Mercedes Renteria District 1

Chris PresleyDistrict 2

Brandon Capetillo Mayor ProTem

Terry SainDistrict 4

Robert HoskinsDistrict 5

David McCartneyDistrict 6

Fellow Baytonians,

On behalf of the Council and Staff of the City of Baytown, I am proud

to present Baytown’s 2013 Popular Annual Financial Report:

Bridging To Our Future. We’re happy to report another successful

year and believe that providing you with a clear and concise look at

how your city operates is of utmost importance in maintaining the

trust you’ve placed in us.

Throughout 2013, announcement of many new projects within the

community set Baytown on the path of unprecedented growth. Bay-

town’s economy is quickly gathering steam as these new infrastruc-

ture, commercial, residential and industrial projects get underway. Here in Baytown, hard work,

creativity and careful stewardship of resources have carried us through financially difficult times

without sacrificing a balanced budget and with no major reductions to service or staff.

Today Baytown is ready for a substantial growth in industry, population and opportunity. Build-

ing the Bridge to the Future is an especially appropriate theme for us this year as we travel the

road to ensuring Baytown’s future as a vibrant and prosperous 21st Century city.

2013 was an exciting, yet demanding year. The City of Baytown met its financial challenges and

prospered. 2014 looks to be even better as sales tax, Industrial District Agreement (IDA)

revenues, and housing sales continue to show positive growth. Through smart growth and

planning, Baytown is leading the way. Business, education and industry are thriving, and our

future is bright.

I‘m proud to be part of such an incredible community and I am confident the City of Baytown

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

Sincerely,

Stephen DonCarlos, Mayor

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Connecting to BaytownCross 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 34 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

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.

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.

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Connecting Community and QualityEach of the City’s 800 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.

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Parks & Recreation Statistics

Parks Developed Park Acreage Undeveloped Park Acreage Spraygrounds Baseball/Softball Diamonds Tennis Courts Community Centers Water parks Quick Soccer Courts

47967 117

4 224 122

73,95034 ft.

68.7o F77.9o F59.6o F53.8 in.$50,107

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By the Numbers

PopulationElevationAvg. TempAvg. HighAvg. LowAvg. Precip.Med. IncomeMedian Age

Water & Sewer Customers 2012 2013WaterSewer

21,21221,316

22,10421,241

Police Statistics 2012 2013Arrests Accident Reports Citations Offense Reports Calls for Service

6,806 1,899

16,120 14,800 46,175

5,8771,980

21,731 15,14448,988

Visitors Welcome

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!

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.

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Building Bridges to the FutureBaytown 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 construction 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 thorough-fares, 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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Statement of Net Position 2012 2013Current and Other Assets Capital Assets, Net Total Assets Long-Term Liabilities Other Liabilities Total Liabilities Net Assets: Net investment in Capital Assets Restricted Unrestricted 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 assets. The statement excludes the Baytown Area Water Authority (BAWA) and the Municipal Development District (MDD).

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$ 119,186,673418,888,522538,075,195

239,269,901 17,990,853

257,260,754

245,020,692 37,532,008 (1,738,259)

$ 280,814,441

Strong Financial Stability

$ 114,559,267393,015,563507,574,830

211,229,41020,146,158

231,375,568

236,572,975 20,829,679 18,796,608

$ 276,199,262

(Accrual Basis of Accounting) 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 ac-counting 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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General Revenues Property Taxes Sales and Hotel/Motel Taxes Franchise Taxes Industrial District Payments Investment Income Miscellaneous Total Revenues 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 ExpensesChange in Net Position

2013 $21,128,244 18,558,609

3,825,432 28,339,356

893,656 1,777,705

74,523,002

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

(71,168,701)

4,723,620 (96,470)

(191,751)(189,238)

780,646 5,026,807

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

2012 $20,121,463 17,343,951 3,800,997

27,403,488 392,846

1,496,293 70,559,038

(20,284,651)(33,442,517)

5,487,020 (990,419)

(8,577,213)(3,229,968)

(61,037,748)

7,586,635 281,364

(138,659)(255,358)

707,307 8,181,289

(52,856,459) $17,702,579

Statement of Activities(Accrual Basis of Accounting)

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).

Top Ten TaxpayersProperty Taxpayer 2013 Taxable Assessed ValueCenterPoint Energy Inc. Sustainable Power Corp.Petroleum Wholesale Inc.PMD Enterprises, LLCGovinji Multiple Business, LLCDicus JimmieOneal RobertRios Pedro M & Mary EGrohman Venture W-1 Ltd.Dykes Norman Source: Goose Creek ISD Tax Office and Chambers County Appraisal Districts.

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

$10,712,322 1,953,437 1,851,690 1,360,310

774,000 723,160 705,630 576,690 565,410 563,940

$19,786,589

Smart Growth/Strong Communities

3,7853,0121,6871,100

800685600325245200

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 $676.42. That’s about $1.85 a day. Less than the price of a soda in a

restaurant. What does the City provide for that $1.85?

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 * Over 40 Parks, including softball fields, skate parks, a bark-park and water parks * Building inspections and code enforcement *

Library Services

2013 Sales Tax Rate Breakdown

State of Texas 6.250%City of Baytown 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%

$ 0.82203 0.40021

0.028090.01952

0.18216

0.00662 1.33213 0.24100

$ 3.03176

Taxing Entities/Tax RatesFY 2013 - Tax rates per $100 of assessed valuation

Source: Harris County Appraisal District 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

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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, 2012. 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 two consecutive years (2011-2012). We believe our current report continues to conform to the Popular Annual Financial Reporting

requirements, and we are submitting it to GFOA.

Recognized For Excellence

• Government Finance Officers Association (GFOA) Distinguished Budget Presentation Award for Fiscal Year 2011-12

• GFOA Certificate of Achievement for Excellence in Financial Reporting for Fiscal Year Ending 2012

• Texas Comptroller Leadership Circle Gold Member - Fourth Year Award• Keep Texas Beautiful - Health Department’s Keep Baytown Beautiful Program - Award

for Sustained Excellence in the Governor’s Community Achievement Award Competition• Harris/Galveston Area Council - 2013 Parks and Natural Areas Award, Planning Process

Category• Texas Recreation and Park

Society - 2013 Lone Star Programming Award Class III

• Texas Recreation and Park Society - 2013 Outstanding Service Organization Award

2013 Awards and Recognitions

The Popular Annual Financial Report (PAFR) is intended to summarize and simplify the statistical, economic and financial information contained in the 2013 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 pub-lic 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/content/financial-transparency

©2014 City of Baytown Public Affairs 2401 Market Street, Baytown, TX 77520

281-420-5311www.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.