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CARROLLTON, TEXAS-PERSPECTIVES OF A SMALLER ISSUER

CARROLLTON, TEXAS-PERSPECTIVES OF A SMALLER ISSUER. Securities and Exchange Commission Birmingham, Alabama Hearing July 29, 2011. Affluent NW Dallas Suburb of 122,000 Diversified Manufacturing and Distribution Center

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CARROLLTON, TEXAS-PERSPECTIVES OF A SMALLER ISSUER

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  1. CARROLLTON, TEXAS-PERSPECTIVES OF A SMALLER ISSUER Securities and Exchange Commission Birmingham, Alabama Hearing July 29, 2011

  2. Affluent NW Dallas Suburb of 122,000 • Diversified Manufacturing and Distribution Center • Grew by 95,000 residents between 1970 and 2000 and is now approaching build out. • Most infrastructure in the City was built with a 25-30 year design life. City of Carrollton Overview

  3. Replacement cost of its existing infrastructure is estimated at approximately $2 billion. • The city addresses its capital replacement needs primarily through bond issuance and pay as you go capital programs. • Total outstanding debt at 9/30/2010 is $193 million. • Total FY 2011 operating budget is $170 million vs. $172 million in 2010. City of Carrollton Overview

  4. In 2001 recognizing approaching build out and the need to shift emphasis from managing growth to capital replacement and redevelopment, the City re-invented itself through re-engineering, right-sizing and managed competition by reducing its payroll from over 1000 to under 800 employees at a time when the City was still growing in population. • Finance and accounting actually have less staff than in 1990 when population was 82,000. City of Carrollton Overview

  5. In spite of all staff wearing multiple hats, Official Statement is prepared in house both to reduce issuance costs and to have a better understanding of debt related commitments. • Debt markets are accessed a maximum of once a year to reduce burden on staff. • Virtually all G.O. debt issued is voted debt and is a result of an extensive capital project prioritization process. Debt Issuance Philosophy

  6. Carrollton’s financial disclosure approach is influenced by the following: • State law • Limited staff resources with none solely dedicated to financial reporting or investor relations • Debt covenants and continuing disclosure requirements • Wealth of information available on its website • Wealth of information available on other websites Financial Disclosure Philosophy

  7. Comprehensive Annual Financial Report (CAFR) • Issuance target of February 1st (four months after year end) • Filed with EMMA upon issuance • Includes all 15c2-12 continuing disclosure requirements (GFOA Best Practice) • Preliminary, Proposed, Adopted Budgets • Preliminary issued by August 1st • Detailed fund by fund including multi-year capital and planned debt issuance Two Primary Financial Disclosure Documents

  8. Additional requirements do not necessarily mean additional resources • Further staff cuts could mean outsourcing OS preparation to Financial Advisor • Misapplication of Accountability • Proliferation of GASB standards in number and complexity • Shelf life of standards appear to be getting shorter • Ever increasing reporting requirements working against desire to increase timeliness of annual report Concerns for the Future

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