Mercedes Renteria Mayor Pro Tem

Scott SheleyDistrict 2

Brandon Capetillo District 3

Terry SainDistrict 4

Robert HoskinsDistrict 5

David McCartneyDistrict 6

Dear Citizens,

On behalf of the Council and Staff of the City of Baytown,

I am proud to present the 2011 Popular Annual Financial

Report: Distinctly Baytown, Texas. We’re happy to report

another successful year. We believe that providing you with

a clear and concise look at how we operate is of utmost

importance in maintaining the trust you’ve placed in us.

Like the rest of the nation, 2011 presented many financial

challenges to our organization. A slow economy, depressed

housing market, and flat sales tax put huge financial pressure on the City’s ability to

continue providing the quality of service that our citizens expect and we demand of

ourselves.

Balancing a $123M budget is difficult, even in the best of times. Through hard work,

creativity and careful stewardship of resources, we were proud to be able to deliver a

balanced budget with no major reductions to service or staff.

Although 2011 was a demanding year, the City of Baytown met our financial challenges

and prospered. 2012 is already looking better, with sales tax, Industrial District

Agreement (IDA) revenues, and housing sales increasing. The future looks bright for

Baytown - while other communities are still struggling with a stagnating economy,

we’re growing. Several of our established businesses are expanding, experiencing

unprecedented growth, while many new companies are establishing a presence here.

I believe Baytown is headed in a very positive direction and I am confident that we will

continue to provide the best service possible to our customers, the citizens of Baytown.

Sincerely,

Stephen DonCarlos, Mayor

2

3

The City of Baytown is the third largest city in Harris County. Located east of Houston, Baytown is 30 miles from downtown Houston and is easily accessible via Interstate 10, a major gateway on the City’s northern portion. Visitors from the south enter the city via the scenic Fred Hartman Bridge. The City encompasses an area of 34 square miles.

Baytown boasts a rich environment, as well as a strong historical and economic heritage. Its strategic location has led not only to the development of a booming petrochemical industry, but also a variety of recreational activities centered around the area’s waterways. The area was home to the Karankawa Indians and some of their artifacts can still be found at the Baytown Nature Center. Historic battles also took place in the Baytown area including the Battle of San Jacinto in 1836.

Originally three separate towns, Goose Creek (dating back to before 1850), and the oil boom towns of Pelly (established in the late 1910s) and East Baytown (early 1920s), today’s City of Baytown was 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. All City Council positions and the Mayor are elected for three-year staggered terms. The City Charter requires that the Council appoint a City Manager to act as the chief administrative and executive officer of the City. It is the responsibility of the City Manager to appoint and remove department heads and conduct the general affairs of the City in accordance with the policies of the Council.

Distinctly Baytown

The State of the City

CITIZEN SAFETY• Crimeisdowninallmajorcategories(robbery,

aggravatedassault,burglary,theftandautotheft)withan8.9%decreaseintotaloffensesfrom2010to2011.

• FireDepartmentexpansiontomeetthegrowingneedsofourCity-Station#6openedin2011;Station#7underdesign,firetrainingfacilityunderconstruction.

• EMSStationExpansion(completedin2012).• AnnualCommunityHurricaneWorkshopandHealth&

SafetyFairprovidesresidentswithinformationonemergencyplanning,andhealthandsafetytopics.

ECONOMIC & FINANCIAL HEALTH• Eightmajorindustrialprojectsarecomingtothe

Baytownarea,representingover$6billionofcapitalin-vestment,nearly12,000constructionjobsand550perma-nentjobs.

• NewretaildevelopmentincludesAcademySports,JoeV’sandTexasRoadhouse.

• BalancedCitybudgetwithstablerevenue.• Baytownhasbeen,andcontinuestobetherecipientof

millionsofdollarsingrantawardsforpublicsafety,downtownredevelopment,sidewalksandwaterwaycleanup.

Police Statistics 2010 2011Arrests Accidentreports Callsforservice Citations Offensereports

4

7,3472,04749,57315,40113,680

6,8801,90049,02415,18613,352

Each of the City’s more than 700 employees work 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.

These priorities are strengthened through relationships with local partners, including GCCISD, Lee College, the Chamber of Commerce, local service clubs

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

INFRASTRUCTURE

MAINTENANCE &

IMPROVEMENT

• $7.4 million per year in roadway improvements funded through bonds and Street Maintenance Sales Tax funds (reap-proved by voters in 2011), including the Baker Road & Hunt Road Extension Projects.

• Sidewalk improvements funded with bonds and grants.

• Utility Improvements including West & Central District Wastewater Treatment Plant projects, Steinman & Raccoon Lift Station projects, BAWA projects and Collection & Water System Rehabilitation projects.

Parks & Recreation Statistics

Parks Developed Park Acreage Undeveloped Park Acreage Swimming Pools Splash Parks Baseball/Softball Diamonds Tennis Courts Community Centers Water parks Pirates Bay Waterpark Visitors

QUALITY OF LIFE

• Park Improvements to Eddie Huron and N.C. Foote Parks (Calypso Cove neighborhood water park) and the addition of four new splash parks (Bergeron Splash Park opened in 2011, Pelly & McElroy Splash Parks opening spring 2012).

• Community beautification efforts supported by bond and grant funds (median landscaping, waterfront development, the Tabbs Bay cleanup project, and marina reconstruction).

• Supporting community spirit with events such as Relay for Life (10th largest event in the United States), Pink Heals Tour, National Night Out, Bayou Bowl, 4th of July, and Baytown Blue Santa.

5

47967 117

2 4

227 12

201,273

6

Core Values

Community Service and Charitable GivingBaytown employees are public servants at heart. In addition to their daily duties,

City employees give generously of their time and money within the community. These are just a few of the organizations that benefit from the volunteer spirit of our employees.

• Habitat for Humanity• Special Olympics• Salvation Army Angel Tree• Toys for Tots• Police Explorers• Wounded Warriors• Teen Life Skills Academy

• Relay for Life• Pennies for Justice • Jail Break Run• Blue Santa• Share Your Christmas Food

Drive• Food For Fines

• Boy Scouts of America• Adopt-A-Street• United Way• Fill the Boot Campaign• MDA Summer Camp• Fire Scholarships• Pink Heals Tour

7

Birders and wildlife enthusiasts will delight in two great Baytown conservation facilities. The Baytown Nature Center, a 450 acre preserve within the city limits, is on the Great Texas Birding Trail and is host to over 300 different species of birds along with numerous varieties of flora and fauna. The Eddie V. Gray Wetlands Education and Recreation Center, a cooperative effort of the School District, Lee College and the City provides visitors the perfect location to learn more about the region’s fisheries, wildlife, and ecology.

Calypso Cove is a smaller water park located at N.C. Foote Park on West Main. The Cove replaces a 1970’s era pool and consists of a shallow, zero beach entry pool perfect for smaller children. A second pool located adjacent to the zero entry pool features a crossing activity, slide tower and body slide. This pool is also used for swim lessons and other group activities.

Pirates Bay Waterpark, winner of the Aquatics International 2011 Dream Designs Award is owned and operated by the City. The 3-acre park features attractions for everyone with zero beach entry, a pirate-themed play center, a lazy river and large slide towers. A Flowrider surfing machine provides an endless mountain of water with all the excitement of ocean surfing.

Exploring Opportunities

Baytown’s Financial Position

Statement of Net Assets 2010 2011Current and Other Assets Capital Assets, Net TotalAssets Long-Term Liabilities Other Liabilities TotalLiabilities NetAssets: Invested in Capital Assets, Net of Related Debt Restricted Unrestricted TotalNetAssets The Statement of Net Assets presents information on all of the City's assets and liabilities, with the difference between the two presented as net assets. The statement is inclusive of all blended component units. BAWA and MDD are not included.

Bond Ratings Moody’s Aa2 Stable

Standard & Poor’sAA Stable

8

By the Numbers

Population Elevation Avg. Temp Avg. HighAvg. LowAvg. Precip.Med. IncomeMedian Age

72,33934 ft.68.7o F77.9o F59.6o F53.8 in.$50,10731

$ 132,133,321352,843,017484,976,338

205,717,865 20,761,790 226,479,655

220,390,220 17,652,246 20,454,217

$258,496,683

$ 147,156,814 326,097,078 473,253,892

198,581,156 23,927,994 222,509,150

209,124,748 29,939,436 11,680,558

$250,744,742

Tax Revenues by Source, Governmental Activities

(Modified Accrual Basis of Accounting)

Function 2010 2011Property Taxes Sales and Hotel Taxes Franchise Taxes Industrial In-Lieu-of-Taxes TotalTaxRevenue

$18,735,003 15,576,815 3,994,547

25,496,842 $63,803,207

$20,386,674 14,948,919 3,485,310

23,026,843$61,847,746

9

Top Ten Taxpayers PropertyTaxpayer 2011Taxable AssessedValue

LCY Elastomers LP Wal-Mart Foothills Texas Inc. Rollingbrook Apts. LP Camden Property Trust Comcast of Houston LLC Verizon Southwest TPC Group Inc. CenterPoint Energy Inc. Lowes Home Center Source: Goose Creek ISD Tax Office and Chambers County Appraisal Districts.

Taxing Entities/Tax RatesFY 2011

City of Baytown Harris County Harris County Flood Control District Port of Houston Authority Harris County Hospital District Harris County Dept. of Education Goose Creek ISD Lee Junior College District Total

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

Top Ten Area Employers Employer Employees Exxon Mobil Baytown Complex GCCISD San Jacinto Methodist Hospital Bayer Corporation City of Baytown Chevron Phillips Chemical Company Wal-Mart Distribution Center Lee College Home Depot Distribution Center TMK-IPSCO Source: Baytown Chamber of Commerce, City of Baytown and Lee College.

2011 Sales Tax Rate Breakdown

State of Texas 6.250%City of Baytown 1.000%Street Maintenance 0.500%Municipal Development District 0.250%Crime Control & Prevention District 0.125%Fire Control, Prevention & EMS District 0.125%TotalSalesTax 8.250%

$23,235,33319,596,96219,043,63515,422,76514,245,60814,036,38012,849,50711,182,16510,917,90010,646,012

$151,176,267

3,7852,9281,621

967743637550355319215

$ 0.78703 0.38805

0.029230.02054

0.19216

0.00658 1.30213 0.25200

$2.97772

10

The City of Baytown Financial Cycle

CITY OF BAYTOWN AWARDS 2010-11• Government Finance Officers Association (GFOA)

Distinguished Budget Presentation Award• GFOA Certificate of Achievement for Excellence in Financial Reporting• Texas Comptroller Gold Leadership Circle 2nd Year Award• Texas Public Pool Council Agency of the Year• Parks and Recreation Director’s Association Young Professional Award• Texas Recreation & Park Society Promotional and Marketing Excellence Award• Texas Recreation & Park Society Volunteer of the Year Award• Keep Texas Beautiful Citation of Merit in the Government Award Category• Award of Excellence in Keep Texas Beautiful’s Governor’s Community Achievement

Award Competition• Keep Texas Beautiful Affiliate Gold Star Award

JAN FEB

MAR

APR

O

CT

NOV

DEC

New Budget Submitted to GFOA

CAFR Completed for City Council

Potential Bond Issuance/POS Information

Compiled

Council Strategic Planning Retreat for

Upcoming Fiscal Year

1st QTR Financial & Investment

Reports

PAFR Compiled

Rating Reviews

CAFR & PAFR submitted to GFOA

New Fiscal Budget Process Information

Compiled for Depts.

Continuing Disclosure Information

Compiled for Financial Advisors

Budget Kicko�

Depts Work on BudgetsBudget Training

2nd QTR Financial & Investment Reports

Dept Budget Proposals DueRevenue Proposals Due

Admin & Dept Budget MeetingsBudget

Development with Admin &

Depts

Present Proposed Budgets to Special Districts - CCPD &

FCPEMSD

Present Proposed

Budgets to MDD & BAWA

Present City's Proposed Budget to

Council

3rd QTR Financial & Investment Reports

Council Budget Work Sessions

Public Hearing on Budget

Budget Adopted

Tax Rate Adopted

End of Fiscal Year

Fiscal Year Begins

Fund Closing

4th QTR Financial & Investment Reports

Fund Closing Continues

Audit Begins - External Auditors &

Sta� Begin Work on CAFR, BAWA AFR &

Single Audit

Budget Document Finalized &

Presented to Council

Audit Continues - External Auditors & Sta�

SEPT

AUG JUL JUN

M

AY

Police 30¢

Planning & Development 3¢

Fire 20¢ Gen. Govt. 19¢Library 5¢

Public Works 8¢Health/EMS 8¢

Parks & Rec 7¢

City Services By the Tax Dollar

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

$629.62. That’s about $1.72 a day. About the price of a soda in a restaurant. What does the City provide for that $1.72?

• 24-hour Police and Fire Protection• 24/7 Emergency Medical Services• Animal Control Services• Maintenance of over 400 miles of paved streets• Maintenance of over 350 miles each of water and sanitary sewer lines• Library Services• Over 40 Parks, including softball fields, skate parks, a bark-park and water parks• Building inspections and code enforcement, protecting your investment

11

The Popular Annual Financial Report (PAFR) is intended to summarize and simplify the statistical, economical and financial information contained in the 2011 Comprehensive Annual Financial Report (CAFR). The CAFR was presented

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 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, one should refer to the

City’s CAFR that is accessible through the City’s web site: www.baytown.org/content/financial-transparency-0.

©2012 City of Baytown Public Affairs www.baytown.org

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.

Need information? Have a question? Want to report a problem? Call the “Ask Baytown” helpline at 281-420-5311,

Monday - Friday, from 8 am - 5 pm.