03-27-2025 Agenda SEDC Board Reg Meeting with packet
NOTICE OF MEETING
AGENDA
MARCH 27, 2025
6:00 P.M.
The City of Schertz Economic Development Corporation (SEDC) Board of Directors will hold a regular
monthly meeting on Thursday, MARCH 27, 2025, at 6:00 p.m. at the Hal Baldwin Municipal Complex,
Council Chambers Conference Room, Building No. 4, 1400 Schertz Parkway, Schertz, Texas. This is an
open meeting, subject to the open meeting laws of the State of Texas.
In accordance with provisions of the Texas Open Meetings Act, Chapter 551, Texas Government Code
notice is hereby given that a Possible Quorum of the governing body of the City of Schertz, Texas may
take place at this meeting.
Call to Order
1.Roll call, recognition of visitors, and review of meeting instructions for effective Board
interaction and public participation.
2.SEDC Board Member Oath of Office for member appointed by City Council on 03/18/2025 for a
term of two years ending on 09/30/2027 (S.Courney)
3.Election of Schertz Economic Development Corporation Board Secretary. (S.Morrill)
Hearing of Residents
4.This time is set aside for any person who wishes to address the Board. Presentations should be
limited to no more than 3 minutes. The presiding officer will call on those persons who have
signed up to speak.
Minutes
5.Approval of the minutes for the Board of Directors Regular Monthly Meeting held Thursday,
February 27, 2025. (T.Miller)
Presentations
6.Staff briefing on SEDC monthly financial statement for the month of February 2025. (S.Wayman)
Discussion Items
7.Resolution 2025-2 - Approval of the Independent Auditor's Report for the SEDC Annual
Financial Report for the Year Ending September 30, 2024. (Travis Roger, CPA, Audit Supervisor
of Pattillo, Brown and Hill, LLP/J.Walters)
8.Staff update on the Lookout Road project. (J.Nowak/S.Wayman)
9.Discussion of Impact Fee phase-in. (S.Wayman)
10.Staff update on proposed Strategic Plan for FY2025/2026. (A.Madison)
SEDC Agenda March 27, 2025 Page 1 of 2
Closed Session
11.Called in accordance with Section 551.087 of the Texas Government Code,
Deliberation Regarding Economic Development Negotiations; Closed Meeting. The governmental
body is not required to conduct an open meeting (1) to discuss or deliberate regarding commercial
or financial information that the governmental body has received from a business prospect that the
governmental body seeks to have locate, stay, or expand in or near the territory of the
governmental body and with which the governmental body is conducting economic development
negotiations; or (2) to deliberate the offer of a financial or other incentive to a business prospect.
Project E-105
Project E-102
Project E-103
Reconvene to Regular Session
12.Take any actions based on discussion held in closed session under Agenda Item No. 11.
Requests and Announcements
Announcements by staff:
Next Regular Board Meeting - April 24, 2025
Requests by Board Members to place items on a future SEDC Board Meeting agenda.
Adjournment
CERTIFICATION
I, Tracy Miller, Administrative Assistant, of the City of Schertz Economic Development Corporation, do hereby certify that
the above agenda was posted on the official bulletin boards on this the 21st day of March, 2025, at 5:00 p.m., which is a
place readily accessible to the public at all times and that said notice was posted in accordance with chapter 551, Texas
Government Code.
________________________
Administrative Assistant- Economic
Development
I certify that the attached notice and agenda of items to be considered by the Schertz Economic Development
Corporation Board of Directors was removed from the official bulletin board on _____day of _______________, 2025.
Name/Title:______________________________
This facility is accessible in accordance with the Americans with Disabilities Act. Handicapped parking spaces are
available. If you require special assistance or have a request for sign interpretative services or other services, please call
210-619-1070.
The Economic Development Corporation Board of Directors reserves the right to adjourn into closed session at any
time during the course of this meeting to discuss any of the matters listed above, as authorized by the Texas Open
Meetings Act.
Closed Sessions Authorized: This agenda has been reviewed and approved by the City’s legal counsel and the
presence of any subject in any Closed Session portion of the agenda constitutes a written interpretation of Texas
Government Code Chapter 551 by legal counsel for the governmental body and constitutes an opinion by the
attorney that the items discussed therein may be legally discussed in the closed portion of the meeting considering
available opinions of a court of record and opinions of the Texas Attorney General known to the attorney. This
provision has been added to this agenda with the intent to meet all elements necessary to satisfy Texas Government
Code Chapter 551.144(c) and the meeting is conducted by all participants in reliance on this opinion.
SEDC Agenda March 27, 2025 Page 2 of 2
Agenda No. 5.
SEDC MEMORANDUM
SEDC
Board Meeting:03/27/2025
Department:Economic Development Corporation
Subject:Approval of the minutes for the Board of Directors Regular Monthly
Meeting held Thursday, February 27, 2025. (T.Miller)
SUBJECT:
Approval of the minutes for the Board of Directors Regular Monthly Meeting held Thursday, February 27,
2025. (T.Miller)
Attachments
02-27-2025
MINUTES
Thursday, February 27, 2025
The City of Schertz Economic Development Corporation (SEDC) Board of Directors met for a Regular Monthly
Meeting on Thursday, February 27, 2025, at 6:00 p.m. at the Hal Baldwin Municipal Complex, Council Chambers
Conference Room, Building No. 4, 1400 Schertz Parkway, Schertz, Texas. This was an open meeting, subject to
the open meeting laws of the State of Texas.
In accordance with provisions of the Texas Open Meetings Act, Chapter 551, Texas Government Code notice is
hereby given that a Possible Quorum of the governing body of the City of Schertz, Texas may take place at this
meeting.
Call to Order
1.Roll call, recognition of visitors, and review of meeting instructions for effective Board interaction and
public participation.
Board President Sammi Morrill presided over the meeting and called it to order at 6:00 p.m.
Board of Directors Present:Staff Present:
Sammi Morrill, Board President Scott Wayman, Executive Director
William "Bill" Dixon, Board Vice President Amy Madison, Deputy Director
Donna Steward, Board Treasurer Tracy Miller, Administrative Assistant
Mark Moody, Board Member Brian James, Deputy City Manager
Eryn McElroy, Board Member
Reynaldo "Ray" Chavez, Board Member Others Present:
Larry Busch, Public Works Director
Matt Troutt, EastGroup Properties, L.P.
Hearing of Residents
2.This time is set aside for any person who wishes to address the Board. Presentations should be limited to
no more than 3 minutes. The presiding officer will call on those persons who have signed up to speak.
No residents signed up to speak. No comments were made.
Minutes
3.Approval of the minutes for the Board of Directors Regular Monthly Meeting held Thursday, January
23, 2025. (T.Miller)
Board President Sammi Morrill asked for a motion to approve the Minutes of the Board of Directors
Regular Monthly Meeting held Thursday, January 23, 2025.
Moved by Board Member Eryn McElroy, seconded by Board Member Mark Moody.
AYE: Board President Sammi Morrill, Board Vice President Bill Dixon, Board Treasurer Donna
Steward, Board Member Mark Moody, Board Member Eryn McElroy, Board Member Ray
Chavez.
Unanimous affirmative vote - Motion carries.
Presentations
4.Staff briefing on SEDC monthly financial statement for the month of January 2025. (S.Wayman)
Scott Wayman, Executive Director gave a brief overview of the SEDC Financial Statement for January
2025.
January 2025 sales tax received was $529,876.34, expenses were $21,730.62, a 7.3% increase over the
year prior. The 12-month rolling average is 2.3% still trending up. Notable expenditures include a
payment to Group C Media for conference registration and payments to Citibank for conferences,
memberships and monthly subscriptions. Total Cash & Investments figure at the end of January was
$41,335,655.28.
Scott Wayman, Executive Director gave a brief overview of the Reserve Funds.
5.Presentation by Matt Troutt with EastGroup Properties, L.P. (S.Wayman)
Matt Troutt with EastGroup Properties, L.P. gave a brief presentation on the Town Creek Sanitary
Extension project that will cost just under 7 million dollars. The funding will be used for design,
easement acquisition, permitting and construction. The project will take approximately 22-28 months to
complete. Mr. Troutt also gave an overview of other projects that EastGroup Properties have completed.
Public Hearing
6.Resolution 2025-1 - Authorizing the Executive Director of the City of Schertz Economic Development
Corporation to enter into a Performance Agreement with EastGroup Properties, L.P. (S.Wayman)
Board President Sammi Morrill opened the public hearing at 6:20 p.m.
No public comments were made.
Board President Sammi Morrill closed the public hearing at 6:21 p.m.
Board President Sammi Morrill recessed Open Session to Closed Session at 6:21 p.m.
Closed Session
7.Called in accordance with Section 551.087 of the Texas Government Code, Deliberation Regarding
Economic Development Negotiations; Closed Meeting. The governmental body is not required to
conduct an open meeting (1) to discuss or deliberate regarding commercial or financial information that
the governmental body has received from a business prospect that the governmental body seeks to have
locate, stay, or expand in or near the territory of the governmental body and with which the governmental
body is conducting economic development negotiations; or (2) to deliberate the offer of a financial or
other incentive to a business prospect.
Project E-99
Project E-106
Project E-101
Project E-102
Project E-103
Project E-104
Project E-105
Start time: 6:22 p.m.
End time: 7:28 p.m.
Board President Sammi Morrill reconvened to Open Session at 7:29 p.m.
Reconvene to Regular Session
8.Take any actions based on discussion held in closed session under Agenda Item No. 7.
Based off the discussion held in Closed Session Board President Sammi Morrill asked for a motion to
approve Resolution 2025-1 - Authorizing the Executive Director of the City of Schertz Economic
Development Corporation to enter into a Performance Agreement with EastGroup Properties, L.P.; and
other matters in connection therewith.
Moved by Board Member Ray Chavez, seconded by Board Vice President Bill Dixon.
AYE: Board President Sammi Morrill, Board Vice President Bill Dixon, Board Treasurer Donna
Steward, Board Member Mark Moody, Board Member Eryn McElroy, Board Member Ray
Chavez.
Unanimous affirmative vote - Motion carries.
Requests and Announcements
Announcements by staff:
Update on Caterpillar Tour
Scott Wayman, Executive Director and Amy Madison, Deputy Director gave an update on
the Caterpillar Tour. This year will be Caterpillar's 100th year of service.
Next Regular Board Meeting - March 27, 2025
Requests by Board Members to place items on a future SEDC Board Meeting agenda.
Board Member Eryn McElroy requested an update on the Strategic Plan.
Adjournment
Board President Sammi Morrill asked for a motion to adjourn the meeting.
Moved by Board Member Eryn McElroy.
AYE: Board President Sammi Morrill, Board Vice President Bill Dixon, Board Treasurer Donna
Steward, Board Member Mark Moody, Board Member Eryn McElroy, Board Member Ray
Chavez.
Unanimous affirmative vote - Motion carries.
Board President Sammi Morrill adjourned the meeting at 7:33 p.m.
MINUTES PASSED AND APPROVED THIS _____ DAY ___________________ 2025.
____________________
Sammi Morrill
Board President
___________________
Donna Steward
Board Treasurer
Agenda No. 6.
SEDC MEMORANDUM
SEDC
Board Meeting:03/27/2025
Department:Economic Development Corporation
Subject:Staff briefing on SEDC monthly financial statement for the month of
February 2025. (S.Wayman)
SUBJECT:
Staff briefing on SEDC monthly financial statement for the month of February 2025. (S.Wayman)
Attachments
February Financials
p
Agenda No. 7.
SEDC MEMORANDUM
SEDC
Board Meeting:03/27/2025
Department:Economic Development Corporation
Subject:Resolution 2025-2 - Approval of the Independent Auditor's Report for the
SEDC Annual Financial Report for the Year Ending September 30, 2024.
(Travis Roger, CPA, Audit Supervisor of Pattillo, Brown and Hill,
LLP/J.Walters)
BACKGROUND
Per State law requirements, the City of Schertz, and the City of Schertz Economic Development Corporation
("SEDC") contract an independent licensed public accounting firm to perform an annual financial audit. For
FY 2023-2024 year, the CPA firm Pattillo, Brown, and Hill, LLP performed the audit. The Finance DIrector
and SEDC Executive Director have reviewed the audit findings and financial statements as presented by the
auditor.
During the Board meeting, the Audit Partner will make a presentation showing the financial performance and
financial health of the SEDC for the previous fiscal year ending on September 30, 2024. The Board of
Directors will review the audit report attached hereto as Exhibit A. The Board will be asked to make a formal
vote for approval/disapproval.
COMMUNITY BENEFIT
The audit helps ensure that the SEDC funds are managed in accordance with the highest level of standards.
FISCAL IMPACT
The SEDC audit cost is budged and will be charged to the Auditors/Accounting Services line item.
SUMMARY OF RECOMMENDED ACTION
Staff recommends approval of SEDC Resolution 2025-2.
Attachments
Res. 2025-2
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SEDC RESOLUTION 2025-2
A RESOLUTION BY THE CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION ("SEDC") BOARD OF
DIRECTORS ("THE BOARD") AUTHORIZING THE APPROVAL
OF THE INDEPENDENT AUDITOR'S REPORT FOR THE SEDC
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED
SEPTEMBER 30, 2024, AND OTHER MATTERS IN CONNECTION
THEREWITH
WHEREAS, the City of Schertz Economic Development Corporation ("SEDC") is a
non- profit industrial development corporation duly established under the Development
Corporation Act of 1979, as amended (Section 501.001 et seq. Texas Local Government
Code ("the Code" formerly the Development Corporation Act of 1979) (the "Act"); and
WHEREAS, all of the powers of the corporation are vested in the SEDC Board of
Directors (the "Board"}appointed by the governing body of the corporation's authorizing
unity; and
WHEREAS, the Texas Local Government Code, Section 103.001 requires that local
governments complete an annual audit by an independent licensed public accounting firm; and
WHEREAS, the City of Schertz and the SEDC contracted with CPA Pattillo, Brown
and Hill, LLP to perform the audit for Independent Auditor's Report for the SEDC Annual
Financial Report for the Year ended September 30, 2024; and
WHEREAS, the SEDC staff has cooperated with CPA Pattillo, Brown and Hill, LLP
to provide any information necessary to account for SEDC activities for SEDC Annual
Financial Report for the Year ended September 30, 2024.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
THE CITY OF SCHERTZ ECONOMIC DEVELOMENT CORPORATION THAT:
Section 1. The Board hereby authorizes the approval of the Independent Auditor's
Report for the SEDC Annual Financial Report for the Year ended September 30, 2024,
attached hereto as Exhibit A.
Section 2. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as
a part of the judgment and findings of the Board.
Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with
any provision of this Resolution are hereby repealed to the extent of such conflict, and
the provisions of this Resolution shall be and remain controlling as to the matters resolved
herein.
Section 4. This Resolution shall be construed and enforced in accordance with the laws
of the State of Texas and the United States of America.
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Section 5. If any provision of this Resolution or the application thereof to any person or
circumstance shall be held to be invalid, the remainder of this Resolution and the application of
such provision to other persons and circumstances shall nevertheless be valid, and the Board
hereby declares that this Resolution would have been enacted without such invalid provision.
Section 6. It is officially found, determined, and declared that the meeting at which this
Resolution is adopted was open to the public and public notice of the time, place, and subject matter
of the public business to be considered at such meeting, including this Resolution, was given,
all as required by Chapter 551, Texas Government Code, as amended.
Section 7. This Resolution shall be in force and effect from and after its final passage, and
it is so resolved.
PASSED AND ADOPTED, this ____day of ________________ 2025.
CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION
_______________________________
Sammi Morrill, SEDC Board President
ATTEST:
________________________________
Donna Steward, SEDC Board Treasurer
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EXHIBIT A
The Independent Auditor’s Report for the SEDC Annual Financial Report for the
Year Ended September 30, 2024
(See Attached)
SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION
(A COMPONENT UNIT OF THE CITY OF SCHERTZ, TEXAS)
ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 2024
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
SEPTEMBER 30, 2024
TABLE OF CONTENTS
Page
Number
INTRODUCTORY SECTION
Corporate Officials ................................................................................................ i
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................. 1 – 3
Management’s Discussion and Analysis .................................................................... 4 – 7
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position ................................................................................... 8
Statement of Activities ....................................................................................... 9
Fund Financial Statements
Governmental Fund Financial Statements
Balance Sheet ................................................................................................ 10
Reconciliation of the Governmental Funds Balance
Sheet to the Statement of Net Position ............................................................ 11
Statement of Revenues, Expenditures and
Changes in Fund Balance ............................................................................... 12
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balance of the Governmental Fund
to the Statement of Activities ...................................................................... 13
Note to the Financial Statements ............................................................................ 14 – 19
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balance
Balance – Budget and Actual ............................................................................... 20 – 21
Notes to the Required Supplementary Information .................................................... 22
SUPPLEMENTARY INFORMATION
Comparative Balance Sheets .................................................................................. 23
COMPLIANCE SECTION
Independent Auditor’s Report on Internal Control Over Financial Reporting
and On Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing Standards ................ 24 – 25
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i
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
CORPORATE OFFICIALS
AS OF SEPTEMBER 30, 2024
PRESIDENT.............................................................................................................DR. SAMMI MORRILL
VICE-PRESIDENT…………........................................................................................................BILL DIXON
SECRETARY..................................................................................................................... HENRY HAYES
TREASURER................................................................................................................DONNA STEWARD
DIRECTOR.....................................................................................................................ERYN MCELROY
DIRECTOR.........................................................................................................................REY CHAVEZ
DIRECTOR.......................................................................................................................MARK MOODY
EXECUTIVE DIRECTOR ...................................................................................................SCOTT WAYMAN
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INDEPENDENT AUDITOR’S REPORT
Board of Directors
Schertz Economic Development Corporation
Schertz, Texas
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities and general
fund of the Schertz Economic Development Corporation, a component unit of the City of Schertz, Texas, as of
and for the year ended September 30, 2024, and the related notes to the financial statements, which
collectively comprise the Schertz Economic Development Corporation’s basic financial statements as listed in
the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the
respective financial position of the governmental activities and the general fund information of the Schertz
Economic Development Corporation, a component unit of the City of Schertz, Texas, as of September 30,
2024, and the respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report. We are required to be independent of the Schertz Economic Development Corporation City and to meet
our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation, and maintenance of internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the Schertz Economic
Development Corporation’s ability to continue as a going concern for twelve months beyond the financial
statement due date, including any currently know information that may raise substantial doubt shortly
thereafter.
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2
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and
therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing
Standards will always detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are
considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Schertz Economic Development Corporation’s internal control.
Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Schertz Economic Development Corporation’s ability to
continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal control –
related matters that we identified during the audit.
Report on Summarized Comparative Information
We have previously audited Schertz Economic Development Corporation’s fiscal year 202 3 financial
statements, and we expressed an unmodified audit opinion on those audited financial statements in a report
dated March 28, 2024. In our opinion, the summarized comparative information presented herein as of and for
the year ended September 30, 2023, is consistent, in all material respects, with the audited financial
statements from which it has been derived.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis and budgetary comparison information be presented to supplement the
basic financial statements. Such information, although not part of the basic financial statements, is required
by the Governmental Accounting Standards Board, who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency
with management’s responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to
express an opinion or provide any assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Schertz Economic Development Corporation’s basic financial statements. The
supplementary information as listed in the table of contents are presented for purposes of additional analysis
and are not a required part of the basic financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records used
to prepare the basic financial statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the
supplementary information as listed in the table of contents are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual financial report (AFR). The
other information comprises the introductory section but does not include the financial statements and our
auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we
do not express an opinion or any form of assurance thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and consider whether a material inconsistency
exists between the other information and the financial statements, or the other information otherwise appears
to be materially misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 17,
2025, on our consideration of the Schertz Economic Development Corporation’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide an opinion
on the effectiveness of the Schertz Economic Development Corporation’s internal control over financial
reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the Schertz Economic Development Corporation’s internal
control over financial reporting and compliance.
Waco, Texas
March 17, 2025
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SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
A COMPONENT UNIT OF THE CITY OF SCHERTZ, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
SEPTEMBER 30, 2024
Our discussion and analysis of the Schertz Economic Development Corporation’s, a component unit of the City
of Schertz, financial performance provides an overview of the Corporation’s financial activity for the fiscal year
ended September 30, 2024. It should be read in conjunction with the financial statements.
FINANCIAL HIGHLIGHTS
• The Corporation’s net position was $40,365,651 at September 30, 2024, an increase of $7,316,338.
This was primarily attributable to growth in the Corporation’s sales tax revenue, and lower-than-
expected economic incentive payments.
• The Corporation’s total governmental fund revenues were $8,757,676, while total expenditures
(including transfers to the City) were $1,441,338.
OVERVIEW OF THE FINANCIAL STATEMENTS
The City of Schertz Economic Development Corporation was formed in 1998 under the Development Corporation
Act of 1979, Texas Revised Civil Statutes Annotated, Article 5190.6, Section B. It receives the majority of its
income from the one half of one percent sales tax adopted in 1998 for economic development in the City of
Schertz.
This annual report consists of three parts; Management’s Discussion and Analysis, Financial Statements and
Required Supplementary Information. The Statement of Net Position and Activities provides information of the
Corporation as a whole. The corporation’s net position - the difference between assets and liabilities – are a way
to measure financial health or financial position.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad overview of the
Corporation’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the Corporation’s assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may serve
as a useful indicator of whether the financial position of the Corporation is improving or deteriorating.
The statement of activities presents information showing how the Corporation’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in
this statement for some items that will only result in cash flows in future fiscal periods (e.g., depreciation).
The government-wide financial statements present functions of the Corporation that are provided from funding
sources (governmental activities). The government-wide financial statements can be found on pages 8 – 9 of
this report.
FUND FINANCIAL STATEMENTS
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The Corporation, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The funds of
the Corporation consist of governmental funds.
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Governmental Funds – Governmental funds are used to account for essentially the same function reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources (modified accrual basis), as well as on balances of spendable resources available at the
end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing
requirements.
Because the focus of the governmental funds is narrower than that of the government-wide financial statements,
it is useful to compare the information presented in the governmental funds with similar information presented
for governmental activities in the government-wide financial statements. By doing so, readers may better
understand the long-term impact of the government’s near-term financial decisions. Both the governmental
funds balance sheet and the governmental funds statement of revenues, expenditures, and changes in fund
balances provide an adjustments column to facilitate this comparison between the governmental funds and
governmental activities. The basic governmental fund financial statements can be found on pages 10 – 13 of
this report.
NOTES TO THE FINANCIAL STATEMENTS
The notes to the financial statements provide additional information that is essential to a full understanding of
the data provided in the government-wide and fund financial statements. The notes to the financial statements
can be found on pages 14 – 19 of this report.
OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the Corporation’s General Fund budget. Required supplementary
information can be found on pages 20 – 22 of this report.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In
the case of the Corporation, assets exceeded liabilities by $40,365,651 as of September 30, 2024. A portion of
the Corporation’s total net position reflects its net investment in capital assets (e.g., furniture and equipment)
less any related debt. The Corporation uses these assets in providing services; consequently, these assets are
not available for operational types of future spending.
The remainder of the Corporation’s net position is restricted for the purpose of promoting economic development
within the City of Schertz.
2024 2023
Current assets 40,332,003$ 33,004,576$
Noncurrent assets 42,455 53,479
Total Assets 40,374,458 33,058,055
Current liabilities 8,807 8,742
Total Liabilities 8,807 8,742
Investment in capital assets 42,455 53,479
Restricted for economic development 40,323,196 32,995,834
Total Net Position 40,365,651$ 33,049,313$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION'S
NET POSITION
6
Table 2 shows all of the expenses and revenues of the Corporation and is also presented on the accrual basis.
General Revenues consists of the one half of one percent sales tax the corporation receives for economic
development. The Corporation's net position increased primarily from increased sales tax revenues and lower-
than-expected economic incentive payments. The reduced incentive payments are discussed in the budgetary
highlights section below.
2024 2023
Program revenues -$ -$
General revenues 8,757,676 7,811,287
Total revenue 8,757,676 7,811,287
Total expenses (1,441,338) (869,605)
Change in net position 7,316,338$ 6,941,682$
CHANGES IN NET POSITION
Governmental Activities
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION'S
FINANCIAL ANALYSIS OF THE CORPORATION’S FUNDS
Total assets the year ended September 30, 2024, were $40,332,003 with an ending fund balance of
$40,323,196. This represents an increase of $7,327,362 over the previous year. This increase in fund balance
relates primarily to the factors discussed previously.
General Fund Budgetary Highlights
The Corporation’s expenditures were $11,554,739 less than the $12,985,053 budget. This stemmed primarily
from budgeting for Economic development project payments that have not yet been made. The projects include
Titan 312 Phase II, Cinestarz and Kellum Medical Building, totaling over $3,000,000. Additional savings were
realized through travel and training dollars savings due to a slow COVID recovery as well as salary savings due
to turnover throughout the fiscal year.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
Table 3 shows all capital assets of the Corporation. Total net capital assets were $42,455. The Corporation did
not purchase or dispose of any capital assets during the year.
2024 2023
Land 53,991$ 53,991$
Land improvements 38,967 38,967
Equipment and vehicles 28,533 28,533
Accumulated depreciation (79,036) (68,012)
Totals 42,455$ 53,479$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION'S
CAPITAL ASSETS
Governmental Activities
Long-term Debt
The Corporation had no long-term debt as of and for the year ended September 30, 2024.
7
ECONOMIC FACTOR’S AND NEXT YEAR’S BUDGET AND RATES
Schertz EDC continued to be solid throughout the FY 202 4 year. The San Antonio area prospered and succeeded
in the attraction of projects to the region. Financially, with sales tax being the source of revenue for the Schertz
Economic Development Corporation (SEDC), the Corporation has continued to thrive, fund projects and
designate reserves to prepare for projects. The Board of Governors of the Federal Reserve System published in
its Dallas District that “Economic activity expanded at a modest pace over the reporting period, with most
sectors holding steady or experiencing slight growth. Wage growth moderated and input cost of selling prices
growth held slightly above average overall.”
As another indicator of economic growth, the City of Schertz realized a 8.7% increase year -over-year in sales
tax collections during FY 2024. The City has maintained a 7.5% rolling average over the 12-month period, which
indicates the City has maintained its previous growth in recent years and continued its growth at historic
averages.
Progress continued to be made on the three industrial parks, as the existing parks maintain high occupancy
rates. This industrial development continued to push North along IH-35 and across FM 3009 with a combination
of Boomerang Interests and Lovett Commercial partnering on two projects that received incentives from the
SEDC to start a much-needed Town Creek sewer line. This project was contemplated in a study performed last
year and funded by the SEDC. Doerr Lane Logistics Center was completed this year an d partly occupied, with
another 112,000 sq. ft. warehouse/distribution center recently finished and looking for appropriate tenants. To
top off the development in northern Schertz, Park 35 is moving dirt for their project, which will be 1.4M square
foot of industrial warehouse, sitting on 119 acres on IH-35.
Caterpillar continues to excite the region with two more projects being incentivized in 202 4. Projects Hydra and
Aquos were both committed to funding from the Corporation to increase the engine components that are made
at the facility. This Caterpillar addition promises increased capital investments in Schertz, estimated at
$24,000,000, and an increase in manufacturing jobs.
In Southern Schertz, the SEDC and City staff continue to work with CORE5 on a 1.7M sq. ft. development of
speculative industrial product near the intersection of Loop 1604 and IH-10, kicking off development along IH-
10. The Corporation contributed incentives to this project to assist in the management of the stormwater
conveyed across the site and into the watershed of the region, showing our dedication to safeguarding our
environment.
Finally, the SEDC took an active role in the attraction and finalization of plans for a retail development that will
serve the city for years to come. Located on 68 acres at the intersection of IH -35 and Cibolo Valley Drive.
Schertz Station promises 250,000 sq. ft. of retail space, along with 322 market-rate, built-to-rent single family
homes. The Schertz EDC participated in the development with infrastructure funding that provided an extension
of Ripps-Kreusler Drive, which enhanced our major thoroughfare plan as well as opened other areas for
development and utilities.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Corporation’s finances and to show the
Corporation’s accountability to its taxpayers. If you have any questions about this report or need additional
financial information, contact the Executive Director’s office at City of Schertz Economic Development
Corporation, 1400 Schertz Parkway, Schertz, Texas 78154.
BASIC FINANCIAL STATEMENTS
Governmental
Activities
ASSETS
Current assets:
Cash and cash equivalents 36,851,691$
Investments 2,330,549
Accounts receivable 1,141,814
Accrued interest receivable 7,949
Total current assets 40,332,003
Noncurrent assets:
Land 53,991
Buildings and improvements 38,967
Equipment and vehicles 28,533
Less: accumulated depreciation (79,036)
Total noncurrent assets 42,455
Total assets 40,374,458
LIABILITIES
Accounts payable 8,807
Total liabilities 8,807
NET POSITION
Investment in capital assets 42,455
Restricted for economic development 40,323,196
Total net position 40,365,651$
SEPTEMBER 30, 2024
STATEMENT OF NET POSITION
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
The notes to the financial statements are
an integral part of this statement.8
Net (Expense)
Revenue and Changes
in Net Position
Program Governmental
Functions/Programs:Expenses Revenues Activities
Governmental activities:
Administration 568,529$ -$ (568,529)$
Economic development 872,809 - (872,809)
Total governmental activities 1,441,338$ -$ (1,441,338)
General revenues
Sales taxes 6,698,059
Interest revenues 1,868,124
Miscellaneous 191,493
Total general revenues 8,757,676
Change in Net Position 7,316,338
Net position - beginning 33,049,313
Net position - ending 40,365,651$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2024
The notes to the financial statements are
an integral part of this statement.9
General
Fund
ASSETS
Cash and cash equivalents 36,851,691$
Investments 2,330,549
Accounts receivable - sales tax 1,141,814
Accrued interest receivable 7,949
Total assets 40,332,003
LIABILITIES
Accounts payable 8,807
Total liabilities 8,807
FUND BALANCE
Restricted for economic development 40,323,196
Total fund balance 40,323,196
Total liabilities and fund balance 40,332,003$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
BALANCE SHEET
SEPTEMBER 30, 2024
GOVERNMENTAL FUND
The notes to the financial statements are
an integral part of this statement.10
Total fund balance 40,323,196$
Capital assets used in governmental activities are not current financial resources
and therefore are not reported in the funds.42,455
Net position of governmental activities 40,365,651$
Amounts reported for governmental activities in the statement of net position are
different because:
SEPTEMBER 30, 2024
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET
TO THE STATEMENT OF NET POSITION
The notes to the financial statements are
an integral part of this statement.11
General
Fund
REVENUES
Taxes 6,698,059$
Interest revenues 1,868,124
Miscellaneous 191,493
Total revenues 8,757,676
EXPENDITURES
Current:
Economic development 872,809
Direct administration 557,505
Total expenditures 1,430,314
NET CHANGE IN FUND BALANCES 7,327,362
FUND BALANCE, BEGINNING OF YEAR 32,995,834
FUND BALANCE, END OF YEAR 40,323,196$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED SEPTEMBER 30, 2024
The notes to the financial statements are
an integral part of this statement.12
Net change in fund balance 7,327,362$
Governmental funds report capital outlay as expenditures.However,in the
statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense.In addition,capital assets
contributed to governmental activities are not recorded on the fund statements.
Depreciation expense (11,024)
Change in net position of governmental activities 7,316,338$
Amountsreportedforgovernmentalactivities in thestatement of activities are different
because:
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE OF THE GOVERNMENTAL FUND
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2024
The notes to the financial statements are
an integral part of this statement.13
THIS PAGE LEFT BLANK INTENTIONALLY
14
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
In 1998, the “City of Schertz Economic Development Corporation” (SEDC), a nonprofit corporation,
was incorporated under the Development Corporation Act of 1979, Texas Revised Civil Statutes
Annotated, Article 5190.6, Section B. SEDC is organized exclusively for public purposes of the City
of Schertz, and the City Council appoints directors of SEDC. It receives the majority of its income
from the one half of one percent sales tax adopted in 1998 for economic development in the City of
Schertz. The City is directly liable for any debts of SEDC, and thus meets the criteria of a blended
component unit of the City and is included as a special revenue fund in the financial statements of
the City of Schertz.
The financial statements of SEDC have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to government units. The Governmental Accounting
Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles.
B. Basis of Presentation
The government-wide financial statements (i.e. the statement of net position and the statement of
activities) report information on all the nonfiduciary activities of the primary government and its
component units, as applicable. The effect of interfund activity has been removed from these
statements. Governmental activities are supported by taxes and intergovernmental revenue.
Likewise, the primary government is reported separately from certain legally separate component
units for which the primary government is financially accountable. The Corporation had no business-
type activities or component units as of and for the year ended September 30, 2024.
The statement of activities demonstrates the degree to which the direct expenses of a given function
or segment is offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function or segment. Program revenues include 1) charges of customers or applicants
who purchase, use, or directly benefit from goods, services, or privileges provided by a given
function or segment and 2) grants and contributions that are restricted to meeting the operational
or capital requirements of a particular function or segment. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
The governmental funds financial statements consist of the balance sheet and statement of
revenues, expenditures and changes in fund balance. These financial statements have been adjusted
to arrive at the government-wide financial statement balances (statement of net position and
statement activities).
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement
focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are
recorded when a liability is incurred, regardless of the timing of related cash flows.
Governmental funds financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the government considers revenue to be available if they are collected within 60
days of the end of the current fiscal period. Revenues accrued include interest earned on
investments and income from Corporation operations. Expenditures generally are recorded when a
liability is incurred, as under accrual accounting. However, debt service requirements, as well as
expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
15
The accounting system is organized on a fund basis. A fund is defined as a fiscal and accounting
entity with a self-balancing set of accounts, which comprise its assets, liabilities, fund balance,
revenues and expenditures.
The Corporation reports the following governmental fund:
General Fund – The General Fund is used to account for all financial transactions of
the Corporation. The principal sources of revenue are assessments to taxing authorities
and interest earned on investments. Expenditures include all costs associated with the
daily operations of the Corporation.
D. Cash and Cash Equivalents
Cash and cash equivalents include cash deposits and amounts deposited in investment pools.
Investments with a maturity of 90 days are less are considered cash equivalents.
E. Investments
Investments consist of certificates of deposit; investments in Texas Cooperative Liquid Assets
Securities System; and obligations of the U.S. government and its agencies. Investments for the
Corporation are reported at fair value, except for the position in investment pools, which are
reported at net asset value per share (which approximates fair value) even though it is calculated
using the amortized cost method.
Public funds investment pools in Texas (“Pools”) are established under the authority of the Interlocal
Cooperation Act, Chapter 791 of the Texas Government Code, and are subject to the provisions of
the Public Funds Investment Act (the “Act”), Chapter 2256 of the Texas Government Code. In
addition to other provisions of the Act designed to promote liquidity and safety of principal, the Act
requires Pools to: 1) have an advisory board composed of participants in the pool and other persons
who do not have a business relationship with the pool and are qualified to advise the pool; 2)
maintain a continuous rating of no lower than AAA or AAAm (or equivalent) rating by at least one
nationally recognized rating service; and 3) maintain the market value of its underlying investment
portfolio within one-half of one percent of the value of its shares.
F. Related Party Transactions
During the course of operations, numerous transactions occur between SEDC and the City. Balances
between the entities are classified as “due from primary government” or “due to primary
government” on the balance sheet and statement of net position. Similarly, transactions occurring
between the entities are labeled as primary government on the statement of activities and the
statement of revenues, expenditures, and changes in fund balance. These transactions are reported
as expenditures of the Corporation for reimbursements or as transfers when the Corporation is
contributing additional resources to the Primary Government.
16
G. Capital Assets
Capital assets, which include land, buildings and improvements, machinery, equipment, vehicles,
and infrastructure assets are reported in the governmental activities in the government-wide
financial statements. Capital assets are defined by the Corporation as assets with an initial,
individual cost of more than $5,000 and an estimated useful life in excess of one year. When capital
assets are purchased, they are capitalized and depreciated in the government-wide financial
statements. Capital assets are recorded as expenditures of the current period in the governmental
fund financial statements. Capital assets are valued at cost where historical records are available
and at an estimated cost where no records exist. Donated capital assets, donated works of art and
similar items received as part of a service concession arrangement are reported at acquisition value,
rather than fair value. The costs of normal maintenance and repairs that do not add to the value of
the asset or materially extend asset lives are not capitalized. Improvements to capital assets that
materially extend the life of the asset or add to the value are capitalized. Major outlays for capital
assets and improvements are capitalized as projects are constructed. Capital assets are depreciated
over their useful lives on a straight-line basis as follows:
Use Lives
Assets (Years)
Buildings and Improvements 10 - 50
Machinery, equipment, and vehicles 2 - 20
H. Accrued Liabilities and Long-Term Obligations
All payables, accrued liabilities, and long-term obligations are reported in the statement of net
position. Long-term liabilities, and related accrued interest payable, are recognized as a liability on
the governmental fund financial statement (balance sheet) when due.
I. Fund Balance
Fund balances in governmental funds are classified as below:
Nonspendable – Represents amounts that cannot be spent because they are either not in spendable
form (such as inventory or prepaid items) or legally required to remain intact.
Restricted – Represents amounts that are constrained by external parties, constitutional provisions,
or enabling legislation.
Committed – Represents amounts that can only be used for a specific purpose because of a formal
action by the highest level of decision-making authority (the Schertz City Council). Committed
amounts cannot be used for any other purpose unless the City Council removes those constraints
through the same formal action.
Assigned – Represents amounts which the Corporation intends to use for a specific purpose but do
not meet the criteria of restricted or committed. The Board of Directors is the only entity that may
make assignments at this time as the Board has not designated any other individuals with the
authority to make assignments.
Unassigned – Represents the residual balance that may be spent on any other purpose of the
Corporation.
When an expenditure meets multiple classifications of fund balance, the Corporation’s policy is to
consume the most restrictive provision first.
J. Net Position
Net position represents the difference between assets less liabilities. Net investment in capital assets
consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of
any borrowing used for the acquisition, construction or improvements of those assets, and adding
back unspent proceeds. Net position is reported as restricted when there are limitations imposed by
laws or regulations of other governments.
17
K. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
II. DEPOSITS AND INVESTMENTS
As of September 30, 2024, SEDC had the following investments:
Reported Weighted Average
Investment type:Value Maturity (days)
Texas Class Local Government Pool 36,851,691$ 34
Certificate of Deposit 2,330,549 162
39,182,240$ 196
Texas CLASS has redemption notice periods of one day and may redeem daily. The investment pools’
authorities may only impose restrictions on redemptions in the event of a general suspension of trading
on major securities markets, general banking moratorium or national state of emergency that affects
the pools’ liquidity.
Interest Rate Risk. As a means of limiting exposure to fair value losses arising from rising interest rates,
the City’s investment policy limits the City’s investment portfolio to highly liquid investments to meet
unanticipated cash requirements, and/or to redeploy cash into other investments expected to
outperform current holdings.
Credit Risk. The investment policy limits investments to obligations of the United States or its agencies
and instrumentalities; direct obligations of the State of Texas; obligations of states, agencies, contracts,
cities, and other political subdivisions rated as to investment quality of not less than AAA by a nationally
recognized investment firm. As of September 30, 2024, the Corporation's investments in the pooled
investment funds were rated AAAm by Standard & Poor's.
Custodial Credit Risk - Deposits. In the case of deposits, this is the risk that in the event of a bank
failure, the government’s deposits may not be returned to it. As of September 30, 2024, the
Corporation’s deposits were fully insured by FDIC and the City’s pledged securities.
Custodial Credit Risk – Investments. For an investment, this is the risk that, in the event of the failure
of the counterparty, the government will not be able to recover the value of its investments or collateral
securities that are in the possession of an outside party. All of the governmental securities were held by
its agent in the Corporation’s name.
III. ACCOUNTS RECEIVABLE
Accounts receivable at September 30, 2024 consists of sales tax collections held by the Texas State
Comptroller at year end for the Corporation. Management considers the entire balance to be collectible.
18
IV. CAPITAL ASSETS
Capital Asset activity for the year ended September 30, 2024 was as follows:
Beginning Retirements/Ending
BalanceAdditionsAdjustmentsBalance
Governmental activities
Capital assets, not being depreciated:
Land 53,991$ -$ -$ 53,991$
Total capital assets not
being depreciated 53,991 - - 53,991
Capital assets being depreciated:
Land improvements 38,967 - - 38,967
Equipment and vehicles 28,533 - - 28,533
Total capital assets
being depreciated 67,500 - - 67,500
Accumulated depreciation:
Land improvements (13,637) (1,948) - (15,585)
Equipment and vehicles (54,375) (9,076) - (63,451)
Total accumulated
depreciated (68,012) (11,024) - (79,036)
Total capital assets being depreciated, net (512) (11,024) - (11,536)
Capital assets, net 53,479$ (11,024)$ -$ 42,455$
V. EMPLOYEE BENEFITS
The Corporation has no responsibility for long -term payroll liabilities beyond current billings. The
Corporation uses employees of the City of Schertz and is charged, per the service agreement with the
City, the full cost of these employee’s salaries and related benefits. This includes a pro-rata portion of
contributions to the pension plan (through the City’s involvement in the Texas Municipal Retirement
System) and other postemployment benefits (the Supplemental Death Benefits Fund through the Texas
Municipal Retirement System). The City and thus the Corporation have made all actuarially required
contributions to the plans with no net pension obligation (or asset). More details about the plans and
their funding status can be found in the City’s annual financial report.
VI. TRANSACTIONS WITH CITY (PRIMARY GOVERNMENT)
The Corporation contributes amounts to the City for various purposes. For the year ending September
30, 2024, the Corporation paid $546,883 for an allocation of fleet and administrative overhead costs,
per the service agreement with the City. This expenditure is recorded in the Administration function and
was equal to the original and final budgeted amount.
VII. ECONOMIC DEVELOPMENT AGREEMENTS
The City of Schertz Economic Development Corporation negotiates economic development incentive
agreement on behalf of the SEDC and the City of Schertz (the City) on an individual basis. As of
September 30, 2024 Schertz, had 17 active incentive agreements.
On May 2, 2017, the City and the Corporation approved the Schertz Incentive Policy which outlines the
City’s primary tools to attract commercial investment and promote economic development. Projects are
selected on a case-by-case basis in accordance current policy and state laws at the discretion of the
governing body. All incentive agreements are formalized through a performance agreement with
specified terms and recapture criteria.
19
The SEDC Incentive program, authorized by Chapters 501, 502 and 505 of the Texas Local Government
Code, enables the Corporation to fund allowable projects from the collection of one -half of one percent
of sales tax proceeds collected in the City of Schertz. In accordance with state law, the SEDC Incentive
Policy establishes grants and loans for businesses that create Primary Jobs for the following categories:
Existing Businesses (3 years of operation within the City), Small Businesses (fewer than 50 full-time
jobs or annual sales less than $10 million), Large Impact Businesses (Up to $100 million in taxable
property), and Extra-Large Businesses (over $100 million in taxable property). The Corporation’s
outstanding incentive agreement grants are as follows:
FY 2023-24 Amt.Est. Remaining Grant
SEDC - LGC 501.101 (Bolster Primary Jobs):
Ace Mart 33,985$ -$
Caterpillar Hydra 25,000 25,000
Caterpillar Aquos - 361,559
Schertz RE 25,000 1,633,870
Mile Hi - 2,167,364
Totals 83,985$ 4,187,793$
SEDC - LGC 501.103 (Infrastructure):
Core 5 - 350,000
Kellum - 350,000
Schertz 312 - 2,500,000
Mob - 40,000
Boom Connect - 6,500,000
Schertz Station - 8,000,000
Palapas Johns - 154,100
Freckles - 50,000
Totals -$ 17,944,100$
VIII. RISK MANAGEMENT
The City of Schertz Economic Development Corporation is exposed to various risks of losses to torts;
theft of, damage to, and destruction of assets; and errors and omissions. The Corporation, through the
City, contracts with the Texas Municipal League (TML) to provide insurance coverage for property and
casualty. The provider is a multi-employer group that provides a combination of risk sharing among pool
participants and stop loss coverage. Contributions are set annually by TML. Liability for the Corporation
is generally limited to the contributed amounts.
IX. COMMITMENTS AND CONTINGENCIES
Litigation - Management of the City of Schertz Economic Development Corporation is not aware of any
pending or threatened litigation that would have a significant impact on the Corporation’s financial
statements.
Economic Development Agreements – As of the year ending September 30th 2024, the SEDC had a
variety of development agreements including: Ace Mart, Amazon, Caterpillar, Closner Equipment,
Kellum Medical, Major Wire, Nexus Enterprises, Food Related, Schertz 35, Boomerang Interest/Lovett
Commercial, Schertz Medical Office Building, Health Texas, Sysco, Texas Plumbing Supply and Core 5.
REQUIRED SUPPLEMENTARY INFORMATION
2024
Actual
Original Final Amounts
REVENUES
Taxes 7,092,000$ 7,092,000$ 6,698,059$
Interest 1,315,000 1,315,000 1,868,124
Miscellaneous - - 191,493
Total revenues 8,407,000 8,407,000 8,757,676
EXPENDITURES
Current:
Economic development 12,366,870 12,366,870 872,809
Administration 618,183 618,183 557,505
Total expenditures 12,985,053 12,985,053 1,430,314
NET CHANGE IN FUND BALANCES (4,578,053) (4,578,053) 7,327,362
FUND BALANCE, BEGINNING OF YEAR 32,995,834 32,995,834 32,995,834
FUND BALANCE, END OF YEAR 28,417,781$ 28,417,781$ 40,323,196$
Budgeted Amounts
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED SEPTEMBER 30, 2024
(WITH COMPARATIVE ACTUAL AMOUNTS FOR 2023)
20
Variance 2023
Positive Actual
(Negative)Amounts
(393,941)$ 6,548,941$
553,124 1,262,346
191,493 -
350,676 7,811,287
11,494,061 264,776
60,678 593,805
11,554,739 858,581
(11,905,415) 6,952,706
- 26,043,128
11,905,415$ 32,995,834$
21
22
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
SEPTEMBER 30, 2024
Budgetary Information – The budget is prepared in accordance with accounting principles generally accepted
in the United States of America. The Corporation maintains strict budgetary controls. The objective of these
controls is to ensure compliance with legal provision embodied in the annual appropriated budget approved by
the Board of Directors.
Budgetary preparation and control is exercised at the department level. Actual expenditures may not legally
exceed appropriations at the fund level.
The Corporation did not exceed the budgeted expenditures during 2024.
2024 2023
ASSETS
Cash and cash equivalents 36,851,691$ 29,560,533$
Investments 2,330,549 2,253,041
Accounts receivable - sales tax 1,141,814 1,183,053
Accrued interest receivable 7,949 7,949
Total assets 40,332,003$ 33,004,576$
LIABILITIES
Accounts payable 8,807 8,742
Total liabilities 8,807 8,742
FUND BALANCE
Restricted for economic development 40,323,196 32,995,834
Total fund balance 40,323,196 32,995,834
Total liabilities and fund balance 40,332,003$ 33,004,576$
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION
COMPARATIVE BALANCE SHEETS
SEPTEMBER 30, 2024 AND 2023
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COMPLIANCE SECTION
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INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Directors
Schertz Economic Development Corporation
Schertz, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards, issued
by the Comptroller General of the United States, the financial statements of the governmental activities and
the general fund of the Schertz Economic Development Corporation, a component unit of the City of Schertz,
Texas, as of and for the year ended September 30, 2024, and the related notes to the financial statements,
which collectively comprise the Schertz Economic Development Corporation’s basic financial statements, and
have issued our report thereon dated March 17, 2025.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Schertz Economic
Development Corporation’s internal control over financial reporting (internal control) as a basis for
determining the audit procedures that are appropriate in the circumstances for the purpose of expressing our
opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of
the Schertz Economic Development Corporation’s internal control. Accordingly, we do not express an opinion
on the effectiveness of the Schertz Economic Development Corporation’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect
and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of
deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the
entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or
significant deficiencies may exist that have not been identified.
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Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Schertz Economic Development
Corporation’s financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could
have a direct and material effect on the financial statements. However, providing an opinion on compliance
with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s
internal control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this
communication is not suitable for any other purpose.
Waco, Texas
March 17, 2025