Aireort Funds Total Gross receivables

Ad valorem taxes $ 9,206,766 $ $ 2,524,894 $ 1 1 , 731 ,660 Sales taxes 1 , 1 76,661 1 , 1 78,681 Fines 5,1 67,732 5,187,732 Interest 4,798 4,798 Other 52,410 3,407 737,107 792,924

Total gross receivables 1 5,630,387 3,407 3,262,001 1 8,895,795

Less: allowances 3.835,850 127,217 3,963,067

Total net receivables $ 1 11794,537 $ 3,407 $ 3,134,784 $ 1 419321728

The County's governmental funds report deferred revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period_ The governmental funds also defer revenue recognition In connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Unavailable Unearned Total

General Fund Ad valorem taxes receivable $ 931 ,577 $ 1 1 ,730,466 $ 1 2,662,043 Fines receivable 1 ,552,291 1 ,552,291

Nonmajor Funds Ad valorem taxes receivable 252,470 3,210,022 3,462,492 Grants 21,166 21 ,1 86

$ � zaa 338 :Ii j �,9al,§ZSi iIj H,a9a,Q12

Property taxes attach as an enforceable lien on property as of January 1 . Taxes are levied on October 1 and payable by the following January 31 . The County of Victoria Tax Assessor-Collector bills and collects Its own property taxes.

The County is permitted by State Statute to levy taxes up to $.80 per $100 of assessed valuation. The combined tax rate for the budgetary year ended December 31 , 2005 was $_3986 per $1 00, which means the County has a tax margin of $.4014 per $100.

40

NOTE 5: CAPITAL ASSETS

Primary Government Beginning Ending Balance Increases Decreases Balance

Governmental activities Capital assets, not being depreciated

Land $ 1,365,758 $ $ $ 1 ,365,758 Total capital assets not being depreciated 1 ,365,758 1 ,365,758

Capital assets, being depreciated Machinery and equipment 1 0,035,849 677,995 572,018 1 0,141 ,826 Buildings 1 8,519,306 1 92,482 1 01 ,238 1 8,61 0,550 Improvements 1 2,652, 1 1 6 592,775 66,774 1 3,178,1 17

Total capital assets being depreciated 41 ,207,271 1 ,463,252 740,030 41 ,930,493

Less accumulated depreciation for Machinery and equipment 6,287,542 691 ,741 507,399 6,471 ,884 Buildings 6,230,542 344,785 101 ,238 6,474,089 Improvements 5,751,427 604,272 62,906 6,292,793

Total accumulated depreciation 18,269,51 1 1 ,640,798 671,543 1 9,238,766

Total capital assets being depreciated, net 22,937,760 (177,546) 68,487 22,691 ,727

Govenmental activities capital assets, net $ 24,303,51 8 $ (177,546) $ 68,487 $ 24,057,485

Business-type activities Capital assets, not being depreciated

Land $ 149,433 $ � $ 1 49,433 i otal capital assets not being depreciated 149,433 1 49,433

Capital assets, being depreciated Machinery and equipment 632,663 16,684 4,840 644,507 Buildings 2,642,790 2,642,790 Improvements 1 1 ,523,41 1 2,318,604 1 3,842,01 5

Total capital assets being depreciated 1 4,798,864 2,335,288 4,840 1 7,129,312

Less accumulated depreciation for Machinery and equipment 422,342 62,481 4,705 480, 1 18 Buildings 1 ,408,547 1 21 ,076 1 ,529,623 Improvements 4,869,279 652,240 5,51 1 ,519

Total accumulated depreciation 6,690,168 835,797 4,705 7,521 ,260

Total capital assets being depreCiated, net 8,108,696 1 ,499,491 135 9,608,052

Business-type activites capital assets, net $ 8,258,129 $ 1 ,4991491 $ 135 $ 9,751,485

41

NOTe 5: CAPITAL ASSETS - (Continued)

Depreciation expense was charged to functions/programs of the County as follows:

Governmental activities General government Pu blic safety Highways and streets Culture and recreation Public health

Total depreciation expense - governmental activities

Business-type activities Airport Commissary Navarro project

Total depreciation expense - business-type activities

NOTE 6: I!MPLOYEES' RETIREMENT PLAN

$ 518, 1 39 703,1;140 295,323

55,797 67 699

� 1 640 798

$ 626,334 6,446

203 017

� 835 797

The County provides retirement, disability, and death benefits for all of its full-time employees through a nontraditional defined benefrt pension plan in the statewide Texas County and District Retirement System (TCDRS). The aoard of Trustees of TCDRS is responsible for the administration of the statewide agent multlple-employer public employee retirement system consisting of 559 nontraditional defined benefit pension plans. TCDRS in the aggregate issues a comprehensive annual financial report (CAFR) on a calendar year basis. The CAFR Is available upon written request from the TCDRS Board of Trustees at P. O. Box 2034, Austin, Texas 78768-2034.

The plan provisions are adopted by the governing body of the employer, within the options available in the Texas state statutes governing TCDRS (TCDRS Act). Members can retire at ages 60 and above with 8 or more years of service, with 20 years of servioe regardless of age. or when the sum of their age and years of service equals 75 or more_ Members are vested after 6 years of service but must leave their accumUlated contributions In the plan to receive any employer-financed benefit. Members can withdraw contributions in a lump sum via partial payments, however, these members are not entitled to any amounts contributed by their employer.

Benefit amounts are determined by the sum of the employee's contributions to the plan, with interest, and employer-financed monetary credits. The level of these monetary credits is adopted by the governing body of the employer within the actuarial constraints imposed by the TCDRS Act so that the resulting benefits can be expected to be adequately financed by the employer's commitment to contribute. At retirement, death, or disability, the benefit is calculated by converting the sum of the employee's accumulated contributions and the employer-financed monetary credits to a monthly annuity using annuity purchase rates prescribed by the TCDRS Act

A. Funding Policy

The employer has elected the annually determined contribution rate (Variable-Rate) plan provisions of the TCDRS Act. The plan is funded by monthly contributions from both employee members and the employer based on the covered payroll of employee members. Under the TCDRS Act, the contribution rate of the employer is actuarlally determined annually. It was 11 .00% for calendar year 2005. The deposit rate payable by the employee members is the rate of 7.00% as adopted by the governing body of the employer. The employee deposit rate and the employer contribution rate may be changed by the governing body of the employer within the options available in the TCDRS Act.

42

NOTE 6; EMPLOYEES' RETIREMENT PLAN - (Continued)

B. Annual Pension Cost

For the employer's accounting year ending December 31 , 2005, the annual pension cost for the TCDRS plan for Its employees was $1 ,948,643 and the actual contributions were $1 .948.643.

The annual required contributions were actuarially determ ined as a percent of the covered payroll of the participating employees, and were in compliance with the GASB Statement No. 27 parameters based on the actuarial valuation as of December 31 . 2004. the basis for determining the contribution rate for calendar year 2005. The December 31, 2003 actuarial valuation Is the most recent valuation.

C, Actuarial Valuation and Trend Information

Actuarial Valuation Infonnatlon

12131/02 12131/03 12/31/04

entry age entry age entry age Actuarial cost method Amortization method level percentage level percentage level percentage

of payroll, open of payroll, open of payroll, open Amortization period in years Asset valuation method

20 20 20 long-term long-term long-term appreciation appreciation appreciation with adjustment with adjustment with adjustment

Assumptions: Investment return (1) 8.00% Projected salary increases (1) 5.5% Inflation 3,5% Cost of living adjustments 0.0%

(1) includes inflation at the stated rate

8.00% 5.5% 3,5% 0.0%

8.00% 5.5% 3,5% 0.0%

Trend Infonnation for the Retirement Plan for the Employees ofthe County of Victoria, Texas

Fiscal Annual Percentage Net Year Ending Pension ofAPC Pension

l2!l2lwt!!!r �l r;;Qm (8�r;;l r;;Qo!J:it.l!J� Q!:!ligali2!l 2003 $ 1 ,347,224 100% $ 2004 1 .616.963 100% 2005 1 ,948,643 100%

Schedule of Funding Progress for the Retirement Plan for the Employees of the County of Victoria, Texas

Actuarial Actuarial Actuarial Unfunded Annual Valuation Value of Accrued AAL Funded Covered

Datf! Assets Llabil1!)' (AALI (UAALl RatlQ Pa�QU(1) (a) (b) (b-a) (alb) (e)

12131102 $35,551 ,549 $ 42,296,318 $6,744,769 84.05% $ 1 7, 1 1 9,092 12/31/03 39,191 , 192 47,91 7, 136 8,725,944 81 ,79% 1 7,297,132 12/31/04 41 ,978,518 50,831 ,804 8,853,286 82,58% 1 7,709,859

UAAL as a Percentage of Collered

�!illl[211 « Ira)!e)

39.40% 60.45% 49.99%

(1 ) The annual covered payroll is based on the employee contributions received by TCDRS for the year ending with the valuation date.

43

NOTE 7; OTHER POST EMPLOYMENT BENEFITS

In add ition to providing pension benefits, the County provides its retirees with post employment health care benefits. In order for a County employee to be eligible for this benefit, their age combined with their years of service must equal seventy-five (75), or they must have attained the age of sixty (60) and with eight (8) years of service, or they must have twenty (20) or more years of service with Victoria County and can retire at any age with full benefits.

The County pays 50% of the premium cost for each retiree regardless of age provided they worked for Victoria County for twenty (20) or more years. If the retiree worked less than twenty (20) years for Victoria County the County will pay 40% of the premium cost. The County also pays 20% of the premium cost for dependents who may be covered under the retiree's health insurance plan.

Other post employment benefits are expensed and funded on a pay-as-you-go basis. The County recognizes the cost of providing these benefits as a payroll expense/expenditure in an operating fund with corresponding revenue in the Employee Health Insurance Fund . Payments for health insurance are shown as an expense in the Employee Health Insurance Fund. The cost of providing these benefits for 50 and 44 retirees and active employees for the years 2005 and 2004, respectively, is not separated. Total payments to the Employee Health Insurance Fund by retirees were $161,369 in 2005 and $1 29,546 In 2004.

NOTE 8; EMPLOYEES' HEALTH INSURANCE FUND

The County maintains a self-insurance internal service fund designed to pay comprehensive health benefits incurred by its participants. The fund assumes all risk up to $85,000 of claims per participant annually; after this a reinsurance policy pays any remaining claims for the remainder of the year. Premiums are charged to the individual funds based on a predeterm ined cost per employee and dependent. These amounts are recorded as operating revenue in the internal service fund and as operating expenditures/expenses In the respective funds. Any claims that have been Incurred , but not reported, as of the balance sheet date are shown as current liabilities in the internal service fund and have been charged as an operating expense for that period. This amount was determined by the County's health plan administrator. As of December 31 , 2005, the fund had estimated liabilities for outstanding claims of $217,557. There was a deficit unrestricted net assets of $259,248 as of December 31 , 2005, an increase of $1 32,885 from 2004.

Below is a reconciliation of claims liabilities reported in the Employee's Health Insurance Fund for the years noted:

Year

1 996 1997 1 996 1 999 2000 2001 2002 2003 2004 2005

Payable 1/1

$142,738 193,602 330,568 274,539 193,739 339,519 745,480 378,791 272,698 621 ,055

Incurred

$1 ,428,064 2,045,794 1 ,754,903 2;639,039 2,083,065 2,617,446 1 ,546,613 1 ,635,920 1 ,663,809 1 ,548, 1 12

Paid

$1 ,377,200 1 ,908,828 1 ,810,932 2,719,839 1 ,937,285 2,21 1 ,485 1 ,913,502 1 ,742,013 1 ,315,452 1 ,951 ,610

Payable 1V31

$193,602 330,568 274,539 193,739 339,519 745,480 378,791 272,698 621 ,055 21 7,557

The above schedule reflects only those claims for which the County was l iable. Information on claims paid by the insurance carrier under the reinsurance policy was not available. Settled claims resulting from insured risks have not exceeded Insurance cOllerage in any of the past t hree fiscal years.

44

NOTE 9: DEFERRED COMPENSATION PLAN

The County offers its employees a deferred compensation plan created in accordance with Internal Revenue Code section 457. The plan, available to all County employees, permits them to defer a portion of their salary until future years. Except in specified circumstances, the deferre(! compensation is not available to employees until termination, retirement. death, or unforeseeable emergency.

During 1 998, the County transferred plan assets to an independent trust for the exclusive benefit of the participants and their beneficiaries.

NOTE 10:. RISK MANAGEMENT

The County is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The County purchased commercial insurance to cover risks associated with potential claims in 2005. There were no significant re(!uctions in coverage in the past fiscal year, and there were no settlements exceeding insurance coverage for each of the past three fiscal years.

NOTE 1 1 : LONG.TERM OEeT

A. Changes In Long-Term Liabilities

Long-term liability activity for the year ended December 31 , 2005, was as follows:

Beginning Ending Balanc!! Additions RedY!OIign!! BalaDC!!

Governmental activities

Bonds and certificates payable Certificates of obligation $ 4,700,000 $ $ 31 5,000 $ 4,385,000 General obligation bonds 6,1;\:1:1 QQQ 210,000 5,9!!f.i,QQQ

Total bonds payable 1 1 ,555,000 1 ,225,000 10,330,000

Capital leases payable 2,500,Q!2Q 569,270 1,9�Q,7!i!0 Compensated absences !lZ7,145 1,280,�92 1,094,fl38 1 ,Q!22,599 Arbitrage earnings payable 3,867 3,867

Total 90vernmental activity long-term liabilities $ 14 936 072 $ 1 .289,392 $ 2,889,208 i13 327 256

Business.type activities

Bonds Revenue bonds $ 1 ,305,000 $ $ 70,000 $ 1 ,235,000 Less: issuance discount 3,871 310 3,561

Total bonds payable 1 ,301 , 129 69,690 1 , 231,439

Compensated absences 21 ,460 41 ,803 35,282 27,981

Total business-type activity long-term liabilities $ 1,322 589 $ 41,603 $ 104 972 $ 1,259420

Due Within One Year

$ 325,000 940,000

1 ,265,000

569,2711 263,lI3

S2,097,£:!l}

$ 75,000

75,000

1 8,023

$ 93,023

For the governmental activities. compensated absences are generally liquidated by the General Fund.

45

NOTE 1 1 : LONG· TERM DEBT - (Continued)

B. General Obligation Certificates and Bonds

C.

Long-term liabilities at December 31 , 2005 are comprised of the following issues:

$2,590,000 2003 Limited Tax Refunding (Jail) Bonds due in annual installments ranging from $420,000 to $455,000 through 2009; interest varying between 2.0% and 3.0%. $ 1 ,745,000

$775,000 2003 Unlimited Tax Refunding (Road) Bonds due In annual installments ranging from $1 35,000 to $1 50,000 through 2009; interest varying between 2.0% and 3.0%. 560,000

$1,650,000 1998 Unlimited Tax (Road) Bonds due in annual installments ranging from $145.000 to $205,000 through 2013; interests varying between 4.5% and 4.75%. 1 ,380,000

$2,700,000 1996 Limited Tax (Courthouse Restoration) Bonds due In annual installments ranging from $240,000 to $335,000 through 2013; interest varying between 4.1 % and 4.4%. 2,260,000

$5,000,000 2001 Certificates of Obligation (Bridge Street Annex) due in annual installments ranging from $325,000 to $485,000 through 2016; Interest varying between 3.55% and 4.5%. 4,385,000

Total general obligation debt $ 10 330 !.lJ.l9

Year Ending pecember 31

2006 $ 2007 2008 2009 2010

201 1 -2015 2016

$

C!llI;!lta! I&!!§!!§

Governmental Activities Principal Interest Total

1 ,265,000 $ 1 ,300,000 1 ,360,000 1 .405,000

840,000 3,675,000

485.000

375,634 334,319 290,418 241 ,925 198,685 452,407

10 913

1 Q 330 000 l/!,$ =='�991S4�3�0!:b1

$ 1 ,640,634 1 ,634,319 1 ,650,418 1 ,646,925 1 ,038,685 4,127,407

495,913

$ 1 2 234 301

Capttal leases payable at December 31. 2005 are comprised of the following Individual leases:

Lease purchase agreement on the construction of a regional juvenile detention facility. The original amount of the lease, entered into In 1 995, was refinanced in 2004 for $2,351 ,458. It bears interest at a rate of 5.69% and requires monthly installments of $41 ,626. $ 1 ,881,812

Lease purchase agreement on a 2003 Kubota tractor used by Precinct #1 . The original amount of the lease. entered into in 2003, was $15,765. The lease Is payable in three annual installments of $4,710 and bears no interest 2,355

46

NOTE 11 : LONG· TERM DEBT . (Continued)

c. Capital Leases · (Continued)

D.

Lease purchase agreement on six 2005 Ford Crown Victoria four-door sedans used by the Sheriff's Department. The original amount of the lease, entered into in 2004, was $139,923. The lease Is payable in three annual installments of $48,232 and bears Interest at a rate of 3.45%. $ 46,623

Total caprtal leases $ 1.930.790

The present value ofthe capital leases after deduction of imputed interest Is $ 1 ,930,790.

Year Ending Governrnental Activities December 31 Principal Interest Total

2006 $ 451 ,818 $ 98,286 $ 550,104 2007 426,368 73,148 499,516 2008 451 ,272 48,245 499,517 2009 477,629 21 ,887 499,516 2010 123,703 1 .1 77 1 24,880

$ 1 930 790 $ 242 713 $ ? 173 533

Revenue Bondi

Revenue bonds payable Is comprised of the following:

$1 ,650,000 1997 Victoria County Public Facilities Corporation Lease Revenue Bonds, Series 1997 due in annual installments ranging from $75,000 to $140,000 through 2017; interest rate varying between 5.35% and 6.00%. $ 1,235,000

Total revenue bonds $ 1.235.000

Annual debt service requirements to maturity for revenue bonds are as follows:

Year Ending Business-!Jl� Activities Q!ilr.1!il!!!!.l!ilr �1 Princij;!!!1 Intel:§l Total

2006 $ 75,000 $ 69,691 $ 144,691 2007 75,000 65,678 1 40,678 2008 80,000 61 ,452 141 ,452 2009 85,000 56,874 141,874 2010 90,000 51 ,928 141 ,928

201 1-2015 555,000 168,910 723,910 2016-2017 275.000 16,650 291,650

:Ii 1,235,000 � �!i!j,jas :Ii j Z26,183

47

NOTI! 12: PRIOR YEAR DEFEASANCE OF DEBT

In prior years the County defeased certain general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability of the bonds are not included in the County's financial statements. At December 31 , 2005, $2,300,000 of bonds outstanding are considered defeased.

!\IOTE 13: INTERFUND RECEIVABb!;S, PAYABLES AND TRANSFERS

A. Interfund Receivables and Pavables

At times during the fiscal year the various funds of the County were involved In transactions that created interfund receivable and payable balances. These transactions related to such things as the purchase of goods by one fund on behalf of another and the receipt of revenue in one fund that belongs to or is designated for another fund. In addition to the short-term amounts, the General Fund has made long-term loans to the Navarro Project Fund, a proprietary enterprise fund type, during the years ended December 31, 1998 through December 31 , 2005. The amounts of the loans total $1 ,01 0,690 and are being used to finance the construction and operation of the Navarro lease project.

Interfund receivable and payable balances as of December 31 , 2005, were as follows:

Receivable Fund General

CDA Victims Assistance Grant

Total

Payable Fund Nonmajor Governmental

Health Department W.I.C. Program Other Nonmajor Governmental

Airport Navarro Project Commissary Internal Service Private Purpose Trust

Nonmajor Governmental CDA Processing Fee

Advances from/to other funds:

Receivable Fund

General

Total

Payable Fund

Navarro Project

48

$

$

$

$

Amount

231,001 221 ,667

75,820 2,337

1 66 175

759,745 35,000

268

1,326,179

Amount

362,219

362,219

NOTE 13: INTERFUNQ RECEIVABLES. PAYABLES AND TRANSFERS · (Continued)

B. Interfund Transfers

NOTE! 14:

Each year various funds of the County transfer funds to other funds. The most sIgnificant of these are the planned transfers from the County's General Fund to the Health Department Fund. a Special Revenue Fund. These transfers are intended to provide the necessary resources to meet the operating obligations of the receiving fund. During the current fiscal year, transfers between funds consisted of the following:

Transfers Out General

General $

NonmaJor Governmental 307,273

$ 307.273

RELATED PARTY TRAN�6!::IIQ!!l�

Transfers In

Nonmajor Governmental

$ 1 .nO.a55

13,236

$ 1 .764.091

Internal AllJ!!?rt Service Total

$ 130,000 $ 1 04,000 $ 2,004,855

320,509

$ 130.000 $ 104.000 :I: 2.325.364

During fiscal year 2005, the County's General Fund entered into transactions with the Victoria County Navigation District and the Victoria County Child Welfare Board, discretely presenled component units of the County. whereby the Navigation District contributed to the primary government a total of $8.400 for services of the County and the County oontributed to the Board $58.500 for operational purposes.

NOTE 15: CQNTlNGENCIES

The County is exposed to the risk of contingent liabilities in the ordinary course of its operations. Specifically, such risks arise as a result of the County's participation in various state and federal grant programs and as a result of threatened and pending litigation_ Disallowed costs could result if County expenditures made under its grants programs are found to be improper in that they violate state or federal regulations. Such disallowed costs would have to be paid back to the granllng agency from the County's General Fund. The County is not aware of any costs that have been disallowed in the current year and does not anticipate that any will be.

As of December 31, 2005, the County was involved in various matters of litigation. II Is the opinion of the County's legal counsel that any exposure faced by the County as a result of these matters was minimal. Furthermore, any losses incurred would in all probabilijy be covered by liab�ity insurance carned by the County.

Based on the above Information, the accompanying financial statements do not reflect any accrual for contingent liabilities as of the end of the current fiscal year.

NOTE 16: SUBSEQUENT EVEN[

There were no events, which occurred subsequent to the fiscal year-end and prior to the issuance of this report, which would have a material effect on the County's financial position as of December 31 . 2005.

49

NOTE 17: VICTORIA CgUNTY NAVIGATION DISTRICT

As described In Nole 1 , the Victoria County Navigation District is a component unit of the County. Il ls reported in a separate column to emphasize that it is legally separate for accounting purposes from the County. Following are note disclosures relating to this component unit.

A. Organlzstlon

Victoria County Navigation District (the "District") was oreated by a vote of the electorate of Victoria County, Texas, at an election held on February 4, 1 947, under the provisions of Article 8263(h) V.A.T.S. (now codified into Chapter 62, Texas Water Code). The Board of Navigation and the Canal Commissioners (the 'Board') is the level of government which has oversight responsibility and control Over all activities related to the District's activities in the County.

Board members are apPOinted by the Commissioners' Court of the County and have decision-making authority, the power to designate management, the responsibility to Significantly influence operations, and primary accountability for fiscal matters including taxing authority.

B. Summary of Signifioant Accounting PoliCies

The accounting and reporting polioies of the District conform to generally accepted accounting principles (GAAP), as applicable to governmental units. For inclusion in this report, the District's operations are reported in a single Governmental Fund Type.

C. Deposits and Inyestments

As of December 31, 2005, the District had the following investments:

Investment Tyoe

U.S. Government Securities $

Total $

Interest Rate Risk

Fair Value

2.470,600

2 470 600

Weighted Average Maturity

2.5 years

In accordance with the District's investment policy, the District manages its exposure to declines In fair values by limiting the weighted average maturity of its investment portfolio for Investments to less than five years from the time of purchase. Specifically, investments of operating funds must have stated final maturities of three years or less and investments In capital project funds must have stated final maturities that do not exceed the expected completion date of the project for which the bonds were sold.

Credit Risk

II is the District's policy to limit its investments to those with ratings of not less than A or its equ ivalent.

The District's investments In the U.S. Government Securities had AAA ratings from both Standard & Poor's and Moody and Fitch.

50

NOTE 17: VICTORIA COUNTY NAVIGATION DISTRICT · (Continued)

C. Deposils and Investments - (Continued)

Concentration of Credit Risk

The District's Investment policy requires that the investment portfolio shall be diversified in terms of investment instruments, maturity scheduling, and financial institutions to reduce the risk of loss resulting from over concentration of assets in a specific class of investments, specific maturity or specific user. At year-end, the District was not exposed to concentration of credit risk.

CYli!gdjal Credit Risk - Deposjts

In the case of deposits, this Is the risk that in the event of a bank failure. the District's depoSits may not be returned to it. The District's investment policy requires that deposits at financial institutions be insured by the Federal Deposit Insurance Corporation ("FDIC') and/or collateralized by securities pledged to the District by the depository in an amount equal to at least 1 1 0% of the carrying value of deposits held. As of December 31, 2005, $5,029,185 of the District's bank balance of $5,037,91 3 was exposed to custodial credit risk because it was uninsured and collateralized with securities held by the District's depository.

Custodial Credit Risk · Investments

For an investment, this is the risk that, In the event of the failure of the CQunterparty, the District will not be able to recover the value of its investments or collsteral securities that are in the possession of an outside party. The District's Investment policy requires that securities be held in the name of the District or held on behalf of the District and that all securities are purchased using the delivery versus payment method. As of December 31 , 2005, and for the year then ended, the District was not exposed to any custodial credit risk.

D. Recell/ables

Receivables at December 31 , 2005 consisl of the following:

General

Gross receivables: Accounts $ 1 1 3,775 Ad valorem taxes 832,781 Interest 25,338 Other 150

Total gross receivables 972,044

Less: allowances 41,§�2

Total net recell/ables $ 930 405

$

$

Debt Service

1 8,867 $ 271,946

290,813

13,597

Total

1 32,642 1 . 104.727

25,338 150

1 ,262,857

55,236

277 21 A :iI,$ __ '.&..t11?QII,jI:..JBIloI?l.j,l

The DislJiel's governmental funds report deferred revenue In connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. The governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned.

51

NOTE 17; VICTORIA COUNTY NAVIGATION DISTRICT - (Continued)

D. Receivables - (Continued)

E.

At the end of the current fiscal year, the various components of deferred revenue and unearned revenue reported in the governmental funds were as follows:

Unavailable Unearned Total

General Fund Ad valorem taxes receivable $ 42,699 $ 1 , 1 1 2,61 0 $ 1 , 1 55,209

Debt Service Fund Ad valorem taxes receivable 30,907 337,677 368,584

$ Z�I§g§ i l �Qg l8Z :Ii j 523 Z93

The District's ad valorem property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real and business personal property located in the District. Ta1!es are delinquent by February 1 following the October 1 levy date. A statutory lien becomes effective on all property with unpaid taxes as of January 1 of the year following the assessment.

Capital Assets

The District's capHal asset activity for the year ended December 31 , 2005 was as follows :

Beginning Balance I ncreases Decreases

Governmental ac:tivities

Capital assets, not being depreCiated Land $ 8,497,073 $ 42,244 $ Construction in progress 1 , 1 1 8,214 1 , 1 18,214

Total capital assets, not being depreciated 9,615,287 42,244 1 ,1 18,214

Capital assets, being depreciated Improvements 5,751 ,820 1 ,528,230 M.P.R.R. Main Line Bridge 1 ,493,1 34 Equipment 4,735 1 .480

Total capital assets, being depreciated 7,249,689 1 ,529,71 0

Less accumulated depreciation for Improvements 4,562,491 184,695 M.P.R.R. Main Line Bridge 1 ,083,388 27,677 Equipment 2,446 972

Total accumulated depreciation 5,648,325 21 3,344

Total capital assets being depreciated, net 1,601,364 1,316,366

Governmental activities capital assets, net $ 1 1,216,661 $ 1 ,358,610 $1,118,214

Ending Balance

$ 8,539,317

8,539,317

7,280,050 1 ,493,1 34

6,21 5 8,779,399

4,747,186 1 , 1 1 1 ,065

3,418 5,861,669

2,917,730

$ 1 1,457,047

Depreciation expense of $213,344 was charged to the general government function/program in 2005.

52

NOTE 17: VICTORIA COUNTY NAVIGATION DISTRICT - (Continued)

F. Long-Term Debt

The following is a summary of general obligation bond transactions for the year ended December 31, 2005 for governmental activities:

Bonds payable at January 1 , 2005 Additions Retirements

Bonds payable at December 31, 2005

$ 3,005,000

260,000}

$ 2 745 000

Bonds payable at December 31 , 2005 is comprised of the following issue:

2003 General Obligation refunding bonds due in annual installments of various amounts beginning in 2005 through February 15, 2014; interest rate varies based on year of maturity and ranges from 3.0% to 3.75%. $ 2 745 090

Annual debt service requirements to maturity for the general obligation bonds are as follows:

MiilllJcilifilli erinci!;!al

2006 $ 265,000 2007 270,000 2006 285,000 2009 295,000 2010 305,000

201 1-201 4 1,325,000

Total ;!! � Z�g CQQ

$

Interest

84,731 76,706 68,381 59,661 50,881 98,047

438 427

Total

$ 349,731 346,706 353,381 354,681 355,881

1.423,047

$ 3 183 427

In 2004 the District issued $2,860,000 of General Obligation Refunding Bonds with interest rates varying from 3.0% to 3.75% to currently refund the District's General Obligation Bonds, Series 1 994 with interest rates varying from 5.0% to 7.0% and to provide funding for costs of issuance. As a result, the Series 1994 bonds are considered defeased and the liabilities have been removed from the governmental activities column on the statement of net assets. The 1994 Series that was refunded has $2,640,000 of bonds outstanding at December 31, 2005.

G. Commitments and Contingfilncifils

Grant Programs

The District participates in numerous state and federal grant programs which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies; therefore, to the extent that the District has not complied with rules and regulations governing the grants, refunds of any money received may be required and the oollectibility of any related receivable at December 31 , 2005 may be impaired. In the opinion of the District, there are not significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants; therefore. no provision has been recorded In the accompanying combined financial statements for such contingencies.

53

NOTE 17: VICTORIA COUNTY NAVIGATION DISTRICT - (Continued)

G. Commitments and Contingencies - (Continued)

H.

Construction Commitments

On November 17, 1994, the District and the West Side Calhoun County Navigation District (collectively known as the 'local sponsors') entered into a Project Cooperation Agreement with the Department of the Army for the alteration of the Channel to Victoria, Victoria County, Texas authorized by Section 3(15) of the Water Resources Development Act of 1988. The project entails deepening and widening of the Channel to Victoria from 9 feet deep and 1 00 feet wide to 1 2 feet deep and 125 feet wide. Of the cash contributions required by the local sponsors, West Side Calhoun County Navigation District contributes 26.5%, while the District conlributes 73.5%.

As of December 31 . 2005, the District has contributed $3,870,694 directly to the Department of the Army for this project of which $4,173,123 was spent as of year-end. At December 31. 2005, the local sponsors also have an escrow account of $561 at Wells Fargo Bank Texas, NA, which Is available to be withdrawn by the Department of the Army in accordance with the Project Cooperation Agreement Any unspent funds remaining in escrow when the project is completed, will be paid out to the local sponsors .

The activity in the escrow account for the year ended December 31 , 2005 Is as follows:

Transaction

Balance at 1/1/05 Withdrawals Interest received

Balance at 1 2/31/05

Ri§k t::dilCIl!.lIlIll!l1l1

Victoria County Navigation District

$ 83,638 (83,496)

270

$ 412

West Side Calhoun County Total

$ 30,155 $ 1 1 3,793 (30,104) ( 1 1 3,600)

98 368

$ 149 $ 561

The District is exposed to various risks of loss related to torts. theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District purchased commercial insurance to cover risks associated with potential claims during fiscal year 2005. There were no significant reductions in coverage in the past fiscal year, and there were no settlements exceed ing insurance coverage for each of the past three fiscal years.

I. Interrund Receivables and Pilvabl!lli

At various times during the year the District's General Fund receives payments for property tax collections and remits these to the Debt Service Fund. At December 31, 2005 the General Fund owed the Debt Service Fund a total of $67,278.

NOTE 18: VICTORIA COUNTY CHILD WELFARE BOARD

As described in Note 1 , the Victoria County Child Welfare Board is a component unit of the County. It is reported in a separate column to emphasize that il is legally separate for accounting purposes from the County. Following are note disclosures relating to this component unit:

54

NOTE 18: l£IC!ORIA COUNTY CHILD WELFARE BOARD - (Continued)

A. Organization

The Victoria County Child Welfare Board (the Board) was established by the Commissioners' Court of Victoria County, Texas on August 8, 1 938. The Board is a county-wide, jointly financed, stateadministered program of child protection to meet the needs of abused, neglected and abandoned children, and children with special needs. The board members of the Victoria County Chitd Welfare Board have decision-making authority, the power to designate management, the responsibility to Sign ificantly influence operations. and primary accountability for fiscal matters. The Board Is considered a component unit of Victoria County, Texas under the guidelines established by Governmental Accounting Standards Board (GASB) Statement No. 14.

B. SummarY of Significant Accounting Policies

The accounting and reporting policies of the Board conform to accounting principles generally accepted in the United States of America (GAAP). as applicable to governmental units. For inclusion in this report. the Board's operations are reported in a single Governmental Fund Type.

C. Deposits and Investments

The Board has deposits that are held by two finanCial Institutions within Victoria County, Texas. At December 31, 2005 and 2004, the carrying amount of the Board's deposits was $1 32,634 and $1 47,229, respectively. The bank balances were $1 32,933 and $147,129, respectively. The deposits are Collateralized by FDIC coverage as follows:

Insured by FDIC

Amount of Board's depOSits uncollateralized

by financial institutions

Total

Texas Statutes authorize the Board to invest in:

1 . obligatlons of the U. S. Treasury or its agenCies;

2. direct obligations of the State of Texas or its agencies;

2005 2004

$ 132,933 $ 147.129

$ 132 933 $ 147,129

3. other obligations. the principal of and Interest on which are unconditionally guaranteed or insured by the State of Texas or the United Stales;

4. obligaHons of states, agencies, counties, or cities rated A or better by a national investment rating firm;

5. certificates of deposit that are insured by the Federal Deposit Insurance Corporation or secured by obligations having a market value of at least the principal amount of the certificates; and

6. fully collateralized direct repurchase agreements.

As of December 31. 2005. the Board held $131 .600 invested In FDIC Insured certificates of deposit. The Board held no other investments during the current fiscal year.

55

NOTE 18: VICTORIA COUNTY CHILD WELFARE BOARD - (Continued)

Il!OTE 19:

D. Federal Title IY-E Reimbursement Program

The Federal Title IV-E Program, whereby the federal government reimburses the Board for monies spent on childcare and general support costs during the year, began in 1997. The amount reimbursed to the Board is determined based on a calculation made by the federal government. As of December 31 , 2005, $9, 1 26 was receivable pertaining to the Title IV-E Reimbursement Program.

E- Retirement Plan

The Board set up a retirement plan during 1 999 for their employees. Employees who are reasonably expected to receive at least $5,000 in compensation for the calendar year and employees who have received at least $5,000 in compensation during any one calendar year preceding the current calendar year are eligible to participale in the plan. Employees may contribute up to $6,000 of their annual salary. The Board matches up to three percent of an employee's annual salary. For the years ended December 31, 2005 and 2004, the Board made contributions of $916 and $748, respectively, on behalf of its employees.

F. Budgetary Legal Compli!\nce

For the fIScal year ended December 31 , 2005, the Board complied with budgetary restrictions except as follows:

Fund Variance

General Fund

Bank oharges $ 146 Discretionary fund 330

payroll expenses 817

Retirement contributions 66

Cell phone and pager 162

Office supplies 1 02

Travel 1 ,258

CITIZENS MEDICAL CENTER

As described in Note 1 , Citizens Medical Center is a component unit of the County. It is reported In a separate column to emphasize that It Is legally separate for accounting purposes from the County. Following are note disclosures relating to this component unit:

A. Organization

Citizens Medical Cenler (the "Medical Center") is !l 368-bed facility that is a component unit of the County of VIctoria, Texas. The Medical Center is operated by a Board of Directors that is appointed by the County Commissioners' Court. Its primary mission is to provide health care services to the citizens of Victoria County. The Medical Center primarily earns revenues by providing inpatient, outpatient, skilled nursing, home health, and emergency care services to patients in the Victoria County and surrounding areas. The financial statements of the Medical Center also include accounts of the Citizens Medical Center Foundation (the "Foundation"). The Foundation was established to foster, support and encourage the activities and purposes of the Medical Cenler, and to advance its objectives, including sponsorship of, and assistance to, the Med ical Center.

56

NOTE 19: CITIZI:NS MI:DICAL CENTER - (Continued)

B. Summary of Significant Accounting Policies

The financial statements of the Medical Center have been prepared on the accrual basis of accounting using the economic resources measurement focus. Revenues, expenses, gains, losses, assets, and liabilities from exchange and exchange-like transactions are recognized when the exchange transaction takes place. Operating revenues and expenses inClude exchange transactions. Investment income and interest on capital assets-related debt are included in nonoperating revenues and expenses. The Medical Center first applies restricted net assets when an expense or outlay is incurred for purposes for which both restricted and unrestricted net assets are available.

The Medical Center prepares its financial statements as a business-type activity In conformity with applicable pronouncements of the Govemmental Accounting Standards Board (GASB). Pursuant to GASB Statement No. 20, the Medical Center has elected to apply the provisions of all relevant pronouncements of the Financial Accounting Standards Board (FASB) that were Issued on or before November 30, 1989, and do not conflict with or contradict GASa pronouncements.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

The Medical Center considers all liquid investments, with original maturities of three months or less, to be cash equivalents. At June 30, 2005, cash equiyalents consisted primarily of money market mutual funds.

Risk Management

The Medical Center is exposed to various risks of loss from torts; theft of, damage to and destruction of assets; business interruption; errors and omissions; employee injuries and illnesses; natural disasters; employee disability; and employee health, dental and accident benems. Commercial insurance coverage Is purchased for claims arising from such matters other than those related to general and professional liability, employee health care benefits, and workers' compensation. Settled claims have not exceeded this commercial insurance coverage in any of the three preceding years.

The Medical Center is self-insured for a portion of Its exposure to risk of loss from general and prOfessional liability, employee health claims, and workers' compensation. Annual estimated provisions are accrued for the self-insured portion of general and professional liability, employee health claims and workers' compensation, and include an estimate of the ultimate costs for both reported claims and claims incurred but not yet reported.

57

NOTE 19: CITIZENS MEDICAL CENTER - (Continued)

B. Summary of Significant Accounting Policies - (Continued)

Investments in Debt Securities

Investments In debt securities are carried at fair value which is determined using quoted market prices. Investment income includes dividend and interest income, realized gains and losses on investments carried at other than fair value, and the net change for the year in the fair value of investments oarried at fair value.

Supplies

Supply inventories are stated at the lower of cost. determined using the first-in, first-Qut method, or market.

Capital Assets

Capital assets are recorded at oost at the date of acquisition, or fair value at the date of donation if acquired by gift. Depreciation is computed using the straight-line method over the estimated useful life of each asset. Assets under capital lease obligations and leasehold improvements are depreciated over the shorter of the lease term or their respective estimated useful lives. The following estimated useful lives are being used by the Medical Center:

Land improvements Buildings, building improvements and fixed equipment Major movable equipment

Net Assets

5 to 25 years 3 to 60 years 3 to 25 years

Net assets of the Medical Center are classified In three oomponents. Net assets Invested In caplt.:.1 assets, net of related debt, consist of capital assets, net of accumulated depreciation. and reduced by the current balances of any outstanding borrowings used to finance the purchase or construction of those assets. Restricted expendable net assets are noncapltal assets that must be used for a particular purpose. as specified by creditors, grantors, or donors external to the Medical Center, including amounts depoSited with trustees as required by revenue bond indentures, reduced by the outstanding balances of any related borrowings. unrestricted net assets are remaining net assets less remaining liabilities that do not meet the definition of invested in capital assets, net of related debt, or restricted expendable.

Net Patient Service Revenue

The Medical Center has agreements with third·party payers that provide for payments to the Medical Center at amounts different from Its established rates. Net patient service revenue Is reported at the estimated net realizable amounts from patients. third-party payers and others for services rendered and Includes estimated retroactive revenue adjustments and a provision for uncollectible accounts. Retroactive adjustments are considered In the recognition of revenue accrued on an estimated basis In the period the related services are rendered and such estimated amounts are revised In future periods as adjustments become known.

Deferred Financing Cpsts

Deferred financing costs represent oosts incurred in connection with the Issuance of long-term debt. Such costs are being amortized over the term of the bond Issues using the straight-line method. The unamortized amount of deferred financing costs is included In other assets on the balance sheet.

58


B. Summary of Significant Accgunting Policies - (Continued)

Charity Care

The Medical Center provides care without charge or at amounts less than its established rates to patients meeting certain criteria under Its charity care policy. Because the Medical Center does not pursue collection of amounts determined to qualify as charity care, these amounts are not reported as net patient service revenue.

Income Taxes

As an essential government function of the County, the Medical Center is generally exempt from federal and state income taxes under Section 1 1 5 of the Internal Revenue Code and a similar provision of state law. However, the Medical Center is subject to federal income tax on any unrelated bUSiness taxable income.

Estimated Professional Liability Costs

The Medical Center has set aside certain assets for the payment of self-insured professional liability losses and related costs. An annual estimated provision is accrued for the self-insured portion of professional liability claims and includes an estimate of the ultimate costs for both reported claims and claims incurred but not reported.

Compensated Absences

Medical Center policies permit most employees to accumulate vacation benefits that may be realized as paid time off or. in lim�ed circumstances, as a cash payment. Expense and the related liability are recognized as vacation benefits are earned. Compensated absence liabilities are computed using the regular pay and termination pay rates in effect at the balance sheet date plus an additional amount for compensation-related payments such as social security and Med icare taxes computed using rates in effect at that date.

Patient Accounts ReceIVable

The Medical Center reports patient accounts receivable for services rendered at net realizable amounts from third-party payers, patients and others. The Medical Center provides an allowance for doubtful accounts based upon a review of outstanding receivables, historical coUection information and existing economic conditions. As a service to the patient, the Medical Center bills third-party payers directly and bills the patient when the patient's liability is determined. Patient accounts receivable are due in full when billed. Accounts are considered delinquent and subsequently written off as bad debts based on individual credit evaluation and specific circumstances of the account.

Reclassificationl:!

Certain reclassifications have been made to the 2004 financial statements to conform to the 2006 financial statement presentation. The reclassifications had no effect on the results of operations.

59


C. Net Patient Service Revenue

The Medical Center has agreements with third-party payers that provide for payments to the Medical Center at amounts different from its established rates. These payment arrangements Include:

Medicare

Inpatient acute care, skilled nursing, and substantially all outpatient services rendered to Medicare program beneficiaries are paid at prospectively determined rates. These rates vary according to a patient classification system that Is based on clinical, diagnostiC. acuity and other factors. The Medical Center is reimbursed for certain services at tentative rates with final settlement determined after submission of annual cost reports by the Medical Center and audits thereof by the Medicare fiscal intermediary, The Medicare fiscal intermediary has audited the Medical Center's cost reports through June 30, 2003.

Medjr;:aid

Inpatient services are paid under a prospective payment system. Outpatient services rendered to Medicaid program beneficiaries are primarily reimbursed based on a cost reimbursement methodology. The Medical Center is reimbursed for certain services at a tentative rate with final settlement determined after submission of annual cost reports by the Medical Center and audits thereof by the Medicaid fiscal intermediary.

Approximately 47% of net patient service revenues are from participation in the Medicare and statesponsored Medicaid programs for the year ended June 30, 2005. Laws and regulations governing the Medicare and Medicaid programs are complex and SUbject to Interpretation and change. As a result, it is reasonably possible that recorded estimates will change materially in the near term.

The Medical Center has also entered into payment agreements with certain commercial insurance carriers, health maintenance organizations, and preferred provider organizations. The baSis for payment to the Medical Center under these agreements inclUdes prospectively determined rates per discharge, discounts from established charges and prospectively determined daily rates.

In 2005, net patient service revenue includes approximately $5.21 6.000 of funds received through the Medicaid Upper Payment Limit program.

D. 8cCQunts Receivable

The Medical Center grants credit without collateral to its patients, many of whom are area residents and are insured under third-party payer agreements. Patient accounts receivable at June 30, 2005, consisted of these amounts:

Patients and their Insurance carriers Medicare Medicaid

Less allOWance for uncollectible amounts

60

$ 31 ,366,577 3,1 58,699

619.490 35,1 44,766 22,925.231

$ 1 2.219,535

NOTE 19; CITIZENS MEDICAL CENTER - (Continued)

E. Capital Assets

F.

Capital asset activity for the year ended June 30, 2005 was as follows:

Balance June 30. 2004 AddlUons

Land and land Improvements $ 5.531,424 $ 65,427 Buildings, improvements,

and fixed equipment 85,734,188 773,937 Major moveable equipment 73,362,095 2,965,764 Construction in progress �,m,HiH a Q�5,25�

1�7 ��!l!!1 � ll�Q 1Q� Less accumulated depreCiation

Land Improvements 1 ,352,985 58,725 9ulldlng, lmprov"""onts, and bed equipment 34,��3,270 2,676,302

Major moveable equipment §Q,!l!!,U�Q !,HMQl

96,552,794 6,876,026

Capltat assets, net $ 79912 847 $ (45 625)

Deposits Investments and Investment Income

Deposits

T�n!l!f8!:1 Ols�osals

S $

469,269 4,744,225 (3,514,544)

1�,2l Mil!!) (� � 14 !l.11)

12,zll.4,jllQ) (2,7B4,160)

$ (732 3B4)

Balance June 30, 200�

$ 5,596,851

86,977.394 77,557,560

:i.!lH,�a5 1 7Q �ll1 �!lll

1 ,411 ,710

37,229,�72

�2,QQM�Q 100,644,662

$ 70,936 saa

Custodial oredit risk is the risk that in the event of a bank failure, a government's deposits may not be returned to It. The Medical Center's demand and time deposits are Insured by the Federal Deposit Insurance Corporation and collateralized by pledged U,S, government securities held by the depository bank in the name of Viotoria County, Texas. The Medical Center's deposit policy for oustodial oredit risk requires compliance with the provisions of state law which requires collateralization of all deposits with federal depository insurance and other acceptable collateral in specific amounts.

At June 30, 2005, the Medical Center's bank balance was $38,547,860, None of these deposits were exposed to oustodial oredit risk at June 30, 2005,

Investments

The Medical Center's internally deSignated investments are made by the Victoria County Treasurer and either held by the county or bank trust departments in the county's name, In accordance with the Medical Center's Investment policy, these investments are in either money market mutual funds or government obligations,

At June 30, 2005, the Medical Center had the following investments and maturities:

Type Fair Value

U,S. agencies obligations $ 25,023,51 B Money market mutual funds 4,§!§!7,681

30,021 , 199 Accrued investment income 263,7§8

:li 30 284,,967

61

$

:li

Maturitjes jn Years Less

Than 1 1-5

$25,023,518 $ 4,§!91,681

4,997,681 25,023,518 2§;!,Z§£I

fi 261,449 S $

6-10


F. Deposits. Investments and Inyestment Income - (Continued)

Investments - (Continued)

• Interest Rate Risk - As a means of l imiting its exposure to fair value losses arising from rising interest rates, the Medical Center's investment policy limits Its Investment portfolio to maturities of four years or less. The money market mutual funds are presented as an investment with a maturity of less than one year because they are redeemable in full immediately.

• Credit Risk - Credit risk Is the risk that the issuer or other counterparty to an investment will not fulfill its obligations. At June 30, 2005, the Medical Center's investments not directly gUaranteed by the U.S. government were rated as follows:

Investment

U.S. agencies obligations Money market mutual funds

Moody's

Aaa Aaa

S&P

AM AM

Fitch

AM Not rated

• Concentration of Credit Risk - The Medical Center places no lim it on the amount that may be invested in U.S. agencies obligations. At June 30, 2005, Individual Investments that exceeded 5% of the total fair value of all investments are shown below.

Federal Home Loan Mortgage Corporation, July 6, 2006 Federal Home Loan Bank, August 18, 2006 Federal Home Loan Mortgage Corporation, August 27, 2007 Federal National Mortgage Association, September 28, 2007 Federal National Mortgage ASSOCiation, October 29, 2007 Federal Home Loan Bank, Oecember 28, 2007 Federal National Mortgage Association, January 1 5, 2009

Summary of Carrying Values

2005

Fair Value

!II 1 ,999,000 3,998,125 1 ,633,991 3.498,906 2,030,492 2,148,925 2,036,871

Ii H 346 :llQ

The carrying values of deposits and investments at June 30, 2005 are as follows:

Carrying value Deposits Investments

Included in the following balance sheet captions Cash and cash equivalents Restricted cash and cash equivalents - current Restricted cash Bnd CBsh equivalents - noncurrent Other long-term investments

62

$ 38,681 ,547 30,284,967

S 68,966,514

$ 38,681 ,547 2,316,907 4,776,275

23,191,785

:Ii 68966514

Percent of Total

6.60 1 3.20

5.40 1 1 .55

6.70 7.10 6.73

5Z 26

NOTE 19; CITIZENS MEDICAL CENTER · (Continued)

F. DepOsits, Investments and Investment Income · (Continued)

Investment Income

Investment income of $1 ,628,286 for the year ended June 30, 2005 consists primarily of dividends and interest income.

G, Long-term Obligations

The following is a summary of long-term obligation transactions for the Medical Center for the year ended June 30, 2005:

Balance B�I�nce June 30, Jun. 30, Current

2Q04 ��i�gn§ Qmhl¥tiS2I.V.i �QQ� E>illi20 Long-term debt

Sorios 1994 Bonds (A) $ 23,905,000 $ $(3,050,000) $ 20,855,000 $ 1,330,000 Selies 1999 Bonds (B) lM�!,j,QQQ (��5,QQQ) 1�,440,OOO 930,000

Total long-t.rrn debt 4�,23Q,QQQ [J S;}:2 QDg) ;}lil �a§ ggg 2 2!l!l QQQ Other long-terrn liabilities

Self .. insured prof .... lon.1 liability 21Q,QQQ 21Q,QQQ

Total long-terrn liabilities � 43 440 000 $(3 9�5 000) � �9 505,Ogg II 3 g§g OOg

(A) Due January 1 , 2016; principal payable annually on January 1 ; Interest payable semiannually at Interest rates varying between 4,00% to 6,25%; secured by the Medical Center's net revenues and trustee held assets,

(B) Due February 1 5, 2019; principal and interest payable semiannually at interest rates varying between 4,30% and 6.25%: secured by the Medical Center's net revenues and trustee held assets,

Under the terms of the Revenue Bond Indentures, the Medical Center is required to maintain certain funds with a trustee, Accordingly, these funds are included as assets held by trustee for debt service and capital acquisitions in the balance sheets, The Revenue Bond Indentures also place limits on the incurrence of additional borrowings and require that the Medical Center satisfy certain measures of financial performanoe as long as the bonds are outstanding .

The debt service requirements as of June 30, 2005, are as follows:

Y!illl[� i;[lr.1i!lg �!.!n!il �Q, TQ!:il1 Princi(;!al

2006 $ 4,498,529 $ 2,260,000 2007 4,61 7,939 2,51 0,000 2008 4,51 2,601 2,545,000 2009 4,651,036 2,835,000 2010 4,639,598 2,990,000

201 1 .201 5 22,412,224 16,975,000 2016·2020 1 Q,&Q:1,I.i§� fil,1 80,000

$ gQIr.1��I!1:�Q I 3£1 2Sg ggg

Interest

$ 2,238,529 2,1 07,939 1 ,967,601 1 ,81 6,036 1 ,649,596 5,437,224 1,024,563

$ 16 241 490

During 2005, the Medical Center paid $1 ,645,000 of the 1 994 bonds prior to their scheduled maturity at a price of 102% of the par amount of the bonds,

63


H. Derivative Instruments

Objective of the Derivative Instruments

The Medical Center's asseVliability strategy is to have a mixture of fixed and variable-rate debt to take advantage of market fluctuations. As a strategy to maintain acceptable levels of exposure to the risk of changes in future cash flows due to interest rate fluctuations and to lower its borrowing costs when compared against fixed-rate debt at the time of issuance, the Medical Center entered into six separate total return swap agreements and one fixed pay interest rate swap agreement related to its Series 1 994 revenue bonds. the total return swap agreements effectively changed 100 percent of the Series 1 994 revenue bonds to a variable interest rate obligation. The fixed pay swap agreement effectively converted $1 0,000,000, or appro)(imately 50 percent of the Series 1994 debt, back to a fixed rate of 3.05 percent, which is lower than the original effective fixed interest rate of the 1 994 bonds.

Terms

The agreements were entered into on September 30, 2004, and expire at various dates through January 1 , 2016. The agreements required no initial net cash receipt or payment by the Medical Center. Under the fixed pay swap agreement, the Medical Center will receive interest from the counlerparty at 67 percent of the London Interbank Offering Rate (UBOR) and will pay interest to the counterparty at a fixed rate of 3.05 percent on an amortizing notional amount of $10,000,000.

Under the total return swap agreements, the Medical Center will pay interest equal to the BMA Index plus 24 basis points, and will receive interest at rates ranging from 6.00 percent to 6.25 percent on an amortizing notional amount, initially $20,855,000. The Medical Center will pay an additional amount of the counterparty of $41 7,1 00 on January 2, 2006, and $208,550 on January 1 , 2007. At the termination date of each total return swap agreement, the Medical Center will pay or receive the difference in the fair value of the underlying portion of the Series 1994 bonds and the base price of the swap's notional amount.

The notional amount of the total return swap and the principal amount of the aSSOCiated debt were equal at inception of the swap. Each swap agreement expires prior to the payment of a corresponding amount of principal on the Series 1 994 bonds. The fixed pay swap's notional amount was not directly associated to any portion of the Series 1 994 bonds. Under the agreement, the Medical Center pays or receives the net interest amount monthly, with the monthly settlements Included in interest expense.

Fajryalue

As of June 30, 2005, the agreements had an aggregate fair value of ($497,000) as calculated by a third-party financial advisor. For the fixed pay swap agreement, the fair value was calculated using the par-value method, i.e., the fixed rate on the swap was compared with the current fix rates that could be achieved in the marketplace should the swap be unwound. The fixed-rate component was valued by discounting the fixed-rate cash flows using the current yield to maturity of a comparable bond. The variable-rate component was assumed to be at par value because the Interest rate resets to the market rate at every reset date. The fair value was then calculated by subtracting the estimated market value of the fixed component from the established market value of the variable component.

For the total return swaps, the fair value was based on the difference in the total return base price (103 percent of the bonds par value) at June 30, 2005, compared to the fair market value of the Series 1 994 bonds based on current traded value. The fair value of the total return swap agreements Include the 2 percent and 1 percent premium payments due on January 1 , 2006, and January 1 , 2007.

The premium payments due January 1 , 2006 and 2007. which total $625,650. are recorded as a liability on the Medical Center's balance sheet. The remaining fair value of the agreement Is not recognized In the financial statements.

64

NOTE 19: CITIZENS MEDICAL CENTER · (Continued)

H. Derivative Instruments · (Continued)

Interest Rate Risk

The total return swaps increase the Medical Center's exposure to interest rate risk. As the BMA Index increases, the Medical Center's net payments on the total return swaps increase.

Credit Rlsls

The swaps' fair values represent the Medical Center's credit exposure to the counterparty as of June 3D, 2005. Should the counterparty to this transaction fail to perform according to the terms of the swap agreements, the Medical Center has a maximum possible loss equivalent to the swaps' fair value at that date. As of June 3D, 2005, the Medical Center was not exposed to credit risk because the swap had a negative fair value. The swap Counterparty was rated AA- by Fitch Ratings, A+ by Standard & Poor's, and Aa3 by Moody's Investor Service, Inc., as of June 3D, 2005.

Basis Risk

The swaps expose the Medical Center to basis risk should the relationship between UBOR and BMA rats bonds change in a manner adverse to the Medical Center. If an adverse change occurs In the relationship between these rates, the expected cost savings may not be realized.

Termination Risk

The Medical Center or the counterparty may terminate the swap If the other party fails to perform under the terms of the contract. If the swap is terminated, the synthetic variable rates under the total return swap and fixed rate under the fixed pay swap would cease, increasing the net interest cost to the Medical Center. Also, if the swap has a negative fair value at the time of termination, the Medical Center would be liable to the counterparty for a payment equal to the swap's then fair value. Either party may term inate any or all of the total return swaps with advance written notice.

Rolloyer Risk

The Medical Center is exposed to rollover risk on many of the total return swaps, which mature or may be terminated prior to the maturity of the Series 1994 revenue bonds. When these swaps terminate, or in the case of the termination option, if the counterparty exercises its option, the Medical Center will not realize the synthetic rate offered by the total return swaps on the bonds. In addition, the Medical Center will be subject to disproportionate interest rate risk subsequent to the latest total return swap maturity (at latest November 2, 201 1 , unless earlier terminated by the counterparty) as it is obligated to pay fixed rates on the remaining outstanding bonds and will also pay fixed rates and receive variable retes on the interest rate swap through January 2016.

65


H. Derivative Instruments - (Continued)

I.

Swap eeymenls and Associated Debt

Using rates as of June 30, 2005, debt service requirements of the Series 1994 bonds and net swap payments, assuming current interest rates remain the same, for their term are set forth in the table shown below. As rates vary, net swap payments will vary.

Series 1994 Bonds

Principal Interest

2006 $ 1 ,330,000 $ 1 ,250,949 2007 1 ,535,000 1 ,164,999 2008 1 ,525,000 1 ,072,436 2009 1 ,765,000 971,671 2010 1 ,665,000 860,003

201 1 -201 5 1 0,365,000 2.470.469 2016-2020 2.470,000 77,1 88

$ 20,855,090 ill 7 887 Q1S

Self-Insured Claiooll

$

ill

I nterest Rate Swap, Net

(684,266) (613,391) (542,004) (463,229) (432,580) (41 0,560)

46,166

(3 099.864)

Total

$ 1 ,896,683 2,086,608 2,055,432 2,273,642 2,292,423

1 2,424,909 2.593,354

$ 25,623 951

The Medical Center partially self-insures the cost for its general and professional liability, employee health care benefits, and workers' compensation. The Texas Tort Claims Act limits the Medical Center's general and professional liability to $1 00,000 per claim and $300,000 per occurrence, with no annual aggregate. The Medical Center purchases annual stop-loss Insurance coverage for all employee health care benefrts and workers' compensation claims. Stop-loss coverage began at $300,000 for workers compensation claims in 2005. Stop-loss coverage for employee health claims began at $425,000 during 2005.

Losses from asserted and unasserted claims identified under the Medical Center's incident reporting system are accrued based on estimates that incorporate the Med ical Center's past experience. as well as other oonsiderations, includ ing the nature of each claim or incident and relevant trend factors. Management believes that the funds deSignated by the Medical Center related to self-Insured general and professional liability and the accrued liabilities for all self-insured claims are suffiCient to cover any losses it may incur. It is reasonably possible that the Medical Center's estimate of losses will change by a material amount in the near term.

66

NOTE 19; CITIZENS MEDICAL CENTER . (Continued)

I .

J.

Self-insured Claims · (Continued)

Activity in the Medical Center's self-Insured claims liability accounts during 2005 and 2004 are summarized as follows:

2005 Employee General and

Health Care Workers' Professional Benefits Com£!ensation Liabilil:i

Balance, beginning of year $ 1 ,029,106 $ 766,770 $ 21 0,000 Current year claims incurred

and changes in estimates for claims incurred in prior years 8,490,823 329,696

Claim and expenses paid, net (7,277,739) 1410,838)

Balance, end of year Ii jil.242.1QIl $ 685 628 $ 210.000

2004 Employee General and

Health Care Workers ' Professional Benefits Com£!ensation Liabilit�

Balance, beginning of year $ 700,000 $ 329,030 $ 21 0,000 Current year claims incurred

and changes In estimates for claims incurred in prior years 7,749,437 828,645

Claim and expenses paid, net 17.420,331 ) 1390,905)

Balance, end of year $ 1 .029.106 $ 766.ZZQ � 210 000

Charity Care

In support of its mission, the Medical Center voluntarily provides free care to patients who lack financial resources and are deemed to be medically Indigent. Because the Medical Center does not pursue collection of amounts determined to qualify as charity care, they are not reported in net patient service revenue. In addition, the Medical Center provides services to other medically indigent patients under certain government-reimbursed public aid programs. Such programs pay providers amounts which are less than established charges for the services provided to the recipients and many times the payments are less than the cost of rendering the services provided.

In addition to uncompensated charges, the Medical Center also commits significant time and resources to endeavors and critical services wh ich meet otherwise unfilled community needs. Many of these activities are sponsored with the knowledge that they will not be self-supporting or financia lly viable. Such programs include health screening and assessments, prenatal education and care, community educational services and various support groups.

K. Related Party Transactions

The County maintains custOdy of the Medical Center's operating cash acoounts and is responsible for obtaining appropriate collateralization of suoh accounts. The County issues debt on behalf of the Medical Center and invests the unadvanced proceeds. The Investment income attributable to deposits of the 1 994 and 1 999 bond funds, net of amounts capitalized, are included In nonoperating income.

67

NOTE 19: CITIZENS MEDICAL CENTER · (Continued)

L. Pension Plan

Defined Benefit Plan

The Medical Center sponsors a defined benefit pension plan for eligible employees within a costsharing multiple-employer retirement program sponsored for member hospitals by the Texas Hospital Association (THA). Health SharefTHA Is the administrator of the plan. The plan provides retirement. disability, and death benefits to plan mem bers and their beneficiaries. The Medical Center's Board of Directors have the sole authority to establish and amend benefit provisions of the plan. There is no publicly available financial report for the plan.

Funding Policy

The authority to establish and amend the contribution requirements of plan members and the Medical Center is vested in the Medical Center's Board of Directors. Most plan members are required to contribute 3% of their annual covered salary. The Medical Center Is required 10 contribute at an actuarially determ ined rate .

Annual Pension Cost and Net Pension Obligation (Assell

The Medical Center's annual pension cost and net pension obligallon (asset) to the plan for 2006 and 2004 were as follows:

Annual required contribution Interest on net pension obligation Adjustmenl to annual required contriblJtlon Annual pension cost Contributions made Decrease in net pension obligation (asset) Net pension obligation (asset)

at beginning of year

2005 $ 1 ,294,667 $

(29,990) 45,927

1 ,31 0,604 (1.1 57.100)

1 53,504

(378.819)

20Q4 1 ,21 8,000

6,014 (9.107\

1 ,214,907 (1 .668.900)

(453,993)

75.174

Net penSion obligation (asset) at end of year $ (225,315) "$_� .. (3",7 ... 8 ... r8u.1",,,9)

The net pension asset is included in other assets on the 2005 balance sheet.

The annual required contributions for 2005 and 2004 were determined as part of an actuarial valuation on MarCh 1 , 2005 and 2004, respectively, using the aggregate actuarial cost method. The actuarial assumptions Included Investment rate of return of 8% (net of administrative expenses), and prOjected salary increases of 6.6% beginning at age 20, decreasing thereafter to 5-0% at age 65 and averaging 5.70/0. The actuarial assumptions included an inflation component of 4.0%. The actuarial value of assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments over a five"year period. There was no separately determined unfunded actuarial accrued liability and no amortization period at the February 28, 2005 and February 29, 2004, valuation due to the actuarial cost method being used.

Trend Infonnation

Year Ended

2005 2004 2003

Annual Pension Cost (APC)

$ 1 ,31 0,604 1 ,1 24,907

730,646

Percentage of APC Contributed

68

88% 1 37% 54%

Net Pension Obligation (Asset)

$ (225,315) (378,819

75,174

NOTE 19: CITIZENS MEDICAL CENTER . (Continued)

M. Designated Net Assets

At June 30, 2005 and 2004, unrestricted net assets have been designated by the Medical Center's Board of Directors for the following purposes:

Capital acquisitions Self-insured professional liability Self-insured health care

$

2005

22,650,492 $ 826,702 300,362

2004

20.314.745 801 ,322

86,829

Designated net assets remain under the control of the Board of Directors. which may at its discretion later use these net assets for other purposes.

N. Contingencies

In the normal course of business, the Medical Center is, from time to time. subject to allegations that may or do result in litigation. Some of these allegations are in areas not covered by the Medical Center's self-insurance program (discussed elsewhere in these notes) or by commercial insurance; for example. allegations regarding employment practices or performance of contracts. The Medical Center evaluates such allegations by conducting investigations to determine the validity of each potential claim. Based upon the advice of legal counsel. management records an estimate of the amount Of ultimate expected loss, if any, for each. Events could occur that would cause the estimate of ultimate loss to differ materially in the ne!lr term.

69

Required Supplementary Information

COUNTY OF VICTORIA, TEXAS MAJOR GOVeRNMENTAL FUND - GeNERAL FUND SCHEDULE OF REVENUES, EXpeNDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts

Original Final Budgetary Budget Budget Basis

REVENUES Taxes $ 16,407,506 $ 16,942,506 $ 1 7,770,872 Fees of office and user fees 1 ,51 1 ,000 1 ,51 1 ,000 1 ,697,269 Intergovernmental 4,641 ,600 4,737,470 4,333,915 Fines and forfeitures 1 ,095,500 1 ,095,500 1 ,337,420 Investment income

Interest 150,000 1 50,000 409,202 Licenses and permits 34,950 34,950 34,034 Contributions 400 6,790 6,424 Miscellaneous 579,567 674,567 756,624

Total revenues 24,420,523 25,152,783 26,345,760


General government 12,1 76,690 12,533,298 12,060,545 PubliC safety 9,148,212 9,550,922 9,212,078 Culture and recreation 1 ,246,351 1 ,252,210 1 ,236,746 Public health 58,186 58,186 57,338

Total expenditures 22,629,439 23,394,616 22,566,705

Excess (deficiency) of revenues over expenditures 1 ,791,084 1 ,758,167 3,779,055

OTHER FINANCING SOURCES (USES) Sale of assets 10,000 1 1 0,000 293,939 Transfers In 265,000 307,274 307,273 T ranafers out (2,086,084) (2,189,21 1 ) (2,004,855)

Total other financing sources (uses) (1,791,084) (1,771 ,937) (1,403,643)

Change in fund balance (1 3,770) 2,375,412

Fund balanoe, January 1 4,596,751 4,596,751 4,596,751

Fund balance, December 31 $ 4,5961751 $ 4,582,981 $ 619721163

explanation of differences: The County budgets on the cash basis of aocounting. Therefore, under the budgetary baSiS, revenues are recognized as collected and expenditures when paid.

The accompanying notes are an integral part of this schedule.

70

Budget to GMP Actual

Differences Amounts Over (Under) GMP Basis

$ (1 22,200) $ 1 7,893,072 6,958 1 ,690,31 1

(9,098) 4,343,013 (16,199) 1 ,353,619

409,202 510 33,524

6,424 (10,255) 766,879

(1 50,284) 26,496,044

36,1 79 12,024,366 (1 0,027) 9,222, 105

2,422 1 ,234,324 (1,420) 58,756

27, 1 54 22,539,551

(1 77,438) 3,956,493

293,939 307,273

(2,004,855)

(1,403,643)

(1 77,438) 2,552,650

p,376,7(2) 5,973,503

$ 11 ,554,190) $ 6,526,353

COUNTY OF VICTORIA, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION De cember 31, 2005

NOTE 1 : BUDGETARY BASIS OF ACCOUNTING

The County annually adopts bUdgets that are prepared using the cash basis of accounting, which is not consistent with GAAP. A reconciliation to GAAP basis is provided in the preceding statement.

NOTE 2: BUDGETARY LEGAL COMPLIANCE

For the year ended December 31, 2005, the County complied with budgetary restrictions at all Hne-item levels except the following. The following table details this variance:

Department/Fund

General Fund Building maintenance

Operating expenditures Parks and recreation

Salaries

71

Amount

$ 3,987

3

Combining and Individual Fund Statements and Schedules

COUNTY OF VICTORIA, TEXAS ALL NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET December 31, 2005

Total Total Total Total NonmaJor Nonmajor Nonmajor Nonmajor Special Debt Capital Governmental

Revenue Funds Service Funds Project Fund ASSETS Current assets

Cash and cash equivalents $ 2,812,730 $ 71 5,984 $ 4,574 $ 3,533,288 Investments 449,974 300,186 750,1 60 Receivables (net) 1 ,386,893 1 ,028,839 2,41 5,732 Due from other governments 1 ,060,724 1 ,060,724 Due from other funds 268

Total assets $ 5,710,589 $ 1 ,744,823 $ 304,760 $ 7,760,1 72

LIABILITIES AND FUND BALANCES Liabilities

Accounts payable $ 624,352 $ 663 $ $ 625,01 5 Accrued expenditures 1 04,753 104,753 Due to other funds 528,756 526,756 Oeferred revenue 1 ,992,290 1,491,388 3,483,678

Total liabilities 3,250,151 1 ,492,051 4,742,202

Fund balances Reserved for:

Debt service funds 252,772 252,772 Unreserved, undesignated reported In:

Special revenue funds 2,460,438 2,460.438 Capital project fund 304,760 304,760

Total fund balances 2,460,438 252,772 304,760 3,01 7,970

Tolai llabilities and fund balances $ 5,71 0,589 ill 1 ,744,823 ill 304,760 $ 7,760,1 72

72

COUNTY OF VICTORIA, TEXAS ALL NONMAJOR GOVERNMENTAL FUNDS COMBINING STA TEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES For the year ended Decsmber 31, 2005

Total Total Total Total Nonmajor Nonmajor Nonmajor Nonmajor Special Debt Capital Governmental

Revenue Funds Service Funds Project Fund Funds

REVENUES Taxes $ 1 ,673,163 $ 1 ,665,943 $ $ 3,339,106 Fees of office and user fees 781 ,976 781,976 Intergovernmental 5,487,261 5,487,261 Fines and forfeitures 1 10,007 1 1 0,007 Investment income 1 42,806 16,735 16,999 1 76,540 Contributions 9,661 9,661 Miscellaneous 94,039 7,014 101.053

Total revenues 8,298,913 1 ,682,678 24,013 10,005,604


General government 2,253,765 2,253,765 Public safety 61 ,268 61,268 Highways and streets 3,641 ,527 696,239 4,337,766 Culture and recreation 6,734 6,734 Public health 3,653,967 3,653,967

Capital outlay 643,352 643,352 Debt service

Principal retirement 1 ,225,000 1 ,225,000 Interest and fiscal oharges 41 7,093 41 7,093

Total expenditures 10,260,613 1 ,642,093 696,239 12,598,945

Excess (deficiency) of revenues over expenditures (1 ,961 ,700) 40,585 (672,226) (2,593,341 )

OTHER FINANCING SOURCES (USES) Sale of assets 10,036 10,036 Transfers in 1 ,466,091 298,000 1 ,784,091 Transfers out !32O,509) (320,509)

Total other financing sources (uses) 1 , 1 75,618 298,000 1,473,618

Change in fund balances (786,Q82) 40,585 (374,226) (1 ,1 1 9,723)

Fund balances at beginning of year 3,246,520 212,187 678,986 4,1 37,693

Fund balances at end of year $ 2,460.438 $ 252,772 $ 304,760 $ 3,01 7,970

NONMAJOR SPECIAL REVEI!lUE FUNDS

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than special assessments, private purpose trusts, or major capital projects) that are legally restricted to expenditures for specific purposes. The County's Special Revenue Funds consists of Road and Bridge and other funds.

ROAD AND BRIDGE FUNDS

The Road and Bridge Funds are constitutional fu nds established to account for current funds used for the purpose of constructing and ma intaining roads and bridges. The principal sources of revenues for these funds are ad valorem taxes and Intergovernmental revenues .

The County is divided into four precincts. each of which is administered by one of the four County Commissioners. Each precinct has a separate budget for construction and maintenance of roads and bridges in the precinct The Road and Bridge Funds consists of the following:

Road and Bridge Precinct Funds • Accounts for costs associated with the construction and maintenance of roads and bridges in the four Commissioners' precincts. Revenues are derived primarily from ad valorem taxes, vehicle registration fees, and interest earnings.

Lateral Road Precinct Funds · Also used to account for costs aSSOCiated with the constructiOn and maintenance of roads and bridges in the four CommiSSioners' preCincts. However, the primary source of revenue In these funds is grant monies received by the County (and interest earned thereon) which is deSignated to be spent on roads and bridges.

OTHER SPECIAL REVENUE FUNDS

The Other Special Revenue Funds conSists of various funds that account for particular functions and activities as described below:

Records Management Fund - Accounts for monies received by the County under Local Government Code Section 1 1 8.01 1 . Expenditures of the fund are made to manage and preserve documents filed in the office of the County Clerk. Revenues come from filing charges assessed by the County Clerk.

Courthouso Soeurity Fund - Accounts for funds received from various sources designated to be used to enhance security In the County Courthouse.

District Clerk Records Management Fund • Accounts for monies received by the County from filing charges assessed by the District Clerk under Local Government Code Section 51 .317. Expenditures of the fund are made to manage and preserve documents filed in the office of the District Clerk.

Appellate Judicial System Fund · Accounts for fees received by the County for court costs on ciVil suits filed with the County Court, County Court at Law, Probate Court, or District Court under Section 22.214 and 22.2141 of the Texas Government Code. The purpose of the fee Is to reimburse Nueces County for this County's share of supplemental salaries, automobile allowances and fringe benefits for the Justices of the 1 3'h Court of Appeals.

FEMA Hurricane • Accounts for the funds received from the Federa l Emergency Management Agenoy and insurance reimbursements. Funds are used to repair hurricane-<lamaged properties.

FEMA Unmet Needs Fund - Account for funds received from the U.S. Department of Homeland Security for unmet needs associated with major disaster declaration FEMA-1257-DR for acquisition of nine parcels of land.

74

NONMAJOR SPECIAL REVENUE FUNDS (Continued)

OTHER SPECIAL REVENUE FUNDS (Continued)

Juvenile Probation Fund - Records monies received by the County from the Texas Juvenile Probation Commission as well as operating transfers from the General Fund of the County. These monies are spent to provide various services related to the operation of the County Juvenile Probation Department.

Juvenile Acoountability Incentive Block Grant Fund - Aocounts for funds received from the U.S. Department of Justice and administered by the Office of Juvenile Justice and Delinquency Prevention. The purpose of the grant is to provide funds for training and technical assistance to states and units of local government so they may develop programs outlined in the 12 program areas to promote greater accountability in the juvenile justice system.

Federal Foster Care Grant Fund · Aocounts for the funds received from the Administration for Children and Families under the Department of Health and Human Services. The purpose of the grant is to provide funds for administrative and training costs, and equipment needs as it relates to juvenile probation activities.

Juvlmill! Delinquency Prevention Fund - Accounts for funds received as a cost of court fee for offenses committed under Section 26.06, Penal Code. These funds are administered by or under the direction of Commissioners' Court and are used to repair damage, provide educational and intervention programs, and provide public rewards.

Justice Technology Fund - Aocounts for funds received from a defendant convicted of a misdemeanor offense in a Juslice Court. pursuant to Article 102.0173. Code of Criminal Procedures. These funds are administered by or under the direction of the Commissioners' Court and are used to finance the technological enhancements of the Justice Courts.

Family Protection Fee Fund - Accounts for funds received from individuals filing suit for dissolution of a marriage. These funds are administered by or under the direction of the Commissioners' Court and are to be distributed to non-profit organizations in Victoria County.

Texas DPS Traffic Conviction Reporting Grant Fund - Accounts for funds received from the Texas Department of PubliC Safety fOr the purchase of traffic conviction software.

CDA Processing Fee Fund - Aocounts for fees earned by the office of the Criminal District Attorney from the collection of "hot' checks returned to County merchants. Expenditures of the fund include normal operating costs of the District Attorney's Office.

CDA Victims Assistance Grant Fund - Accounts for the funds received from the U.S. Department of Justice and administered by the Office for Victims of Crime. The purpose of the grant Is to stimulate State participation and support for victim service programs and promote victim cooperation with law enforcement, in addition to the direct benefit to crime victims with Federal assistance monies.

Sheriff Victims Assistance Grant Fund - Accounts for the funds received from the Office of the Attorney General to provide funding for a full-time Crime Victim Liaison to work in the Sheriff's Department and the Victoria Pollee Department.

Sheriff Victims Discretionary Assistance Grant Fund - Account for funds received from the Office of the Attorney General to provide needed victim services to the reSidents of Bloomington by placing a Victim OutreaCh Officer In the area. This would insure that victims/residents have access to Victoria County Sheriff's Office Services.

75



Texas Vine Grant - Accounts for funds received from the Office of the Attorney General. The purpose of the VINE (Victim Information and Notification Everyday) grant is to provide basic information on jailed suspects/offenders and their scheduled court events to crime victims and other concerned citizens.

4-H Activity Center Fund - Appropriation from Victoria County to help fund the shooting sports building for the Victoria County 4-H Department of the Texas Agricultural ExtenSion Service.

Byrne Justice Assistance Grant Fund - Accounts for funds received from the City of Victoria for the purchase of equipment for the Viotoria County Sheriff's Office.

Local Law Enforcement Block Grant Fund - Accounts for funds received from the U.S. Department of Justice and administered by the Office of Justioe Programs. The purpose of the grant is to provide funds for use in one or more of seven program areas for the purposes of reducing crime and improving public safety.

GCRPC Solid Waste Grant Fund - Accounts for funds reoeived from the Texas Commission on Environmental Quality administered by Golden Crescent Regional Planning Commission. The purpose of the grant is to provide funds for an Environmental Officer position to reduoe illegal dumping in Victoria County.

State Homeland Security Program Grant Fund - Accounts for funds received from the Department of Homeland Security. The purpose of this grant is to enhance the capacity of first responders to respond to terrorism inoidents involving chem ica l. biological, nuclear, radiological, incendiary, and explosive devices.

State Homeland Security Law Enforcement Terrorism Prevention Program (LETPP) Grant Fund - Accounts for funds received from the Department of Homeland Security. The purpose of this grant is to provide law enforcement communities with funds to support the following prevention activities: Information sharing to preempt terrorist attacks; target hardening to reduce vulnerability of selected high value targets; recognition and mapping of potential or developing threats; interoperable communications; and, interdiction of terrorists before they can execute a threat or intervention activities that prevent terrorists from executing a threat.

Disaster Relief Grant Fund - Accounts for funds received from the Office of Rural Community Affairs. The purpose of this grant is to provide disaster relief for the repair of County roads damaged by the November 2004 flood.

Hurricane Relief Fund - Accounts for funds reoeived in the relief efforts of Hurricanes Rita and Katrina.

Sheriff's Special Purpose Fund - Accounts for the use of drug related monies awarded to the Sheriff's Department via court proceedings.

CDA Contraband Forfeiture Fund - Accounts for the use of drug related monies awarded to the Criminal District Attorney via court proceedings post October 1 7, 1989.

CDA Homeland Forfeiture Fund - Accounts for funds received from the U.S. Department of Justice. The purpose of this program Is for law enforcement; to deter crime by depriving criminals of the prOfits and proceeds of their illegal activ ities and to weaken criminal enterprises by removing the instrumentalities of crime.

76



COA Department of Trea5ury Federal Forfeiture Fund - Accounts. for funds received from the U.S. Department of Justice. The purpose of this program is for law enforcement; to deter crime by depriving criminals of the profits and proceeds of their illegal activities and to weaken criminal enterprises by removing the instrumentalities of crime.

NOAA Coastal Impact Fund Accounts for funds received from the U.s. Department of Commerce passed through the National Oceanic and Atmospheric Administration for the reconstruction of Fort SI. Louis and creation of related exhibits at the Museum of the Coastal Bend.

Employee Benefit Fund - Accounts for funds received from commissions from vending machines located on County property, donations, and interest earnings. These funds are used to proVide special benefits for employees.

Election Administrator's Special Fund - Records the various fees received deSignated to be used by the County Election Administrator in coordinating various County elections.

Help America Vote Act Grant Fund - Accounts for funds received from the U.S. Elections Assistance Commission passed through the Texas Secretary of State - Elections Division. The purpOSe of this grant fund is to provide reimbursement to Victoria County for expenses incurred In upgrading voting systems to comply with new federal standards. Also, this grant provides reimbursement for expenses incurred as a result of attending professional elections training such as seminars and conferences.

Tax Asse$SQr-Coliector Special Fund - Accounts for interest earnings on the Special Inventory Escrow Account. These funds are the sole property of the collector and are used to defray the cost of administration of the prepayment procedure established by Texas Property Tax Code Section 23.1 22.

Historical Commission Fund - Accounts for monies received through variOUS promotional activities. These funds are expended for the purpose of preparing the historical heritage of the County of Vicloria.

Law Library Fund - Aocounts for expenditures related to the establishment and maintenance of a professional library for members of the Texas Bar Association. Revenues are derived from fees assessed on civil cases filed in County and District Courts.

Health Department Fund - Reports the activity and balances of the General Fund of the City/County Health Department.

WIC Program Fund - Reports the activity and balanceS of the Special Revenue Fund of the City/County Health Department.

Law Enforcement OffIcer Education Fund • Accounts for funds received from the State of Texas. These funds are used for continuing education of persons licensed under Government Code Chapter 415 or to provide necessary training to full-time law enfOrcement support personnel.

77

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 2005

Other Road and Special

Bridge Revenue Total ASSETS Cash and cash equivalents $ 1 ,583,475 $ 1 ,229,255 $ 2,812,730 Investments 449,974 449,974 Receivables (net)

Ad valorem 1 ,368,838 1 ,368,838 Other 17, 192 863 1 8,055

Due from other governments 1 ,060,724 1 ,060,724 Due from other funds 268 268

Tolal assets $ 3,41 9.479 $ 2,291 , 1 10 $ 5,710,589

LIABILITIES AND FUND BALANCE liabilities

Accounts payable $ 36,269 $ 588,083 $ 624,352 Accrued expend�ures 36,649 68,104 104,753 Due to other funds 16,969 51 1 ,787 528,756 Deferred revenue 1 .971 , 104 21,186 1 ,992,290

Total liabilities 2,060,991 1 , 189,160 3,250,151

Fund balance Unreserved, undesi9naled 1,358,488 1,1 01,950 2.460,438

Total liabilities and fund balance $ 3,4191479 $ 2,29111 1 0 $ 5?1 01589

78

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURIES. AND CHANGES IN FuND BALANCE For the year ended December 31. 2005

Other Road and Special

Bridge Revenue Total REVENUES Taxes :Ii 1 .673.163 :Ii $ 1 .673.163 Fees of office and user fees 781,976 781 ,976 Intergovernmental 1 .750,489 3.736.772 5,487,261 Fines and forfeitures 1 1 0,007 1 10.007 Investment income

Interest 84.604 58,202 142,806 Contributions 9,661 9,661 Miscellaneous 52,249 41 .190 94,039

Total revenues 3,560,505 4.738,408 8.298.913


General government 2,253,765 2.253,765 Public safety 61 ,268 61 ,268 Highways and streets 3,473,565 167,962 3.641 .527 Culture and recreation 6,734 6,734 Public health 3.653.967 3,653,967

Capital outlay 643.352 643.352

Total expenditures 3,473,565 6,767,048 1 0.260.613

Excess (deficiency) of revenues over expenditures 86.940 (2.048.640) (1.961,700)

OTHER FINANCING SOURCES (USES) Sale of as;;>ets 1 0.036 1 0,036 Transfers in 1 .486.091 1 ,486,091 Transfers out (200,OOO) (1 20,509) (320.509)

Total other financing sources (uses) (1 89.964) 1,365.582 1,1 75,618

Change in fund balance (103,024) (663,058) (786M2)

Fund balance. January 1 1 ,461 .51 2 1 ,785,008 3,246,520

Fund balance. December 31 $ 1 ,358,468 $ 1 .101 ,950 $ 2,460,438

79

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS ROAD AND BRIDGE FUNDS COMBINING BALANCE SHEET December 31, 2005

Road and Bridge Funds

Pet. 1 Pet. 2 Pet. 3 Pet. 4 ASSETS Cash and cash equivalents $ 348,358 $ 324,130 $ 459.1 25 $ 351 ,319 I nvestments 99,975 49,987 200.037 99,975 Receivables (net)

Ad valorem 376,896 307.887 307,640 376,41 5 Other 4,433 4,011 4,315 4,433

Total assets $ 629.662 $ 686.015 $ 971,1 17 $ 832,142

LIABILITIES AND FUND BALANCE Liabilities

Accounts payable $ 9,133 $ 14.389 $ 5,370 $ 7.377 Accrued expenditures 9,908 8.318 9,350 9.073 Due 10 other funds 4,632 3.689 4,453 4, 195 Revenue 542.519 443,397 443,150 542,038

Tolal liabilities 566,192 469,793 462.323 562,683

Fund balance Unreserved, undesignaled 263.470 216,222 508,794 269,459

Total liabilities and fund balance $ 829,662 $ 696,015 $ 971,1 17 $ 832,142

80

Lateral Road Funds Pet. 3 Pet. 4 Total

$ 45, 1 1 6 $ 9,365 $ 37, 1 06 $ 8,954 $ 1 ,583,475 449,974

1 ,366,838 1 7,192

$ 45,1 1 8 $ 9,365 $ 37,106 $ 8,954 $ 3,419,479

$ $ $ $ $ 36,269 36,649 1 6,969

1,971 , 104

2,060,991

45,1 18 9,365 37,106 8,954 1 ,356,488

$ 45, 1 18 $ 9,365 $ 37,106 $ 8,954 $ 3,419,479

81

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS ROAD AND BRIDGE FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the year ended Decembf'lr 31, 2005

Road and Bridge Funds Pct. 1 Pet. 2 Pet. 3 Pet. 4

REVENUES Taxes $ 460,1 61 $ 376,466 $ 376,467 $ 460.079 Intergovernmental 438,300 41 9,31 1 41 9. 31 1 438 ,300 Investment income

Interest 18,065 17.1 30 28.987 1 7,673 Miscellaneous 26 .838 150 16,249 9,01 2

Total revenues 943,364 81 3,047 841 .01 4 925,064


Highways and streets 868,666 91 9.662 91 5.210

Excess (deficiency) of revenues over e)(penditures 74,698 48,320 (78.648) 9.864

OTHER FINANCING SOURCES (USES) Sale of assets 327 533 327 8,849 Transfers out 150,000) (50,000) 150.000) 150,000)

Total other financing sources (uses) (49,673) 149,467) (49.673) (41,151 )

Change in fund balance 25,025 (1 ,147) (1 28,321 ) (31 ,297)

Fund balance. January 1 238.446 21 7.369 637. 1 1 5 300.756

Fund balance, December 31 $ 263,470 $ 21 6,222 $ 508,794 $ 269,459

82

Lateral Road Funds Pet. 1 Pet. 2 Pet. 3 Pet. 4 Total

$ $ $ $ $ 1 .673.163 8.81 7 8.81 7 8.817 8,816 1 ,750,489

1 .391 98 1 , 1 01 1 59 84.604 52,249

10,208 8.915 9.918 8,975 3,560,505

5,300 3.473,565

1 0,208 8.915 9.918 3,675 86,940

1 0.036 (200,000)

(189.964)

1 0.208 8.91 5 9,918 3,675 (1 03,024)

34,910 450 27.188 5.279 1 .461 ,512

$ 45. 1 1 8 $ 9,365 $ 37,106 $ 8,954 $ 1,358,488

83

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS OTHER SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 2005

District Clerk Appellate FEMA

Records Courthouse Records Jud icial FEMA Unmet Mgml Security Mgmt S�stem Hurricane Needs

ASSETS Cash and cash equivalents $ 219,092 $ 20,840 $ 1 ,300 $ 4,723 $ - $ Receivables (net)

Other 300 1 76 1 5 12 Due from other governments 8,057 Due from other funds

Total assets $ 219,392 $ 21 ,016 $ 1 ,315 $ 4,735 $ $ 8.057

LIABILITIES AND FUND BALANCE

Liabilities Accounts payable $ 785 $ $ - $ 4.723 $ - $ Accrued expenditures 1 ,036 Due to other funds 19 Deferred revenue

Total liabilities 1 ,840 4.723

Fund balance Unreserved, undesignated 21 7.552 21 ,016 1 ,315

Total liabilities and fund balance $ 21 9,392 $ 21 .01 6 $ 1,315 $ 4,735 $ - $ 8,057

84

Juvenile Accountability Federal Juvenile Family Texas CDA

Juvenile Incentive Foster Care Delinquency Justice Protection DPS Processing Probation Grant Grant Prevention Technology

$ 63,867 $ - $ 447,567 $ 86 $ 20,530 $ 8,235 $ $ 1 16,647

88 30 6,624 52,885 5,000 2,795

$ 70,:ll!l $ - $ 5001452 $ 86 $ 201618 $ 8,265 $ 5,000 $ 1 1 9,442

$ 4,062 $ - $ 2,184 $ $ - $ $ $ B,681 10,325 5,230 3,054

153 84 5.000 320

14,540 7,498 5,000 10,055

55,951 492,954 20,618 8,265 109,387

$ 70,491 $ - $ 500,452 $ 86 $ 201618 $ 8,265 $ 5,000 $ 1 1 9,442

(continued)

85

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS OTHeR speCIAL ReveNue FUNDS COMBINING BALANCE SHEET Deoember 31, 2005

Sheriff CDA Sheriff Victims

Victims Victims Discretionary Texas 4·H Byrne Assistance Assistance ASSistance Vine Activity JAG

Grant Grant Grant Grant Center P!]Sram ASSETS Cash and cash equivalents $ . $ . $ . $ . $ 41 ,537 $ 21 ,186 Receivables (net)

Other Due from other governments 1 8,801 1 5,293 9,967 Due from other funds 268

Total assets $ 19,069 $ 15,293 $ 9,967 $ - $ 41 ,537 $ 21,186

LIABILITieS AND FUND BALANCE

liabilities Accounts payable $ 41 $ 31 $ 43 $ . $ 195 $ Accrued expenditures 941 826 785 Due to other funds 1 6,067 9,976 9,137 Deferred revenue 21 , 166

Total liabilities 19,069 10,835 9,965 195 21,186

Fund balance Unreserved, undesignated 4,458 2 41 ,342

Total liabilities and fund balance $ 191°69 $ 151293 $ 91967 � - $ 41,537 $ 21,186

86

Local Law Enforcement GCRPC State Homeland Sheriff's CDA

Block Solid Waste Homeland Security Disaster Hurricane Special Contraband Grant Grant Security LETPP Relief Relief Purpose Forfeiture

$ 10,018 $ - $ $ . $ $ · $ 40,035 $ 37,279

347 14,998

$ 10,01 8 $ $ 347 $ 14,998 $ . $ · $ 40,035 $ 37,279

$ $ $ . $ $ - $ $ 201 $ 2,196

347 14,998 1

347 14,998 201 2,197

1 0,01 8 39,834 35,082

m 1 0,01J! $ - $ 347 $ 14,998 $ . $ · $ 40,035 $ 37,279

(continued)

87

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS OTHER SPECIAL REVENUE FUNDS COMBINING BALANCE SHEET December 31, 2005

CDA Help CDA Dept. of T reas. NOAA Employee Election America

Homeland Federal Coastal Benefit Admin Vote Act Forfeiture Forfeiture Imj:!act Fund S(,!ecial Grant

ASSETS Cash and cash equivalents $ 16.863 $ 1 2,958 $ - $ 5.789 $ 1 0,666 $ Receivables (net)

Other 1 07 Due from other governments 504.644 Due from other funds

Total assets $ 16,663 $ 1 2,958 $ $ 5,696 $ 1 0,688 $ 504,644

LIABILITIES AND FUND BALANCE

Liabilities Accounts payable $ 309 $ 1 ,1 31 $ . $ 260 $ . $ 503,851 Accrued expenditures Due to other funds 2 993 Deferred revenue

Total liabilities 309 260 504,844

Fund balance Unreserved, undeslgnated 16,554 1 1 ,827 5,636 10,686

Total liabilities and fund balance $ 1 6,863 $ 12,958 $ . $ 5,896 $ 1 0,688 $ 504,844

88

Tax Assessor-Collector Historical Law Health WIC Special Commission Library Department Program LEOSE Total

$ 58,692 $ 1 2,210 $ 45,284 $ 350 $ $ 13.479 $ 1 ,229,255

1 35 663 182,163 238,950 1 ,060,724

268

$ 581692 $ 12,210 $ 45,419 $ 182,513 $ 238,950 $ 13,479 $ 2,291 , 1 10

$ - $ $ 1 2,476 $ 45,266 $ 2,474 $ 1 , 1 74 $ 588,083 35,046 10,861 68,104

231,001 221 .667 51 1 ,787 21,186

12,476 31 1 ,31 3 235,002 1 , 1 74 1 ,189,160

58,692 1 2,210 32,943 (128.800) 3,948 1 2,305 1,101 ,950

$ 58,69� $ 12,210 $ 45,419 $ 182,513 $ 238,950 $ 13,479 $ 2,291,1 1 0

89

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS OTHER SP£CIAL REVENUE FUNDS COMBINING STA TEMENT OF REV£NUES, EXPENDITURES, AND CHANGES IN FUND BALANC£ For thril year ended Decemwr 31, 2005

District Clrilrk Appellate FEMA

Records Courthouse Records Judicial FEMA Unmet Milmt Securit� Mgmt S�stem Hurricane Needs

REVENUES Fees of office and user fees $ 95, 1 1 1 $ 58,526 $ 5,060 $ 4,720 $ $ Intergovernmental 22,877 Fines and forfeitures Investment income

Interest 8,836 946 59 Contributions Miscellaneous 189

Total revenues 1 03,947 59,472 5, 1 1 9 4,720 23,066


General government 135,225 7,289 7,034 4,723 4,047 Public safety Hi9hways and streets Culture and recreation Public health

Capital outlay 50,000 335,823 1 35,582

Total expenditures 135,225 57,289 7,034 4,723 339,870 1 35,582

Excess (defiCiency) of revenues over expenditures (31 ,278) 2,183 (1 ,915) !339,870) (1 1 2,516)

OTHER FINANCING SOURCES (USES)

Transfers in 53,253 Transfers out !40,OOO) (42,273)

Total other financing sources (uses) (40,000) (42,273) 53,253

Change in fund balance (31,278) (37,817) (1 ,915) (3) (382,143) (59,263)

Fund balance, January 1 248,830 58,833 3,230 15 382,143 67,320

Fund balance, December 31 $ 21 7,552 $ 21 ,016 $ 1 ,315 $ 1 2 $ . $ 8,°57

90

Juvenile Accountability Federal Juvenile Family Texas COA

Juvenile Incentive Foster Care Delinquency Justice Protection DPS Processing Probation Grant Grallt Prevention Teohnology Fee Grant Fee

$ - $ $ $ - $ 32,735 $ 6,240 $ $ 166,075 571 ,466 4,722 142,733 5,000

3,486 1 7,21 1 3 753 5,082

5,410 5 ,033

580,362 4,722 159,944 3 33,488 6,240 5,000 1 76,190

666,947 5,484 223,668 37,404 203,884 5,000

666,947 5,484 223,668 37,404 5,000 203.�

(86,585) __ --1.(7:.,::6:::.;2) (63,724) ___ ..:::.3 (3,916) 6,240 (27,694)

99.584 762 (762) (8,682)

98,822 762 (8,682)

1 2,237 (63,724) 3 (3.916) 6,240 (36,376)

556,678 83 24,534 2,025 145.763

$ 55.951 $ $ 492,954 $ 86 $ 20.618 $ 8,265 $ - $ 109,387

(continued)

91

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS OTHER SPECIAL REVENUE FUNDS COMBINING STATEMENT OF REVENU£S, EXPENDITURES, AND CHANGES IN FUND BALANCE For the year ended December 31, 2005

Sheriff COA Sheriff Victims

Victims Victims Discrellonary Texas 4-H Byrne Assistance Assistance Assistance Vine Activity JAG

Gran! Grant Grant Grant Center Program

REVENUES Fees of office and user fees $ - $ - $ $ - $ $ Intergovernmental 41 ,588 45,937 49,385 1 7,253 Fines and forfeitures Investment Income

Interest 1 ,553 Contributions 450 Miscellaneous

Total revenues 41,588 45,937 49,385 1 7,253 2,003


General government 51 ,902 42,898 49,383 1 7,253 Public safety Highways and streets Culture and recreation 2,222 Public health

Capital outlay

Total expenditures 51 ,902 42,898 49,383 1 7,253 2,222

Excess (deficiency) of revenues over expenditures (10,314) 3,039 (219)


Transfers in 1 2,474 Transfers out

Total other financing sources (uses) 12.474

Change in fund balance 2,160 3,039 2 (219)

Fund balance, January 1 (2,160) 1,419 41 ,561

Fund balance, December 31 $ - $ 41458 $ 2 $ - $ 41 ,342 $

92

Local Law Enforcement GCRPC State Homeland Sheriffs COA

Block Solid Waste Homeland Security Disaster Hurricane Special Contraband Grant Grant Security LETPP Relief Relief Purpose Forfeiture

$ - $ - $ - $ - $ $ - $ - $ 26, 1 33 64,900 14,998 167,962

1 ,978 32,646

385 1 ,387 1 ,500

8,592

385 26,1 33 64,900 14,998 167,962 1 1 ,957 34,146

14,766 25,434 929 7,453 14,998 16, 1 79

167,962

35,803 57,447

929 35,803 64,900 14,998 167,962 14,766 16,179 25,434

(544) (9,670) !14,766) (4,222) 8,712

5,127 14,766 (3,792)

5,127 14.766 (3,792)

(544) (4,543) (4,222) 4,920

10,562 44,056 30,162

$ 10,01 8 $ - $ - $ $ - $ $ 39,834 $ 351°82

(continued)

93

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · SPECIAL REVENUE FUNDS OTHER SPECIAL REVENUE FUNDS COMBINING STA TEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE For the yeef ended December 31, 2005

CDA Help CDA Dept. of Treas. NOAA Employee Election America

Homeland Federal Coastal Benefit Admin Vote Act Forfeiture Forfeiture Imeact Fund Seecial Grant

REVENUES Fees of office and user fees $ $ . $ $ - $ 28,228 $ Intergovernmental 25,460 672,794 Fines and forfeitures 50,500 24,883 Investment Income

Interest 1 ,239 623 213 261 Contributions 8,780 Miscellaneous 2,993

Total revenues 51,739 25,506 25,460 1 1 ,986 28,489 672,794


General government 35,185 1 3,679 25,460 1 1 ,468 24,677 608,294 Public safety Highways and streets Culture and recreation Public health

Capital outlay 64,500

Total expenditures 35,185 25,460 1 1 ,468 24,677 672,794

Excess (deficiency) of revenues over expenditures 16,554 1 1 ,827 518 3,81 2


Transfers in Transfers out

Total other financing sources (uses)

Change in fund balance 1 6,554 1 1 ,827 518 3,81 2

Fund balance, January 1 5, 1 1 8 6,874

Fund balance, December 31 $ 16,554 $ 1 1,827 $ $ 5,636 $ 10,686 $

94

Tax Assl'!ssor-Collector Historical Law Health WIC Special Commission Library Department Program LEOSE Total

$ $ - $ 56,368 $ 328,91 3 $ $ $ 781 ,976 1 , 101 ,241 748,819 1 3,504 3,736,772

1 10,007

1 3,063 487 1 , 1 1 5 58,202 431 9,661

453 1,321 16,986 41,790

1 3,876 940 57 ,483 1 ,431 ,906 765,805 13,504 4,738,408

276 37,385 2,253,765 16,709 61 ,268

167,962 4,512 6,734

2,852, 1 54 766,010 3,653,967 643,352

276 4,512 37,385 2,852,1 54 766,010 16,709 6,767,046

1 3,600 (3,572) 20,096 (1,420,248) (205) (3,205) (2,048,640)

3,000 1 ,297,125 1 ,486,091 (25,000) (120,509)

3,000 (25,000) 1 ,297,1 25 1 ,365,582

1 3,600 (572) (4,902) (123, 123) (205) (3,205) (663,058)

45,092 1 2,782 1,785,008

$ 58,692 $ 1 2,210 $ 32,943 $ (1 28,800) $ 3,948 $ 1 2,305 $ 1,101,950

95

NONMAJOR DEBT SERVICE fUNDS

Debt Service Funds are used to account for the accumulation of resources for and the payment of general long-term debt principal, interest and related costs.

96

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVeRNMeNTAL FUNDS - DeBT seRVIce FUNDS COMBINING BALANCE SHEET December 31, 2005

Courthouse Bridge Road Jail Restoration Street Bonds Bonds Bonds Annex

Sinking Sinking Sinking Sinkinlj Total ASSETS Cash and cash equivalents $ 168,083 $ 1 86,91 7 $ 145,346 $ 21 5,638 $ 715,984 Receivables (net)

Ad valorem 209,(;(;0 308,606 202,699 307,874 1 ,028,839

Total assets $ 377,743 $ 495,523 $ 348,045 $ 523,512 $ 1,744,823

LIABILITIES AND FUND BALANCE Liabilities

Accounts payable $ 663 $ . $ $ $ 663 Deferred revenue 303,931 441 ,839 295,71 3 449,905 1 ,491 ,388

Total liabil�ie$ 304,594 441,839 295,71 3 449,905 1,492,051

Fund balance Reserved · debt service 73,149 53,664 52,332 73,607 252,772

Total ll;tbilities and fund balance $ 377,743 $ 495,523 $ 348,045 $ 523,51 2 $ 1 ,744,823

97

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMIENTAL FUNDS · DEBT SERVICE FUNDS COMBINING STA TEMENT OF REVENUES, EXPENDITURfS, AND CHANGES IN FUND BALANCE For the year ended December 31, 2005

Courthouse Bridge Road Jail Restoration Street Bonds Bonds Bonds Annex

Sinking Sinking Sinking Sinking Total REVENUES Taxes $ 340,004 $ 471,100 $ 337,849 $ 51 6,990 $ 1 ,665,943 Investment income

Interest 4,130 3,61 8 3,528 5,459 16,735

Total revenues 344,1 34 474,718 522.449 1,682,678

EXPENDITURES Debt service

Principal retirement 240,000 445,000 225,000 31 5,000 1 ,225,000 Interest and fiscal charges 83, 1 1 1 47,175 101,639 1 85,168 41 7,093

Total expenditures 323,1 1 1 492,175 326,639 500,168 1,642,093

Change in fund balance 21 ,023 (1 7,457) 14,738 22,281 40,585

Fund balance, January 1 52,1 26 71 ,141 37,594 51 ,326 212,167

Fund balance, December 31 $ 73,149 $ 53,684 $ 52,332 $ 73,607 $ 252?72

98

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (NON-GMP BUDGETARY BASIS) AND ACTUAL For the year ended December 31. 2005

Actual Amounts Variance Original Final Budgetary POSitive Budget Budget Basis (Negative)

REVENUES Taxes

Ad valorem Current $ 1 1 ,050.506 $ 1 1 ,050,506 $ 1 1 .407.540 $ 357,034 Delinquent 250.000 250,000 324,609 74,609 Penalty and interest 107,000 1 07,000 1 55.265 48.265

Sales and use 5,000,000 5.535,000 5,883,458 348,458 Total taxes 16 .407,506 16,942.506 1 7,770,872 828,366

Fees of office and user fees Sheriff's department 400,000 400,000 533,027 1 33,027 Prisoner maintenance 1 ,000 1 ,000 . 4,200 3.200 County treasurer 1 3,400 13,400 1 2,031 (1 ,369) Eleotion administrator 1 ,000 1 ,000 6,003 5,003 County clerk 350,000 350.000 392,768 42,768 Probate personnel education fees 2,000 2,000 1 ,546 (454) County courts at law 4,000 4,000 4,409 409 Tax assessor-collector 425.000 425,000 423,938 (1 .062) Criminal district attorney 25,000 25,000 29,254 4.254 District clerk 260,000 260,000 259.834 (1 66) Justices of the peace 10,500 1 0.500 14,704 4.204 Deferred adjudication 1 5,000 1 5,000 1 2,582 (2,418) Constables 4.100 4,100 2,973 (1 ,1 27)

TOlal fees of office and user fees 1 .51 1 ,000 1,51 1 .000 1,697,269 1 86,269

Intergovernmental Payment In lieu of taxes 1 00 1 00 162 62 Alcohol beverage tax 125,000 125,000 1 37.007 1 2,007 County courts at law 70.000 77,870 86.137 8,267 Bingo gross receipts tax 50,000 50,000 78.777 28,777 Tobacco settlement 60,000 60,000 108,033 48,033 Indigent defense grant 45.000 45,000 49,613 4,613 Title IV-E legal service 22,000 21 .664 (316) Juvenile detention contracts 1 .200.000 1 ,200,000 1 , 1 13, 1 53 (86.847) State juvenile detention funds 56,500 67,500 76,099 8,599 Jail inmate beds pace 2.900,000 2,900,000 2,486,555 (413.445) Jail Inmate contract medical 45.000 45,000 53,426 8,426 Jail inmate contract other 40,000 40,000 39,61 8 (382) Jail inmate extradition 25,000 25,000 23,651 (1 ,349) General inmate medical 25,000 25,000 30.649 5,649 PrOject lifesaver 742 742 Vest reimbursement 40.000 18,535 (21 ,465) DOJ FY 2005 SCAAP program 1 5,000 10 .074 (4,926)

Total intergovernmental 4,641 .600 4,737,470 4,333,91 5 (403,555)

(continued)

99

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES /N FUND BALANCE - BUDGET (NON-GAAP BUDGETARY BAS/S) AND ACTUAL For the year ended December 31, 2005

Actual Amounts Variance Original Final Budgetary Positive Budget Budget Basis (Negative)

REVENUES (continued) Fines and forfeitures

District court fines $ 250,000 $ 250,000 $ 261 ,857 $ 1 1 ,857 County court at law fines 300,000 300,000 454,986 1 54,986 Justice of the peace fines 525,000 525,000 581,781 56,781 Forfeitures 20,500 20,500 38,796 18,296

Total fines and forfeitures 1 ,095,500 1,095,500 1,337,420 241,920

Interest 1 50,000 1 50,000 409,202 259,202

Licenses and permits Marriage licenses 1 1 ,000 1 1 ,000 1 0,434 (566) Beer and whiskey licenses 22,500 22,500 23,415 915 Misoellaneous 1,450 1,450 185 (1,265)

Total licenses and permits 34,950 34,950 34,034 (916)

Contributions 400 6,790 6,424 (366)

Miscellaneous Records management preservation 30,000 30,000 38,858 8,858 WIC program administrative fee 20,000 20,000 21 ,493 1 ,493 Criminal justice planning comm ission 100 100 567 467 Crime stopper fee 5 5 1 (4) LEOSEF collection 50 50 1 (43) Victims of crime collection 13,000 1 3,000 1 ,933 (1 1 ,067) JCPTF commission 1 ,500 1 ,500 1 49 (1 ,351 ) Juvenile probation diversion collections 400 400 160 (240) Operators/chauffeurs license collection 50 50 13 (37) General revenue/m isdemeanor cost 50 50 14 (36) Comprehensive rehabililation colleelion 50 50 4 (46) Criminal assessment collection 50 50 (50) Abused children fees 50 50 (50) Legal service for indigents fees 800 800 492 (308) Defensive driving course fee 1 0,000 10,000 1 7,300 7,300 Visual record by electronic device 500 500 3,102 2,602 Court reponer fees 27,000 27,000 24,123 (2,677) Arrest warrant fees 48,000 46,000 39,251 (8,749) Other fees 101 ,800 101 ,800 1 58,776 56,976 Personal recognizant fees 7,000 7,000 7,156 156 CJAD contracl services 6,000 6,000 5,702 (298) Rents and royalties 30,912 30,91 2 39,01 1 6,099 Telephone commissions 21 0,000 21 0,000 21 8,207 8,207 Election machines rental 6,775 6,775 Reimbursements 44,500 44,500 32,803 (1 1 ,697) Refunds 1 50 95,150 94,897 (253) Restitutions 500 500 2,856 2,356 Miscellaneous 27,100 27,100 42,974 1 5,874

Total miscellaneous 579,567 674,567 756,624 82,057

Total revenues 24,420,523 25,1 52,783 26,345,760 1,1 92,977

(continued) 1 00

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (NON-GAAP BUDGETARY BASIS) AND ACTUAL For the year ended December 31, 2005

Actual Amounts Variance Original Final Budgetary Positive Budget Budget Basis IN!:!!lative)


General government County judge

Salaries $ 144,006 $ 1 43,606 $ 1 41 ,505 $ 2,101 Fringe benefits 37,962 37,962 37,179 783 Operating expenditures 1 1,032 1 1 ,432 3,584

Total county judge 1 93,000 1 93,000 1 86,532 6,468

Commissioners' court Salaries 38 ,901 38,901 38,901 Fringe benefits 1 0,928 1 0,928 1 0,684 44 Operating expend�ures 1 1 ,000 1 1 ,000 10 , 146 854 Other services and charges 14,000 1 8,200 16,176 2,024

Total commissioners' court 74,829 79,029 76,107 2,922

Records management Salaries 8,300 8,300 5,975 2,325 Fringe benefits 635 635 457 1 78 Operating expenditures 21,065 865 865

Total records management 30,000 9,800 6,432 3,368

County clerk Salaries 428,629 428,629 412,679 15,950 Fringe benefits 1 37,524 1 37,524 1 30,514 7,010 Operating expenditures 37,166 36,546 24,409 1 2, 137 Other services and charges 1 ,200 1 ,200 1 ,200 Capital outlay 620 620

Total county clerk 604,51 9 604,519 568,222 36,297

Veterans' service Officer Salaries 39,1 46 39,146 36,730 2,416 Fringe benefits 10,975 1 0,975 6,910 4,065 Operating expenditures 3,500 3,500 2

Total veterans' service officer 53,621 53,621 47,138 6,483

Heritage director Salaries 33,354 33,354 33,197 1 57 Fringe benefits 1 0,622 10,622 1 0,407 215 Operating expenditures 7,300 5,600 3,846 1 ,754 Capital outlay 1 ,700 1,693 7

Total heritage director 51,276 51 ,276 49,143 2,1 33

Non-departmental Operating expenditures 1 , 1 67,672 929,601 885,369 44,232 Other services and charges 656,509 779,808 763,523 16,285 Capital outlay 307,235 344,992 321,100 23,692

Total non-departmental 2,1 31 ,416 2,054,401 ',969,992 84,409

(continued)

101

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (NON·GAAP BUDGETARY BASIS) AND ACTUAL For the year enclad December 31, 2005


EXPENDITURES (continued) Current (continued)

General government (continued) County court at law # 1

Salaries $ 1 35,390 $ 1 38,706 $ 1 38,265 $ 441 Fringe benefits 34,264 34.883 33.994 889 Operating expenditures 3,755 3,755 2,038 1 ,71 7 Other services and charges 40.000 50,000 45,061 4,939

Total county court at law # 1 21 3.409 227,344 21 9,358 7,986

County court at law # 2 Salaries 134,455 1 37,771 1 37,770 1 Fringe benefits 29.046 29,665 29,050 615 Operating expenditures 3,450 3,450 3,267 183 Other services and charges 32,000 47,000 40,446 6.554

T atal county court at law # 2 1 98.951 21 7,886 21 0,533 7.353

District court Salaries 203,568 203.568 1 97,826 5,742 Fringe benefits 85,447 85,447 82.947 2,500 Operating expenditures 1 3,250 13.250 1 1 ,044 2,206 Other services and charges 480,070 576,344 526.271 50.073

Total distriot court 782.330 878,609 81 8.088 60,521

District clerk Salaries 381,728 381 .728 378,383 3,345 Fril1ge benefits 1 1 7,978 1 1 7.978 1 1 5,651 2.327 Operating expenditures 24,240 25,240 23,392 1 ,848

Total district clerk 523,946 524.946 51 7,426 7,520

Justice of the peace # 1 Salaries 65,357 65,357 65,356 1 Fringe benefits 1 9,497 19,497 1 9,337 1 60 Operating expenditures 5,490 6,090 5.733 357 Other services and charges 1 2,240 12,140 1 2,084 56

Total justice of the peace # 1 102,584 1 03,084 1 02,510 574

Justice of the peace # 2 Salaries 64,547 64,547 63,786 761 Fringe benefits 20.087 20,087 1 7.818 2,269 Operating expenditures 3,075 3.075 2,307 768 Other services and charges 1 3,750 13.750 1 1,992 1,758

Total justice of the peace # 2 101,459 1 01 ,459 95,903 5.556

Justice of the peace # 3 Salaries 21 0,685 210.685 207,786 2,899 Fringe benefits 61 .260 61 ,260 57,391 3.669 Operating expenditures 5,390 5,390 4,898 492 Other services and charges 900 900 772 1 28

Total justice of the peace # 3 278.235 278,235 270.847 7,388

(col1l1nued) 1 02




General government (continued) Justice of the peace # 4

Salaries $ 93,632 $ 1 03,301 $ 1 02,361 $ 940 Fringe benefits 29,153 30,986 27,382 3,604 Operating expenditures 4,905 4,905 3,967 938 Other services end charges 1 0,000 1 1 ,700 1 1 ,695 5

Total justice of the peace # 4 1 37,690 1 50,892 1 45.405 5,487

Criminal district attorney Salaries 613,449 61 3,449 608, 1 1 8 5,331 Fringe benefits 1 55,551 1 55,551 1 52,706 2,845 Operating expenditures 1 0,000 1 0,000 9,877 123

Total criminal district attorney 779,000 779,000 770,701 8,299

Election administrator Salaries 126,851 1 30,733 130,355 378 Fringe benefits 31 ,901 30,654 26,594 2,060 Operating expendHures 1 8,700 1 9,240 16,805 2,435 Other services and charges 1 1 ,350 7,375 4,1 31 3,244 Capital outlay 7,400 7,345 55

Total election administrator 1 66,602 1 95,402 1 87,230 8,172

County auditor Salaries 281 ,31 6 261 ,316 267,21 5 14,101 Fringe benefits 78,946 76,946 72,694 6,252 Operating expenditures 1 8,675 1 8,675 1 6,104 2,571

Total county auditor 378,937 378,937 356,013 22,924

County treasurer Salaries 1 84,088 1 84,086 181 ,028 3,060 Fringe benefits 52,665 52,665 47,364 5,301 Operating expenditures 34,000 35,120 1 5,498 1 9,622

Total county treasurer 270,753 271 ,873 243,890 27,983

Tax assessor-collector Salaries 444,713 444,71 3 429,503 1 5,210 Fringe benefits 132,727 1 32,727 128,010 4,71 7 Operating expenditures 22,975 22,975 21,841

Total tax assessor-collector 600,41 5 600,41 5 579,354 21,061

Administrative servioes Salaries 1 24,199 1 31 ,399 1 30,992 407 Fringe benefits 31 ,396 36,343 35,793 550 Operating expenditures 1 2,308 1 3,708 1 3,168 540

Total administrative services 167,905 181 ,450 1 79,953 1 ,497

(continued)

1 03




General government (continued)

I nformation technology Salaries $ 192,509 $ 21 1 ,672 $ 21 0.691 $ 1 ,181 Fringe benefits 55,749 62,1 1 8 61,012 1 ,106 Operating expenditures 221 ,785 1 82,285 1 71 ,901 10.384 Other services and charges 61 .300 84.561 80,976 3,585 Capital outlay 25,000 73,039 73,039

Total information technology 576.343 61 3.675 597,619 16,256

Building maintenance Salaries 221,267 221 ,267 21 7.653 3.614 Fringe benefits 65,497 65,497 59,469 6.006 Operating expenditures 721,500 91 6,447 920,434 (3.987)

Total building maintenance 1,008,264 1,203,21 1 1,197,576 5,635

Adult probation department Operating expenditures 16,340 1 4,040 1 2,799 1 .241 Capital outlay 1 7.233 1 7.226 7

Total adult probation department 1 6,340 31,273 30,025 1 ,248 Juvenile detention facility

Salaries 1 .384,1 57 1 .365.766 1.31 3.449 52,31 7 Fringe benefits 396,094 396,094 348.159 47.935 Operating expenditures 293,200 341 , 1 79 327,207 13,972 Other services and charges 59,140 53,302 53, 156 146 Capital outlay Debt service 509.497 499.597 499.51 7 80

Total juvenile detention facility 2,642,088 2,655,938 2,541,488 1 14,450 Juvenile board

Salaries 29,650 29,650 29,650 Fringe benefits 5.623 5,623 4,891 732 Other services and charges 35,300 58.550 58.519 31

Total juvenile board 70,573 93,823 93,060 763 Total general government 1 2.176,690 12,533,298 12,060,545 472,753 Public safety

Fire marshal Salaries 82.221 82.221 77,41 6 4,805 Fringe benefits 22,694 22.694 21 . 1 1 6 1 .578 Operating expenditures 30,618 38,557 35,933 2,624 Other services and charges 66,500 56.343 53.993 2.350 Capital outlay 2.100 2,048 52

Total fire marshal 202,033 201,915 1 90,506 1 1 ,409

(continued)

1 04

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (NON-GMP BUDGETARY BASIS) AND ACTUAL For the year ended December 31, 2005



Public safety (continued) Sheriff

Salaries $ 5,200,799 $ 5,1 50,672 :5 5,075,134 $ 75,538 Fringe benefits 1 ,472,052 1 ,416,952 1 ,404,946 1 2,006 Operating expenditures 1 ,552,975 1 ,882,062 1 ,803,404 78,658 Other services and charges 1 5,000 1 5,000 Capital outlay 600 217, 1 1 0 59,109 1 58,001 Debt service 83,032 81,764 81,762 2

Total sheriff 8,309,458 8,763,560 8.439,355 324,205

Constable # 1 Salaries 1 8, 127 18,127 1 8, 127 Fringe benefits 7,734 7,734 7,526 208 Operating expenditures 780 780 322 458

Total constable # 1 26,641 26,641 25,975 666

Constable # 2 Salaries 18,437 1 8,437 1 8,437 Fringe benefits 7,793 7,709 7,631 78 Operating expenditures 2,580 2,676 2,673 3

Total constable # 2 28,810 28,822 28,741 81

Constable # 3 Salaries 1 7,907 1 7,907 1 7,907 Fringe benefits 6,948 6,948 6,339 609 Operating expenditures 780 1 ,61 1 1 ,586 25

Total constable # 3 25,635 26,466 25,832 634

Constable # 4 Salaries 1 7,907 1 7,907 1 7,907 Fringe benefits 6,948 4,748 3,393 1 ,355 Operating expenditures 780 2,980 2,486 494

Total constable # 4 25,635 25,635 23,786 1 ,849

Non-departmental Other services and charges

City/County interlocal agreement 530,000 477,883 477,883 Total non-departmental 530,000 477,883 477,883

Total publio safety 9,148,212 9,560,922 9,212,078 338,844

Culture and recreation Parks and recreation

Salaries 57,018 57, 1 1 2 57,1 1 5 (3) Fringe benefits 1 7,916 1 8,291 1 8,250 41 Operating expenditures 19,200 1 7,363 1 5,175 2,188 Capital outlay 2,837 2,837

Total parks and recreation 95,134 95,603 93,377 2,226

(continued) 105

COUNTY OF VICTORIA, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET (NON·GAAP BUDGETARY BASIS) AND ACTUAL For the year ended December 31, 2005

Actual Amounts Variance Original Final Budgetary Positive Budeet Budget Basis (Negative)


Culture and recreation (continued) Extension service

Salaries $ 169,177 $ 161 ,577 $ 1 61 ,361 $ 216 Fringe benefits 43,478 43,478 31 ,043 12,435 Operating expenditures 1 6.387 20, 1 52 1 9,720 432 Other services and charges 9,600 1 8,825 1 8.670 155

Total extension service 238.642 244,032 230,794 13,238

Non-departmental Other services and charges Victoria Public Library 912,575 91 2,575 912.575

Total culture and recreation 1 ,246,351 1 .252.210 1 ,236.746 15,464

Public health Emer Mgmt I Flood plain

Salaries 44.863 44.863 44.863 Fringe benefits 8.508 8,508 8,481 27 Operating expenditures 4.81 5 4.61 5 3,992 823

Total flood plain management 58,186 58,186 57,336 850

Total publio health 58,186 58. 1 86 57.336 850

Total expenditures 22,629.439 23,394,616 22,566,705 827,91 1

Excess (deficiency) of revenues over expenditures 1 ,791,084 1,758,167 3,779,055 2,020,888

OTHER FINANCING SOURCES (USES) Sale of assets 10,000 1 10.000 293.939 183,939 Transfers In 265,000 307,274 307,273 ( 1 ) Transfers out (2.066.084) (2,189,21 1 ) (2,004,855) 1 84,356

Total other financing source5 (U51:15) (1,791,084) (1.771 ,937) (1 ,403,643) 368,294

Change In fund balance (1 3,770) 2,375,412 2,389,182

Fund balance. January 1 4,596,751 4.596,751 4.596,751

Fund balance, December 31 $ 41 596?51 $ 4,582,981 $ 6,9721163 $ 213891182

1 06

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS ROAD AND BRIDGE PR£CINCT NO. 1 SCHEDULE OF REVENUES, EXPENDITUR£S, AND CHANGES IN FUND BALANCE · BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts Budget to GAAP Final Budgetary Differences Actual Amounts

Budset Basis Over (Under) GAAP Basis REVENUES Taxes

Current taxes $ 427,491 $ 441,539 $ - $ 441,539 Delinquent taxes 1 2,000 1 2,380 (64) 1 2,444 Penalty and Interest 5,200 6,154 (24) 6,178

Intergovernmental Vehicle license fees 225,000 235,350 235,350 Additional license fees 1 90,000 198,936 (456) 199,392 Permits 3,500 3,558 3,558

Investment inoome Interest 7,500 1 8,065 1 8,065

Miscellaneous 25,355 27,194 26,838 Total revenues 896,046 943,1 76 (1BB) 943,364


Highways and streets Salaries 41 1 , 942 40B,949 70 40B,879 Fringe benefits 1 40,295 1 36,668 2,969 1 33,699 Operating expenditures 259,1 1 0 249,797 (2,291 ) 252,088 Other services and charges 4,650 4,796 4 ,796 Capital outlay 1 1 ,724 1 0,724 10,124 Debt service 58,480 58,480 58,480

Total expenditures 886,401 869,414 748 866,666

Excess (deficiency) of revenues over expenditures 9,645 73,762 (936) 74,698

OTHER FINANCING SOURCES (USES) Sale of assets 1 00 327 327 Transfers out (50,000) (50,000) (50,000) Total other financing sources (uses) (49,900) (49,673) (49,673)

Change in fund balance (40,255) 24,089 (936) 25,025

Fund balance, January 1 294,510 294,51 0 56,065 238,445

Fund balance, December 31 $ 254,255 $ 318,599 §l 55,129 $ 263,470

Explanation of differences: The County budgets on the cash basis of accounting. Therefore, under the budgetary basis, revenues are recognized as collected and expenditures when paid.

1 07

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS " SPECIAL REVENUE FUNDS ROAD AND BRIDGE PRECINCT NO. 2 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE " BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts Budget to GAAP Final Budgetary Differenoes Actual Amounts

Budget Basis Over (Under) GAAP Basis REVENUES Taxes

Current taxes $ 349,765 $ 361 ,259 $ " $ 361 ,259 Delinquent taxes 10,000 1 0,096 (52) 10,148 Penalty and interest 4,000 5,030 (19) 5,049

Intergovernmental Vehiole license fees 235,000 235,350 235,350 Additional license fees 1 80,000 1 79,990 (413) 1 60,403 Permits 3,500 3,558 3,558

Investment Income Interest 8,000 17,130 17 , 130

Miscellaneous 100 150 1 50 Total revenues 790,365 81 2,563 (484) 813,047


Highways and streets Salaries 329,769 329,199 (1 67) 329,3a6 Fringe benefits 1 1 7,309 1 1 4,032 2,251 1 1 1 ,761 Operating expenditures 303,1 1 1 266,254 1 1 , 194 277,060 Other services and charges 5,200 1 ,425 1 ,425 Capital outlay 45,076 45,075 45,075

Total expenditures 800.465 777,985 1 3,258

Excess (defioienoy) of revenues over expenditures PO,100) 34,578 (13,742) 48,320

OTHER FINANCING SOURCES (USES) Sale of assets 1 00 533 533 Transfers out (50,000) (50,OOO) (50,000) Total other financing sources (uses) (49,900) (49,467) !49,467)

Change in fund balance (60,000) (14,889) (13,742) ( 1 , 147)

Fund balance, January 1 289,042 289,042 71 ,673 217,369

Fund balance, December 31 $ 229,042 $ 274,153 ! 57 ,931 $ 216,222

Explanation of differences; The County budgets on the cash basis of accounting. Therefore, under the budgetary basis, revenues are recognized as oollected and expenditures when paid.

108

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS ROAD AND BRIDGE PRECINCT NO. 3 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Alllounts Budget to GMP Final Budgetary Differences Actual Amounts

Budget Basis Over (Under) GMP Basis REVENUES Ta�es

Current taxes $ 349,765 $ 361 ,259 $ $ 361 ,259 Delinquent taxes 1 0,000 10,096 (52) 1 0,148 Penalty and interest 4,000 5,041 (19) 5,060

Intergovernmental Vehicle license fees 220,000 235,350 235,350 Additional license fees 1 80,000 1 79,990 (413) 1 80,403 Permits 3.500 3,558 3,558

Investment income Interest 18,000 28,987 28,987

Miscellaneous 15,100 1 5,945 (304) 16,249 Total revenues 600,365 640,226 (768) 641 ,01 4


Highways and streets Salaries 403,161 384,474 (1 10) 384,584 Fringe benefits 124,661 1 21 ,326 2,229 1 19,097 Operating expenditures 272,220 237,793 5,659 232,1 34 other services and charges 8,700 3,607 3,607 Capital outlay 1 80,320 1 80,240 1 80,240

Total expenditures 989,062 927,440 7,778 919,662

Excess (deficiency) of revenues over expenditures (1 88,697) (87,214) (8,566) (78,648)

OTHER FINANCING SOURCES (USES) Sale of assets 1 00 327 327 Transfers out (50,000) (50,000) (50,000) Total other financing sources (uses) (49,900) (49,673) (49,673)

Change in fund balance (238,597) (1 36,887) (8,566) (128,321)

Fund balance, January 1 696,081 696,081 58,966 637,1 15

Fund balance, December 31 $ 457,464 $ 559,194 $ 50.400 $ 508,794

Explanation of differences: The County budgets on tlhe cash basis of accounting. Therefore, under the budgetary basis, revenues are recognized as collected and expenditures when paid,

109

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE FUNDS ROAD AND BRIDGe PRECINCT NO. 4 SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts Budget to GAAP Final Budgetary DH'ferences Actual Amounts

Budget Basis Over (Under) GAAP Basis REVENUES Taxes

Current taxes $ 427,491 $ 441 ,539 $ - $ 441,539 Delinquent taxes 12,000 1 2,298 (64) 12,362 Penalty and interest 5,200 6,155 (23) 6,178

Intergovernmental Vehicle license fees 230,000 235,350 235,350 Additional license fees 190,000 1 98,936 (456) 1 99,392 Permits 3,500 3,558 3,558

Investment income Interest 10,000 1 7,673 1 7,673

Miscellaneous 10,100 9,012 9,012 Total revenues 888,291 924,521 (543) 925,064


Highways and streets Salaries 408,255 384,587 257 384,330 Fringe benefits 1 26,179 1 1 9,262 3,096 1 1 6, 166 Operating expenditures 353,994 330,305 1 0,039 320,266 Other services and oharges 1 2,000 9,438 9,438 Capital outlay 97,500 95,498 68,304 27,194 Debt service 57,616 57,816 57,816

Totl'll expenditures 1 ,055,744 996,906 81 ,fl96 91 5,210

Excess (deficiency) of revenues over expenditures (167,4(3) (72,385) 182,239) 9,854

OTHER FINANCING SOURCES (USES) Sale of assets 100 8,849 8,849 Transfers out (50,000) (50,000) (50,000) Total other financing sources (uses) (49,900) (41,1 51) (41 ,1 51)

Change in fund balance (21 7,353) ( 1 1 3,536) (82,239) (31 ,297)

Fund balance, January 1 435,095 435,095 1 34,339 300,756

Fund balance, December 31 $ 217,742 $ 321 ,559 $ 52,100 $ 269,459

Explanation of differences: The County budgets on the cash basis of acoounting, Therefore, under the budgetary basis, revenues are recognized as collected and expenditures when paid.

1 10

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS · DEBT SERVIC£ FUNDS ROAD BONDS SINKING FUND SCHeDULE: OF REVENues, exPENDITURES, AND CHANGES IN FUND BALANCE · BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts Budget to GAAP Final Budgetary Differences

Budget Over (Underl REVENUES Taxes

Current taxes $ 31 7,1 54 $ 326,585 $ -

Delinquent taxes 7 ,000 9,039 (37) Penalty and interest 3,400 4,330 ( 13)

Investment income Interest 1 ,500 4,130

Totat revenues 329,054 344,064 (50)


Principal retirement 240,000 240,000 Interest and fiscal charges 82,787 82,449 1662)

Total expenditures 322,787 322,449 (662)

Change in fund balance 6,267 21 ,635 61 2

Fund balance, January 1 52,167 52,167 41

Fund balance, De<:ember 31 $ 51l,434 $ 73,802 $ 653

Explanation of differences: The County budgets on the cash basis of accounting. Therefore, under the budgetary basis, revenues are recogoized as collected and expenditures when paid.

1 1 1

Actual Amounts GAAP Basis

$ 326,585 9,076 4,343

4,130 344,134

240,000 63,1 1 1

323, 1 1 1

21 ,023

52,126

$ 73,149

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS JAIL BONDS SINKING FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For the year ended December 31, 2005


Budget Basis Over (Underl REVENUES Taxes

Current taxes $ 438,31 4 $ 452,471 $ -

Delinquent taxes 14,000 12,644 (63) Penalty and interest 5,500 6,012 (20)


Tolal revenues 459,714 474,645 (73)


Principal retirement 445,000 445,000 Interest and fiscal charges 47,475 47,175

Total expenditures 492,475 492,175

Change in fund balance (32,761 ) (1 7,530) (73)

Fund balance, January 1 71,190 71,1 90 49

Fund balanca, December 31 $ 38,429 $ 53,660 $ (24)


1 1 2


$ 452,471 12,697 6,032

3,618 474,718

445,000 47,175

492,175

(1 7,457)

71,141

$ 53,684

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS COURTHOUSE RESTORATION BONDS SINKING FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGeT AND ACTUAL For the year ended December 31, 2005


Budget Basis Over (Under) REVENUES Taxes

Current taxes $ 31 3,591 $ 324,539 $ Delinquent taxes 4,300 8,961 (31) Penalty and interest 3, 100 4,298 (14)


Total revenues 322,291 341 ,326 (51)


Principal retirement 225,000 225,000 Interest and fiscal charges 101,640 1 01,639


Change in fund balance (4,349) 14,687 (51)

Fund balance, January 1 37,633 37,633 39


$ 324,539 8,998 4,31 2

3,528 341,377

225,000 101,639 326,639

14,738

37,594

Fund balance, December 31 $ 33,284 $ 52,320 $ (12) $ 52,332


1 1 3

COUNTY OF VICTORIA, TEXAS NONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE FUNDS BRIDGE STREET ANNEX SINKING FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -BUDGET AND ACTUAL For the year ended December 31, 2005

Actual Amounts Budget to GMP Final Budgetary Differences

Budset Basis Over (Under) REVENUES Taxes

Current taxes $ 461 ,076 $ 496,619 $ -

Delinquent taxes 9,000 1 3,719 (56) Penalty and Interest 5,700 6,575 (21 )

Investment Income Interest 2,200 5,459

Total revenues 497,976 522,372 (77)


Principal retirement 31 5,000 315,000 Interest and fiscal charges 186,169 1 85,168


Change In fund balance (3.193) 22,204 (77)

Fund balance. January 1 51,362 51,382

Actual Amounts GMP Basis

$ 496,619 13,775 6,596

5,459 522,449

315,000 165,168 500,168

22,281

51,326

Fund balance, December 31 $ 48,189 $ 73.586 $ (21) $ 73,607


1 1 4

A@ENCY FUNPS

Agency Funds are used to account for the monies received and disbursed by the County in the capacity of trustee, custodian, or agent for individuals or other entities.

County Clerk-Trusts Fund - Accounts for monies held by the County Clerk in trust for various minors of the County of Victoria .

Criminal District Attorney Fund - Accounts for the merchants' portion of collections made on "hot' checks.

District Clerk-Trusts Fund Accounts for monies held by the District Clerk in trust for various minors of the Counly of Victoria.

District Clerk·Chiid Support Fund - Records the collection and disbursement of child support payments made by residents of Victoria County.

Clerk's Special Fund - Accounts for the collection and disbursement of eXCess fees collected by both the County and District Clerks.

Jail Inmate Trust Fund - Accounts for monies that are held for the benefit of and use by Inmates in the County Jail.

Sheriff Special Fund - RecordS out-of-county cash bonds and various flnes and fees collected by the Sheriff's department These funds are remitted to the State and other entities as appropriate.

State Fees Fund Accounts for statutory additions to various fines COllected by the County. These fees are transferred to the State and the General Fund of the County on a periodic basis.

Justice of the Peace Special Fund - Records the disposition of cash bonds and miscellaneous overpayments. These funds are disbursed according to court orders.

Tax Assessor-Colleotor Fund - Accounts for the collection of ad valorem taxes, various vehicle taxes, and sales taxes by the County Tax Assessor-Collector. These monies are remitted to other various County funds and the State as collected.

Juvenile Restitution Fund - Records the receipt and disbursement of monies collected from juvenile offenders and paid to owners of damaged property.

SpeCial Services Fund - Records confiscated drug monies prior to their being awarded, by action of the court, to various individuals and/or County departments.

Munlolpal Court Fund - Accounts for the receipt of monies collected from City of Victoria inmates housed In the Victoria County Jail. Such monies consist of fines, court costs, and other related items that are in turn remitted to the City of Victoria.

Juvenile Inmate Trust Fund - Accounts for monies that are held for the benefit of and use by inmates in the County Juvenile Detention facility.

CDA State Judiciary Fund - Accounts for funds received from the State Comptroller's Office to provide financial assistance to district attorneys for office expenses, supplies, and personnel.

1 1 5

COUNTY OF VICTORIA, TEXAS AGENCY fUNDS COMBINING STA TEMENT OF CHANGES IN ASSETS AND LIABILITIES for the year ended December 31, 2005

Balance at Balance at Beginning End

of Year Additions Deletions of Year COUNTY CLERK·TRUSTS

ASSETS Cash and cash equivalents $ 1 ,546,708 $ 693,899 $ 787,627 $ 1,452,980

LIABILITIES Accounts payable $ 1 ,546,708 $ 693,699 $ 787,627 $ 1,452,960

CRIMINAL DISTRICT AlTORNEY ASSETS

Cash and cash equivalents $ 19,043 $ 1,005,627 $ 1,017,434 $ 7,236

LIABILITIES Accounts payable $ 19,043 $ 1 ,005,627 $ 1,01 7,434 $ 7,236

DISTRICT CLERK-TRUSTS ASSETS

Cash and cash equivalents $ 2.899,674 $ 795,748 $ 1,226,775 $ 2,468,647

LIABILITIES Accounts payable $ 2,899,674 $ 795,748 $ 1 ,226,775 $ 2,468,647

DISTRICT CLERK-CHILD SUPPORT ASSETS

Cash and cash equivalents $ 1 1 ,549 $ 755,821 $ 755,668 $ 1 1,702

LIABILITIES Acoounts payable $ 1 1,549 $ 755,821 $ 755,668 $ 11,702

CLERK'S SPECIAL ASSETS

CaSh and cash equivalents $ 1 ,653 $ 14,203 $ 15,831 $ 25 Other receivables 25 1 8

$ 1,678 $ 1 4,221 $ 1 5,856 $ 43

LIABILITIES Accounts payable $ 1,678 $ 14,221 $ 15,856 $ 43

JAIL INMATE TRUST FUND ASSETS

Cash and cash equivalents $ 34,963 $ 594,179 $ 612,572 $ 16,570

LIABILITIES Accounts payable $ 34,963 $ 594,1 79 $ 612,572 $ 1 6,570

(continued)

1 1 6

COUNTY OF VICTORIA, TEXAS AGENCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES For the ye<lf ended December 31, 2005


of Year Additions Deletions of Year SHERIFF SPECIAL

ASSETS Cash and cash equivalents $ 1 0,414 III 31 3,386 $ 322,800 $ 1 ,000 Other reoeivables 250 250

Total assets $ 1 0,414 $ 31 3,636 $ 322,800 $ 1 ,250

LIABILITIES Accounts payable $ 1 0,414 $ 31 3,636 $ 322,800 $ 1,250

STATE FEES ASSETS

Cash and cash equivalents $ 1 79,610 $ 942,550 $ 923,317 $ 1 98,843 Other receivables 7,578 2,484 7,578 2,484

Total assets $ 1 87,1 88 III 945,034 $ 93°1895 $ 201,327

LIABILITIES Accounts payable $ 187,188 $ 945,034 $ 930,895 $ 201 ,327

JUSTICE OF THE PEACE-SPECIAL ASSETS

Cash and cash equivalents $ 2°1842 $ 1 2,831 $ 33,447 $ 226

LIABILITIES Accounts payable $ 20,842 $ 1 2,831 $ 33,447 $ 226

TAX ASSESSOR-COLLECTOR ASSETS

Cash and cash equivalents $ 2,574,290 III 86,1 87,066 $ 85,539.173 $ 3,222,183 Other receivables 51 ,289 54,945 51 ,289 54,945

Total assets $ 2.625,579 $ 86,242,o1 1 $ 85,590,462 $ 3,277,1 28

LIABILITIES Accounts payable $ 1 ,141 $ 82,966,139 $ 82,966,024 1 ,256 Due to other governments 2,624,438 3.275,872 2,624,438 3,275,872

Total liabilities $ 2.625.579 $ 86,242,01 1 $ 66,590,462 $ 3.277.128

JUVENILE RESTITUTION ASSETS

Cash and cash equivalents $ 1 87 $ 1 0,715 $ 10,487 $ 415

LIABILITIES Accounts payable $ 1 87 $ 1 0,715 $ 1 0,487 $ 41 5

(continued)

1 1 7

COUNTY OF VICTORIA, TEXAS AG£NCY FUNDS COMBINING STATEMENT OF CHANGES IN ASSE:1S AND LIABILITIES For the year ended December 31, 2005


of Year Additions Deletions of Year SPECIAL SERVICES

ASSETS Cash and cash equivalents $ 362.569 $ 49,838 $ 345,060 $ 67.347 Seized assets 70.516 6,881 70,51 1 6.886

Total assets $ 433,085 $ 56,719 $ 415,571 $ 741233

LIABILITIES Accounts payable $ 433,°85 $ 56,719 $ 41 5.571 $ 74,233

MUNICIPAL COURT FUND ASSETS

Cash and cash equivalents $ 7,883 $ 234,363 $ 228.590 $ 1 3,656 Other receivables 7,522 7,522

Total assets $ 7.883 � 241,885 $ 228,590 $ 21 .178

LIABILITIES Accounts payable $ 7,883 $ 241 ,885 $ 228,590 $ 21 . 1 78

JUVENILE INMATE TRUST FUND ASSETS

Cash and cash equivalents $ 745 $ 2,845 $ 2,842 $ 748

LIABILITIES Accounts payable $ 745 $ 2,845 $ 2,842 $ 748

CDA STATE JUDICIARY FUND ASSETS

Due from other governments $ 10,81 8 $ 8,1 38 $ 10,818 $ 8,138 Other receivables 4,525 4.525

Total assets :II 10,818 $ 12,663 $ 1 0,818 $ 1 21663

LIABILITIES Accounts payable $ 1 0,589 $ 1 2.427 $ 1 0,589 $ 1 2,427 Accrued expenditures 229 236 229 236

Total liabilities $ 1 0,818 $ 1 2,663 $ 1 0,818 $ 12.663

TOTALS - ALL AGENCY FUNDS ASSETS

Cash and cash equivalents $ 7,670,130 $ 91.61 3.071 $ 91 ,821 ,623 $ 7,461 .578 Other receivables 58,892 69,744 58,892 69,744 Due from other governments 10.81 8 8,138 1 0,818 8.138 Seized assets 70.516 6,881 70.51 1 6.886

Total assets $ 7.810.356 $ 91,697,834 $ 91,961,844 $ 7.546.346

LIABILITIES Accounts payable $ 5.1 85,689 $ 88,421,726 $ 89,337,177 $ 4,270.238 Accrued expenditures 229 236 229 236 Due to other governments 2.624,438 3,275,872 2.624,438 3,275.872

Total liabilities $ 7.81 0.356 $ 91,697,834 $ 91 ,961,844 $ 7,546.346

1 1 8

STATISTICAL SECTION (UNAUDITED)

COUNTY OF VICTORIA, TEXAS GENERAL GOVERNMENTAL EXPENDITURES BY FUNCTION (1) Last ten fiscal }IEIars

Fiscal Year Highways Culture Ended General Public and and

December 31 Government Safety Streets Recreation

1 996 $ 9,007,346 $ 6,479,580 $ 2,643,508 $ 955,1 36

1 997 9,484,560 8,036,287 2,615,299 964,160

1 998 10,993,798 8,517,491 3,016,237 976,903

1999 1 1 ,767,909 8,440,385 3,439,508 1 ,090,778

2000 1 4,336,043 8,363,OB6 3,651,506 1 ,035,824

2001 15,1 18,795 9,286.414 3,507,070 1 ,1 35,727

2002 13,166,835 9,528,954 3,707,315 1 ,148,920

2003 1 3,068,613 8,614,925 3,331 , 107 1 , 1 90,649

2004 13,277,443 8,963,262 3.808,439 1 ,1 57,450

2005 14,278,131 9,283,373 4,337,766 1 ,241 ,058

( 1 ) Includes General, Special Revenue, Debt Service, and Capital Project Fund expenditures,

Source: County of Victoria

1 1 9

Public Health

$ 2,658,938

2.498,023

2,664,140

3,084,031

2,974,273

3,215,084

3,422,583

3,554,074

3,489,;;>44

3,712,723

Capital Debt Outlay Service Total

$ 433,623 $ 2,387,275 $ 24,565,406

1 ,014, 137 2,334,686 26,947,1 54

491,399 1 .647,1 98 28,209,1 66

2,600,809 1 ,405,297 31 ,828,71 7

233,064 1 ,352,623 31 ,946,419

855,424 1 ,488,474 34,606,988

1 ,774,802 1 ,51 3,231 34,262,640

2,971 ,375 1 ,651 ,912 34,382,855

542,487 1 ,600,642 32,638,967

643,352 1 ,642,093 35,13S,496

1 20

COUNTY OF VICTORIA, TEXAS GeNERAL GOVERNMENTAL REVENUES BY SOURCE (1) Last ten fiscal years

Fiscal Year Fees of Office Fines Ended and Inter- and

December 31 Taxes User Fees governmental Forfeitures

1 996 $ 1 3,564,067 $ 1 ,838,100 $ 7,094,721 $ 804,685

1997 14,1 81 ,211 1 ,963,787 8,394,543 1 ,023,676

1 998 14,714,305 1 ,886,278 9,254,030 1 ,21 1 ,423

1999 1 5,303,357 1 ,764,916 1 0,256,1 1 6 890,265

2000 15,801,261 1 , 970,039 9,437,979 1 , 1 87,787

2001 16,442,785 2,017,132 9,648,596 1 ,069,082

2002 17,073,371 2,21 7,546 9,054,252 840,129

2003 1 7,902,538 2,207,983 1 0,546,682 1 ,619,602

2004 1 9,855,785 2,595,533 10,035,336 1 .403,048

2005 21 ,232,178 2,472,287 9,830,274 1 ,463,626

( 1 ) Includes General, Special Revenue, Debt Service, and Capital Project Fund expenditures,


121

Investment Income

$ 558,814

61 9,933

781 ,366

761 ,378

624,131

625,154

398,71 1

223,670

272,257

585,742

Licenses and

Permits Other Total

$ 35,948 $ 707 ,208 $ 24,623,543

33,213 928,413 27,144,776

48,974 863,840 28,760,216

32,782 1 ,419,91 9 30,426.735

45,605 2,103.951 31 ,370. 753

32,330 2,61 9,524 32,474,603

32,990 977,634 30,594,633

40,053 1 ,480,947 34,021 ,475

36,451 1 .204.01 7 35,402,427

33.524 SS4,017 3(;,501.648

1 22

COUNTY OF VICTORIA, TEXAS ESTIMATED ACTUAL VALUE AND ASSESSED VALUE OF TAXABLE: PROPERTY Last ten fiscal years

(1 ) Estimated Assessed County

Tax Roll Actual Value Percentage Value Tax Rate Tax Levy

1995 $ 3,374,254,1 1 0 1 00.00% $ 3,374,254,1 1 0 0.3410 $ 9,566,303

1 996 3,602,838,570 1 00.00% 3,602,838,570 0.3410 9,882,352

1 997 3,694,072,420 1 00.00% 3,694,072,420 0.3410 10 , 164,770

1 998 3,829,320,660 1 00.00% 3,829,320,660 0.3410 1 0,743,545

1 999 3,939,71 0,595 1 00.00% 3,939,710,595 0.3410 1 1 ,001,347

2000 4,060, 1 72,186 1 00.00% 4,060,1 72,186 0.3410 1 1 ,283,448

2001 4,215,690,368 100.00% 4,215,690,368 0.3485 1 2,236,930

2002 4,264,566,312 1 00.00% 4,264,566,312 0.3601 1 2,765,348

2003 4,307,725,666 1 00.00% 4,307,725,666 0.3986 14,1 10,533

2004 4,524,675,041 1 00.00% 4,524,675,041 0.3986 14,744,800

( 1 ) Assessed values shown above are before all exemptions.


1 23

COUNTY OF VICTORIA, TEXAS TAX RATE DISTRIBUTION Last ten fiscal years

General Total F.M. and Unlimited Fiscal Operating Limited Constitutional Lateral Road Tax Road

Tax Roll Year Fund Tax Bonds Tax Levy Tax Bonds

1 995 1 996 0.2228 0.0585 0.2813 0.0550 0.0047

1996 1 997 0.2297 0.0569 0.2866 0.0500 0.0044

1997 1998 0.2361 0.0406 0.2767 0.0600 0.0043

1 998 1 999 0.2361 0.0371 0.2732 0.0600 0.0078

1999 2000 0.251 1 0.0237 0.2748 0.0600 0.0062

2000 2001 0.2561 0.0248 0.2809 0.0550 0.0051

2001 2002 0.2578 0.0393 0.2971 0.0450 0.0064

2002 2003 0.2764 0.0371 0.31 35 0.0400 0.0066

2003 2004 0.3075 0.0362 0.3437 0.0450 0.0099

2004 2005 0.3101 0.0346 0.3447 0.0450 0.0089

Tax Rate Limitations The Texas Constitution (Art. VIII. Sec. 9) imposes a limit of $.80 per $1 00 of assessed valuation fur operating (General) fund purposes. In addition. a Farm-to-Market Road Tax (Art. 7048A. VACS) of $.30 per $100 of assessed valuation was adopted in 1955. Hence. a total tax rate of $1.10 is authorized for the County.


1 24

Total Tax Rate

0.3410

0.3410

0.3410

0.3410

0.3410

0.3410

0.3485

0.3601

0.3986

0.3986

COUNTY OF VICTORIA, TEXAS PROPERTY TAX LEVIES AND COLL£CTIONS Last ten fiscal years

Percent Percent of Current of Levy Delinquent Total Total Tax

Total Tax Tax Collected Tax Tax Collections Tax Roll Levy Collections Currently' Collections Collections to Tax Levy

1 995 $ 9,566,303 $ 9,255,753 96.75% $ 270,633 $ 9,526,386 99.58%

1996 9,882,352 9,598,704 97.13% 290,650 9,889,354 1 00.07%

1997 10,164,770 9,888,879 97.29% 279,603 10,168,482 100.04%

1 998 1 0,743,545 10,389,773 96.71% 251,020 1 0,640,793 99.04%

1 999 1 1 ,001 ,347 1 0,629,356 96.62% 281 ,289 10,91 0,645 99.18%

2000 1 1 ,283,448 1 0,926,207 96.83% 308,318 1 1 ,234,525 99.57%

2001 12,236,930 1 1 ,816,256 96.56% 372,504 12,1 86,760 99.61%

2002 12,765,348 12,298,988 96.35% 358,925 12,657,913 99.16%

2003 14, 1 1 0,533 13,664,697 96.84% 396,595 14,061 ,492 99.65%

2004 14,744,800 14,613,351 99.1 1 % 414,156 15,027,507 1 01 .92%

SourCe; County of Victoria

1 25

COUNTY OF VICTORIA, TEXAS DIRECT AND OVERLAPPING TAX RA TES PER $100 OF ASSESSED VALUE Last ten fiscal years

Victoria County City County Victoria

Fiscal of of Navigation Junior Victoria Bloomington Industrial Nursery McFaddin Year Victoria Victoria District College 1 .5.0. 1.5.0. 1.5.0. I.S.D. 1.8.0.

1996 .3410 .7100 .0132 .1 521 1 .4250 1 .3800 1 .4400 1 .3250 1.3800

1997 .3410 .6900 .0132 .1500 1 .4250 1 .3800 1 .4400 1 .3531 1 .5000

1998 .3410 .7000 .0131 .1 422 1 .4260 1 .4400 1 .4400 1 .3850 1 .4400

1999 .3410 .7000 .0123 .1413 1 .4860 1 .4660 1 .4400 1 .4100 1 .5000

2000 .341 0 .7000 .0418 .1 394 1 .4750 1 .5490 1 .4100 1 .3350 1 .5000

2001 .3410 .7000 .0414 .1 394 1 .5285 1 .5350 1 .6200 1 .3950 1 .3650

2002 .3485 .7000 .0401 . 1 394 1 5510 1.5600 1 .9894 1 .3850 1 .2400

2003 .3601 .7000 .0404 .1 394 1 .6535 1 .6630 1 .9387 1 .3700 1 .5000

2004 .3986 .7000 .0402 .1491 1 .5535 1 .6672 1 .8485 .8998 1 .5000

2005 .3986 .6900 .0386 .1461 1 .5535 1 .6433 1 .7361 1 .0250 1 .4500


1 26

Quail W.C.I.D. W.C.I.D. V.C.D.D. V.C.D.D. Creek

# 1 # 2 # 2 # 3 M.U.D. Total

.3218 1 .0910 .0877 .0700 . 1877 9.9251

.3645 1 .0950 .0939 .0500 .191$ 10.0872

.6446 1 .1 267 .0972 .0504 .1964 10.4416

.6450 1 . 1710 .0972 .0500 .1885 1 0.6463

.6629 1 .1 229 .0972 .0500 .1 900 10.6742

.6427 1 .0793 .0976 .0500 .1 900 10 .7249

.6551 1 .0880 .0979 .0500 .1900 1 1 .0544

.6262 1 .0332 . 1103 .0500 .1 900 1 1 .2748

.6146 1 .0167 . 1241 .0500 .1 937 10 .7580

.6162 .991 1 .1247 .0477 .1 896 10.6505

1 27

COUNTY OF VICTORIA, TEXAS RA TlO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA Last ten fiscal years

General Debt Service Tax Fiscal Estimated Assessed Obligation Funds Roll Year Population Value Bonded Debt AvaHable

1 995 1 996 80,100 $ 3,374,254,1 10 $ 9,775,000 $ 520,592

1 996 1 997 81 ,600 3,602,838,570 8,540,000 604,362

1 997 1998 82,650 3,694,072,420 1 1 ,970,000 641 ,793

1 998 1 999 82,087 3,829,320,660 1 1 ,200,000 708,224

1 999 2000 84,088 3,939,710,595 10,375,000 368,023

2000 2001 84,710 4,060,1 72,186 1 4,485,000 25,218

2001 2002 84,710 4,215,690,368 1 3,575,000 144,701

2002 2003 85,396 4,264,566,312 1 2,71 6,000 1 51 ,540

2003 2004 85,853 4,307,725,666 1 1 ,555,000 2 1 2, 187

2004 2006 85,648 4,524,675,041 10,330,000 252,772

Source; County of Victoria

1 28

Net Ratio of Net Net Bonded Bonded Debt to Bonded Debt

Debt Assessed Value per Capita

$ 9,254,408 0.27% $ 1 1 5.54

7,935,638 0.22% 91.25

1 1 ,328,207 0.31 % 1 37,06

1 0,491 ,776 0.27% 127.81

10,006,977 0.25% 1 19.01

1 4,459,762 0.36% 1 70.70

13,430,299 0.32% 158.54

12,563,460 0.29% 147.12

1 1 ,342,81 3 0.26% 1 32.12

10,077,228 0.22% 1 1 7,66

1 29

COUNTY OF VICTORIA, TEXAS COMPUTATION OF LEGAL DEBT MARGIN December 31, 2005

Assessed value of real property

(1 ) Debt limit percentage

Legal debt limit

Amount of debt applicable to debt limit: General obligation bonds

Less: Available in debt service funds

Legal debt margin

$ 10,330,000

252,772

(1 ) Established by Article 3, Section 52 of the Constitution of the State of Texas.


1 30

$ 4,524,675,041

25,00%

1 ,131 , 168,760

(10,on,228)

$ 111 21 ,0911532

COUNTY OF VICTORIA, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT December 31, 2005

Jurisdiction

Direct Debt:

County of Victoria

Overlapping Debt:

City of Victoria

Victoria County Navigation District

Victoria Junior College District

Victoria Independent School District

Industrial Independent School District

Victoria County Water Control and Improvement District # 1

Victoria County Water Control and Improvement District # 2

Total Overlapping Debt

Total Direct and Overlapping Debt

Net Debt Outstanding Date Amount

12/31/2005 $ 1 0.017,228

9/30/2005 61 ,496.614

1 2/31/2005 2,492.584

8/3112005 5,799,271

6/31/2005 29,420,316

6/31/2005 9,036,421

6/30/2005 1 ,091,661

9/30/2005 384,142

109.723,209

$ 1 1 9,800,437

Percent Applicable to County

1 00.00%

1 00.00%

1 00.00%

100.00%

1 00.00%

25.46%

1 00.00%

100.00%

Dollar Amount Applicable to County

$ 1 0.077.228

61 ,496,614

2,492.584

5,799,271

29.420.31 6

2,301 . 1 62

1 ,091 ,861

384,142

1 02.985,970

$ 1 1 3,063.198

Sources: County of Victoria, City of Victoria. Victoria Junior College, Victoria Independent School District, Industrial Independent School District, Victoria County Water Control and Improvement District Numbers 1 and 2.

1 31

COUNTY OF VICTORIA, TEXAS RA TlOS OF ANNUAL D£BT S£RVIC£ EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL EXPENDITURES Last ten fiscal years

Debt Service EXj;!enditures (1 ) Fiscal Interest General Year Principal and Other Total Expenditures Ratio

1 996 $ 1 ,401 .578 $ 985.691 $ 2.387,275 $ 24.070,004 9.92%

1997 1 ,457.21 3 877,475 2,334.688 26,947.1 54 8.66%

1998 965.000 582.198 1 ,547,198 28,209,166 5.48%

1999 770,000 635.297 1 ,405.297 31 ,828.717 4.42%

2000 825,000 527.623 1 ,352,623 31,21 6.597 4.33%

2001 890,000 4134.672 1 ,374,672 34,606,988 3.97%

2002 910,000 603,231 1 ,513,231 34,262.640 4.42%

2003 975.000 676,912 1 .651,912 34,382,855 4.80%

2004 1 ,1 60.000 440,642 1 .600,642 32.838,967 4.87%

2005 1 ,225,000 41 7,093 1 ,642.093 35,1 38.496 4.67%

(1) Includes General, Special Revenue. Debt Service. and Capilill Project Fund expenditures.


1 32

COUNTY OF VICTORIA, TEXAS PRINCIPAL TAXPAYERS 2004 Tax Roll

Percent Type of Assessed of

Name Business Valuation Valuation

Invista Chemical Manufacturer $ 529.755.990 1 1 .71%

Equistar Chemicals. LP Chemical Manufacturer 45,430,835 1 .00%

AEP Texas Central Company ElectriC Utility 51 ,986.940 1 .1 5%

Air Liquide America Corporation Chemical Manufacturer 35,160.810 0.78%

Southwestern Bell Telephone Company Telephone Utility 32,589,220 0.72%

H S Victoria, LP Real Estate 26,725.860 0.59%

Carlisle PlastiCS. Inc. PlastiCS Manufacturer 24,807.940 0.55%

Victoria Hospital. LLC Hospital 20,784.630 0.46%

Union Gas Operating Company Gas Utility 16,452,550 0.36%

H E Butt Grocery Company Retail 1 5.496.300 �

$ 79911 91 ,075 17 .66%


133

COUNTY OF VICTORIA, TEXAS SALES TAX REVENUE Last ten fiscal years

(1 ) (1 ) (1 ) Percel'lt of Equivalent of (1 )

Fiscal Total Ad Valorem Ad Valorem Per Year Collected Tax Levy Tax Rate Capita

1997 $ 4,074,422 41 .23% 0.1 406 $ 49.93

1 998 4,382,896 43.1 2% 0.1470 53.03

1999 4,503,101 41 .91% 0.1 429 54.86

2000 4,729,825 42.99% 0.1466 56.25

2001 4,992,320 44.24% 0.1 509 58 93

2002 4,858,298 39.70% 0.1 384 57.20

2003 4,921,323 38.55% 0.1 388 57.63

2004 5,546,860 39.31% 0.1567 64.61

2005 5,883,458 39.90% 0.1590 68.69

( 1 ) Information for years prior to 1997 is not readily available. Additional Information will be added until ten years are disclosed.


1 34

COUNTY OF VICTORIA, TEXAS SALARIES AND SURETY BONDS OF PRINCIPAL OFFICIALS December 31, 2006

Name

Donald R. Pozzi County Judge

Chris Rivera Commissioner, Precinct # 1

Robert J. Nobles Commissioner, Precinct # 2

Gary Burns Commissioner, Precinct # 3

Wayne D. Dierlam Commissioner, Precinct # 4

Judy McAdams County Auditor

Cathy Bailey County Treasurer

Rena Scherer County Tax Assessor-Collector

Val D. Huvar County Clerk

M.P. "Dexter" Eaves Criminal District Attorney

Laura Weiser Judge, County Court-at-Law # 1

Juan Velasquez, I I I Judge, County Court-at-Law # 2

Cathy Stuart District Clerk

T Michael O'Connor County Sheriff

Annie Ramos Justice of the Peace # 1

Jack Milam Justice of the Peace # 2

Beatriz Gonzalez Justice of the Peace # 3

Tom Eastland Justice of the Peace # 4


1 35

Annual Surety County Bond

Com l2ensation Amount

$ 82,929 $ 1 ,000

62,0 1 2 6,000

62,012 6,000

62,012 6,000

62,01 2 6,000

62,012 5,000

62,012 250,000

62,012 100,000

62,01 2 1 00,000

7,010 5.000

67,269 1 ,000

67,269 1 ,000

62,012 70,000

62,012 5,000

36,210 5.000

36,210 5,000

62,01 2 5,000

36,210 5,000

COUNTY OF VICTORIA, TEXAS DEMOGRAPHIC STATISTICS December 31, 2005

Average Number of

Number of Persons per Unemployment Population Households Household Rate

1 900 1 3,678 NfA N/A N/A

1 91 0 1 4,990 NIA N/A NIA

1 920 1 8,271 N/A NfA N/A

1930 20,048 NIA N/A N/A

1940 23,741 NIA NIA NIA

1 950 31 ,241 NIA NfA NIA

1960 46,475 N/A N/A NIA

1970 53,766 NfA NIA NIA

1 980 68,807 23,700 2 .90 NIA

1990 74,361 26,269 2.83 5.20%

1991 75,502 26,200 2.88 4.90%

1 992 77,042 26,300 2.93 5.80%

1993 77, 1 71 26,700 2.89 5.1 0%

1994 77,300 27,300 2.83 5.90%

1995 79,992 28,200 2.84 6.01%

1996 80,100 28,600 2.80 5.20%

1997 81 ,600 28,800 2.83 3.70%

1 998 82,650 28,800 2.87 4.10%

1 999 82,087 29,200 2.81 3.60%

2000 84,088 29,400 2 .86 3.50%

2001 84,710 30,400 2.79 4.00%

2002 84,932 33 ,473 2.54 5.20%

2003 85,395 33,473 2.55 5.20%

2004 85,853 30,982 2.77 5.20%

2005 85,648 30,982 2.76 5.40%

Souroes: County of Viotoria, Victoria Economic Development Corporation, US Census Bureau, US Dept. of Labor

136

COUNTY OF VICTORIA, TEXAS MISCELLANEOUS STATISTICAL DATA Dec!':Imber 31, 2005

Creation

Form of government

Area

Altitude

County maintained roads, in miles

Hard surface Gravel Total miles maintained

Motor vehicle registrations

Voting statistics

Total number of registered voters Votes cast in presidential election Voter turnout percentage

Number of County employees


Created In 1836 from Mexican municipality named for Mexican President Guadalupe Victoria.

A public corporation and political sUbdivision of the State of Texas.

892 square miles.

200 feet above sea level.

Pet. # 1 Pet. # 2 Pet. # 3 Pet. # 4 Total 96 1 1 8 1 32 80 426 79 19 5 81 184

1 75 1 37 1 37 1 61 610

Year Number 1 996 69,500 1997 73,736 1 998 75,236 1999 78.551 2000 77,169 2001 81 ,007 2002 82,472 2003 81 .773 2004 81 ,739 2005 85,407

2004 2000 1996 1 992 198s 54,738 55,130 48,447 37,176 38,390 29.833 27.582 24.256 26.037 24.353

55% 50% 50% 70% 63%

2005 2004 2003 2002 2001 587 673 546 570 575

1 37

SINGLE AUDIT SECTION

HARRISON, WALDROP & UHEREK, L.L.P.

HWU ce�IFIED PUBLIC ACCOUNTANTS 101 S, M ... I�j, SUITE .o1oo YICTO�rA. f;X ... :; 77901 -81 �2

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable County Judge and Members of the Com missioners' Court

Cou nty of Victoria, Texas

STEPHeN W. VAN MANEN, CPA

HAMILTOf'>' H. REDMON, c;;;PA

DeNNIS c. CIHAL CP' .....

E. e�l,.Ice WOOLSON. CPA e�IC L. KUCER .... , CPA

CLAYTON P. VAN PliiI.T.CPA

R06�IU W. SCHAA�, CP� MeliSSA. M. TERRY, CPA

VOICE; !361) 573-3255 FAX: (MII 57:l-9531

We have audited the financial statements of the governmental activities, the buslnes5"\ype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of County of Victoria, Texas (the 'County") as of and for the year ended December 31 , 2005, which collectively comprise the County's basic financial statements and have issued our report thereon dated May 5, 2006. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The financial statements of the C�izens Medical Center and the Victoria County Child Welfare Board were not audited in accordance with Government Auditing Standards.

Internal Control Over Financial Reponing

In planning and performing our audit, we conSidered the County's internal control over finanCial reporting In order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the Internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the Internal control over financial reporting that might be material weaknesses. A materfal weakness Is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses,

Com pliance and Other Matters

As part of obtaining reasonable assurance about whether the County's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and malerial effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances on noncompliance or other matters thai are reqUired to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the County Judge and members of Commissioners' Court, management, and federal and state awarding agencies, and is not Intended to be and should not be used by anyone other than these specified parties.

�UWu,.,�1H. May 5, 2006

MEMBERS OF AMERIC.-.N INSTITUTe O� CERTIFIEO PUSllC ACCOUNTANTS

TEXAS SOCIeTY OF CERTlPIEO PUBLIC ACCOUNTANTS

HARRISON, WALDROP & UHEREK, L,L.P.

HWU CERTI�IED PrJeLIC ACCOUNTANTS

101 S. MAIN, SUIT� 400 VICTO�IA, TEXAS 77901-81.42

REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABI.E TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPI.IANCE IN ACCORDANCe WITH OMB CIRCULAR A-i 33



Compliance

STePHEN w, VAN MANEN. CPA I-IAMI�TON H. �eOMON, CPA

DENNIS C, CII.jAL, CPA E. BRUCE wOOLSON. CPA

EFlIC l. r.:UCERA, CPA

C�A'r'TON P. VAN PELT, CPA

FJOBERT W. SCHAAR, CPA MEliSSA M. TERRY, CPA

VOICE.: 1:;'61) ,!:i3-325S FAX: {361J 573-9531

We have audited the complianoe of the County of Victoria, Texas (the 'County"), wRh the types of compliance requirements desoribed in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31 , 2005. The County's major federal programs are identified in the summary of auditor's results section of the acoompanylng schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the County's management. Our responsibility is to express an opinion on the County's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audrts contained In Government Auditing Standards. issued by the Comptroller General of the Un�ed States; and OMS Circular A·133. Audits of States, Local Governments. and Non-Profrt Organizations. Those standards and OMS Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types Of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the County's compliance with those requirements.

In our opinion, the County oomplied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December 31, 2005.

lD.lemal Control Over Compliance

The management of the County is responsible for establishing and maintaining effeCb\le Internal control oller compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit. we conSidered the County's internal control over compliance with requirements that could have a direct and malerial effect on a major federal program in order to determine our auditing procedures for the purpose of expressing an opinion on compliance and to tesl and report on internal control over compliance In accordance with OMB Circular A-133.

MEMBEIiIS OF AM�I:!ICAN INSTITUTE OF ceRTIFIED PUBLIC ACCOIJNTA.NTS

TEXAS SOCIETY OF ceRTIFI�O PUBLIC ACCOUNTANTS



Our consideration of the internal control over compliance would not necessarily disclo$e all matters in the Internal control that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal conll'ol components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.

This report is intended solely for the infonnatlon and use of the County Judge and members of Commissioners' Court, management, and federal and state awarding agencies, and is not intended to be and should not be used by anyone other than these specified parties.

May 5, 2006

140

COUNTY OF VICTORIA, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS For the year ended December 31, 2005

Federal Grantor/Pass-Through Grantor/Program Title

FEDERAL EXPENDITURES

U, S. Department of Transportation Airport Improvement Grant Airport Improvement Grant

Total U.S. Department of Transportation

U. S, Department of Homeland Security State Homeland Security Program State Homeland Security LETPP

Total U.S. Department of Homeland Security

U. S. Department of Justice

Federal CFDA

Number

20.106 20.106

97.004 97.074

Passed Through the Office of Governor of T(lxas, Criminal Justice Division Victims Coordinator Uason Grant 1 6.575 Victims Coordinator Llason Grant 16.575 Victims Coordinator Uason Grant 1 6.575 Victims Coordinator Liason Grant 1 6.575 Other Viotims Assistance Grant 16.575 Other Victims Assistance Grant 16.575 Juvenile Accountability Incentive Block Grant 16.523

Total U.S. Department of Justice

U, S. Department of Agriculture Passed Through T(lxas Department of State Health SelVlces

Special Supplemental Nutrition Program for Women, Infants, and Children 10.557

Special Supplemental Nutr�lon Program for Women, Infants, and Ch ildren 10.557

Total Texas Department of Stale Health Services

Passed Through Texes Department of Human SelV/ces School Breakfast Program National School Lunch Program

Total Texas Department of Human Services

Total U.S. Department of Agriculture

1 41

10.553 1 0.555

Agency or Pass-through

Number

3-48-0219-1 8-04 3-48-021 9-1 7-03

2004-GE-T 4-001 5 2004-GE-T4-0015

04G03714 06-02042 04G03821 06-02051 04003726 06-02864

JB4>3-J20-1 5526-05

74600244524>6

7460024452-05

TX235-2005 TX235-2005

Expenditures

$ 752,060 1 .009,496

1,761.556

64,900 1 4,998

ZIl,698

22,787 1 8,801 25,31 1 15,293 31 ,735 17,648 4,722

1 36,297

1 96,809

552,01 1

748,820

22,640 42,094

64,934

813,754

(continued)


Federal CFDA

Federal Grantor/Pass-Through Grantor/Program Title Number

FEDERAL EXPENDITURES - (Continued)

U. S. Department of Health and Human Services Passed Through Texas Department of State Health Services

HIV Prevention Activities - Health Department Based 93.940 BNS-Public Health Nutrition 93.991 Immunization Grant 93.268 Immunization Grant 93.268

lotal Texas Department of State Health Services

Passed Through Texas Department of Health in Bexar County Ryan White Title II - 2005 93.91 7 Ryan White Title I I - 2006 93.91 7

Total Texas Department of Health in Bexar County

Passad Through Texas Juvenila Probation Commission Federal Foster Care Grant Title IV-E 93.658

Passed Through Texas Department of Protective and Regulatory Services Title IV -E Legal Services 93.658

Total U.S. Department of Health and Human ServiCes

U. S. Department of Housing and Urban Development Passed Through Office of Rural and Community Affairs

Texas Community Development Program 14.227

Passed Tilrough Texas Department of Health in Bexar County HOPWA - 2005 14.241 HOPWA - 2006 1 4.241

Total Texas Department of Health in Bexar County

Total U.S. Department of Housing and Urban Development

U. $. Department of Commerce Passed Through National Oceanic & Atmospheric Adm.

NOAA Coastal Impact Grant 1 1 .419

1 42


Number Expenditures

7460024452-06 $ 97,668 7460024452-05-07 18.794 7460024462-05-01 84,062

7460024452-06 40.764

241,288

N/A 44,728 N/A 1 1 6.170

160,898

T JPC-E-05-235 142,733

2005085080 39.180

584.099

71 6337 1 67,962

N/A 4,730 N/A 64,438

69,168

237,130

NA170Z218a 25,460

(continued)


Federal CFDA

Federal Grantor/Pass-Through GrantorlProgram Title Number

FEDERAL EXPENDITURES · (Continued)

U. S, Elections Asslst<lnce Commission Passed Through Texas Secretary of State - Elections Division

County Education Fund 39.01 1 Voting System Replacement 39.01 1 Voting System Accessibility 90.401 General HAVA Compliance 90.401

Total U.S. Elections ASSistance Commission

TOTAL FEDERAL EXPENDITURES

STATE EXPENDITURES

Texas Department of Health OPHP/LPHS N/A OPHP/LPHS N/A TB Control N/A TB Control N/A

Passed Through Texas Department of Health in Bexar County HIV Treatment, Health and Social Services - 2005 N/A HIV Treatment, Health and Social Services - 2006 N/A

Total Texas Department of Health In Bexar County

Total Texas Department of Health

Texas Juvenile Probation Commission State Aid N/A State Aid N/A Progressive Santions J PO N/A Progressive Santlons JPO N/A Progressive Sanlions 123 Program N/A Progressive Santlons 123 Program N/A Community Corrections ASSistance Program N/A Community Corrections Assistance Program N/A Salary Adjustment N/A Salary Adjustment N/A

Total Texas Juvenile Probation Commission

OffJ .. e of the Attorney Gener<ll of Texas Texas Vine Grant N/A

1 43


Number Expenditures

77530 $ 993 77833 1 14,920 78965 108,000 78710 448,881

672,794

4,310,988

7460024452-05H04 1 29,986 7460024452-06-02A 37,397

7460024452-05 27,493 7460024452-{)6 14,356

209,232

N/A 16,973 N/A 32,289

51,262

260,494

T JPC-A-2006-235 39,680 T JPC-A-2005-235 55,550 T JPC-F-2006-235 39,210 T JPC-F-200f).235 54,894 T JPC-G-2006-235 1 2,755 T JPC-G·2005-235 17,854 T JPC-Y -2006.235 92,075 T JPC-Y -2005-235 128,906 T JPC-Z-2006-Z35 42,750 T JPC-Z-2005·235 47,106

530,780

05-00644 1 7,253

(continued)

COUNTY OF VICTORIA, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STA TE AWARDS For th& year ended Decembe( 31, 2005

Federal Grantor/Pass-Through Grantor/Program Title

STATE EXPENDITURES - (Continued)

Texas Commission on Environmental Quality

Federal CFDA

Number

Passed Through Golden Crescent R&glonal Planning Commission Solid Waste Grant N/A

Texas Department of PubliC Safety Electronic T raffle Conviction Reporting

Texas Task Force on Indigent Defense Indigent Defense

TOTAL STATE EXPENDITURES

TOTAL FEDERAL AND STATE EXPENDITURES

N/A

N/A


Number

04-17-G03

CD04482-ILC152

N/A

See accompanying notes to sChedule of expenditures of federal and state awards.

1 44

Expenditures

$ 26.133

5.000

49,613

889,273

$ $,2001261

COUNTY OF VICTORIA, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE: AWARDS For the .year ended December 31, 2005

NOTE 1; BASIS OF PRESENTATION

The accompanying schedule of expenditures of federal and state awards includes the federal and state grant activity of the County and is presented on the modified accrual baSis of accounting. The information in this schedule Is presented In accordance with the requirements of OMS Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented In this schedule may differ from amounts presented in, or used in the preparation of the financial statements.

145

COUNTY OF VICTORIA, TEXAS SCHEDULE' OF FINDINGS AND QUESTIONED COSTS For the year ended December 31, 2005

Section I - Summary of Auditor's Results

Financial Statements

Type of auditor's report issued: Unqualified

Internal control over financial reporting: • Material weakness(es) Identified? • Reportable condition(s) identified

that are not considered to be material weaknesses?

Noncompliance material to financia l statements noted?

Federal AW;;Jrds

Internal control over major programs: • Material weakness(es) identified? • Reportable condition(s) identified

that are not considered to be material weaknesses?

D yes

D yes

D yes

D yes

D yes

Type of auditor's report issued on compliance for major programs: Qualified

Any aud� findings disclosed that are required to be reported in accordance wnh section 51 0(a) of Circular A-1 33?

Identification of major programs;

D yes

181 no

[8J none reported

[8J no

[8J no

[8J none reported

181 110

�Numbar(s) Name of Feder<J/ Program or Cluster .?-O .1.!?.!5

.... ..... ______ ' . ' .... .. _. ___ .. _____ .. , .. _ _______ ", .. .. t!r.�r:t.!.f!1.P!.?,,�.�_fl1_I?!!! . .§.r.!!�,t. , . ... ..... ...... _ . __ . __ ._ " " ______ ._ " " " " " . . ,, . _______ . .

�2:�] . __ ___ . _ .... .... _ ___ ." . _ __ _ .... ___ ___ " " __ . ___

Help �!!1�ri£<l_I!?.!E:l_�?!g!�.!.___ ' '' . .. _ ______ _ " . ... ______ _ , , " .. ... _

N/A Texas Juvenile Probation Commission-2005/2006-235 .""''' .• �� ___ -' .. , ... "",.." ., ___ ._ .. _ •• , ......... "."'.� ______ ,.,,"""." ___ ,. ____ ._ .•. _,_.,�.,,,,",""'� ___ , __ ,',,'" ........ _ .. _ ........ ___ '".�._.""""'M'". ____ ... ,.''' .. ''''·,_·_. __ ····_· ___ · ___ .�'.n.""'�., __

Doliar threshold used to distinguish between type A and type B programs: $300,000

Auditee qualified as low-risk auditee? D yes [8J no

Section 11 - FinanCial Statement Findings

None noted

Section 111 - Federal Award Findings and Questioned Costs

None noted

146

COUNTY OF VICTORIA, TEXAS SCHEDULE OF PRIOR AUDIT FINDINGS For the year ended D@cember 31, 2005

U.S. Department of Homeland Security

FEMA Unmet Needs - CFDA 97.039

2004-1 Grant No. FEMA 1257 - DR

Condition: The finding was a reportable condition stating that the grant reimbursement requests included retain age amounts owed to the contractor but were not immediately paid to the contractor in accordance with the terms of the construction agreement.

Rfilcommendation: The auditor recommended that the responsible County official be reminded of the procedures in place to ensure that cash management procedures are followed.

Currant SlaWs: Cash management procedures were complied with as of the report date of this 2005 fiscal year audit.

1 47

2005 Victoria County CAFR

Documents

Transcript of 2005 Victoria County CAFR