City of Baytown FY 2014 PAFR

Mercedes Renteria District 1

Chris Presley District 2

Brandon Capetillo Mayor ProTem

Terry Sain District 4

Robert Hoskins District 5

David McCartney District 6

tonians,

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Connecting to Baytown Cross over the scenic Fred Hartman Bridge and you’ll find Baytown.

Located just 30 miles east of downtown Houston, Baytown is the third largest city in Harris County, and is easily accessible via Interstate 10, a major gateway on the city’s northern border.

The city encompasses an area of about 40 square miles and boasts a rich environment, as well as a strong historical and economic heritage.

The city’s strategic location has encouraged a successful and diverse blend of employment opportunities and recreational activities centered around the area’s waterways. Located in the Texas Independence Trail region, Baytown is rich in history. General Sam Houston was an early resident, and the area played a significant role in the Battle of San Jacinto in 1836. The region was also home to the Karankawa Indians; their artifacts can still be found at the Baytown Nature Center.

Originally three separate towns, the City of Baytown combined Goose Creek (dating back to before 1850), and oil boom towns Pelly (established in the late 1910s), and East Baytown (early 1920s) when it incorporated in 1948.

Baytown is a Home Rule City operating under the Council-Manager form of government, with a City Council composed of a Mayor (elected at large) and six single district Council members. The City Council appoints a City Manager to act as the chief administrative and executive officer of the City.

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Our Foundation for Success The City of Baytown is proud to be an organization where character counts and service is more than a catch phrase.

Our Mission: To balance public resources and services in order to provide for the health, safety, and welfare of the community, enhance quality of life, and plan for the future.

Our Vision: To be a progressive community that values quality of life, diverse economic opportunities and civic pride as we honor our past and shape our future.

• • • • • •

• • • •

Live the City’s Core Values

Leadership: show others the way Integrity: we earn and honor the trust of others Teamwork: we help each other succeed Excellence: we understand our jobs and take pride in doing them well Respect: we conduct our business with courtesy, kindness and fairness Service: we anticipate our customers’ needs and provide solutions

Get better all the time

Innovate by learning from others and evaluating how we can improve the way we provide services.

Ask customers and employees how we can improve.

Train employees to perform their jobs at higher levels.

Develop employees within their current positions and grow leaders from within the organization.

Communicate

• Always step back when making a decision and consider who needs to be involved and who needs to be informed of what is happening, whether it’s the public or fellow employees.

• Make every decision with the future in mind.

• Will the decision make Baytown a better place to live, work and visit?

• What impact will the decision have on Baytown in twenty years?

• Will the decision have a positive impact on Baytown’s community spirit?

Give back

• Positively impact the Baytown area as public servants and as members of the community.

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Connecting Community and Quality Each of the City’s 802 full-time employees works toward a common goal - a vision for our community set out by the City Council outlining priority areas on which to focus our efforts.

These include: citizen safety, economic and financial health, development and redevelopment and infrastructure maintenance/improvement.

Building and sustaining a strong and vibrant community is always our first priority.

By the Numbers Population Elevation Avg. Temp Avg. High Avg. Low Avg. Precip.

Med. Income Median Age

75,424 34 ft.

68.7o F 77.9o F 59.6o F 53.8 in. $50,107 31

Police Statistics 2013 5,877 Arrests 1,980 Accident Reports 21,731 Citations Offense Reports 15,144

Calls for Service 48,988

2014 5,717 2,207 17,904 14,911 55,045

Parks & Recreation Statistics Parks 50 Developed Park Acreage 972 Undeveloped Park Acreage 179 Spraygrounds

5 Baseball/Softball Diamonds 22 Tennis Courts 4 Community Centers 1 Water parks 2 Quick Soccer Courts 2

Water & Sewer Customers 2013 22,212 Water 21,316 Sewer

2014 22,417 21,513

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Visitors Welcome Tourism plays an important role in a community’s economic development and stability. When hotels are full, restaurants do well, and retail gets a boost. The end result is increased municipal tax revenues, which contribute to lower taxes for residents.

A great way to support tourism is to personally know your city’s assets. What better way to support our local economy than to be a tourist in our own backyard? A few things Baytown has to offer are Nature tourism, Historical tourism and Cultural tourism.

Be a Tourist in Your Own Backyard!

Want to spend the day in a serene environment observing nature?

Visit the Eddie V. Gray Wetlands Center and the Baytown Nature Center, both on the Great Texas Birding Trail. Then take a stroll along Baytown’s Goose Creek Stream Greenbelt Trail.

Want to learn more about our community’s heritage? Visit the Baytown Historical Museum, then head over to the Republic of Texas Plaza, and finish up with dinner on Texas Avenue near historic Goose Creek.

And don’t forget to visit the many historical markers throughout the community, including the marker dedicated to the property once owned by General Sam Houston.

Want to hear great music, see a performance or just stroll along looking at art? Get tickets for a production at the Baytown Little Theater or the Baytown Symphony Orchestra. Purchase tickets for a performance at Lee College’s Performing Arts Center or visit one of the galleries on Texas Avenue: the Baytown Art League’s Gallery or Portrait of a Warrior Memorial Art Gallery!

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Building Bridges to the Future Baytown has embarked on a period of substantial growth. Significant expansions by local industry are underway, bringing many new faces, as well as opportunities to our community.

New restaurants and retail continue to make their way into the city.

To support the unprecedented growth coming to Baytown and to ensure that our community is strong for future generations, infrastructure growth, smart planning, and increased investment in public safety are strong priorities.

Communities across the country are coming back from the recession, with Baytown leading the charge.

The City of Baytown has, and will continue, to make investments to support this growth in our community.

On the employment front, unemployment continues to drop. Billion dollar expansion projects for local industry are bringing thousands of construction jobs and hundreds of permanent positions to our community.

New companies, including Buc-ee’s are locating new facilities in Baytown as well. Retail growth is also on the rise with completion of a new WalMart and retail complex underway at I-10 and State Highway 146.

As Baytown’s economy grows, so does the need for City services. In anticipation of this growth, the City expanded public safety with the building of Fire Station 7; and hired additional fire fighters and police officers.

Infrastructure was not ignored. With over $2 million allotted to street maintenance every year for the past few years, the City has been addressing mobility needs across town. New sidewalks, extended thoroughfares, and the Texas Avenue Streetscape project have made Baytown easier to navigate and more attractive.

Water and wastewater capabilities continue to be improved and expanded. Multiple park projects, such as the Pirates Bay expansion and a new disk golf course, improve a network of parks including Calypso Cove and Bayland Marina, that offer quality leisure opportunities to our residents.

The City’s financial health is strong. Sales tax revenue is up over 10% and Industrial District Agreement revenue continues to climb. The City operates with a balanced budget and maintains strong bond ratings.

What does all this mean? It means that Baytown is well prepared as we go into this growth. Careful planning and good stewardship have prepared the City and the community for a strong future. And that is something we can all be proud of.

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Strong Financial Stability Statement of Net Position

(Accrual Basis of Accounting)

2013 2014 $ 126,464,654 Current and Other Assets $ 119,186,673 418,888,522 440,303,095 Capital Assets, Net 538,075,195 566,767,749 Total Assets & Deferred Resource Outflows 239,269,901 255,448,853 Long-Term Liabilities 17,990,853 20,014,067 Other Liabilities 257,260,754 275,462,920 Total Liabilities

Net Position: Net investment in 245,020,692 257,807,335 Capital Assets 37,532,008 41,561,192 Restricted (8,063,698) Unrestricted (1,738,259) $ 280,814,441 $ 291,304,829

Total Net Position

The Statement of Net Position presents information on all of the City's assets and liabilities, with the difference between the two presented as net position. The statement excludes the Baytown Area Water Authority (BAWA) and the Municipal Development District (MDD).

Bond Ratings Moody’s Aa2 Stable • Ongoing development occurring within the city and industrial districts • Historically sound financial operations and healthy reserves • Sizeable tax base bolstered by industrial district values

Standard & Poor’s AA Stable • Deep and stable economy, with

access to the stable Houston metropolitan statistical area • Steady payments from a payments-in-lieu-of-taxes (PILOTs) agreement with industrial districts, which account for a significant portion of its revenue stream • Very strong financial position, coupled with very strong reserves

Glossary of Financial Terms Accrual Basis of Accounting - A method of accounting that recognizes the financial effect of transactions, events, and interfund activities when they occur, regardless of the timing of related cash flows.

Capital Assets - Land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period.

Current Assets - Assets which are available or can be made readily available to finance current operations or to pay current liabilities. Current assets also include those which will be used up or converted into cash within one year. Some examples are cash, temporary investments and taxes receivable which will be collected within one year.

Modified Accrual Basis of Accounting - Basis of accounting to which (a) revenues are recognized in the accounting period in which they become available and measurable and (b) expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt and certain similar accrued obligations, which should be recognized when due. (cont.)

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Statement of Activities (Accrual Basis of Accounting)

General Revenues Property Taxes Sales and Hotel/Motel Taxes Franchise Taxes Industrial District Payments Investment Income Miscellaneous Total Revenues

Net Revenue (Expense) Governmental Activities General Government Public Safety Public Works Public Health Parks, Recreation & Culture Interest and Fiscal Agent Fees Total Governmental Activities

Business-Type Activities Water and Sewer Sanitation Bayland Island Development Aquatics Storm Water Utility Total Business-Type Activities Total Expenses Change in Net Position

2013 $21,128,244 18,558,609 3,825,432 28,339,356 893,656 1,777,705 74,523,002

2014 $21,788,376 20,494,629 4,053,895 29,379,711 940,377 2,469,911 79,126,899

(20,372,715) (33,590,770) (3,843,566) (1,337,489) (8,274,988) (3,749,173) (71,168,701)

(21,047,442) (38,436,185) (2,974,691) (1,382,710) (8,919,252) (4,111,811) (76,872,091)

4,723,620 (96,470) (191,751) (189,238) 780,646 5,026,807

7,745,721 (123,777) (151,222) (13,202) 778,060 8,235,580

(66,141,894) $8,381,108

(68,636,511) $10,490,388

Glossary of Financial Terms (cont.)

Invested in Capital Assets, Net of Related Debt - This represents the City’s investment in its capital assets less accumulated depreciation and any outstanding debt due to the acquisition, construction, or improvement of capital assets.

Long-Term Liability - A liability with a future benefit over one year, such as notes payable that mature in more than one year.

Restricted Net Assets - A component of net assets calculated by reducing the carrying value of restricted assets by the amount of any related debt outstanding.

Unrestricted Net Assets - Portion of net assets that is neither restricted nor invested in capital assets (net of related debt).

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Smart Growth/Strong Communities Have you ever considered what you get for your tax dollars? City taxes paid by the average household per year with a homestead exemption are $854.25. That’s about $2.34 a day. Less than the price of a soda in a restaurant. What does the City provide for that $2.34?

24/7 Police, Fire Protection and Emergency Medical Services * Restaurant Inspections Neighborhood Protection and Animal Control Services * Maintenance of over 400 miles of paved streets * Maintenance of over 350 miles each of water and sanitary sewer lines * 50 Parks, including softball fields, skate parks, a bark-park and water parks * Building inspections and code enforcement * Library Services

Top Ten Taxpayers

Property Taxpayer 2014 Taxable Assessed Value $48,844,569 CenterPoint Energy Inc. 31,161,035 ExxonMobil Corp.

29,213,072 LCY Elastomers 23,865,498 TPC Group 19,994,151 WalMart 19,780,116 Foothills Texas, Inc. 19,716,000 MREF Villas LLC 18,005,435 AHC Goose Creek LLC 17,294,358 2008 Baker Rd. 15,601,040 2008 Baker R II LTD

$243,475,274 Source: Goose Creek ISD Tax Office and Chambers County Appraisal District.

Taxing Entities/Tax Rates

FY 2014 - Tax rates per $100 of assessed valuation Source: Harris County Appraisal District

City of Baytown $ 0.82203 Harris County 0.41455 Harris County Flood Control District 0.02827 Port of Houston Authority 0.17160 Harris County Hospital District 0.17000 Harris County Dept. of Education 0.00636 Goose Creek ISD 1.38679 Lee Junior College District 0.26070 Total $ 3.26030

Top Ten Area Employers

2014 Sales Tax Rate Breakdown State of Texas 6.250% General Fund 1.000% Municipal Development District 0.500% Street Maintenance 0.250% Crime Control & Prevention District 0.125% Fire Control, Prevention & EMS District 0.125% Total Sales Tax 8.250%

Employer

Employees

3,785 ExxonMobil Baytown Complex

3,012 GCCISD

Houston Methodist San Jacinto Hospital 1,687 1,100 Bayer Corporation

800 JSW Steel 789 City of Baytown 685 Chevron Phillips Chemical Company 600 WalMart Distribution Center 390 Lee College 325 Home Depot Distribution Center Source: Baytown Chamber of Commerce, City of Baytown and Lee College.

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Recognized For Excellence The Government Finance Officers Association of the United States and Canada (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City of Baytown, Texas for its Popular Annual Financial Report for the fiscal year ended September 30, 2013. The Award for Outstanding Achievement in Popular Annual Financial Reporting is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports.

In order to receive an Award for Outstanding Achievement in Popular Annual Financial Reporting, a government unit must publish a Popular Annual Financial Report, whose contents conform to program standards of creativity, presentation, understandability and reader appeal.

An Award for Outstanding Achievement in Popular Annual Financial Reporting is valid for a period of one year only. The City of Baytown, Texas has received a Popular Award for the last three consecutive years (2011-2013).

We believe our current report continues to conform to the Popular Annual Financial Reporting requirements, and we are submitting it to GFOA.

2014 Awards and Recognitions • Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award for Fiscal Year 2012-13 • GFOA Certificate of Achievement for Excellence in Financial Reporting for Fiscal Year Ending 2013 • GFOA Award for Outstanding Achievement in Popular Annual Financial Reporting for Fiscal Year Ending 2013.

• Harris/Galveston Area Council - 2014 Planning Special Recognition- Strategic Master Plan for Pirates Bay Waterpark • Texas Recreation and Park Society East Region Innovations in Park and Facility Design Award - Emmet Hutto Blvd.

• Texas Recreation and Park Society East Region 2013 Lone Star Programming - “Wetlands Wagon Outreach Program”

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The Popular Annual Financial Report (PAFR) is intended to summarize and simplify the statistical, economic and financial information contained in the 2014 Comprehensive Annual Financial Report (CAFR). The CAFR was prepared in conformance with generally accepted accounting principles (GAAP) and was independently audited by Belt Harris Pechacek, LLLP. The PAFR, while unaudited, provides a brief analysis of where the City’s revenues come from and where the dollars are spent as well as trends and details on the local economy. It is presented as a means of increasing public awareness about the City’s financial condition through a more user-friendly presentation. For a more detailed, GAAP basis, full disclosure review of the individual funds and component units’ financial statements, please refer to the City’s CAFR that is accessible through the City’s website: http://www.baytown.org/city-hall/accountability/financial-reports

For more information on the City of Baytown, visit www.baytown.org, follow us on Facebook and Twitter or Baytown Television on Comcast Channel 16. ©2014 City of Baytown 2401 Market Street, Baytown, TX 77520 281-420-5311 www.baytown.org