TOWN OF PROSPER, TEXASFinancial Statements(With Auditor's Report Thereon)September 30, 2009TOWN OF PROSPERAnnual Financial ReportFor the Year Ended September 30, 2009 Page NumberIn d ep en d en t Au d i tor’s Rep ort .................................................... 1 Ma n a g emen t’s Di scu ssi on a n d An a l y si s............................................ 3Basic Financial Statements:Government-Wide Financial Statements:Sta temen t of N et Assets ................................................. 1 3Sta temen t of Acti v i ti es .................................................. 1 4Fund Financial Statements:Ba l a n ce Sh eet - Gov ern men ta l Fu n d ....................................... 1 6Reconciliation of the Balance Sheet of Governmental Funds to theSta temen t of N et Assets.............................................. 1 9Statement of Revenues, Expenditures, and Changes in Fund Balances - Gov ern men ta l Fu n d s ................................................ 2 0Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fu n d Ba l a n ces of Gov ern men ta l Fu n d s to th e Sta temen t of Acti v i ti es ........ 2 2Bu d g et a n d Actu a l - Gen era l Fu n d ..................................... 2 3Bu d g et a ...
TOWN OF PROSPER, TEXAS
Financial Statements
(With Auditor's Report Thereon)
September 30, 2009TOWN OF PROSPER
Annual Financial Report
For the Year Ended September 30, 2009
Page Number
In d ep en d en t Au d i tor’s Rep ort .................................................... 1
Ma n a g emen t’s Di scu ssi on a n d An a l y si s............................................ 3
Basic Financial Statements:
Government-Wide Financial Statements:
Sta temen t of N et Assets ................................................. 1 3
Sta temen t of Acti v i ti es .................................................. 1 4
Fund Financial Statements:
Ba l a n ce Sh eet - Gov ern men ta l Fu n d ....................................... 1 6
Reconciliation of the Balance Sheet of Governmental Funds to the
Sta temen t of N et Assets.............................................. 1 9
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Gov ern men ta l Fu n d s ................................................ 2 0
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fu n d Ba l a n ces of Gov ern men ta l Fu n d s to th e Sta temen t of Acti v i ti es ........ 2 2
Bu d g et a n d Actu a l - Gen era l Fu n d ..................................... 2 3
Bu d g et a n d Actu a l - Imp a ct Fee Fu n d .................................. 2 4
Sta temen t of N et Assets - Prop ri eta ry Fu n d................................. 2 5
Statement of Revenues, Expenses, and Changes in Fund Net Assets -
Prop ri eta ry Fu n d ................................................... 2 6
Sta temen t of Ca sh Fl ows - Prop ri eta ry Fu n d ................................ 2 7
N otes to th e Fi n a n ci a l Sta temen ts ............................................ 2 8
Combining and Individual Fund Statements and Schedule:
Comb i n i n g Ba l a n ce Sh eet - N on ma jor Gov ern men ta l Fu n d s ....................... 5 1
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
N on ma jor Gov ern men ta l Fu n d s 5 2
Schedule of Revenues, Expenses, and Changes in Fund Net Assets -
Bu d g et a n d Actu a l - En terp ri se Fu n d ........................................ 5 3
Statistical Section
N et Assets b y Comp on en t ................................................... 5 6
Ch a n g es i n N et Assets...................................................... 5 8
Gov ern men ta l Acti v i ti es Ta x Rev en u es b y Sou rce ............................... 6 3
Fu n d Ba l a n ces of Gov ern men ta l Fu n d s 6 4
Ch a n g es i n Fu n d Ba l a n ces of Gov ern men ta l Fu n d s .............................. 6 6
Gen era l Gov ern men ta l Ta x Rev en u es b y Sou rce................................. 6 8
Property Tax Rates - Direct and Overlapping Governments .......................69
Prop erty Ta x Lev i es a n d Col l ecti on s .......................................... 7 0
Ra ti os of Ou tsta n d i n g Deb t b y Ty p e........................................... 7 1
Pl ed g ed - Rev en u e Cov era g e .................................................. 7 2PINGLETON, HOWARD & COMPANY, P. C.
CERTIFIED PUBLIC ACCOUNTANTS
P. O. BOX 148
FRISCO, TEXAS 75034
972-335-9754/FAX 972-335-9758
TOM W. PINGLETON, CPA MEMBERS
RANDY HOWARD, CPA AMERICAN INSTITUTE of CPAs
R. WAYNE NABORS, CPA AICPA DIVISION for CPA FIRMS
ROBIN J. TURNBULL, CPA TEXAS SOCIETY of CPAs
WHITNEY YOUNTS, CPA
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor
and Members of the Town Council
Town of Prosper
Prosper, Texas 75058
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, the aggregate discretely presented component unit, each major fund, and the aggregate
remaining fund information of the Town of Prosper, Texas, as of and for the year ended September 30,
2009, which collectively comprise the Town’s basic financial statements as listed in the table of contents.
These financial statements are the responsibility of the management of the Town of Prosper. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examin-
ing, 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 manage-
ment, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, the aggregate
discretely presented component unit, each major fund, and the aggregate remaining fund information
of the Town of Prosper, Texas, at September 30, 2009, and the respective changes in financial position
and cash flows, where applicable, and the budgetary comparison for the general fund and impact fee
fund for the year then ended in conformity with accounting principles generally accepted in the United
States of America.
Management’s discussion and analysis on pages 3 through 10 is not a required part of the basic financial
statements but is 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.
-1-To the Honorable Mayor
and Members of the Town Council
Page Two
Our audit was conducted for the purpose of forming an opinion on the financial statements that collec-
tively comprise the Town’s basic financial statements. The individual fund schedule and statistical
section, listed in the table of contents, are presented for purposes of additional analysis and are not a
required part of the basic financial statements. The individual fund schedule has been subjected to the
auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements taken as a whole. The
statistical section have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we express no opinion on it.
December 23, 2009
-2- Management’s Discussion and Analysis
As management of the Town of Prosper, we offer readers of the Town of Prosper’s financial statements
this narrative overview and analysis of the financial activities of the Town of Prosper for the fiscal year
ended September 30, 2009. All amounts, unless otherwise indicated, are expressed in actual dollars.
Financial Highlights
• The assets of the Town of Prosper exceeded its liabilities at the close of the most recent fiscal year
by $58,839,023 (net assets). Of this amount, $9,632,962 (unrestricted net assets ) may be used to
meet the government’s ongoing obligations to citizens and creditors.
• The government’s total net assets increased by $1,214,376. Most of the increase is due to property
taxes and water/sewer sales.
• As of the close of the current fiscal year, the Town of Prosper’s governmental funds reported com-
bined ending fund balances of $29,757,062, an increase of $10,997,106 in comparison with the prior
year. Most of the increase is from bond proceeds. Approximately $6,083,823 is available for spending
at the government’s discretion (unreserved undesignated fund balance).
• At the end of the current fiscal year, unreserved fund balance for the general fund was $4,397,604
or 77 percent of total general fund expenditures.
• The Town’s long-term debt increased by $13,024,369 during the year due to bond sales.
Overview of the Financial Statements
This discussion and analysis are intended to serve as an introduction to the Town of Prosper’s basic
financial statements. The Town of Prosper’s basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the financial state-
ments. This report also contains other supplementary information in addition to the basic financial
statements themselves.
Government-wide financial statements. The government-wide financial statements are designed to
provide readers with a broad overview of the Town of Prosper’s finances, in a manner similar to a
private-sector business.
The statement of net assets presents information on all of the Town of Prosper’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 Town of Prosper is impro