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03-17-2026 Agenda Packet       MEETING AGENDA City Council REGULAR SESSION CITY COUNCIL March 17, 2026                                   HAL BALDWIN MUNICIPAL COMPLEX COUNCIL CHAMBERS 1400 SCHERTZ PARKWAY BUILDING #4 SCHERTZ, TEXAS 78154 CITY OF SCHERTZ CORE VALUES Do the right thing Do the best you can Treat others the way you want to be treated Work cooperatively as a team (amended to correct term ending date)  AGENDA TUESDAY, MARCH 17, 2026 at 6:00 p.m.        Call to Order   Opening Prayer and Pledges of Allegiance to the Flags of the United States and State of Texas. (Councilmember Heyward)   Special Announcement  Hal Baldwin Scholarship - Students attending for the Hal Baldwin Scholarship need to sign in on the sheet located on the back podium. If you are watching remotely, please email Sarah Gonzalez at sgonzalez@schertz.com to virtually sign in.  Please direct any questions to Ms. Gonzalez.   Presentations   Quarterly Financials - 1st Quarter 2025 (S.Gonzalez/J.Walters)    Presentation of the FY24-25 Parks & Recreation Annual Report (S.Gonzalez/L.Shrum)    City Events and Announcements  March 17, 2026  City Council Agenda                                Page 1  City Events and Announcements  Announcements of upcoming City Events (B.James/S.Gonzalez) Announcements and recognitions by the City Manager (S.Williams) Announcements and recognitions by the Mayor (R.Rodriguez)   Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes.  All remarks shall be addressed to the Council as a body, and not to any individual member thereof. Any person making personal, impertinent, or slanderous remarks while addressing the Council may be requested to leave the meeting. All handouts and/or USB devices must be submitted to the City Secretary no later than noon on the Monday preceding the meeting.  Handouts will be provided to each Councilmember prior to the start of the meeting by the City Secretary.  All USB devices will be vetted by City IT staff to ensure City property is protected from malware. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered.   Consent Agenda Items The Consent Agenda is considered self-explanatory and will be enacted by the Council with one motion. There will be no separate discussion of these items unless they are removed from the Consent Agenda upon the request of the Mayor or a Councilmember.   1.Minutes - Approval of the minutes from the regular Council Meeting on March 3, 2026 (S.Edmondson/S.Courney/I.Chavez)    2.Appointments, Re-appointments, and Resignations - City of Schertz Boards, Commissions, and Committees  Appointments  Capital Improvement Advisory Committee Boardmember for term ending 06/30/2028: Nancy Alicia Schuerman Croteau Parks and Recreation Boardmember for term ending 09/30/2028: Rodricus Harvey Parks and Recreation Boardmember for unexpired term ending 09/30/2027: Janet Sanchez Parks and Recreation Alternate 1 Position for term ending 09/30/2028: Jonathan Marquez March 17, 2026  City Council Agenda                                Page 2  Parks and Recreation Alternate 2 Position for unexpired term ending 09/30/2027: Michelle Frey Planning and Zoning Commissioner for the term ending 06/30/2028: Francisco Velazquez Planning and Zoning Commission Alternate 1 for the term ending 06/30/2028: Sonja Loredo-Reyes Planning and Zoning Commission Alternate 2 for the unexpired term ending 06/30/2027: Sean Grady Transportation Safety Advisory Commissioner for term ending 03/31/2028: Jay Starr and Jonathan Marquez Re-appointments  Transportation Safety Advisory Commission for term ending 03/31/2028: Richard Dziewit, Steven Icke, and Paul Wiley  Planning and Zoning for term ending 06/30/2028: Clay Wallace, Glen Outlaw Resignations, Removals, and Expiring Terms  TSAC: Donald Nolan, Ronald Stevens, Michael Winter and Melanie McCoy Planning and Zoning Commission Alternate 1: Judy Goldick   3.Resolution 26-R-042 - Approving the recommendation to name the 8.83-acre park property at the intersection of Parklands Way and Park Bluff as Meadow Run Park (S.Gonzalez/L.Shrum)    4.Resolution 26-R-043 - Authorizing execution and submittal of a Community Affirmation Form for the Texas Water Development Board's performance of a Flood Management Evaluation study for the City of Schertz (B.James/K.Woodlee)    5.Resolution 26-R-045 - Approving a Schertz Main Street Local Flavor Economic Development Grant for 814 Main (S.Williams/B.James)    Discussion and Action Items   6.Resolution 26-R-038 - Authorizing an Advanced Funding Agreement (AFA) with the Texas Department of Transportation (TxDOT), for the West Dietz Creek Trail Project. (S.Gonzalez/L.Shrum)    7.Resolution 26-R-044 -Approval of the Annual Comprehensive Financial Report FY 2024-25 (S. Gonzalez/J. Walters)  March 17, 2026  City Council Agenda                                Page 3    Public Hearings   8.Ordinance 26-M-009 - Conduct a public hearing to consider amending Chapter 90 Article V. Water and Wastewater Capital Recovery Fees, Section 90-155 Appeals. (S.Williams/B.James)    Closed Session   9.The City Council will convene in closed session pursuant to Texas Government Code Section 551.071 to consult with its legal counsel regarding potential disannexation.    Reconvene into Regular Session   10.Take any action based on discussion held in Closed Session under Agenda Item # 9.    Information available in City Council Packets - NO DISCUSSION TO OCCUR   11.March 2026- Major Projects Update Memo    12.Schertz Area Senior Center Policy Updates - Political Campaigns and Bingo Sponsorships (S.Gonzalez/L.Shrum)    Requests and Announcements  Requests by Mayor and Councilmembers for updates or information from Staff  Requests by Mayor and Councilmembers that items or presentations be placed on a future City Council agenda City and Community Events attended and to be attended (Council)     Adjournment   CERTIFICATION I, SHEILA EDMONDSON, CITY SECRETARY OF THE CITY OF SCHERTZ, TEXAS, DO HEREBY CERTIFY THAT THE ABOVE AGENDA WAS PREPARED AND POSTED ON THE OFFICIAL BULLETIN BOARDS ON THIS THE 11TH DAY OF MARCH 2026 AT 6:45 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. March 17, 2026  City Council Agenda                                Page 4  GOVERNMENT CODE.    SHEILA EDMONDSON      I CERTIFY THAT THE ATTACHED NOTICE AND AGENDA OF ITEMS TO BE CONSIDERED BY THE CITY COUNCIL WAS REMOVED BY ME FROM THE OFFICIAL BULLETIN BOARD ON ________DAY OF ___________________, 2026. 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 210-619-1030. The City Council for the City of Schertz 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.    COUNCIL COMMITTEE AND LIAISON ASSIGNMENTS     Mayor Rodriguez Member Audit Committee Investment Advisory Committee Main Street Committee TIRZ II Board Liaison Board of Adjustments Senior Center Advisory Board-Alternate Councilmember Davis– Place 1 Member Interview Committee  Main Street Committee - Chair TIRZ II Board Liaison Parks & Recreation Advisory Board Schertz Housing Authority Board Transportation Safety Advisory Board Councilmember Watson – Place 2 Member Audit Committee Liaison Library Advisory Board Senior Center Advisory Board Cibolo Valley Local Government Corporation (CVLGC) -Ex-Officio  Councilmember Macaluso – Place 3 Member Interview Committee  Hal Baldwin Scholarship Committee TIRZ II Board   Councilmember Guerrero – Place 4 Member Hal Baldwin Scholarship Committee Investment Advisory Committee Liaison Schertz Historical Preservation Committee Councilmember Westbrook – Place 5 Member Schertz-Seguin Local Government Corporation (SSLGC)      Liaison Planning and Zoning Commission March 17, 2026  City Council Agenda                                Page 5  Schertz Historical Preservation Committee   Planning and Zoning Commission Schertz Historical Preservation Committee Cibolo Valley Local Government Corporation (CVLGC)-Alternate   Councilmember Heyward – Place 6 Member Animal Services Advisory Committee Audit Committee Interview Committee-Chair Investment Advisory Committee Main Street Committee Liaison Building and Standards Commission Economic Development Corporation - Alternate Senior Center Advisory Board Councilmember Sheridan– Place 7      March 17, 2026  City Council Agenda                                Page 6  Agenda No.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Finance Subject:Quarterly Financials - 1st Quarter 2025 (S.Gonzalez/J.Walters) BACKGROUND Staff is presenting the 1st Quater 2025-26 Financial Report which includes a comparison of major revenue sources and the budget performance to date.  In this presentation, staff will also cover the review process for sales tax contributors.  Attachments 1st Quarter FY 2025-26 December Presentation FY 25-26 1st QUARTER FINANCIALS James Walters Director Finance Revenue-General Fund 2 Expenses-General Fund 3 Ad Valorum Tax-General Fund 4 Sales Tax-General Fund 5 Sales Taxes •Sales taxes collected by companies are submitted to the State, either monthly or quarterly, then the state distributes it to the Cities and Counties the month following the submission. •Due to privacy laws, only the City Manager, or their designee, can request to see the full list of sales tax payers and he can only use that data for auditing and financial forecasting. •This data can be shared only in a way that does not single out or reveal a specific taxpayer. 6 Sales Taxes •The city has engaged with ZacTax , a company that compiles and verifies sales tax data on behalf of Schertz. Their robust platform lets staff review sales tax locations easily each month to ensure the state is allocating sales taxes correctly. 7 Sales Taxes •This is helpful to track business that have a location in Schertz. •Not all sales tax contributions received come from businesses that have a physical location in Schertz. Exemptions include: •Online sales •Construction material purchases •For construction generated sales taxes, staff looks at building permits to determine if we are receiving the applicable taxes. 8 Permits-General Fund 9 Franchises-General Fund 10 Water & Sewer Revenue 11 Water & Sewer Revenue 12 Water & Sewer Revenue 13 Water & Sewer Revenue 14 Drainage Fund 15 Drainage Fund 16 EMS Revenue 17 EDC Revenue 18 City of Schertz Investments 19 Investments Rates 20 3.80 3.90 4.00 4.10 4.20 4.30 4.40 4.50 4.60 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Schertz Portfolio 4.51 4.46 4.40 4.39 4.36 4.36 4.39 4.36 4.32 4.19 4.01 3.82 3 Month T-Bill 4.31 4.32 4.32 4.31 4.36 4.36 4.41 4.23 4.02 3.89 3.88 3.67 Investments Rates COMMENTS AND QUESTIONS 21 Agenda No.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Parks, Recreation & Community Servic Subject:Presentation of the FY24-25 Parks & Recreation Annual Report (S.Gonzalez/L.Shrum) BACKGROUND The Parks, Recreation, and Community Services Department compiles an Annual Report each fiscal year to demonstrate our impact on the community, and to highlight the quality of life opportunities available to residents.  Attachments FY 24-25 Parks & Rec Annual Report FY 24-25FY 24-25 A N N U A L R E P O R T WHO WE ARE 21 FULL TIME STAFF 2 PART TIME STAFF 2 SEASONAL STAFF 200 # OF VOLUNTEERS PARKS & RECREATION LEADERSHIP Lauren Shrum, Director Jared Montney, Park Superintendent Cassie Paddock, Recreation Manager Athena Nolen, Civic Center Manager Robert Dobratz, Crew Supervisor PROFESSIONAL DEVELOPENT Lauren Shrum: TRAPS Central Region Director Emerging Leaders Mentor AAPRA Mentor Cassie Paddock: TRAPS Education Task Force TRAPS State Presenter NRPA Annual Institute Presenter Central Region Workshop Chair AAPRA Mentor Jared Montney Central Region Rodeo Chair Sydney Paredes: F&YP Volunteer Coordinator TRAPS Tex-tern Al Johnson Scholarship NRPA Young Professional Fellowship Kathryn Scheel: TRAPS Central Region Awards Committee TRAPS State Awards Committee Ian King Emerging Leaders Diego Martinez Emerging Leaders Lexis Michael Cibolo Valley Elementary Presenter Sydney Paredes NRPA 30 Under 30 Schertz Rising Star Award Kathryn Scheel City Managers Coin DariAnn Douglas 1 Year Service Pin Central Region Maintenance Rodeo: Ray Tyquiengco: 3 place Zero Turn Mowerrd Diego Martinez & Daniel DeLong: 4 place Truck & Trailerth Cole Moody & Larry May: 6 place Truck and Trailerth Ian King: 5 place Backhoeth Ian King & Diego Martinez: 5 place Irrigation Assemblyth Cole Moody: 6 place Nail Driveth Central Region Awards: Lauren Shrum: Park Professional of the Year The Great Spring Project: Conservation Award Veterans Memorial Plaza: Photography Award Color Fight: Photography Award State Maintenance Rodeo: Cole Moody & Larry May: 1 place Truck and Trailerst Certified Playground Safety Inspector (CPSI) Daniel DeLong Certified Pool Operator DariAnn Douglas Pesticide Applicator Diego Martinez Jeremy Jacoway Daniel DeLong Scissor Lift Operator Art Ortiz Albert Orosco Lonnie Corso Robert Gaitan Archery Instructor Isaiah Granado AJ Jimenez AWARDS & RECOGNITIONS CERTIFICATIONS TEAM ACCOMPLISHMENTS PARKS AND RECREATION ADVISORY BOARD SCHERTZ YOUTH SOCCER ALLIANCE BUFFALO VALLEY YOUTH ASSOCIATION SENIOR CENTER ADVISORY BOARD BOARDS & COMMITTEES Johnie McDow, Chair William Bosch, Vice Chair Reginna Agee Sally Macias Robert Sheridan III Brad Snow Elizabeth Wiley Penny Jennings Christopher Castoro Tim Dusek Sydney Shippey Jason Hernandez Sabrina Sheridan Jason Hernandez Michelle Hernandez Dora Boyle Damani Phillips Demetrius Hopson Cassie Paddock Jared Montney Sydney Paredes Robert Sheridan III Mario Gallegos Jason Hahn Barton Bowers Daniel Hernandez Gerald Connell Matt Netherton Nick Morales Ashley Underwood Dustin Quinney Christina Clark Obie Harrison Lillian Redus Christopher Castoro Pam Lucas Mary Wigle Linda Powell Adela Lugo Della Morgan Tess Daniels FRIENDS OF CRESCENT BEND Debby Arnold Gary Arnold Bill Skinner Sandi Wheeler Branch Archer Ardell Winters Paula Oliver Ann Mallard Steve Layton Clare Layton WHAT WE DO 272727 PARKSPARKSPARKS 121212 SPONSORSSPONSORSSPONSORS 111 DOG PARKDOG PARKDOG PARK 777 MULTIPURPOSEMULTIPURPOSE COURTSCOURTSMULTIPURPOSE COURTS 111 SENIOR CENTERSENIOR CENTERSENIOR CENTER 262626 NATURE PROGRAMSNATURE PROGRAMSNATURE PROGRAMS 181818 PARTNER ORGANIZATIONSPARTNER ORGANIZATIONSPARTNER ORGANIZATIONS 1,1311,1311,131 CIVIC & COMMUNITY CENTER BOOKINGSCIVIC & COMMUNITY CENTER BOOKINGSCIVIC & COMMUNITY CENTER BOOKINGS 111 CIVIC/CONVENTION CENTERCIVIC/CONVENTION CENTERCIVIC/CONVENTION CENTER 444 ADULT SOCIAL LEAGUESADULT SOCIAL LEAGUESADULT SOCIAL LEAGUES 464646 EVENTSEVENTSEVENTS 444 POOLSPOOLSPOOLS 444 WATER ACCESS POINTSWATER ACCESS POINTSWATER ACCESS POINTS 222 SPLASH PADSSPLASH PADSSPLASH PADS 121212 BASEBALL & SOFTBALL FIELDSBASEBALL & SOFTBALL FIELDSBASEBALL & SOFTBALL FIELDS 121212 PAVILIONS & PICNIC AREASPAVILIONS & PICNIC AREASPAVILIONS & PICNIC AREAS 121212 SoccerSoccer FieldsFieldsSoccer Fields 363636 PLAYSCAPE UNITSPLAYSCAPE UNITSPLAYSCAPE UNITS 25.625.625.6 MILES OF HIKE & BIKE TRAILSMILES OF HIKE & BIKE TRAILSMILES OF HIKE & BIKE TRAILS 457457457 ACRES OF PARKLANDACRES OF PARKLANDACRES OF PARKLAND 111 SKATE PARKSKATE PARKSKATE PARK 222 COMMUNITY CENTERSCOMMUNITY CENTERSCOMMUNITY CENTERS AQUATICS- PICKRELL POOL CIVIC CENTER RENTALS RECREATION Events Event Participants Programs Program Participants Leagues League Participants Sponsorships Volunteer Hours 46 20,303 353 4,544 5 431 $51,750 884 Visits Admissions Season Passes 20,337 $24,838 $6,020 Grand Ballroom Bluebonnet Hall Community Center North Center 262 265 315 289 PARK RENTALS Ashley Park Pavilion Crescent Bend Group Campsite Gutierrez Garden Park Gazebo Pickrell Park- Large Pavilion Pickrell Park- Aero Pavilion Pickrell Park- Oak Pavilion Pickrell Park- Poplar Pavilion Pickrell Park- Picnic Area A Pickrell Park- Picnic Area B Pickrell Park- Picnic Area C Pickrell Park- Picnic Area D Rhine Valley Park Pavilion Wendy Swan Pavilion A Wendy Swan Pavilion B Woodland Oaks Gazebo 20 5 9 283 60 92 52 4 5 4 2 8 45 10 2 FY 24FY 25 21 3 3 158 68 82 63 10 9 11 9 8 2 N/A 3 41 28,426 123 1,750 5 540 $58,050 579 194 236 299 199 18,362 $22,244 $5,768 THE YEAR IN NUMBERS YOUTH SPORTS PARTICIPANTS FY 24FY 25 Baseball (BVYA) Softball (BVYA) Basketball (BVYA) Volleyball (BVYA) Swimming (BVYA) Soccer (SYSA) Volunteer Hours 1,211 470 314 72 142 1,993 22,220 936 291 255 89 140 1,329 22,530 SENIOR CENTER Building Scan Ins Lunch Scan Ins Memberships Lunch Memberships Volunteer Hours 33,035 17,119 840 776 1,987.5 31,327 15,904 816 715 1,875.5 460- Parks (Parks and Recreation) 463- Swim Pool (Pickrell Park Pool & Splash Pad) 464- Event Facilities (Civic Center) 901- City’s Assistance (Senior Center) 106- Special Events Fund (Kick Cancer and Hal Baldwin Golf Tournament) 317- Park Fund 319- Tree Mitigation Revenue From All Parks Department Funds Parks and Rec Fees Civic Center Fees Special Event Fund Fees Parkland Dedication Fees Tree Mitigation Fees Revenue Total: Budget 360,700.00 440,589.00 55,000.00 150,000.00 100,000.00 1,106,289.00 Actual 395,093.92 300,173.26 56,763.00 58,000.00 218,481.58 1,028,511.76 BUDGET REVENUES $ $ $ $ $ $ $ $ $ $ $ $ 460- Parks (Parks and Recreation) Personnel Services Operating Repairs and Maintenance Capital Outlay Expense Total: Budget 1,363,118.30 634,950.00 320,100.00 314,000.00 2,632,168.30 Actual 1,395,202.43 741,991.77 311,329.13 121,164.03 2,569,687.36 463- Swim Pool (Pools and Splash Pad) Operating Contract Services Expense Total: Budget 119,800.00 587,233.00 707,023.00 Actual 124,729.12 533,597.52 658,326.64 464- Event Facilities (Civic/Community Centers) Personnel Services Operating Expense Total: Budget 535,188.00 109,489.00 644,677.00 Actual 527,875.21 103,859.41 631,734.62 BUDGET EXPENSES Budget: $4,488,868.00 Actual: $4,296,118.81 901- City’s Assistance (Senior Center) Repairs and Maintenance Contract Services Expense Total: Budget 10,000.00 255,000.00 265,000.00 Actual 5,000.00 255,299.45 260,299.45 106- Special Events Fund (KC & HB) Operating Expense Total: Budget 55,000.00 55,000.00 Actual 56,763.00 56,763.00 317- Park Fund Capital Improvements Expense Total: Budget 100,000.00 100,000.00 Actual 15,621.95 15,621.95 319- Tree Mitigation Trees Expense Total: Budget 85,000.00 85,000.00 Actual 103,685.79 103,685.79 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOP FY25 HIGHLIGHTS LAUNCHED Schertz Hometown Harvest, a community farmers market that supports local vendors. The Power Wheels Derby and Cardboard Boat Regatta, introducing creative, family-friendly events. Together We Play, an inclusive event designed to ensure individuals of all abilities could fully participate in meaningful recreation experiences. Hilltop Park as the official name for the parkland dedication within the Homestead neighborhood, as designated by the Parks and Recreation Advisory Board. Online North Center and Community Center rentals by transferring the reservation software to CivicRec. In addition to local goods, each Farmer’s Market had live music for attendees to enjoy while they shop. Together We Play was put on in partnership with the Schertz Public Library and Kinetic Kids. The Power Wheels Derby, Together We Play, and Schertz Hometown Harvest are funded through the budget previously allocated to Movin on Main. PLANNED The transition of the Senior Center to city-run operations with a focus on continuity of services and enhanced programming. Long-term system growth through the adoption of the PROST Master Plan. Chaired the Texas Recreation and Parks Society’s Central Region Workshop Planning Committee as the fall 2025 hosts of the Central Region Workshop and Rodeo. Our theme for the Central Region Workshop was designed to tie into Schertz’s trail focus. Staff had an increased presence and outreach in September leading up to the transition of the Senior Center operations. The PROST Master Plan was also adopted into the Comprehensive Land Use Plan. ENHANCED The Schertz Soccer Complex through the installation of new LED lighting on all 12 fields, and facility touchups including extensive irrigation repairs, painting, and amenity replacements. Public Art with the addition of a new mural at the Schertz Soccer Complex. The Veteran’s Memorial Plaza by beginning work to recognize Purple Heart, Gold Star Families, and the Space Force. Restrooms with the addition of epoxy floors in 13 Restrooms throughout the park system. The Civic Center by converting all light fixtures to LED. Mural painted by San Antonio native, Cristina Sosa Noriega. This vibrant piece celebrates a variety of youth sports and adds even more life and energy to the facility. The Parks Maintenance team working to install the new granite fixtures at Veteran’s Memorial Plaza. EXPERIENCED Participated in TRAPS’s legislative initiatives, Playday at the Capitol and Walk the Halls. An unusually rainy event season that impacted attendance at Holidazzle and Jubilee, informing future contingency and event planning efforts. The Parks Maintenance Crew attended TRAPS’s first ever Maintenance Morning at the State Institute. Hosted 80 professionals from across Texas for a Certified Playground Safety Instructor (CPSI) course at the Schertz Civic Center in conjunction with the Texas Recreation and Park Society and the National Recreation and Parks Association. Our biggest summer yet, increasing attendance across Parks and Rec Month events, Music and Movies in the Park, and summer camps as well as increasing our summer camp offerings from 24 in 2024 to 38 in 2025. Had our first summer intern who helped elevate our social media presence and increase engagement online. Among the 80 professionals taking the CPSI exam, our very own, Daniel DeLong, passed the exam and is our designated CPSI on staff. 6 of our summer camps sold out with a waitlist: Little Princess, LEGO, Archery, Little Scientists, Pickleball and Slime Sculptor. Agenda No. 1.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:City Secretary Subject:Minutes - Approval of the minutes from the regular Council Meeting on March 3, 2026 (S.Edmondson/S.Courney/I.Chavez) Attachments Draft Minutes 03-03-2026 City Council Meeting D R A F T MINUTES REGULAR MEETING March 3, 2026 A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on March 3, 2026, at 6:00 p.m. in the Hal Baldwin Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to-wit: Present: Mayor Ralph Rodriguez; Mayor Pro Tem Mark Davis; Councilmember Paul Macaluso; Councilmember Michelle Watson; Councilmember Ben Guerrero; Councilmember Robert Westbrook; Councilmember Robert Sheridan Absent: Councilmember Allison Heyward Staff present: City Manager Steve Williams; City Attorney Daniel Santee; Deputy City Manager Brian James; Assistant City Manager Sarah Gonzalez; Deputy City Secretary Sheree Courney; Assistant City Secretary Irene Chavez         Call to Order Mayor Rodriguez called the meeting to order at 6:01 p.m.   Opening Prayer and Pledges of Allegiance to the Flags of the United States and State of Texas. (Councilmember Westbrook) Councilmember Robert Westbrook provided the opening prayer and led the Pledges of Allegiance to the Flags of the United States and the State of Texas.   Special Announcement Hal Baldwin Scholarship - Students attending for the Hal Baldwin Scholarship need to sign in on the sheet located on the back podium. If you are watching remotely, please email Sarah Gonzalez at sgonzalez@schertz.com to virtually sign in. Please direct any questions to Ms. Gonzalez. Mayor Rodriguez provided instructions for students applying for the Hal Baldwin Scholarship.   Proclamations   National Employee Appreciation Day-March 6, 2026 (Councilmember Guerrero) Councilmember Ben Guerrero presented the National Employee Appreciation Day-March 6, 2026 proclamation to City Manager Steve Williams and city staff.   311 Recognition Day-March 11, 2026 (Councilmember Westbrook) 1 311 Recognition Day-March 11, 2026 (Councilmember Westbrook) Councilmember Robert Westbrook presented the 311 Recognition Day-March 11, 2026 proclamation to Public Affairs Manager Krystal Haynes, Service Representative Lidia Martinez and Service Representative Guadalupe Martinez.   Procurement Month -March 2026 (Councilmember Sheridan) Councilmember Robert Sheridan presented the Procurement Month-March 2026 proclamation to Director of Human Services & Purchasing Jessica Kurz, Purchasing Manager Daniel Ellenburg, and Purchasing Specialist Christopher Keen.   Employee Introductions Mayor Rodriguez recognized City Department Leaders who introduced the following new staff: EMS: Azalea Iniguez-EMT Library: Rachel Bowerman, Library Assistant; Helena Frende-Library Assistant; Veronica Jones-Library Assistant Planning: Brandon Elliott, Planner Public Works (Water): Chandler Layer, Water/Wastewater Operator Trainee; Romeo Pena, Water/Wastewater Operator Trainee   Presentations   Presentation of 2026 TRAPS Gold Medal Award to the Schertz Parks, Recreation, and Community Services Department. (S.Gonzalez/L.Shrum) Mayor Rodriguez recognized Parks & Recreation and Community Services Director Lauren Shrum, who highlighted the 2026 TRAPS Gold Medal awards earned by the Schertz Parks, Recreation, and Community Services Department, including Class IV Medal and Arts & Humanities awards, individual competition placements, and staff contributions in volunteer roles such as room hosts, CU monitors, and check-in tables, as well as leadership positions held by Shrum, Sydney Perez, Cassie Paredes, and Kathryn Scheel.   City Events and Announcements Announcements of upcoming City Events (B.James/S.Gonzalez) Assistant City Manager Sarah Gonzalez provided the announcement of upcoming city events. Announcements and recognitions by the City Manager (S.Williams) City Manager Steve Williams recognized promotions for Samantha Pinello, from Administrative Assistant to Civic Center Coordinator, Benjamin Ekomo and Jayden Fincher, from Cadets to Police Officers. He also recognized Sarah Gonzalez, who was elected as a Texas Municipal League board representative. 2 Announcements and recognitions by the Mayor (R.Rodriguez) Mayor Rodriguez recognized City Manager Steve Williams, who was elected as the Texas Municipal League president.   Workshop   11. March 2026 Quarterly Streets Update (B.James/K.Woodlee/R.Martinez) Mayor Rodriguez recognized City Engineer Kathryn Woodlee and Streets Maintenance Supervisor Robert Martinez for the March 2026 Quarterly Streets update. Mr. Martinez reviewed maintenance activities tracked through the Streets Maintenance Dashboard, including pothole repairs, sidewalk assessments, and emergency coordination through the 311 system. Staff highlighted the use of a sidewalk severity index to prioritize repairs, ongoing neighborhood sidewalk rehabilitation, roadway improvements on FM 482 and Old Nacogdoches Road due to heavy truck traffic, and completion of 0.95 miles of crack sealing in Willow Grove Estates. Additional efforts included deployment of a new pothole repair truck and installation of striping and traffic-calming measures near schools and residential areas. Engineer Woodlee also provided an update on the 2024 street rehabilitation project on St. Andrews, Maple Drive, and Dove Meadows/Silver Tree. Although the contractor remains within the July 17, 2026 completion deadline, residents have raised concerns about construction impacts and communication. Staff stated issues will be addressed before project acceptance, and council encouraged improved coordination, contractor accountability, and resident communication.   Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes.  All remarks shall be addressed to the Council as a body, and not to any individual member thereof. Any person making personal, impertinent, or slanderous remarks while addressing the Council may be requested to leave the meeting. All handouts and/or USB devices must be submitted to the City Secretary no later than noon on the Monday preceding the meeting.  Handouts will be provided to each Councilmember prior to the start of the meeting by the City Secretary.  All USB devices will be vetted by City IT staff to ensure City property is protected from malware. Mayor Pro Tem Mark Davis recognized the following residents: Delia Ibarra, 18311 Cabin Road, San Antonio, introduced the first Smoothie King in Schertz. Daniel Jameson, 1048 Richmond Drive, Schertz, expressed concern that the city currently lacks a playground area designed for children and youth with special needs and also invited the 3 a playground area designed for children and youth with special needs and also invited the community to attend the upcoming VFW breakfast. Adam Green, 500 Schertz Parkway, Schertz, expressed concern that his church, located at 500 Schertz Parkway since 2017, was recently informed that the signs are now non-compliant under a new ordinance. He requested assistance from the city to find a permit solution that would allow the church to maintain its signs year-round without incurring excessive costs or disruption. Richard Elder, 4317 Willow Oak, Schertz, raised concerns that the city’s sewer billing system may overcharge residents when outdoor irrigation increases water usage. He suggested using a single reference month, adjusting billing data, or allowing charges based on actual sewer usage with a consistent per-thousand-gallon rate. Sarah Dietz, 2529 Melville, Schertz, introduced herself as a candidate for Council Place 6 and shared that her roots in the community run deep, noting her family strongly support public safety. She also highlighted her work as a former SCUC ISD teacher, and her current service with the SCUC Education Foundation and the Women’s Council of Realtors, emphasizing her commitment to thoughtful growth and community service. Raquel Gutierrez, 1016 Silvertree, Schertz, as a candidate for Council Place 6 raised awareness for dedicated leadership that plans for the future, ensuring water, infrastructure, and finances are reliable, sustainable, and protective of public safety. She expressed her commitment to serving this community with foresight, integrity, and steadfast advocacy for long-term stability and responsible growth. Bob Jameson, 4504 Brush Creek Drive, Schertz, stated that a commercial development was built about 20 feet from his property line, raising drainage concerns. He also alleged the city delayed releasing requested plans and requested accountability for the approval process and use of taxpayer funds. Lori A. Murphy, 1013 Grey Feather, Schertz, experienced dust, property damage, irrigation disruptions, and safety concerns during construction in her neighborhood. She requested consistent dust control, secure site management, full restoration of property and trails, and clear communication of the project timeline. Miguel Vazquez, 9320 Berean Way, San Antonio, introduced himself as President of the Schertz-Cibolo Cemetery Association and thanked the city council and historical preservation committee for the received grant. Shane Sailer, 2924 Pawtucket Road, Schertz, expressed concerns about the new trash contractor, Frontier Waste Solutions and urged the city to ensure compliance, increase transparency, and provide a clear system for customer complaints to protect residents and guide future contracts. Mayor Rodriguez recessed the meeting at 8:15 p.m. and reconvened at 8:26 p.m.   Consent Agenda Items 4 Consent Agenda Items The Consent Agenda is considered self-explanatory and will be enacted by the Council with one motion. There will be no separate discussion of these items unless they are removed from the Consent Agenda upon the request of the Mayor or a Councilmember.   1.Minutes - Approval of the minutes from the Strategic Planning Meeting Council/Staff on February 6, 2026, the Special Council Meeting on February 9, 2026-Canvassing the January 31, 2026 Runoff Election and the regular Council Meeting on February 17, 2026 (S.Edmondson/S.Courney/I.Chavez)   2.Resolution 26-R-023 - Authorizing the purchase of security hardware from SHI (B.James/D.Hardin/J.Bluebird)   3.Resolution 26-R-036 - Authorizing an Advance Funding Agreement with the State of Texas for Rail Highway Safety Program Off-System (B.James/K.Woodlee/E.Schulze) Mayor Rodriguez asked if any items needed to be removed for separate action. No items were removed. Mayor Rodriguez asked for a motion to approve Consent Agenda Items # 1-3.    Moved by Councilmember Robert Westbrook, seconded by Councilmember Robert Sheridan  AYE: Councilmember Paul Macaluso, Mayor Pro Tem Mark Davis, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   Discussion and Action Items   4.Resolution 26-R-040 - Authorizing the land acquisition of the property located at 12235 Aztec Way for an amount not to exceed $100,000 plus closing costs, specifying funding sources, and other matters in connection therewith (S.Williams/B.James) Mayor Rodriguez recognized Deputy City Manager Brian James, who presented Resolution 26-R-040 authorizing the purchase of the property at 1235 Aztec Way for an amount not to exceed $100,000 plus closing costs. The property is partially located in the floodplain and includes a leased billboard. The acquisition would allow the city to address ongoing issues such as illegal dumping, debris, and unauthorized campsites while improving property oversight and floodplain management. The billboard lease has fewer than five years remaining but may include provisions allowing an extension of up to 30 years if acquired by a governmental entity. Staff plans to negotiate with the billboard company regarding lease terms, which could allow the city to continue receiving revenue or potentially use the billboard for public messaging and community event announcements. 5 Mayor Rodriguez recognized Councilmember Ben Guerrero who made a motion to pass Resolution 26-R-040, seconded by Councilmember Michelle Watson    AYE: Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan NAY: Mayor Pro Tem Mark Davis Passed   5.Resolution 26-R-039 - Authorizing a Wastewater Transmission and Treatment Capacity Lease Agreement with Green Valley Special Utility District (GVSUD) for temporary sewer capacity (S.Williams/B.James) Mayor Rodriguez recessed to Closed Session at 8:40 p.m. Mayor Rodriguez reconvened to Regular Session at 9:41 p.m. Mayor Rodriguez stated that no action was taken in the Executive Session on item #5 Resolution 26-R-039. Mayor Rodriguez recognized Deputy City Manager Brian James, who presented the sewer capacity lease agreement between the City of Schertz and Green Valley SUD that would provide the city with access to 125,000 gallons of sewer treatment capacity at the South Schertz Treatment Plant for approximately six years. This additional capacity is intended to support growth in southern Schertz while the city completes the planned plant expansion, which is expected to take four to five years following previously approved bond funding for design. The agreement would cost $250,000 annually and would help bridge the capacity gap until the expansion is operational. The agreement also includes a right of first refusal for Green Valley SUD regarding the city’s water lease rights through the Cibolo Valley Local Government Corporation if the city ever chooses to sell them. This provision does not obligate the city to sell those rights but recognizes that Green Valley currently provides water and sewer service to a significant portion of the surrounding service area within their CCNs. Any future consideration of selling those rights would require coordination with the City of Cibolo and further council direction. Mayor Rodriguez opened the floor to council for discussion. No discussion occurred. Mayor Rodriguez recognized Mayor Pro Tem Mark Davis who made a motion to approve Resolution 26-R-039, seconded by Councilmember Michelle Watson    AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook 6 NAY: Councilmember Robert Sheridan Passed   Public Hearings   6.Ordinance 26-S-007- Conduct a public hearing and consider amendments to Part III of the Schertz Code of Ordinances, Unified Development Code (UDC), to Article 4 Section 21.4.3- Notice Requirements (B.James/L.Wood/D.Marquez). Mayor Rodriguez recognized Senior Planner Daisy Marquez who presented the proposed amendments to the Unified Development Code (UDC) to ensure compliance with state law following the 89th Texas Legislative Session and the adoption of House Bill 24, which took effect on September 1, 2025. The bill changes requirements for public notice related to zoning changes, including requiring notice signs to be posted no later than the 10th day before a hearing and specifying that signs must be at least 24 inches by 48 inches in size. Staff removed outdated language from the UDC and incorporated the required language directly from the Texas Local Government Code. The Planning and Zoning Commission held a public hearing on February 4, 2026, and unanimously recommended approval. City departments including Fire, EMS, and Police, along with legal counsel, reviewed the amendments without objection. Staff has already implemented compliant signage since the law took effect and is now updating the UDC to formally align with state requirements. Mayor Rodriguez opened the Public Hearing at 9:48 p.m. No residents came forward to speak. Mayor Rodriguez closed the Public Hearing at 9:49 p.m. Mayor Rodriguez opened the floor to Council for discussion. Councilmember Sheridan asked if the signs would have to be changed to be in compliance. Daisy Marquez confirmed affirmatively. Mayor Rodriguez recognized Councilmember Michelle Watson who made a motion to approve Ordinance 26-S-007, seconded by Councilmember Paul Macaluso    AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   7.Ordinance 26-S-004 - Conduct a public hearing and consider a request for a Specific Use Permit to allow a convenience store with gas pumps on approximately 7.8 acres of land, located approximately 51-feet west from the intersection of IH-35 N Access Road and FM 2252, also known as 18920 IH 35 N, more specifically known as Guadalupe County Property Identification Number 114083 and Comal County Property Identification 7 Number 119021, City of Schertz, Comal and Guadalupe County, Texas. (B.James/L.Wood/D.Marquez) Mayor Rodriguez recognized Senior Planner Daisy Marquez, who presented a map of the property and a request for a Specific Use Permit (SUP) to allow a convenience store with gas pumps on property west of I-35 and FM 2252, which is zoned General Business (GB). A previous SUP approved in January 2024 expired in January 2026 after a building permit was not issued within two years, although the applicant has since completed an approved site plan and final plat and is nearing permit approval. Public notices were issued with no responses received, and the request is consistent with the Comprehensive Plan and surrounding GB zoning along the I-35 corridor. The Planning and Zoning Commission unanimously recommended approval with the condition that a building permit be issued within two years. Mayor Rodriguez opened the Public Hearing at 9:55 p.m. No residents came forward to speak. Mayor Rodriguez closed the Public Hearing at 9:55 p.m. Mayor Rodriguez opened the floor to Council for discussion. No discussion occurred. Mayor Rodriguez recognized Councilmember Guerrero who made a motion to approve Ordinance 26-S-007, and Councilmember Watson who seconded it.    AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   8.Ordinance 26-S-005 - Conduct a public hearing and consider a request for a Specific Use Permit to allow a Truck Terminal on approximately 4.1 acres of land, located approximately 600-feet west of the intersection of Baugh Lane and Schwab Road, also known as 23870 Baugh Lane, more specifically known as Comal County Parcel Identification Number 464879, City of Schertz, Comal County, Texas.(B.James/L.Wood/W.Willingham) Mayor Rodriguez recognized Planner Willim Willingham, who presented a map of the subject property and a request for a Specific Use Permit (SUP) for a truck terminal on approximately 4.1 acres zoned General Business (GB) adjacent to Light Manufacturing (M1), where the Sysco facility is located. A previous SUP approved in 2024 expired in January 2026, although the applicant completed a preliminary plat, final plat, site plan, and submitted a building permit application during that time. The terminal is intended to support the nearby Sysco development and address truck parking needs. The request meets UDC requirements, aligns with the Comprehensive Plan, and received no objections from city departments. The Planning and Zoning Commission unanimously recommended approval with the condition that a building permit be issued within two 8 years. Mayor Rodriguez opened the Public Hearing at 10:00 p.m. No residents came forward to speak. Mayor Rodriguez closed the Public Hearing at 10:01 p.m. Mayor Rodriguez opened the floor to Council for discussion. No discussion occurred. Mayor Rodriguez requested a motion to approve Ordinance 26-S-005.    Moved by Councilmember Paul Macaluso, seconded by Councilmember Robert Westbrook  AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   9. Ordinance 26-S-006 - Conduct a public hearing and consider amendments to Part III of the Schertz Code of Ordinances, Unified Development Code (UDC), to Article 8 Section 21.8.4 - Home Occupations and Article 16- Definitions (B.James/L.Wood/W.Willingham) Mayor Rodriguez recognized Planner William Willingham who presented proposed amendments to the Unified Development Code (UDC) Articles 8 and 16 to comply with state law following the adoption of Texas House Bill 2464. The legislation restricts municipalities from prohibiting or requiring permits for “no-impact” home-based businesses that do not create nuisances such as traffic or noise. The amendments add references to these businesses, remove several regulatory criteria and sections that previously allowed permitting or prohibitions, and update definitions to align with state requirements. Staff confirmed the amendments meet all UDC procedures, received no objections from city departments or legal review, and the Planning and Zoning Commission unanimously recommended approval. Mayor Rodriguez opened the Public Hearing at 10:05 p.m. No residents came forward to speak. Mayor Rodriguez closed the Public Hearing at 10:06 p.m. Mayor Rodriguez opened the floor to Council for discussion. No discussion occurred. Mayor Rodriguez requested a motion to approve Ordinance 26-S-006.    Moved by Councilmember Michelle Watson, seconded by Councilmember Robert Sheridan  AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, 9  AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   10.Ordinance 26-S-008 - Conduct a public hearing and consider amendments to Part III of the Schertz Code of Ordinances, Unified Development Code (UDC) to Article 5, Section 21.5.7- Dimensional and Development Standards, and Article 16 Definitions (B.James/L.Wood/D.Marquez). Mayor Rodriguez recognized Senior Planner Daisy Marquez who presented proposed amendments to UDC Article 5 (Dimensional and Development Standards) and Article 16 (Definitions) following City Council direction from a September 17, 2024, workshop regarding impervious coverage. The amendments clarify that swimming pool water surface areas do not count toward maximum impervious coverage and remove the requirement for an overflow device. Staff also proposed updating the definition of impervious coverage to exclude decorative pavers used for residential landscaping, provided they are not used for vehicular travel. The Planning and Zoning Commission supported the pool-related changes but recommended an alternative definition allowing decorative pavers to count only up to 25% of the allowable impervious coverage and permitting their use for driveways. Staff recommended approval of the ordinance as directed by Council, while the Planning and Zoning Commission recommended approval with the modified Article 16 language following a public hearing. Mayor Rodriguez opened the Public Hearing at 10:13 p.m. Glen Outlaw, 3729 Force Scythe Park, Schertz, expressed concern that pavers should not have a flat exemption and suggested they be rated between concrete and grass, noting his own attempt to install a paver driveway was denied under current UDC rules and encouraging the city to consider future updates allowing paver driveways similar to nearby cities. Mayor Rodriguez closed the Public Hearing at 10:17 p.m. Mayor Rodriguez opened the floor to Council for discussion. Mayor Rodriguez recognized the following: Mayor Pro Tem Davis who suggested pavers be rated between concrete and grass rather than given a flat exemption and encouraged updating regulations to allow residential paver driveways, citing his own blocked project and examples from other cities. Councilmember Macaluso cautioned that DIY or low-quality pavers could deteriorate, while Councilmembers Westbrook and Guerrero supported exploring the option in the future, with staff noting they could research and return with a focused ordinance. Mayor Rodriguez recognized Councilmember Michelle Watson who made a motion to approve Ordinance 26-S-008, seconded by Councilmember Robert Westbrook 10    AYE: Mayor Pro Tem Mark Davis, Councilmember Paul Macaluso, Councilmember Michelle Watson, Councilmember Ben Guerrero, Councilmember Robert Westbrook, Councilmember Robert Sheridan Passed   Information available in City Council Packets - NO DISCUSSION TO OCCUR   Requests and Announcements Requests by Mayor and Councilmembers for updates or information from Staff Councilmember Michelle Watson asked for an update on Ordinance 26-S-008 to be put on the next agenda. Councilmember Robert Westbrook asked for a workshop to be included in the next Council Meeting regarding the procedure for the Boards, Commissions, and Committees liaison assignments. Requests by Mayor and Councilmembers that items or presentations be placed on a future City Council agenda No requests by Mayor or Councilmembers that need items or presentations be placed on a future City Council agenda. City and Community Events attended and to be attended (Council) Councilmember Paul Macaluso attended the Jubilee meeting. Councilmember Robert Westbrook attended the Get Out to Vote event in the Civic Center. Councilmember Robert Sheridan attended the Retirement Ceremony for officer Bill Freeman and the Schertz Economic Development Board Meeting.   Adjournment Mayor Rodriguez adjourned the meeting at 10:28 p.m.   _______________________________ Ralph Rodriguez, Mayor ATTEST: ____________________________________ Sheila Edmondson, City Secretary 11 Agenda No. 3.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Parks, Recreation & Community Servic Subject: Resolution 26-R-042 - Approving the recommendation to name the 8.83-acre park property at the intersection of Parklands Way and Park Bluff as Meadow Run Park (S.Gonzalez/L.Shrum) BACKGROUND On November 28, 2017, City Council approved Resolution 17-R-105, which authorized a Parkland Improvement Agreement with Parklands Subdivision Unit 1 and 2 to defer construction of public parkland until a later stage in the development.  The agreement was amended in 2020, 2023, and 2025, with the final completion of the park to be by the end of 2025.  The park is substantially complete, and is pending acceptance by the City until the punch-list items are completed.  The park will feature a playscape, picnic pavilion, sport court, two (2) pickleball courts, practice soccer field, practice baseball field, restroom, and parking lot.  On January 26, 2026, the Parks & Recreation Advisory Board discussed the naming of the future city park property and recommended the name, Meadow Run Park, due to the park's openness and meadow-like qualities.  The Board followed their Naming Policy, which includes guidelines to name park properties based on ecological, historical, or geographical features. The Board's Naming Policy also recommends naming parks independently of the name of the subdivision due to the confusion that can be caused when subdivisions have a private HOA park in addition to a public city park. The Board also voted on alternate names if Council does not approve of the primary recommendation. 1. Meadow Run Park 2. Horizon Park 3. Northview Park  GOAL The goal is to name the next public city park that is being added to the Schertz Parks system.  COMMUNITY BENEFIT The community will benefit from the addition of a new 8.83-acre park in northern Schertz, which was an area identified in the Parks, Recreation, Open Space, and Trails (PROST) Plan that needed additional park acreage to serve the residents of Schertz.  The park also features the city's first dedicated outdoor pickleball courts, plus additional much-needed practice space for soccer and baseball/softball.  SUMMARY OF RECOMMENDED ACTION Approve Resolution 26-R-042.  RECOMMENDATION Approve Resolution 26-R-042.  Approve Resolution 26-R-042.  Attachments Resolution 26-R-042 naming Meadow Run Park park photo RESOLUTION NO. 26-R-042 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS APPROVING THE RECOMMENDATION TO NAME THE 8.83-ACRE PARK PROPERTY AT THE INTERSECTION OF PARKLANDS WAY AND PARK BLUFF AS MEADOW RUN PARK. WHEREAS, the City is pending acceptance of an 8.83-acre park property at the intersection of Parklands Way and Park Bluff through a Parkland Dedication Agreement; and WHEREAS, the Schertz Parks & Recreation Advisory Board selected the name Meadow Run Park because of the openness of the park and meadow-like qualities of the park property; and WHEREAS, the Schertz Parks & Recreation Advisory Board approved the name at their regular meeting on January 26, 2026 and recommended that council approve the name, Meadow Run Park. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby names the 8.83-acre park property at the intersection of Parklands Way and Park Bluff as Meadow Run Park. 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 City Council. 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. 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 City Council 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 __________________, 2026. CITY OF SCHERTZ, TEXAS Ralph Rodriguez, Mayor ATTEST: Sheila Edmondson, City Secretary (CITY SEAL) Agenda No. 4.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Engineering Subject:Resolution 26-R-043 - Authorizing execution and submittal of a Community Affirmation Form for the Texas Water Development Board's performance of a Flood Management Evaluation study for the City of Schertz (B.James/K.Woodlee) BACKGROUND A Drainage Master Plan for the City of Schertz was identified as a top project recommended for funding and performance by the Texas Water Development Board (TWDB) through the Flood Management Evaluation (FME) for Small Communities funded through the Flood Infrastructure Fund.  Facts that contributed to the selection by the Region 12 Flood Planning Group included the high number of buildings, critical facilities, and roads in high risk, flood-prone areas.   The Drainage Master Plan will evaluate flood risks, update hydrologic and hydraulic data, identify priority mitigation improvements projects, and develop concept-level plans for the top priority projects.  The value of the scope of the effort is approximately $650,000 and the plan is expected to be complete by the end of 2026.  The work will be entirely done by the TWDB's consultant at no cost to the City.  While the Plan was identified by Region 12, the portion of the City that lies within Region 11 Flood Planning Group area will also be included.  City Staff will participate in the plan development by attending coordination meetings and a public meeting and by sharing available knowledge, plans, data, and documentation on the City's drainage facilities and areas at risk. It is notable that the City will still be undertaking preparation of a separate Comprehensive Local Master Drainage Plan that will include both the priority flood prevention projects identified in the FME and projects to mitigate localized nuisance drainage and maintenance issues that are not within the scope of the FME.  GOAL The goal of Resolution 26-R-043 is to authorize the City Manager to sign and submit a Community Interest Affirmation form required for the Schertz Drainage Master Plan to be prepared under the Flood Management Evaluation for Small Communities program by the Texas Water Development Board.  COMMUNITY BENEFIT The benefit to the community of having the TWDB prepare a Drainage Master Plan for flood management projects is the creation of concept plans for the top priorities to mitigate flood issues in the City.  The plan will work to guide the investment of funds to develop and maintain drainage infrastructure.  SUMMARY OF RECOMMENDED ACTION Staff recommends approval of Resolution 26-R-043.  Staff recommends approval of Resolution 26-R-043.  FISCAL IMPACT There is no funding obligation associated with this resolution.  RECOMMENDATION Approve Resolution 26-R-043.  Attachments Resolution 26-R-043 w attachment RESOLUTION 26-R-043 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING EXECUTION AND SUBMITTAL OF A COMMUNITY INTEREST AFFIRMATION FOR THE TEXAS WATER DEVELOPMENT BOARD’S PERFORMANCE OF A FLOOD MANAGEMENT EVALUATION STUDY FOR THE CITY OF SCHERTZ WHEREAS, the Schertz Drainage Master Plan has been selected by the Region 12 Flood Planning Group for funding through the Texas Water Development Board (TWDB) Flood Management Evaluation (FME) for Small Communities Program; and WHEREAS, the program is funded through the Flood Infrastructure Fund; and WHEREAS, the TWDB, through a consultant, will prepare an FME for Schertz; and WHEREAS, the FME will include the identification and conceptual level planning of the top flood risk reduction solutions within the City; and WHEREAS, the City will participate in the FME process through data sharing and coordination meetings. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to sign and submit a Community Interest Affirmation for the Texas Water Development Board’s performance of a Flood Management Evaluation study (Attachment “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 City Council. 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. 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 City Council 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 APPROVED on the _________ day of _______________________, 2026. CITY OF SCHERTZ, TEXAS ____________________________________ Ralph Rodriguez, Mayor ATTEST: ____________________________________ Sheila Edmondson, TRMC City Secretary ATTACHMENT A Flood Management Evaluation for Small Communities Community Interest Affirmation Flood Management Evaluation (FME 1) for Small Communities Community Interest Affirmation Please Note: Study information submitted in this document must be consistent with the details submitted by the Regional Flood Planning Group (RFPG). By submitting this affirmation, you understand and confirm that the information provided is true and correct to the best of your knowledge and further understand that the failure to submit this affirmation may result in the withdrawal of the Study from the TWDB list of FMEs being performed. GENERAL INFORMATION Entity Name Entity Type A Citation of the Law Under Which the Political Subdivision Operates and was Created Entity’s Physical Address (e.g., central office address) Entity’s Mailing Address Official Representative  The Community’s official study representative with authorized signatory authority.  Name Title Phone Email Address Primary Contact The Community’s primary study contact for day-to-day study implementation. Name Title Phone Email Address 1 Flood Management Evaluation (FME) Is a proposed study to identify and assess and quantify flood risk or identify, evaluate, and recommend flood risk reduction solutions. 2 GENERAL STUDY INFORMATION (PROPOSED STUDY) Study Name (as referred to by Community) Full Name of FME as presented to the RFPG Regional Flood Planning Group (01-15) Regional Flood Planning Areas Benefitting from Study Unique 9-digit FME ID Number(s) from the associated RFPG PROPOSED STUDY 1.Scope of Work. Please review the attached Scope of Work as identified and developed by your Regional Flood Planning Group (RFPG) that will be performed on behalf of your community by the Texas Water Development Board. Please provide feedback, if any, on the scope of work including if you would like any changes or have additional information. 2.Description of why this study was selected for the FME Small Communities. Please explain in your own words why the study should be performed by TWDB. (for example, the study would benefit from financial assistance from the state, any previous loss of life, critical facilities in flood hazard area, high risk area of flooding, need to address a specific flooding issue etc.). 3.Please affirm that the community does not have the resources to perform the study and will benefit from state funding. 3 Please confirm the following related to this study: 4.Redundant Funding. Would redundant funding for activities already performed and/or funded through another source? Has the proposed study, in part or in whole, been awarded funds by another funding program (e.g., Clean Water State Revolving Fund (CWSRF), Community Development Grant (CDBG), Hazard Mitigation Grant Program (HMGP), Flood Infrastructure Fund (FIF), Texas Department of Transportation (TXDOT), US Army Corps of Engineers (USACE), etc.)? ☐Yes ☐No 5.Documentation. Does the Community wish to provide any relevant documents or information that will be supportive of this study (example: previous studies, survey etc.)? If yes, please list below and attach with the form. 6.Is the Community committed to being responsive and engaged with the RFPG, TWDB, and TWDB’s Contractor - including participating in Monthly Study Progress Meetings - over time and as needed, to ensure successful completion of this study? I, _____________________________________________________________________________________________(Name), Serving as the Authorized Representative of ____________________________________________________________________________________(Entity) Hereby certify that __________________________________________________________________________(Entity) has reviewed the attached Scope of Work and confirms that the entity would like Texas Water Development Board to perform the Flood Management Evaluation (Study) with FME ID No. _________________________ on behalf of the community. _________________________________________________ ______________________________________ Signature Date _________________________________________________ Printed Name _________________________________________________ Title Agenda No. 5.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Executive Team Subject:Resolution 26-R-045 - Approving a Schertz Main Street Local Flavor Economic Development Grant for 814 Main (S.Williams/B.James) BACKGROUND The owner of the property at 814 Main Street is applying for a Main Street Local Flavor Economic Development grant for the property. The owner is asking for this 50/50 matching grant for work that is estimated to cost $45,000.00. The work involves demolition work, electrical upgrades, an additional bathroom, AC upgrades, water heater upgrades and finish-out work. This is the first Main Street grant for this property.  GOAL Highlight the history and culture of the City of Schertz to tourists and residents. Promote and enhance commercial activity along Main Street to promote the economic, cultural and general welfare of the public. The area around Main Street in Schertz once served as the commercial and social hub of the community. The City seeks to improve the image of the area around Main Street through matching grants that promote local economic development and stimulate business and commercial activities.   COMMUNITY BENEFIT Recognize structures of significance to the community’s past. Encourage the attraction of small businesses that will create local charm and help develop a sense of place around Main Street. Promote commercial development. Stabilize and improve property values. Foster civic pride. Strengthen the economy of the City by protecting and enhancing the attractiveness of the Main Street area to residents and visitors, as well as provide support of local businesses.  SUMMARY OF RECOMMENDED ACTION Approval of Resolution 26-R-045 authorizing a Main Street Local Flavor Economic Development Grant for 814 Main Street for up to $22,500.00.  FISCAL IMPACT This could have a fiscal impact of up to $22,500.00 and would be paid from the Economic Development Department of the General Fund Budget.  RECOMMENDATION Approval of Resolution 26-R-045.  Attachments Resolution 26-R-045 w attachment RESOLUTION 26-R-045 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING APPROVING A REQUEST FOR A SCHERTZ MAIN STREET LOCAL FLAVOR ECONOMIC DEVELOMENT GRANT FOR 814 MAIN STREET. WHEREAS, the City of Schertz desires to protect, enhance, and preserve the historic resources and landmarks which represent distinctive elements of Schertz’ historic, architectural, economic, cultural, and social heritage by providing property owners and incentive for protecting their property; and WHEREAS, the City of Schertz desires to encourage the attraction of small businesses that will create local charm and help develop a sense of place in and around Main Street; and WHEREAS, the City of Schertz desires to stabilize and improve property values; and WHEREAS, the City of Schertz desires to foster civic pride in the beauty and accomplishments of the past, and to promote the use of the historic structures for the culture, education, and general welfare of residents; and WHEREAS, the City of Schertz desires to strengthen the economy of the city by protecting and enhancing the attractiveness of the Main Street area to residents and visitors, as well as provide support and stimulus to businesses; and WHEREAS, staff is in support of this program and recommends approval of the grant request for 533 Main for up to $22,500.00. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby approves the Schertz Main Street Local Flavor Economic Development Grant request for 814 Main Street subject to the approved criteria of the program and execution of a funding agreement generally as outlined in 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 City Council. 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. 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 City Council 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 APPROVED on the __________ day of _____________, 2026. CITY OF SCHERTZ, TEXAS ________________________________ Ralph Rodriguez, Mayor ATTEST: _______________________________ Sheila Edmondson, City Secretary Exhibit “A” Main Street Local Flavor Grant Funding Agreement STATE OF TEXAS § § COUNTY OF BEXAR § SCHERTZ MAIN STREET LOCAL FLAVOR ECONOMIC DEVELOPMENT PROGRAM FUNDING AGREEMENT BETWEEN THE CITY OF SCHERTZ, TEXAS AND Main Street Legacy LLC, FOR EXPENDITURE OF LOCAL FLAVOR GRANT FUNDS This Hotel Tax Funding Agreement (AGREEMENT) is made and entered into by and between the City of Schertz, Texas (CITY) and Main Street Legacy LLC, (ENTITY). WHEREAS, the ENTITY has developed a proposal to make plumbing improvements at 814 Main (the “Project”); and WHEREAS, Section 380.001 of the Texas Local Government Code, as amended, allows the governing body of a municipality to establish and provide for the administration of one or more programs to promote state and local economic development and to stimulate business and commercial activity in the municipality; and WHEREAS, the Schertz Main Street Local Flavor Economic Development Program is intended to encourage and expansion and attract small businesses that create local charm and help develop a sense of place in and around Main Street, promote commercial development, stabilize and improve property values, foster civic pride, and protect and enhance the attractiveness of the Main Street area to residents and visitors; and WHEREAS, funding for the Schertz Main Street Local Flavor Economic Development Program will be provided annually through the City’s General Fund; and WHEREAS, the Schertz Main Street Local Flavor Economic Development Program will enhance other city efforts to improve, beautify, and promote economic development in the Main Street area. WHEREAS, the area around Main Street in Schertz once served as commercial and social hub of the community; and WHEREAS, the City seeks to improve the image of the area around Main Street through restoration and rehabilitation of structures in the Main Street area to serve as a commercial, social, cultural and tourism hub of the City; and WHEREAS, the City Council of the City of Schertz desires to provide funds to Main Street Legacy LLC (ENTITY). NOW, THEREFORE, it is mutually agreed by and between the CITY and ENTITY as follows: GENERAL PROVISIONS Section 1. P urpose. The purpose of this Agreement is to provide funding to the ENTITY for the project identified in the attached Exhibit “A” (the “Project”), the intent of which is to promote state and local economic development and to stimulate business and commercial activity in the municipality to encourage and expansion and attract small businesses that create local charm and help develop a sense of place in and around Main Street, promote commercial development, stabilize and improve property values, foster civic pride, and protect and enhance the attractiveness of the Main Street area to residents and visitors. Section 2. Obligation of the ENTITY. The ENTITY shall use all of the awarded funds provided by the CITY in accordance with Chapter 351 of the Texas Tax Code, the ENTITY’S funding application, and the attached Exhibit “A”. Section 3. Reporting Requirements of the ENTITY. The ENTITY shall deliver a detailed accounting of the expenditures for the Project within thirty (30) days after completion of the Project (the “Post Event Report”). The Post Event Report shall include copies of receipts and other documents establishing the expenditures for the project. The CITY shall not make reimbursements for expenditures where no receipt or invoice is provided. Partial or incomplete reports will not be accepted. Section 4. Authorization of Payment. Subject to the ENTITY’S satisfactory performance and compliance with the terms of this AGREEMENT, the CITY agrees to pay the ENTITY up to fifty percent (50%) of the Project. The Project is estimated to be approximately $45,000.00, the maximum grant is $22,500.00 if the project cost is at least $45,000.00 as the grant will only be paid up to fifty percent. Payment will be made within forty-five (45) days of acceptance of the complete Post Event Report. Partial or incomplete reports will not be accepted. Only expenditures that meet Chapter 351 of the Tax Code and this AGREEMENT shall be reimbursed. Section 5. Appeal Process. Any ENTITY wishing to appeal the decision of the CITY must present their appeal in writing within ten (10) business days of funding denial. Section 6. Rights. The City of Schertz has the right, at any time, to inspect the books or records of the ENTITY that may relate to performance of this AGREEMENT. The CITY, at its sole expenses, has the right to conduct an audit of the ENTITY or Project. Section 7. Term. The AGREEMENT shall become effective as of the date entered below. The AGREEMENT shall terminate one year from its effective date or once the terms have been met, whichever occurs first. Section 8. Indemnification. The ENTITY agrees to defend, indemnify and hold harmless the CITY, its officers, agents and employees, against any and all claims, lawsuits, judgments, cause of action, costs and expenses for personal injury (including death), property damage or other harm for which recovery of damages is sought, suffered by any person or persons, that may arise out of or be occasioned by the ENTITY’s breach of any of the terms or provisions of this AGREEMENT, or by any negligent act or omission of the ENTITY, its officers, agents, servants, employees, contractors, or subcontractors, in the performance of this AGREEMENT; except that the indemnity provided for in this paragraph shall not apply to any liability resulting from the sole negligence of the CITY, its officers, agents, employees or separate contractors, and in the event of joint and concurrent negligence of both the ENTITY and the CITY under Texas law and without waiving any defenses of the parties under Texas law. The provisions of this paragraph are solely for the benefit of the parties hereto and not intended to create or grant any rights, contractual or otherwise, to any other person or entity. Both parties expressly agree that this AGREEMENT does not assign any responsibility for civil liability to the City of Schertz that may arise by virtue of this AGREEMENT. Section 9. Termination. A party may terminate this AGREEMENT in whole or in part if the other party fails to comply with a term of the AGREEMENT, including the inability of the ENTITY to conform to any change required by federal, state or local laws or regulations; or for the convenience of either party. The terminating party shall provide written notification to the other party of the decision to terminate this AGREEMENT within thirty (30) days before the effective date of termination. A party may terminate the AGREEMENT for breach of any provision of this AGREEMENT, upon written notice of the breach and the breaching party shall have ten (10) days after receipt of the written notice in which to cure the breach to the satisfaction of the non-breaching party. Section 10. Notice. All notices required or permitted under this AGREEMENT shall be in writing and shall be delivered in person or mailed as follows: to the CITY at: City of Schertz Attention: City Manager 1400 Schertz Parkway Schertz, TX 78154 (210) 619-1000 To the Main Street Legacy LLC. at: Attention: Nick Marquez 534 Mission Hill Run New Braunfels, Texas 78132 MISCELLANEOU S Section 11. Entire Agreement. This AGREEMENT constitutes the entire agreement of the parties regarding the subject matter contained herein. The parties may not modify or amend this AGREEMENT, except by written agreement approved by the governing bodies of each party and duly executed by both parties. Section 12. Approval. This AGREEMENT has been duly and properly approved by each party’s governing body and constitutes a binding obligation on each party. Section 13. Assignment. Except as otherwise provided in this AGREEMENT, a party may not assign this AGREEMENT or subcontract the performance of services without first obtaining the written consent of the other party. Section 14. Non-Waiver. A party’s failure or delay to exercise right or remedy does not constitute a waiver of the right or remedy. An exercise of a right or remedy under this AGREEMENT does not preclude the exercise of another right or remedy. Rights and remedies under this AGREEMENT are cumulative and are not exclusive of other rights or remedies provided by law. Section 15. Paragraph Headings. The various paragraph headings are inserted for convenience of reference only, and shall not affect the meaning or interpretation of this AGREEMENT or any section thereof. Section 16. Attorney fees. In any lawsuit concerning this AGREEMENT, the prevailing party shall be entitled to recover reasonable attorney’s fees from the nonprevailing party, plus all out-of-pocket expense such as deposition costs, telephone, calls, travel expenses, expert witness fees, court costs, and their reasonable expenses, unless otherwise prohibited by law. Section 17. Severability. The parties agree that in the event any provision of this AGREEMENT is declared invalid by a court of competent jurisdiction that part of the AGREEMENT is severable and the decree shall not affect the remainder of the AGREEMENT. The remainder of the AGREEMENT shall be in full force and effect. Section 18. Venue. The parties agree that all disputes that arise of this AGREEMENT are governed by the laws of the State of Texas and venue for all purposes herewith shall be in Milam County, Texas. Section 19. Certificate of Insurance. The ENTITY agrees to provide a certificate of insurance for liability and worker’s compensation insurance or letter of self-insurance on its letterhead indicating its self-insured status before any event awarded funding under this AGREEMENT. The cost of the insurance herein mentioned to be secured and maintained by the ENTITY shall be borne solely by the ENTITY. IN WITNESS HEREOF, the CITY and ENTITY make and execute this AGREEMENT to be effective this day of , 20 . CITY OF SCHERTZ, TEXAS ENTITY City Manager ATTEST: ____________________________________________ City Secretary (Title) EXHIBIT “A” $9,500 Demo Costs - Suite B $5,375 Electrical Upgrades - Suite B $5,000 Finish Out ( Painting Labor and Materials ) Suite B $4,000 - Water Heater Upgrades - Suite A and C $6,000 AC Upgrades - Suite B $15,125 restroom Suite B Agenda No. 6.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Parks, Recreation & Community Servic Subject:Resolution 26-R-038 - Authorizing an Advanced Funding Agreement (AFA) with the Texas Department of Transportation (TxDOT), for the West Dietz Creek Trail Project. (S.Gonzalez/L.Shrum) BACKGROUND The West Dietz Creek Trail is proposed to be a 10-foot wide concrete multi-use path along West Dietz Creek beginning at its crossing with Wiederstein Road, crossing Savannah Dr, crossing Maske Road, and ending at Schertz Parkway. Pedestrian crossing improvements are included for each road crossing as well as rest stations along the trail with benches, trash cans, and water fountains at key intersections. The project is a key component of the 2025 Parks, Recreation, Open Space, and Trails (PROST) Master Plan that City Council adopted in December 2024.  GOAL The goal is to enter into the funding agreement with TxDOT to construct a 10-foot wide, approximately 1.73-mile long concrete trail along the West Dietz Creek drainage channel from just south of Wiederstein Road to Schertz Parkway.  The trail will have 2 rest stations consisting of bench, trash can, and water fountain, and will include pedestrian crossing signals at trail crossings of Maske Road and Savannah Drive.  COMMUNITY BENEFIT The community will benefit from this project by expanding the city's trail network. Trails continue to be a high priority for residents as reflected in the 2025 Parks, Recreation, Open Space, and Trails (PROST) Master Plan as well as multiple Resident Satisfaction Surveys in 2016, 2019, 2021, and 2023.  SUMMARY OF RECOMMENDED ACTION Approve Resolution 26-R-038.  FISCAL IMPACT The total project cost is estimated at $1,603,069. This is an increase from the original project estimate ($1,354,889.56) provided in the council memorandum for Resolution 26-R-002 to initiate design services for the project that council approved on January 6, 2026.  The total construction amount is estimated at $1,250,000.  The city's construction match is 20% or $250,000 and the federal funds are $1,000,000.  TxDOT charges the local government oversight costs and those fees total $21,750, making the city's total commitment for construction $271,750. The federal Transportation Alternatives Set-Aside (TASA) Funds only reimburse for construction, and do not cover professional services such as design, environmental, or construction management, so the city must cover those costs in full.  The project is funded through a combination of Parkland Dedication funds and General Fund dollars set-aside specifically for trail development.       TxDOT Responsibility City Responsibility $1,000,000  Construction $250,000  Construction  $331,319  PS&E, Construction Management  $21,750  TxDOT oversight costs (fees) Total  $1,000,000 Total  $603,609 Total Project Cost  $1,603,609 Funding for the City's responsibility includes the already approved General Fund contributions and investment income of $356,389.56 and $247,219.44 to be funded by the Parkland Dedication Fund with the upcoming quarterly budget adjustment. The Parkland Dedication Fund currently has $635,794 in cash and investments available to use.  RECOMMENDATION Approve Resolution 26-R-038.  Attachments Resolution 26-R-038 AFA West Dietz Creek Trail RESOLUTION NO. 26-R-038 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE CITY MANAGER TO ENTER INTO AN ADVANCED FUNDING AGREEMENT (AFA) WITH THE TEXAS DEPARTMENT OF TRANSPORTATION FOR THE WEST DIETZ CREEK TRAIL PROJECT. WHEREAS, on August 16, 2023, via Minute Order 116522, the Texas Transportation Commission authorized the West Dietz Creek Trail project (the “Project”) to receive Transportation Set-Aside (TASA) funds for project construction, and the Texas Department of Transportation (TxDOT) oversight; and WHEREAS, the City of Schertz commits to provide the match and the local match is comprised of cash; and WHEREAS, the City of Schertz is responsible for all non-reimbursable costs and 100% of overruns, if any; and WHEREAS, the Governing Body of the City of Schertz desires to reaffirm its support of the project, approve and authorize the execution of an Advanced Funding Agreement (AFA) with TxDOT for the Project. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager to enter into an AFA with TxDOT for the West Dietz Creek Trail Project as substantially set forth in a draft agreement in 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 City Council. 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. 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 City Council 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 __________________, 2026. CITY OF SCHERTZ, TEXAS Ralph Rodriguez, Mayor ATTEST: Sheila Edmondson, City Secretary (CITY SEAL) EXHIBIT A TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 1 of 18 AFA TASA Rev. 1/23/2024 STATE OF TEXAS § COUNTY OF TRAVIS § ADVANCE FUNDING AGREEMENT FOR A TRANSPORTATION ALTERNATIVES SET-ASIDE (TASA) PROGRAM PROJECT MPO-Selected Off-System This Advance Funding Agreement for a Transportation Alternatives Set-Aside (TASA) Program Project (“Agreement”) is made between the State of Texas (State), acting through the Texas Department of Transportation, and the City of Schertz (Local Government), acting through its duly authorized officials. WITNESSETH WHEREAS, federal law establishes federally funded programs for transportation improvements to implement its public purposes, and WHEREAS, the Texas Transportation Code, Section 201.103 establishes that the State shall design, construct and operate a system of highways in cooperation with local governments, and Section 222.052 authorizes the Texas Transportation Commission to accept contributions from political subdivisions for development and construction of public roads and the state highway system within the political subdivision, and WHEREAS, Federal law, 23 USC §134 and 49 USC §5303, requires that State and Metropolitan Planning Organizations (MPOs) develop transportation plans and programs for urbanized areas of Texas, and WHEREAS, Federal and state laws require local governments to meet certain contract standards relating to the management and administration of State and federal funds, and WHEREAS, the Texas Transportation Commission has codified 43 TAC, Rules 15.50-15.56 that describe federal, state, and local responsibilities for cost participation in highway improvement and other transportation projects, and WHEREAS, the rules and procedures for the Transportation Alternatives Set-Aside Program (TASA) are established in 23 USC §133(h), and 43 Texas Administrative Code, Part 1, Chapter 11, Subchapter G, §§11.400 – 11.418, and WHEREAS, the Local Government prepared and submitted to the State or Metropolitan Planning Organization (MPO) a project nomination package for TASA funding consideration, which is briefly described as bicycle infrastructure improvements (Project), and DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 2 of 18 AFA TASA Rev. 1/23/2024 WHEREAS, the Texas Transportation Commission (Commission) passed Minute Order Number 116522 (MO) dated August 16, 2023 awarding funding for TASA projects in the TASA Program Call of the Alamo Area MPO, including Project, and WHEREAS, the governing body of the Local Government has approved entering into this Agreement by resolution or ordinance dated {enter date of resolution}, which is attached to and made a part of this Agreement as Attachment C, Resolution or Ordinance. A map showing the Project location appears in Attachment A, Project Location Map, which is attached to and made a part of this Agreement, and NOW, THEREFORE, the State and the Local Government agree as follows: AGREEMENT 1. Period of Agreement and Performance A. Period of Agreement. This Agreement becomes effective when signed by the last party whose signing makes the Agreement fully executed. This Agreement shall remain in effect until terminated as provided below. B. Period of Performance. 1. The Performance Period for each phase of work begins on the date specified in the Federal Project Authorization and Agreement (FPAA) for that phase of work. Local Government may not begin work until issued the State Letter of Authority (SLOA) for that phase of work. 2. The Performance Period for each phase of work ends on the date specified in the FPAA for that phase of work. 2. Scope of Work and Use of Project A. The scope of work for Project consists of constructing ten-foot pedestrian and bicycle path in Schertz, along West Dietz Creek Trail from south of Wiederstein Road to Schertz Parkway, including crossing improvements and rest stations. B. Any project changes proposed must be submitted in writing by Local Government to State. Substantive changes may also require an amendment to this Agreement and the approval of the FHWA, State, MPO, or the Commission. Any changes undertaken without written approval and amendment of this Agreement may jeopardize not only the federal funding for the changes, but the federal funding of the entire Project. 3. Project Sources and Uses of Funds The total estimated development cost of the Project is shown in Attachment B, Project Budget Estimate and Source of Funds (Attachment B). A. If Local Government will perform any work under this Agreement for which reimbursement will be provided by or through the State, the Local Government must complete training. If federal funds are being used, the training must be completed before federal spending authority is obligated. Training is complete when at least one individual who is working actively and directly on the Project successfully completes and receives a certificate for the course entitled “Local Government Project Procedures and Qualification for the Texas Department of Transportation” and retains qualification in accordance with applicable TxDOT procedures. Upon request, Local Government shall provide the certificate of qualification to State. The individual who receives the training certificate may be an employee of Local Government or an employee of a firm that has DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 3 of 18 AFA TASA Rev. 1/23/2024 been contracted by Local Government to perform oversight of the Project. State in its discretion may deny reimbursement if Local Government has not continuously designated in writing a qualified individual to work actively on or to directly oversee the Project. B. The total estimated project cost as shown in Attachment B incudes the Local Government’s estimated itemized cost of real property, utilities, environmental assessments, construction, and other construction related costs. To be eligible for reimbursement or as in-kind contribution, costs must have been included in the nomination form approved by the Texas Transportation Commission or MPO in consultation with State. Local Government must submit to State evidence of payment for eligible in-kind costs at least once per calendar quarter using the State’s In-Kind Match Reporting form. C. State and the Federal Government will not reimburse Local Government for any work performed outside the Performance Period. After federal funds have been obligated, State will send to Local Government a copy of the formal documentation showing the obligation of funds including federal award information. Local Government is responsible for 100 percent of the cost of any work performed under its direction or control before the federal spending authority is formally obligated. D. The Project budget and source of funds estimate based on the budget provided in the application is included in Attachment B. Attachment B shows the percentage and estimated dollar amounts to be contributed to Project by state and local sources, as well as the maximum amount in federal TASA funds assigned by the Commission or MPO in consultation with State. This Agreement may be amended from time to time as required to meet the funding commitments based on revisions to the TASA, FPAA, or other federal documents. E. State will be responsible for securing the federal share of funding required for the development and construction of Project, in an amount not to exceed 80 percent of the actual cost of the work up to the amount of funds approved for Project by the Texas Transportation Commission or MPO in consultation with State. Federal funds will be reimbursed on a cost basis. Project costs incurred prior to issuance of the SLOA are not eligible for reimbursement. F. The Local Government will be responsible for all non-federal or non-State participation costs associated with the Project, unless otherwise provided for in this Agreement or approved otherwise in an amendment to this Agreement. For items of work subject to specified percentage funding, the Local Government shall only in those instances be responsible for all Project costs that are greater than the maximum State and federal participation specified in Attachment B and for overruns in excess of the amount specified in Attachment B to be paid by the Local Government. If the Project was State- selected, the State may apply a portion of any excess program funds to cover all or a portion of any overrun based on criteria provided by 43 Tex. Admin. Code §11.411(d). G. The budget in Attachment B will clearly state all items subject to fixed price funding, specified percentage funding, and the periodic payment schedule, when periodic payments have been approved by the State. H. When fixed price funding is used, the Local Government is responsible for the fixed price amount specified in Attachment B. Fixed prices are not subject to adjustment unless (1) differing site conditions are encountered; (2) further definition of the Local Government’s requested scope of work identifies greatly differing costs from those estimated; (3) work requested by the Local Government is determined to be ineligible DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 4 of 18 AFA TASA Rev. 1/23/2024 for federal participation; or (4) the adjustment is mutually agreed to by the State and the Local Government. I. Following execution of this Agreement, but prior to the performance of any plan review work by State, Local Government will pay to State the amount specified in Attachment B for plan review. At least 60 days prior to the date set for receipt of the construction bids, Local Government shall remit its remaining local match as specified in Attachment B for State’s estimated construction oversight and construction cost. J. In the event State determines that additional funding is required by Local Government at any time during Project, State will notify Local Government in writing. Local Government is responsible for the percentage of the authorized Project cost shown in Attachment B and 100 percent of any overruns above the federally authorized amount. Local Government will make payment to State within 30 days from receipt of State’s written notification. K. Whenever funds are paid by Local Government to State under this Agreement, Local Government will remit a warrant made payable to the “Texas Department of Transportation”. The warrant will be deposited by State and managed by State. Funds may only be applied by State to Project. L. Upon completion of Project, State will perform a final accounting of Project costs. Any funds due to Local Government, State, or the Federal Government will be promptly paid by the owing party. M. In the event Project is not completed, State may seek reimbursement from Local Government of the expended federal funds. Local Government will remit the required funds to State within 60 days from receipt of State’s notification. N. If any existing or future local ordinances, commissioners court orders, rules, policies, or other directives, including but not limited to outdoor advertising billboards and storm water drainage facility requirements, are more restrictive than state or federal regulations, or if any other locally proposed changes, including but not limited to plats or re-plats, result in increased costs, then any increased costs associated with the ordinances or changes will be paid by Local Government. The cost of providing right of way acquired by State shall mean the total expenses in acquiring the property interests through negotiations, including, but not limited to, expenses related to relocation, removal, and adjustment of eligible utilities. O. The state auditor may conduct an audit or investigation of any entity receiving funds from the State directly under the Agreement or indirectly through a contract or subcontract under the Agreement. Acceptance of funds directly under the Agreement or indirectly through a contract or subcontract under this Agreement acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. An entity that is the subject of an audit or investigation must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. P. State will not pay interest on any funds provided by Local Government. Q. State will not execute the contract for the construction of Project until the required funding has been made available by Local Government in accordance with this Agreement. R. Local Government is authorized to submit requests for reimbursement by submitting the original of an itemized invoice in a form and containing all items required by State no more frequently than monthly, and no later than 90 days after costs are incurred. If DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 5 of 18 AFA TASA Rev. 1/23/2024 Local Government submits invoices more than 90 days after the costs are incurred, and if federal funding is reduced as a result, State shall have no responsibility to reimburse Local Government for those costs. S. If Local Government is an Economically Disadvantaged County (EDC) or the State or MPO selected project meets the State’s or MPO’s criteria to receive Transportation Development Credits in lieu of providing a cash local match, and the State has approved adjustments to the standard financing arrangement, this agreement reflects those adjustments. 4. Termination of the Agreement A. This Agreement may be terminated by any of the following conditions: 1. By mutual written consent and agreement of all parties; 2. By any party with 90 days written notice; or 3. By either party, upon the failure of the other party to fulfill the obligations as set forth in this Agreement. Any cost incurred due to such breach of contract shall be paid by the breaching party. B. If the potential termination of this Agreement is due to the failure of Local Government to fulfill its contractual obligations, State will notify Local Government that possible breach of contract has occurred. Local Government should make every effort to remedy the breach within a period mutually agreed upon by both parties. C. The Agreement may be terminated by the State because the parties are not able to execute a mutually agreeable amendment when the costs for Local Government requested items increase significantly due to differing site conditions, determination that Local government requested work is ineligible for federal or state cost participation, or a more thorough definition of the Local Government’s proposed work scope identifies greatly differing costs from those estimated. The State will reimburse Local Government remaining funds to the Local Government within ninety (90) days of termination; D. If Local Government withdraws from Project after this Agreement is executed, Local Government shall be responsible for all direct and indirect Project costs as identified by the State’s cost accounting system and with 2 CFR Part 200 recapture requirements. E. A project may be eliminated from the program as outlined below. If Project is eliminated for any of these reasons, this Agreement will be appropriately terminated. A project may be eliminated from the program, and this Agreement terminated, if: 1. Local Government fails to satisfy any requirements of the program rules cited in 43 Texas Administrative Code, Part 1, Chapter 11, Subchapter G, §§11.400 – 11.418. 2. The implementation of Project would involve significant deviation from the activities proposed in the nomination form and approved by the Texas Transportation Commission or MPO in consultation with State. 3. Local Government withdraws from participation in Project. 4. State determines that federal funding may be lost due to Project not being implemented and completed. 5. Funds are not appropriated, in which case this Agreement shall be terminated immediately with no liability to either party. Payment under this Agreement beyond the current fiscal biennium is subject to availability of appropriated funds. DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 6 of 18 AFA TASA Rev. 1/23/2024 6. A construction contract has not been awarded or construction has not been initiated within three years after the date that the Commission or MPO selected the project or by a letting date determined by the state and agreed to by the Local Government. 7. Local Government fails to attend progress meetings at least twice yearly, as scheduled by State. F. State, at its sole discretion, may terminate this Agreement if State does not receive project invoice from Local Government within 270 days of FPAA. 5. Amendments This Agreement may be amended due to changes in the work, the amount of funding required to complete Project, or the responsibilities of the parties. Such amendment must be made through a mutually agreed upon, written amendment that is executed by the parties. 6. Remedies This Agreement shall not be considered as specifying the exclusive remedy for any agreement default, but all remedies existing at law and in equity may be availed of by either party to this Agreement and shall be cumulative. 7. Utilities Local Government shall be responsible for the adjustment, removal, or relocation of utilities or utility facilities in accordance with applicable State laws, regulations, rules, policies, and procedures, including any cost to State of a delay resulting from Local Government’s failure to ensure that utilities or utility facilities are adjusted, removed, or relocated before the scheduled beginning of construction. At the State’s discretion, State may reimburse Local Government for minor, incidental utility adjustments that are identified during the preliminary engineering phase if they are eligible for federal reimbursement. Local Government must obtain advance approval for any variance from established procedures. Before a construction contract is let, Local Government shall provide, at State’s request, a certification stating that Local Government has completed the adjustment of all utilities that must be adjusted before construction begins. Additional utility work may be required due to unknown conditions discovered during construction. These costs may be eligible for TASA participation if the following conditions are met: (1) the activity is required to complete Project; (2) the cost is incidental to Project; and (3) TASA funding is available. Any change orders must be approved by State prior to incurring any cost for which reimbursement is sought. 8. Environmental Assessment and Mitigation Development of Project must comply with the National Environmental Policy Act and the National Historic Preservation Act of 1966, which require environmental clearance of federal- aid projects. A. The Local Government is responsible for the identification and assessment of any environmental problems associated with the development of Project. B. Local Government is responsible for the cost of any environmental problem’s mitigation and remediation. These costs will not be reimbursed or credited towards Local Government’s financial share of Project unless specified in the nomination form and approved by State or MPO in consultation with State. DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 7 of 18 AFA TASA Rev. 1/23/2024 C. Local Government is responsible for providing any public meetings or public hearings required for development of the environmental assessment, including any public hearing requirements that may be necessary when adding a bike lane. D. Before the advertisement for bids, Local Government shall provide to State written documentation from the appropriate regulatory agency or agencies that all environmental clearances have been obtained. 9. Compliance with Accessibility Standards All parties to this Agreement shall ensure that the plans for and the construction of all projects subject to this Agreement are in compliance with standards issued or approved by the Texas Department of Licensing and Regulation (TDLR) as meeting or consistent with minimum accessibility requirements of the Americans with Disabilities Act (P.L. 101-336) (ADA). 10. Architectural and Engineering Services A. Architectural and engineering services for preliminary engineering will be provided by the Local Government. In procuring professional services, the parties to this Agreement must comply with federal requirements cited in 23 CFR Part 172 if Project is federally funded and Local Government will be seeking reimbursement for these services or if these services will be used as in-kind contributions; and with Texas Government Code Subchapter 2254.A., in all cases. Professional services contracts for federally funded projects must conform to federal requirements. Variety B. The architectural contract documents shall be developed in accordance with the standards of the American Institute of Architects, the U.S. Secretary of the Interior’s Standards for Historic Preservation Projects, Standards and Guidelines for Archeology and Historic Preservation, the National Register Bulletin Number 36: Guidelines for Evaluating and Registering Historical Archeological Sites and in consultation with the State Historic Preservation Officer, as applicable. The engineering plans shall be developed in accordance with State’s applicable Standard Specifications for Construction and Maintenance of Highways, Streets and Bridges and the two American Association of State Highway and Transportation Officials’ (“AASHTO”) publications, “A Policy on Geometric Design of Highways and Streets” and “Guide for the Development of Bicycle Facilities,” as applicable. All design criteria for bicycle and pedestrian bridges must comply with TxDOT’s Bridge Design Manual and AASHTO’s Load and Resistance Factor Design (LRFD) Guide Specifications for the Design of Pedestrian Bridges (latest edition) as applicable. All contract procurement procedures and documents must adhere to the applicable requirements established in the Standard Specifications for Construction and Maintenance of Highways, Streets and Bridges. The use of other systems of specifications shall be approved by State in writing in advance. C. When architectural and engineering services are provided by or through Local Government, Local Government shall submit any plans it has completed to State for review and approval on an agreed upon schedule. Local Government may also submit the plans to State for review any time prior to completion. Local Government shall make the necessary revisions determined by State. Local Government will not let the construction contract until all required plans have received State approval. D. When architectural and engineering services are provided by or through State, then the State is responsible for the delivery and performance of any required architectural or preliminary engineering work. Local Government may review and comment on the work, including any proposed changes to the scope of work, as required to accomplish DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 8 of 18 AFA TASA Rev. 1/23/2024 Project purposes. State will cooperate with Local Government in accomplishing these Project purposes to the degree permitted by state and federal law. 11. Construction Responsibilities A. The Local Government shall advertise for construction bids, issue bid proposals, receive and tabulate the bids, and award and administer the contract for construction of Project. Administration of the contract includes the responsibility for construction engineering and for issuance of any change orders, supplemental agreements, amendments, or additional work orders that may become necessary subsequent to the award of the construction contract. To ensure federal funding eligibility, projects must be authorized by State prior to advertising for construction. B. All contract letting and award procedures must be approved by State prior to letting and award of the construction contract, whether the construction contract is awarded by State or by Local Government. C. All contract change order review and approval procedures must be approved by State prior to start of construction. D. If the Local Government is the responsible party, the State must review and approve change orders. E. Upon completion of Project, the party constructing Project will issue and sign a “Notification of Completion” acknowledging Project’s construction completion. F. For federally funded contracts, the parties to this Agreement will comply with federal construction requirements provided in 23 CFR Parts 633 and 635, and shall include the latest version of Form “FHWA-1273” in the contract bidding documents. If force account work will be performed, a finding of cost effectiveness shall be made in compliance with 23 CFR Subpart 635.B. G. Any field changes, supplemental agreements, or revisions to the design plans that may occur after the construction contract is awarded will be mutually agreed to by State and Local Government prior to authorizing the contractor to perform the work. Prior to completion of Project, the party responsible for construction will notify the other party to this Agreement of the anticipated completion date. All parties will be afforded the opportunity to assist in the final review of the construction services performed by the contractor. 12. Project Maintenance A. Upon completion of Project, Local Government will be responsible for maintaining the completed facility for public use. The property shall be maintained and operated for the purpose for which it was approved and funded for a period commensurate with the federal investment or State rules, whichever is greater. Should Local Government at any time after Project completion decide it can no longer maintain and operate Project for its intended purpose, Local Government shall consult with State and the FHWA as to the disposal or alternate uses, consistent with Project’s original intent. State may require Local Government to return the federal funds in accordance with 2 CFR Part 200 federal recapture requirements. Should Local Government consider conveying the property, State and FHWA must be notified prior to the sale, transfer, or disposal of any property that received federal funds. Written concurrence of approval for the transaction, detailing any required recapture, must be obtained from FHWA prior to the transaction. Advance notice from Local Government of their intended action must be submitted to State for an FHWA review a minimum of 90 days prior to any action DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 9 of 18 AFA TASA Rev. 1/23/2024 being taken by Local Government. Local Government shall be held responsible for reimbursement of all federal funds used or a portion of those funds based on a pro-rata amount, considering the original percentage of federal funds provided and the time elapsed from Project completion date. This same percentage of reimbursement also applies to any amount of profit that may be derived from the conveyance of the property, as applicable. B. Any manufacturer warranties extended to Local Government as a result of Project shall remain in the name of Local Government. State shall not be responsible for honoring any warranties under this Agreement. C. Should Local Government derive any income from the development and operation of Project, a portion of the proceeds sufficient for the maintenance and upkeep of the property shall be set aside for future maintenance. A project income report shall be submitted to State on a quarterly basis. Monies set aside according to this provision shall be expended using accounting procedures and with the property management standards established in 2 CFR Part 200. D. Should any historic properties be included in or affected by this federally funded Project, the historic integrity of the property and any contributing features must continue to be preserved regardless of any approved changes that may occur throughout the life of Project. 13. Right of Way and Real Property Acquisition A. Right of way and real property acquisition shall be the responsibility of Local Government. Title to right of way and other related real property must be acceptable to State before funds may be expended for the improvement of the right of way or real property. B. If Local Government is the owner of any part of Project site under this Agreement, Local Government shall permit State or its authorized representative access to occupy the site to perform all activities required to execute the work. C. Local Government will comply with and assume the costs for compliance with all the requirements of Title II and Title III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 USC §4601 et seq., including those provisions relating to incidental expenses incurred by the property owners in conveying the real property to Local Government, and benefits applicable to the relocation of any displaced person as defined in 49 CFR §24.2(g). Documentation to support such compliance must be maintained and made available to State and its representatives for review and inspection. D. Local Government shall assume all costs and perform all work necessary to obtain needed evidence of title or right of use to the real property required for development of Project. Evidence of title or right of use shall be acquired in the name of (1) State, if the real property is to be made part of the State Highway System, or (2) Local Government, if the real property is not to be made part of the State Highway System. The evidence of title or rights shall be acceptable to State, and be free and clear of all encroachments. Local Government shall secure and provide easements and any needed rights of entry over any other land needed to develop Project according to the approved Project plans. Local Government shall be responsible for securing any additional real property required for completion of Project. E. Local Government shall prepare real property maps, property descriptions, and other data as needed to properly describe the real property and submit them to State for DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 10 of 18 AFA TASA Rev. 1/23/2024 approval prior to Local Government acquiring the real property. Tracings of the maps shall be retained by Local Government for a permanent record. F. Local Government shall determine property values for each real property parcel to be purchased with federal funds using methods acceptable to State and shall submit to State a tabulation of the values so determined, signed by the appropriate Local Government representative. The tabulations must list the parcel numbers, ownership, acreage, and recommended compensation. The tabulation must be accompanied by an explanation to support the estimated values, together with a copy of the documentation and reports used in calculating each parcel’s value. Expenses incurred by Local Government in performing this work may be eligible for reimbursement after Local Government has received written authorization by State to proceed with determination of real property values. State will review the data submitted and will base its reimbursement for parcel acquisitions on these in determining the fair market values. Local Government will not be reimbursed for right-of-way costs on state-selected projects. G. For State-selected TASA projects, Local Government shall not use eminent domain or condemnation to acquire real property for this TASA Project. H. Reimbursement for real property costs will be made to Local Government for real property purchased in an amount not to exceed 80 percent of the cost of the real property purchased in accordance with the terms and provisions of this Agreement. Reimbursement will be in an amount not to exceed 80 percent of State’s predetermined fair market value of each parcel, or the net cost thereof, whichever is less. In addition, reimbursement will be made to Local Government for necessary payments to appraisers for expenses incurred in order to assure good title. Local Government will not be reimbursed for right-of-way costs on state-selected projects. I. Local Government and current property owner are responsible for any costs associated with the relocation of displaced persons and personal property as well as incidental expenses incurred in acquiring property to implement Project. State will not pay any of these costs. J. If Project requires the use of real property to which Local Government will not hold title, a separate agreement between the owners of the real property and Local Government must be executed prior to execution of this Agreement. The separate agreement between Local Government and the current property owner must establish that Project will be dedicated for public use for a period of time not less than ten years after project completion and commensurate with the federal investment. For State-selected projects, this is outlined in 43 Tex. Admin. Code §11.417. The separate agreement must define the responsibilities of the parties as to the use of the real property and operation and maintenance of Project after completion. The separate agreement must be approved by State prior to its execution and a copy of the executed separate agreement shall be provided to State. K. Local Government shall execute individually or produce a legal document as necessary to provide for Project’s continued use from the date of completion, and agrees to cause the same to be recorded in the land records of the appropriate jurisdiction. L. Local governments receiving federal funds must comply with 23 CFR Part 710 and 49 CFR Part 24, and with the procedures provided in Chapter 6 of the State’s Local Government Project Policy Manual. Local Government agrees to monitor Project to ensure: (1) continued use of the property for approved activities, and (2) the repayment of the Federal funds, as appropriate. Local Government agrees to the review of their DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 11 of 18 AFA TASA Rev. 1/23/2024 Project accounts and site visits by State during the development of Project at any time. Upon Project completion, State will continue to perform periodic visits to confirm Project’s continued use and upkeep. M. Before the advertisement for bids, Local Government shall provide a certification to State that all real property has been acquired. 14. Insurance A. Should this Agreement authorize Local Government or its contractor to perform any work on State right of way, before beginning work, the entity performing the work shall provide State with a fully executed copy of State's Form 1560 Certificate of Insurance verifying the existence of coverage in the amounts and types specified on the Certificate of Insurance for all persons and entities working on State right of way. This coverage shall be maintained until all work on State right of way is complete. If coverage is not maintained, all work on State right of way shall cease immediately, and State may recover damages and all costs of completing the work. B. For projects including buildings, Local Government agrees to insure the building according to Department specifications and further agrees to name the Federal Government as a “Loss Payee” should the building be destroyed. 15. Notices, Invoices, Payments, and Project Inquiries All notices to either party shall be delivered personally or sent by certified or U.S. mail, postage prepaid, addressed to that party at the following address: Local Government: City of Schertz ATTN: City Manager 1400 Schertz Parkway Schertz, TX 78154 State: Texas Department of Transportation ATTN: Director of Contract Services 125 E. 11th Street Austin, TX 78701 All notices shall be deemed given on the date delivered in person or deposited in the mail, unless otherwise provided by this agreement. Either party may change the above address by sending written notice of the change to the other party. Either party may request in writing that notices shall be delivered personally or by certified U.S. mail, and that request shall be carried out by the other party. Invoicing, payment, and project inquiries must be sent to the following address, which the State may change by sending written notice of the change to the Local Government: Texas Department of Transportation ATTN: District Advanced Project Development Director 4615 Northwest Loop 410 San Antonio, TX 78229 All invoicing, payment, and project inquiries must include the following information: County: Guadalupe Local Government: City of Schertz DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 12 of 18 AFA TASA Rev. 1/23/2024 CSJ No.: 0915-46-063 Project Name: W Dietz Crk Bike Improvement Highway or Roadway: Various 16. Legal Construction In case one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions and this Agreement shall be construed as if it did not contain the invalid, illegal, or unenforceable provision. 17. Responsibilities of the Parties Neither party is an agent, servant, or employee of the other party and each party is responsible for its individual acts and deeds as well as the acts and deeds of its contractors, employees, representatives, and agents. 18. Ownership of Documents Upon completion or termination of this Agreement, all documents prepared by State shall remain the property of State. All data prepared under this Agreement shall be made available to State without restriction or limitation on their further use. All documents produced or approved or otherwise created by Local Government shall be transmitted to State in the form of photocopy reproduction on a monthly basis as required by State. The originals shall remain the property of Local Government. 19. Document and Information Exchange Local Government agrees to electronically deliver to State all general notes, specifications, contract provision requirements, and related documentation in a Microsoft Word or similar format. If requested by State, Local Government will use State's document template. Local Government shall also provide a detailed construction time estimate, including types of activities and month in which the activity will be completed, in the format required by State. This requirement applies whether Local Government creates the documents with its own forces or by hiring a consultant or professional provider. At the request of State, Local Government shall submit any information required by State in the format directed by State. 20. Compliance with Laws The parties shall comply with all federal, state, and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals in any manner affecting the performance of this agreement. When required, Local Government shall furnish State with satisfactory proof of this compliance. 21. Sole Agreement This Agreement constitutes the sole and only agreement between the parties and supersedes any prior understandings or written or oral agreements respecting the Agreement’s subject matter. DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 13 of 18 AFA TASA Rev. 1/23/2024 22. Cost Principles In order to be reimbursed with federal funds, the parties shall comply with the Cost Principles established in 2 CFR Part 200 that specify that all reimbursed costs are allowable, reasonable, and allocable to Project. 23. Procurement and Property Management Standards The parties to this Agreement shall adhere to the procurement and property management standards established in 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and to the Texas Uniform Grant Management Standards. The State must pre-approve the Local Government’s procurement procedures for purchases to be eligible for state or federal funds. 24. Inspection of Books and Records The parties to this Agreement shall maintain all books, documents, papers, accounting records, and other documentation relating to costs incurred under this Agreement and shall make such materials available to the State, the Local Government, and, if federally funded, the FHWA and the U.S. Office of the Inspector General or their duly authorized representatives for review and inspection at its office during the Agreement period and for seven (7) years from the date of final reimbursement by FHWA under this Agreement or until any impending litigation or claims are resolved. Additionally, the State, the Local Government, and the FHWA and their duly authorized representatives shall have access to all the governmental records that are directly applicable to this Agreement for the purpose of making audits, examinations, excerpts, and transcriptions. 25. Civil Rights Compliance The parties to this Agreement are responsible for the following: A. Compliance with Regulations: Both parties will comply with the Acts and the Regulations relative to Nondiscrimination in Federally-assisted programs of the U.S. Department of Transportation (USDOT), the Federal Highway Administration (FHWA), as they may be amended from time to time, which are herein incorporated by reference and made part of this Agreement. B. Nondiscrimination: The Local Government, with regard to the work performed by it during the Agreement, will not discriminate on the grounds of race, color, or national origin in the selection and retention of subcontractors, including procurement of materials and leases of equipment. The Local Government will not participate directly or indirectly in the discrimination prohibited by the Acts and the Regulations, including employment practices when the Agreement covers any activity, project, or program set forth in Appendix B of 49 CFR Part 21. C. Solicitations for Subcontracts, Including Procurement of Materials and Equipment: In all solicitations either by competitive bidding or negotiation made by the Local Government for work to be performed under a subcontract, including procurement of materials or leases of equipment, each potential subcontractor or supplier will be notified by the Local Government of the Local Government’s obligations under this Agreement and the Acts and Regulations relative to Nondiscrimination on the grounds of race, color, or national origin. D. Information and Reports: The Local Government will provide all information and reports required by the Acts, the Regulations, and directives issued pursuant thereto, and will permit access to its books, records, accounts, other sources of information, and DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 14 of 18 AFA TASA Rev. 1/23/2024 facilities as may be determined by the State or the FHWA to be pertinent to ascertain compliance with such Acts, Regulations or directives. Where any information required of the Local Government is in the exclusive possession of another who fails or refuses to furnish this information, the Local Government will so certify to the State or the FHWA, as appropriate, and will set forth what efforts it has made to obtain the information. E. Sanctions for Noncompliance: In the event of the Local Government's noncompliance with the Nondiscrimination provisions of this Agreement, the State will impose such contract sanctions as it or the FHWA may determine to be appropriate, including, but not limited to: 1. withholding of payments to the Local Government under the Agreement until the Local Government complies and/or 2. cancelling, terminating, or suspending of the Agreement, in whole or in part. F. Incorporation of Provisions: The Local Government will include the provisions of paragraphs (A) through (F) in every subcontract, including procurement of materials and leases of equipment, unless exempt by the Acts, the Regulations and directives issued pursuant thereto. The Local Government will take such action with respect to any subcontract or procurement as the State or the FHWA may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the Local Government becomes involved in, or is threatened with, litigation with a subcontractor or supplier because of such direction, the Local Government may request the State to enter into such litigation to protect the interests of the State. In addition, the Local Government may request the United States to enter into such litigation to protect the interests of the United States. 26. Pertinent Non-Discrimination Authorities During the performance of this Agreement, each party, for itself, its assignees, and successors in interest agree to comply with the following nondiscrimination statutes and authorities; including but not limited to: A. Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq., 78 stat. 252), (pro- hibits discrimination on the basis of race, color, national origin); and 49 CFR Part 21. B. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 U.S.C. § 4601), (prohibits unfair treatment of persons displaced or whose property has been acquired because of federal or federal-aid programs and projects). C. Federal-Aid Highway Act of 1973, (23 U.S.C. § 324 et seq.), as amended, (prohibits discrimination on the basis of sex). D. Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794 et seq.) as amended, (prohibits discrimination on the basis of disability); and 49 CFR Part 27. E. The Age Discrimination Act of 1975, as amended, (42 U.S.C. § 6101 et seq.), (prohibits discrimination on the basis of age). F. Airport and Airway Improvement Act of 1982, (49 U.S.C. Chapter 471, Section 47123), as amended, (prohibits discrimination based on race, creed, color, national origin, or sex). G. The Civil Rights Restoration Act of 1987, (PL 100-209), (Broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, The Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 15 of 18 AFA TASA Rev. 1/23/2024 programs or activities of the federal-aid recipients, subrecipients and contractors, whether such programs or activities are federally funded or not). H. Titles II and III of the Americans with Disabilities Act, which prohibits discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 U.S.C. §§ 12131-12189) as implemented by Department of Transportation regulations at 49 C.F.R. Parts 37 and 38. I. The Federal Aviation Administration’s Nondiscrimination statute (49 U.S.C. § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex). J. Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations. K. Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, the parties must take reasonable steps to ensure that LEP persons have meaningful access to the programs (70 Fed. Reg. at 74087 to 74100). L. Title IX of the Education Amendments of 1972, as amended, which prohibits the parties from discriminating because of sex in education programs or activities (20 U.S.C. 1681 et seq.). 27. Disadvantaged Business Enterprise Program Requirements A. The parties shall comply with the Disadvantaged Business Enterprise (“DBE”) Program requirements established in 49 CFR Part 26. B. Local Government shall adopt, in its totality, State’s federally approved DBE program. C. Local Government shall set an appropriate DBE goal consistent with State’s DBE guidelines and in consideration of Local market, project size, and nature of the goods or services to be acquired. Local Government shall have final decision-making authority regarding the DBE goal and shall be responsible for documenting its actions. D. Local Government shall follow all other parts of State’s DBE program referenced in TxDOT Form 2395, Memorandum of Understanding Regarding the Adoption of the Texas Department of Transportation’s Federally-Approved Disadvantaged Business Enterprise by Entity, and attachments found at web address: http://ftp.dot.state.tx.us/pub/txdot-info/bop/dbe/mou/mou_attachments.pdf. E. Local Government shall not discriminate on the basis of race, color, national origin, or sex in the award and performance of any DOT-assisted contract or in the administration of its DBE program or the requirements of 49 CFR Part 26. Local Government shall take all necessary and reasonable steps under 49 CFR Part 26 to ensure non- discrimination in award and administration of DOT-assisted contracts. State’s DBE program, as required by 49 CFR Part 26 and as approved by DOT, is incorporated by reference in this Agreement. Implementation of this program is a legal obligation and failure to carry out its terms shall be treated as a violation of this Agreement. Upon notification to Local Government of its failure to carry out its approved program, State may impose sanctions as provided for under 49 CFR Part 26 and may, in appropriate cases, refer the matter for enforcement under 18 USC 1001 and the Program Fraud Civil Remedies Act of 1986 (31 USC § 3801 et seq.). DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 16 of 18 AFA TASA Rev. 1/23/2024 F. Each contract Local Government signs with a contractor (and each subcontract the prime contractor signs with a subcontractor) must include the following assurance: “The contractor, sub-recipient, or sub-contractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR Part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this agreement, which may result in the termination of this agreement or such other remedy as the recipient deems appropriate.” 28. Debarment Certifications The parties are prohibited from making any award at any tier to any party that is debarred or suspended or otherwise excluded from or ineligible for participation in Federal Assistance Programs under Executive Order 12549, “Debarment and Suspension.” By executing this Agreement, Local Government certifies that it and its principals are not currently debarred, suspended, or otherwise excluded from or ineligible for participation in Federal Assistance Programs under Executive Order 12549, and further certifies that it will not do business with any party, to include principals, that is currently debarred, suspended, or otherwise excluded from or ineligible for participation in Federal Assistance Programs under Executive Order 12549. The parties to this Agreement shall require any party to a contract, subcontract, or purchase order awarded under this Agreement to certify its eligibility to receive f ederal funds and, when requested by State, to furnish a copy of the certification. If state funds are used, the parties are prohibited from making any award to any party that is debarred under the Texas Administrative Code, Title 34, Part 1, Chapter 20, Subchapter G, Rule §20.585 and the Texas Administrative Code, Title 43, Part 1, Chapter 9, Subchapter G. 29. Lobbying Certification In executing this Agreement, each signatory certifies to the best of that signatory’s knowledge and belief, that: A. No federal appropriated funds have been paid or will be paid by or on behalf of the parties to any person for influencing or attempting to influence an officer or employee of any federal agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. B. If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with federal contracts, grants, loans, or cooperative agreements, the signatory for Local Government shall complete and submit the federal Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. C. The parties shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts, sub-grants, and contracts under grants, loans, and cooperative agreements) and all sub-recipients shall certify and disclose accordingly. Submission of this certification is a prerequisite DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 17 of 18 AFA TASA Rev. 1/23/2024 imposed by 31 USC §1352 for making or entering into this transaction. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. 30. Federal Funding Accountability and Transparency Act Requirements A. Any recipient of funds under this agreement agrees to comply with the Federal Funding Accountability and Transparency Act (FFATA) and implementing regulations at 2 CFR Part 170, including Appendix A. This agreement is subject to the following award terms: http://www.gpo.gov/fdsys/pkg/FR-2010-09-14/pdf/2010-22705.pdf and http://www.gpo.gov/fdsys/pkg/FR-2010-09-14/pdf/2010-22706.pdf. B. Local Government agrees that it shall: 1. Obtain and provide to State a System for Award Management (SAM) number (Federal Acquisition Regulation (FAR) Subpart 4.11) if this award provides more than $25,000 in Federal funding. The SAM number may be obtained by visiting the SAM website whose address is: https://sam.gov/SAM/pages/public/index.jsf 2. Obtain and provide to State a Data Universal Numbering System (DUNS) number, a unique nine-character number that allows the federal government to track the distribution of federal money. The DUNS number may be requested free of charge for all businesses and entities required to do so by visiting the Dun & Bradstreet on-line registration website http://fedgov.dnb.com/webform; and 3. Report the total compensation and names of its top five executives to State if: a. More than 80 percent of annual gross revenues are from the Federal government, and those revenues are greater than $25,000,000; and b. The compensation information is not already available through reporting to the U.S. Securities and Exchange Commission. 31. Single Audit Report A. The parties shall comply with the requirements of the Single Audit Act of 1984, P.L. 98- 502, ensuring that the single audit report includes the coverage stipulated in 2 CFR Part 200. B. If threshold expenditures of $750,000 or more are met during the fiscal year, the Local Government must submit a Single Audit Report and Management Letter (if applicable) to TxDOT's Compliance Division, 125 East 11th Street, Austin, TX 78701 or contact TxDOT’s Compliance Division at singleaudits@txdot.gov . C. If expenditures are less than the threshold during Local Government's fiscal year, Local Government must submit a statement to TxDOT's Compliance Division as follows: We did not meet the $______ expenditure threshold and therefore, are not required to have a single audit performed for FY ______. D. For each year Project remains open for federal funding expenditures, Local Government will be responsible for filing a report or statement as described above. The required annual filing shall extend throughout the life of the agreement, unless otherwise amended or Project has been formally closed out and no charges have been incurred within the current fiscal year. DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 18 of 18 AFA TASA Rev. 1/23/2024 32. Signatory Warranty Each signatory warrants that the signatory has necessary authority to execute this agreement on behalf of the entity represented. Each party is signing this agreement on the date stated under that party’s signature. THE STATE OF TEXAS THE LOCAL GOVERNMENT Signature Signature Typed or Printed Name Typed or Printed Name Typed or Printed Title Typed or Printed Title Date Date DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development Page 1 of 1 AFA TASA Attachment A ATTACHMENT A PROJECT LOCATION MAP DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development AFA TASA Page 1 of 3 Attachment B 1/23/2024 ATTACHMENT B PROJECT ESTIMATE AND SOURCE OF FUNDS LG Performs PE Work or Hires Consultant / LG Lets Project for Construction Work Performed by Local Government (“LG”) Description of Project Costs to be Incurred Total Project Cost Estimate Federal Participation Includes percentage for TDC apportionment on projects where applicable State Participation Includes authorized EDC amounts Local Government Participation Includes authorized EDC reduction % Cost % Cost % Cost Planning/Maps/Education/Non-CST $0 0% $0 0% $0 0% $0 Preliminary Engineering $0 0% $0 0% $0 0% $0 Environmental Cost $0 0% $0 0% $0 0% $0 Right of Way $0 0% $0 0% $0 0% $0 Utilities $0 0% $0 0% $0 0% $0 Construction Cost $1,250,000 $1,250,000 80% $1,000,000 0% $0 20% $250,000 Construction Engineering Cost $ Eligible In-Kind Contribution Value $ Total Construction Value (sum of construction cost and in-kind value) Work by LG Subtotal $1,250,000 $1,000,000 $0 $250,000 Work Performed by the State (Local Participation paid up front by LG to TxDOT) Preliminary Engineering1 $0 0% $0 0% $0 0% $0 Environmental Cost1 $0 0% $0 0% $0 0% $0 Right of Way3 $0 0% $0 0% $0 0% $0 Utilities2 $0 0% $0 0% $0 0% $0 Construction Cost2 $ $0 0% $0 0% $0 0% $0 Eligible In-Kind Contribution Value $ DRA F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development AFA TASA Page 2 of 3 Attachment B 1/23/2024 Total Construction Value (sum of construction cost and in-kind value) Work by State Subtotal $0 $0 $0 $0 Direct and Indirect State Costs Incurred for Review, Inspection, Administration & Oversight Description of Project Costs to be Incurred Total Project Cost Estimate Federal Participation Includes percentage for TDC apportionment on projects where applicable State Participation Includes authorized EDC amount Local Government (LG) Participation Includes authorized EDC reduction % Cost % Cost % Cost Preliminary Engineering1 $5,760 0% $0 0% $0 100% $5,760 Environmental Cost1 $2,880 0% $0 0% $0 100% $2,880 Right of Way1 $2,880 0% $0 0% $0 100% $2,880 Utilities1 $2,880 0% $0 0% $0 100% $2,880 Construction2 $7,350 0% $0 0% $0 100% $7,350 Direct State Costs Subtotal $21,750 0% $0 0% $0 100% $21,750 Indirect State Cost $1,198 $0 0% $1,198 $0 TOTAL PARTICIPATION $1,272,948 $1,000,000 $1,198 $271,750 In-kind Contribution Credit Applied 0% $0 TOTAL REMAINING PARTICIPATION AFTER IN-KIND CONTRIBUTION $0  The estimated total participation by Local Government is $271,750.  The Local Government is responsible for 100% of overruns.  Total estimated payment by Local Government to State is $21,750.  1Local Government’s first payment of $21,750 is due to State within 30 days from execution of this contract.  2 Local Government’s second payment of $0 is due to State within 60 days prior to the Construction contract being advertised for bids.  3If ROW is to be acquired by State, Local Government’s share of property cost will be due prior to acquisition. DR A F T TxDOT:: Federal Highway Administration: CCSJ # 0915-46-063 AFA ID Z00009366 CFDA No. 20.205 AFA CSJs 0915-46-063 CFDA Title Highway Planning and Construction District # 15 Code Chart 64# 38440 Project Name W Dietz Crk Bike Improvement AFA Not Used For Research & Development AFA TASA Page 3 of 3 Attachment B 1/23/2024  The local match must be 20% or greater and may include State contributions, eligible in-kind contributions, EDC adjustments, or TDCs if authorized as part of project selection.  Transportation Development Credits (TDC) are being utilized in place of the Local Government’s participation in the amount of 0.  This is an estimate; the final amount of Local Government participation will be based on actual costs.  Maximum federal TASA funds available for Project are $1,000,000. DR A F T Agenda No. 7.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Finance Subject:Resolution 26-R-044 -Approval of the Annual Comprehensive Financial Report FY 2024-25 (S. Gonzalez/J. Walters) BACKGROUND State law requires that local governments complete an annual audit by an independent licensed public accounting firm and publish an annual financial report within 6 months of the fiscal year end date. The auditors look to make sure there are appropriate practices to ensure balanced and true accounts of the City's financial transactions. They do this by looking at a sample of transactions to verify proper approvals were followed and by verifying some values externally with other organizations the City does business with. Based on their review, auditors will provide their findings on how well the City keeps track of its financials. The City received the highest level of confidence from our auditors that the City's financial statements are fairly represented in the annual report and they found no significant matters or issues as stated in their Governance Letter attached and in the Independent Auditor's Report in the Annual Comprehensive Financial Report (ACFR). Attached is the official Fiscal Year 2024-25 ACFR for the City of Schertz as of September 30, 2025. These statements show the financial performance and financial health of the City for the previous fiscal year. The presentation will be made by Jeremy G, CPA, Senior Audit Associate, of ABIP, LLP. The Audit Committee consisting of Councilmember Heyward, City Manager Steve Williams, Deputy City Manager Brian James, Assistant City Manager Sarah Gonzalez, Finance Director James Walters, and Assistant Finance Director Jessica Dycus, met on March 10, 2026 to review the audit findings and financial statements as presented by the auditor, Janet Pitman, Partner of ABIP, LLP. The assets and deferred outflows of the City of Schertz exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $445,020,423 (net position). Of this amount, $93,407,247 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors. The City's total net position increased by $67,116,291. This was greater than the increase of $28,702,437 in the prior year due to sales tax growth and additional capital contributions. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $231,222,254, an increase of $30,926,126 in comparison with the prior year. The primary cause of this increase was an increase in sales tax revenues that exceeded expenditure growth and additional capital contributions.At the end of the fiscal year, the combined total of the General Fund assigned and unassigned fund balances was $21,407,016 which is 44.7% of the general fund expenditures not including capital outlay. The fund balance policy is to reserve at least a 26% balance. This is an increase of the fund balance by $4,512,446, after restatements.  GOAL Approve and file the Annual Comprehensive Financial Report for FY 2024-25.  COMMUNITY BENEFIT Filing this document meets required guideliens and meetst he standard of financial transparency for the City.  SUMMARY OF RECOMMENDED ACTION Approval of Resolution 26-R-044 Approving the Annual Comprehensive Financial Report for FY 2024-25  RECOMMENDATION Staff and the Audit Committee recommend approval of Resolution 26-R-044.  Attachments Resolution 26-R-044 w attachment RESOLUTION NO. 26-R-044 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE APPROVAL OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL YEAR 2024-25. WHEREAS, the City staff of the City of Schertz (the “City”) has recommended that the City Council approve the Annual Comprehensive Financial Report(ACFR) for Fiscal Year 2024- 25 ; and WHEREAS, the Audit Committee has recommended that it is in the best interest of the City to approve the Annual Comprehensive Financial Report for Fiscal Year 2024-25; and WHEREAS, the City Council has determined that it is in the best interest of the City to approve the Annual Comprehensive Financial Report for Fiscal Year 2024-25. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the approval of the Annual Comprehensive Financial Report for Fiscal Year 2024-25, 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 City Council. 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. 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 City Council 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 APPROVED, this ______day of _________, 2026. CITY OF SCHERTZ, TEXAS Ralph Rodriguez, Mayor ATTEST: _______ Sheila Edmondson, TRMC City Secretary Exhibit A Annual Comprehensive Financial Report September 30, 2025 FINAL DRAFT             FINAL DRAFT CITY OF SCHERTZ, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT For the year ended September 30, 2025 TABLE OF CONTENTS PAGE INTRODUCTORY SECTION Letter of Transmittal i-iv City Officials v Organizational Chart vi GFOA Certificate of Achievement vii FINANCIAL SECTION Independent Auditor’s Report 1-3 Management’s Discussion and Analysis 5-14 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position 17-18 Statement of Activities 20-21 Fund Financial Statements: Balance Sheet – Governmental Funds 22-23 Reconciliation of Balance Sheet – Governmental Funds to Statement of Net Position 24 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 26-27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 28 Statement of Net Position – Proprietary Funds 29-30 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds 31 Statement of Cash Flows – Proprietary Funds 32-33 Notes to Financial Statements 37-68 FINAL DRAFT CITY OF SCHERTZ, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT For the year ended September 30, 2025 TABLE OF CONTENTS PAGE FINANCIAL SECTION (Continued) Required Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund 70-71 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – Economic Development Corporation 72 Note to Budgetary Schedules 73 Schedule of Changes in Net Pension Liability and Related Ratios 74-75 Schedule of Employer Contributions 76-77 Schedule of Changes in TMRS Other Postemployment Benefit Liability and Related Ratios 78-79 Schedule of Changes in City Retiree Health Other Postemployment Benefit Liability and Related Ratios 80-81 Other Supplementary Information: Comparative Balance Sheets – General Fund 86 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balance – General Fund 87 Comparative Balance Sheets – Economic Development Corporation 88 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balance – Economic Development Corporation 89 Comparative Balance Sheets – Debt Service Fund 90 Schedules of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - Debt Service Fund 91 Comparative Balance Sheets – Capital Projects Fund 92 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balance – Capital Projects Fund 93 Nonmajor Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds 94-95 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Nonmajor Governmental Funds 96-97 FINAL DRAFT CITY OF SCHERTZ, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT For the year ended September 30, 2025 TABLE OF CONTENTS PAGE FINANCIAL SECTION (Continued) Other Supplementary Information (continued): Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual – Hotel Occupancy Fund 98 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual – Park Fund 99 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget to Actual – Tree Mitigation Fund 100 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Treasury Forfeitures Fund 101 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Justice Forfeitures Fund 102 Schedule of Revenues, Expenditures, and Changes in Fund Balance - State Forfeitures Fund 103 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Library Advisory Board 104 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual – Historical Committee Board 105 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Capital Recovery Roadways 106 TABLE STATISTICAL SECTION (UNAUDITED) Net Position by Component 1 110-111 Changes in Net Position 2 112-115 Fund Balances - Governmental Funds 3 116-117 Changes in Fund Balances - Governmental Funds 4 118-119 Governmental Funds Tax Revenues By Source 5 120-121 Total Water and Sewer Consumption and Rates 6 122 Principal Water and Sewer Consumers 7 123 Direct and Overlapping Property Tax Rates 8 124 Principal Property Taxpayers 9 125 FINAL DRAFT CITY OF SCHERTZ, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT For the year ended September 30, 2025 TABLE OF CONTENTS TABLE PAGE STATISTICAL SECTION (Continued) Property Tax Levies and Collections 10 126 Taxable Assessed Value 11 128-129 Ratios of Outstanding Debt by Type 12 130-131 Ratios of Net General Bonded Debt Outstanding 13 132-133 Direct and Overlapping Governmental Activities Debt 14 134 Debt Margin Information 15 136-137 Pledged Revenue Coverage 16 138 Demographic and Economic Statistics 17 139 Top Ten Principal Employers 18 140 Full-Time Equivalent City Governmental Employees by Function/Program 19 142-143 Operating Indicators by Function/Program 20 144-147 Capital Asset Statistics by Function/Program 21 148-149 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 153-154 Independent Auditor’s Report on Compliance For Each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 155-157 Schedule of Expenditures of Federal Awards 159 Notes to Schedule of Expenditures of Federal Awards 160 Schedule of Findings and Questioned Costs 161 Summary Schedule of Prior Audit Findings 162 FINAL DRAFT INTRODUCTORY SECTION FINAL DRAFT FINAL DRAFT i       March 17, 2026 To the Honorable Mayor, City Council, and Citizens of the City of Schertz: State law requires that local governments publish a complete set of financial statements presented in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) and audited in accordance with generally accepted auditing standards in the United States of America by a firm of licensed certified public accountants. Pursuant to that requirement, we hereby issue the annual comprehensive financial report of the City of Schertz for the fiscal year ended September 30, 2025. This report consists of management’s representations concerning the finances of the City of Schertz. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Schertz has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Schertz’s financial statements in conformity with U.S. GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Schertz comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material aspects. The City of Schertz’s financial statements have been audited by ABIP, PC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that financial statements of the City of Schertz for the fiscal year ended September 30, 2025, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Schertz’s financial statements for the fiscal year ended September 30, 2025, are fairly presented in conformity with U.S. GAAP. The independent auditor’s report is presented as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and Analyss (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Schertz’s MD&A can be found immediately following the report of the independent auditors. Profile of the Government The City of Schertz, incorporated in 1958, is located in the central part of Texas, which is considered to be a top growth area in the state, and one of the top growth area in the country. The City of Schertz currently occupies a land area of 32.21 square miles with a population of 44,428 in 2024 according to the US Census Bureau. The City of Schertz is empowered to levy a property tax on both real and personal properties located within its boundaries. It is also empowered by state statue to expend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing body. FINAL DRAFT ii The City of Schertz has operated under the council-manager form of government since November 30, 1972. Policymaking and legislative authority are vested in a City Council consisting of the Manor and seven at-large councilmembers. The City Council is responsible for establishing public policy on City matters by the passage of appropriate ordinances and resolutions. The City Manager is responsible for overseeing the day-to-day operations of the government, implementing policy established by City Council, and for appointing the heads of the various departments. The council is elected on a non-partisan basis. Council members serve three-year staggered terms, with two council members elected every three years and then three council members elected the final three years in the cycle. The mayor is elected to serve a three-year term. The City of Schertz provides a full range of services, including police and fire protection, EMS services, library services, the construction and maintenance of streets, recreational facilities, cultural events and water and sewer services. The annual budget and five-year forecast serve as the foundation for the City of Schertz’s financial planning and control. All city departments are required to submit requests for appropriation to the City Manager by June of each year. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents the proposed budget to the council for review in early August. The council then holds public hearings and community meetings on the proposed budget and to adopt a final budget by September 30th. The fiscal year for the City of Schertz is from October 1 through September 30. The appropriated budget is prepared by each department (e.g., police). The City Manager may make transfers of appropriations within a department. The City Manager may make transfers between departments and funds with City Council approval. Budget to actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented on pages 70-72 as part of the required supplementary information. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Schertz operates. Local Economy Economic growth in the City of Schertz remained strong in 2025. The surrounding metro area saw growth evidenced by the Federal Reserve Bank of Dallas reporting the San Antonio Business-Cycle Index increase 1.83% annual year over year for September 2025. This index has decreased below its long-term trend and continues to indicate economic expansion, however, the rate of expansion is slowing as markets had started to expect an economic downturn nationwide. As of December 2025, the unemployment rate for Texas was 3.7% and San Antonio-New Braunfels area was lower at 3.9%. The City of Schertz mirrors the local area unemployment rate still indicating full employment. As another indicator of economic growth, the City of Schertz realized a 68.3% increase year-over-year in sales tax collections during the fiscal year. This increase is due to limited time contributions that are above the normal recurring sales tax collections and will cease in the second quarter of 2026. Without the additional one-time contribution, the annual sales tax growth was 5.1%. The City’s average long-term growth is 7.0% which indicates the City is still growing above inflation but not at the average seen historically. This data mirrors the slowdown seen in the Business Cycle index for the local economy is growing but at a reduced rate. The City of Schertz economy may be starting to pick back up as new residential construction was strong in 2025, more than tripling the amount of permit revenue on new home construction from 2023. New commercial development was not as strong with only 67 permits issued, down from 99 in 2024. This development indicates population growth and business growth could improve the Schertz economy in the coming years. Industrial development continued along IH 35 with plans to construct 8 additional warehouse distribution buildings. East Group currently operates 6 of these buildings on Lookout Road, and this expansion further strengthens Schertz’ industrial and logistics base. FINAL DRAFT iii A new retail development has begun with the Schertz Station Shopping Center, the first major retail development in 20 years. Final plans were completed in 2025 and construction continued on the 25,000 square feet of shopping space anchored by Home Depot. Lone-term Financial Planning. The community approved bond propositions in November 2010 for quality of life projects which included an adequate facility, improvements to the baseball fields and soccer fields, building a new animal adoption facility, and improvements to Main Street. The only remaining project is the Main Street improvements, which is currently in the planning and engineering phase. In November 2021, the City placed 1 bond proposition before voters totaling $15.45 million for Fire Station number 4 which passed. The funds for the new fire station were issued in 2022 and the fire engine and the land have been purchased with engineering and design for the building are underway. Current Year Budget Initiatives. For FY 2025-2026, the City had $415,000 for traffic safety projects, and $1.7 million in discretionary items that include IT upgrades and police and fire equipment replacements in the General Fund. This budget includes pay increases for employees totaling $1.2 million based on rising public sector wages, performance, and tenure. This is broken down into a 1% employment cost index increase for all employees effective October and either a merit or non-uniformed public safety or a step increase for uniformed public safety employees up to 4% effective mid-year. There are 26 new positions approved in the budget including 10 in the General Fund, 6 Water & Sewer Fund, 4 in EMS, and 6 in the Drainage Fund. The General Fund received 6 Firefighters to complete staffing for the upcoming Fire Station 4, an Assistant City Secretary, a Senior Center Supervisor, an Athletic s Coordination, and a Recreation Specialist. The Water & Sewer Fund was approved for 4 Water/Wastewater Worker I positions and Worker II. EMS was approved for 4 EMTs while the Drainage Fund was approved for 3 Worker I, a Worker II, a Crew Leader, and a Floodplain Manger. Financial Information Internal Control. Management is responsible for establishing and maintaining internal controls designed to ensure that assets for the City fare protected from loss, theft or misuse and to provide adequate accounting information compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles for local governments as prescribed by the Governmental Accounting Standards Board (GASB), the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA). The internal control system is designed to provide reasonable, but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of an internal control should not exceed the benefits derived from the internal control. The City utilizes financial accounting software which is designed with a system of internal controls. These controls are continually being reevaluated to provide reasonable, but not absolute, assurances. Budget Controls. The City also utilizes budgetary controls. Legally expenditures cannot exceed the appropriated amount. The objective of these budgetary controls is to ensure compliance with the adopted budget approved by the City Council as mandated by the city charter and state law. The levels of budgetary control are established at the line-item basis and at the fund level. Staff believes these controls help monitor and direct approved expenditures to a level within the budget parameters which directly results in a strong financial performance. Financial Results. Assets and fund balances continue to grow as the City grows and financial results remain strong. While additional debt was issued during the year, Staff closely monitors and plans the amount of issuance to keep steady debt ratios per capita, per revenue, and per operations tax rate to the debt tax rate. Examples of these ratios can be found in the Statistical Section starting on page 110. A more detailed summary of the City’s Financial Performance is available in the Management Discussion and Analysis section on pages 5-14. FINAL DRAFT iv Independent Audit. Every year an independent audit is performed of the general ledger, accounts, financial records, and transactions of all city departments. The audit is completed by an independent certified public accounting firm selected by the City Council. The City is in compliance with this requirement and the independent auditor’s report by ABIP, Certified Public Accountants, has been included in this report. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Schertz for its annual comprehensive financial report for the fiscal year ended September 30, 2024. This was the 39th consecutive year that the City as received this prestigious award. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe our current annual comprehensive financial report continue to meet the Certificate of Achievement Program’s requirements and we will be submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. In conclusion, we would have none of the success we have enjoyed without the assistance of each and every staff member, as well as the support and strategic direction from the Mayor and City Council during the strategic planning, pre-budget, and budget approval process. FINAL DRAFT CITY OF SCHERTZ, TEXAS CITY OFFICIALS For the year ended September 30, 2025 v CITY COUNCIL MAYOR RALPH GUTIERREZ MAYOR PRO-TEM TIM BROWN CITY COUNCIL MARK E. DAVIS MICHELLE WATSON PAUL MACALUSO BENJAMIN GUERRERO ROBERT WESTBROOK ALLISON HEYWARD CITY MANAGER STEVE WILLIAMS DIRECTOR OF FINANCE JAMES WALTERS CITY ATTORNEY DAN SANTEE FINAL DRAFT CITY OF SCHERTZ, TEXAS ORGANIZATIONAL CHART For the year ended September 30, 2025 vi FINAL DRAFT vii FINAL DRAFT FINAL DRAFT FINANCIAL SECTION FINAL DRAFT FINAL DRAFT 1 INDEPENDENT AUDITOR’S REPORT To the Honorable Mayor and Members of the City Council City of Schertz, Texas Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Schertz, Texas (the City) as of and for the year ended September 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City as of September 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. We did not audit the financial statements of the Schertz-Seguin Local Government Corporation, which represents 8.9 percent and 11.5 percent, respectively, of the assets and net position of the Water and Sewer Fund, and 8.7 percent and 11.4 percent, respectively, of the assets and net position of the business-type activities. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Schertz-Seguin Local Government Corporation, is based solely on the report of the other auditors. Change in Accounting Principles As described in note 1 to the financial statements, in 2025, the City adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 100, Accounting Changes and Error Corrections and GASB Statement No. 101, Compensated Absences. Our opinion is not modified with respect to this matter. Basis for Opinions We conducted our audit in accordance with 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. 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 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. FINAL DRAFT 2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America; and for 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 City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 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 generally accepted auditing standards 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 generally accepted auditing standards 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 City’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 City’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. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and pension and OPEB 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 FINAL DRAFT 3 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. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements and schedules and schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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. The 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 combining and individual nonmajor fund financial statements and schedules 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 comprehensive financial report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic 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 basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic 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, 2026, on our consideration of the City’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 solely 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 City’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 City’s internal control over financial reporting and compliance. San Antonio, Texas March 17, 2026 FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS (MD&A) September 30, 2025 5 As management of the City of Schertz, we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities for the City of Schertz for the fiscal year ended September 30, 2025. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. Financial Highlights  The assets and deferred outflows of resources of the City of Schertz exceeded its liabilities and deferred inflows of resources at the close of the fiscal year ending September 30, 2025, by $445,020,423 (net position). Of this amount, $83,727,599 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and creditors.  The City’s total net position increased by $67,116,291. This increase was from capital contributions.  At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $149,496,366, an increase of $34,661,007 in comparison with the prior year. The primary cause of this increase was an increase in property and sales tax revenues that exceeded expenditure growth.  At the end of the current fiscal year the combined total of the general fund assigned and unassigned fund balances was $21,407,016 which is 47% of the general fund expenditures not including capital outlay. The fund balance policy is to reserve at least a 26% balance. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to financial statements. The annual comprehensive financial report (ACFR) also contains other supplementary information in addition to the basic financial statements themselves. GOVERNMENT-WIDE FINANCIAL STATEMENTS The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, using accounting methods similar to a private-sector business. The statement of net position presents information on all of the City’s assets, deferred outflows, liabilities, and deferred inflows, 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 City of Schertz is improving or deteriorating. The statement of activities presents information showing how the City’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., uncollected taxes and earned but not used vacation leave). FINAL DRAFT 6 Both of the government-wide financial statements distinguish functions of the City of Schertz that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Schertz include general government, public safety, streets and parks, health, and culture and recreation. The business-type activities of the City of Schertz include a water and sewer department and an emergency medical services department. 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 City of Schertz, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The funds of the City of Schertz can be divided into two categories: governmental and proprietary. Governmental funds. Governmental funds are used to account for essentially the same functions 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, as well as 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 governmental funds are more narrow than that of the government-wide financial statements, it is useful to compare the information presented for 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 financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Schertz maintains fifteen (15) individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the debt service fund, the economic development corporation, the capital projects fund, and the American Recovery Plan Act fund, all of which are considered to be major funds. Data from the other ten (10) governmental funds are combined into a single, aggregated nonmajor fund presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary funds. The City maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Schertz uses enterprise funds to account for its water and sewer department and for its emergency medical services department. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer department and for the emergency medical services department, both of which are considered to be major funds of the City of Schertz. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s general fund budgetary schedule. The City of Schertz adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. The economic development corporation also adopts an annual budget, and a comparison schedule for it also is provided in the required supplementary information. FINAL DRAFT 7 The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary information. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. In the case of the City of Schertz, assets and deferred outflows exceeded liabilities and deferred inflows by $445,020,423 at the close of the most recent fiscal year. The largest portion of the City’s total net position (67%) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding, plus bond proceeds that have not yet been spent. The City of Schertz uses these capital assets to provide services to citizens; consequently, these assets are not available for operational type of future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City’s total net position (14%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $85,727,599, may be used to meet the government’s ongoing obligations to citizens and creditors. At the end of the current fiscal year, the City of Schertz is able to report positive balances in all three categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. TABLE 1 CITY OF SCHERTZ’S NET POSITION 2025 2024 2025 2024 2025 2024 Assets Current and other assets 157,098,554$ 125,153,191$ 98,066,644$ $ 66,639,490 255,165,198 191,792,681$ Capital assets 212,548,731 194,684,599 180,054,249 144,205,606 392,602,980 338,890,205 Total assets 369,647,285 319,837,790 278,120,893 210,845,096 647,768,178 530,682,886 Deferred outflows of resources 6,878,933 7,156,736 2,271,848 2,348,408 9,150,781 9,505,144 Liabilities Other liabilities 6,181,525 17,855,465 6,990,621 8,146,445 13,172,146 26,001,910 Long-term liabilities 137,010,112 107,487,141 58,963,435 31,131,477 195,973,547 138,618,618 Total liabilities 143,191,637 125,342,606 65,954,056 39,277,922 209,145,693 164,620,528 Deferred inflows of resources 2,112,327 1,355,792 640,516 373,930 2,752,843 1,729,722 Net position Net investment in capital assets 169,821,032 142,891,901 128,188,819 125,867,091 298,009,851 268,758,992 Restricted 53,603,325 50,212,797 7,679,648 6,640,756 61,282,973 56,853,553 Unrestricted 7,797,897 7,191,430 77,929,702 41,033,805 85,727,599 48,225,235 Total net position 231,222,254$ 200,296,128$ 213,798,169$ 173,541,652$ 445,020,423$ 373,837,780$ GOVERNMENT AL ACTIVITIES BUSINESS-T YPE ACTIVITIES TOTAL The government’s net position increased by $67,116,291 during the current fiscal year. The primary cause for the increase was an increase in contributed capital; the City recognized approximately $51.4 million of capital contribution revenue related to dedicated infrastructure assets and also experienced sharp increases in property and sales taxes. These increases stem from the City’s continued rapid population growth; continued new housing and business developments resulted in increased assessed value for property taxes and resulted in the creation of infrastructure that was dedicated to the City. The related population increases resulted in increased economic activity that increased sales tax revenues. FINAL DRAFT 8 The following table indicates changes in net position for governmental and business-type activities followed by graphs displaying total revenues and expenses by type: TABLE 2 CITY OF SCHERTZ’S CHANGES IN NET POSITION 2025 2024 2025 2024 2025 2024 REVENUES Program revenues: Charges for services 5,441,220$ 7,782,686$ 45,567,499$ 42,793,475$ 51,008,719$ 50,576,161$ Operating grants and contributions 3,657,665 3,579,794 - - 3,657,665 3,579,794 Capital contributions 18,408,023 3,293,373 33,036,134 8,431,343 51,444,157 11,724,716 General revenues: Property taxes 27,717,962 27,147,745 - - 27,717,962 27,147,745 Other taxes 37,539,175 23,393,401 - - 37,539,175 23,393,401 Investment earnings 5,704,453 5,569,055 3,977,901 4,535,559 9,682,354 10,104,614 Miscellaneous 781,729 1,119,844 - 974,786 781,729 2,094,630 Total revenues 99,250,227 71,885,898 82,581,534 56,735,163 181,831,761 128,621,061 EXPENSES General government 16,388,166 8,678,145 - - 16,388,166 8,678,145 Public safety 26,692,587 22,719,864 - - 26,692,587 22,719,864 Public environment 8,145,230 8,802,846 - - 8,145,230 8,802,846 Parks and recreation 5,208,597 5,539,108 - - 5,208,597 5,539,108 Cultural 1,627,098 1,520,759 - - 1,627,098 1,520,759 Administration 7,198,709 6,343,146 - - 7,198,709 6,343,146 Interest and other fees 3,334,685 2,508,098 - - 3,334,685 2,508,098 Water and sewer - - 33,234,866 32,088,184 33,234,866 32,088,184 EMS - - 12,885,532 11,718,474 12,885,532 11,718,474 Total expenses 68,595,072 56,111,966 46,120,398 43,806,658 114,715,470 99,918,624 Increases (decreases) in net position before transfers 30,655,155 15,773,932 36,461,136 12,928,505 67,116,291 28,702,437 Transfers 169,768 - (169,768) - - - Change in net position 30,824,923 15,773,932 36,291,368 12,928,505 67,116,291 28,702,437 NET POSITION - BEGINNING 200,296,128 184,522,196 173,541,652 160,613,147 373,837,780 345,135,343 RESTATEMENT 101,203 - 3,965,149 - 4,066,352 - NET POSITION – ENDING 231,222,254$ 200,296,128$ 213,798,169$ 173,541,652$ 445,020,423$ 373,837,780$ ACTIVITIES ACTIVITIES TOTAL GOVERNMENTAL BUSINESS-TYPE FINAL DRAFT 9 GENERAL REVENUE BY SOURCE – GOVERNMENTAL ACTIVITIES  $‐  $5,000,000  $10,000,000  $15,000,000  $20,000,000  $25,000,000  $30,000,000  $35,000,000  $40,000,000 Charges for services Operating grants  and contributions Capital contributions Property taxes Other taxes Investment earnings Miscellaneous Total  Revenues ‐Government Wide  2025 2024 TOTAL EXPENSES – GOVERNMENTAL  $‐  $5,000,000  $10,000,000  $15,000,000  $20,000,000  $25,000,000  $30,000,000 General government Public safety Public environment Parks and recreation Cultural Administration Interest and other fees Total  Expenses  ‐Government Wide 2025 2024 FINAL DRAFT 10 BUSINESS-TYPE REVENUES AND EXPENSES  $‐  $5,000,000  $10,000,000  $15,000,000  $20,000,000  $25,000,000  $30,000,000  $35,000,000  $40,000,000  $45,000,000  $50,000,000 Charges for services Capital  contributions Investment earnings Miscellaneous Total  Revenues ‐Business‐Type 2025 2024  $‐  $5,000,000  $10,000,000  $15,000,000  $20,000,000  $25,000,000  $30,000,000  $35,000,000 Water and  sewer EMS Total  Expenses ‐Business‐Type 2025 2024 FINAL DRAFT 11 FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS As noted earlier, the City of Schertz uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds. The focus of the City’ governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City’ governmental funds reported combined fund balances of $149,496,366. Of this amount $17,524,434 constitutes unassigned fund balance, which is available for spending at the government’s discretion. The remainder of fund balance is non-spendable, restricted, committed, or assigned to indicate that it is not available for new spending because it has already been committed to pay debt service, for capital improvement projects, and other assigned purposes. The general fund is the main operating fund of the City of Schertz. At the end of the current fiscal year, unassigned fund balance of the general fund was $17,788,211, while total fund balance was $24,418,544, an increase of $4.5 million from the prior year. Overall, the increase was caused by property, and sales tax revenues over budget by $5.5 million and expenditures being under budget by $2.0 million. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 39% of total general fund expenditures, not including capital outlay. The debt service fund has a total fund balance of $1,231,229, all of which is restricted for the payment of debt service. The net decrease in fund balance during the current year in the debt service fund was $798,684. This decrease was due to regular principal and interest payments on long-term debt exceeding interest and sinking property tax revenue during the year. Over time, however, the debt service fund has sufficient cash and equivalents on hand to remain liquid if tax revenues decrease. The capital projects fund has a total fund balance of $67,641,341, an increase of $26.1 million. This was caused by the issuance of the City’s Series 2025 Certificates of Obligation. The Economic Development Fund presents the activities of the Schertz Economic Development Corporation (the SEDC), which promotes economic development activities using a portion of the City’s sales tax revenue. At year end, the SEDC fund reported an ending fund balance of $43,115,693, which is an increase of $2.8 million compared to the prior year. The primary cause of this change was sales tax revenue growing faster than expenditures. The American Rescue Plan Act Fund has total fund balance of $807,499, which consists of interest earned on the funding received from the Coronavirus Local Fiscal Recovery Fund grant program and $5.3 million of revenue recognized during the year. Amounts not spent as of year end are presented as unearned revenue until spent in accordance with the terms of the grant agreement in future years. Proprietary funds. The City’ proprietary funds provide the same type of information found in the government- wide financial statements, but in more detail. Unrestricted net position of water and sewer fund at the end of the year amounted to $77.9 million, and those for the Schertz EMS fund amounted to a deficit of $955 thousand, which are 268% and 7% of fund operating costs, respectively. The water and sewer fund reported an increase in net position of $37.2 million. Approximately three quarters of this increase related to revenue recognition for contributed infrastructure assets; the remaining portion of the increase was from operating income, which was consistent with the prior year. Management’s intent is to accumulate operating surplus to fund construction of new water and sewer infrastructure in future years with less reliance on bonded debt. FINAL DRAFT 12 The Schertz EMS fund decreased net position by $895,346. Expenses increased by approximately 9% compared to the prior year. Revenues were consistent to the prior year as a result of approximately the same number of ambulance runs in the prior year. Expenses increased primarily from increased salaries that resulted from the compensation study discussed previously. GENERAL FUND BUDGETARY HIGHLIGHTS The general fund expenditures were $1,990,656 less than the $49.9 million budget. Overall activity in the general fund increased during the current year as the City emerged from COVID-19 pandemic, although the amount of growth was less than expected. Revenues were $5.3 million more than budgeted, primarily due to sales tax revenue increasing more than expected. Overall, ending fund balance in the general fund was $8.0 million higher than budgeted. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. The City’s investment in capital assets for its governmental and business-type activities as of September 30, 2025 amounts to $392,602,980 (net of accumulated depreciation), including several projects in progress from voter approved bonds. TABLE 3 CAPITAL ASSETS AT YEAR-END (Net of accumulated depreciation) 2025 2024 2025 2024 2025 2024 Land 15,443,457$ 15,450,585$ 2,861,843$ 2,415,103$ 18,305,300$ 17,865,688$ Water rights - - 70,245 70,245 70,245 70,245 Buildings and improvements 72,448,767 67,671,372 4,103,606 3,725,152 76,552,373 71,396,524 Machinery, equipment and vehicles 22,621,474 19,506,533 9,100,049 7,895,394 31,721,523 27,401,927 Infrastructure 194,375,915 175,820,607 180,190,441 143,743,449 374,566,356 319,564,056 Construction in progress 15,946,985 14,956,054 36,554,548 35,493,424 52,501,533 50,449,478 Accumulated depreciation (108,287,867) (98,720,552) (52,826,483) (49,137,161) (161,114,350) (147,857,713) Total capital assets 212,548,731$ 194,684,599$ 180,054,249$ 144,205,606$ 392,602,980$ 338,890,205$ ACTIVITIES ACTIVITIES TOTAL GOVERNMENTAL BUSINESS-TYPE Additional information on the City’s capital assets can be found in note 2 to the basic financial statements. FINAL DRAFT 13 Long-term liabilities. At the end of the current fiscal year, the City of Schertz had total long-term debt outstanding of $170,769,325. The related principal and interest payment for the bonds backed by an annual ad valorem tax levied against all taxable property within the City. The City of Schertz maintains an “AAA+” rating from Standard and Poor’s. TABLE 4 OUTSTANDING LIABILITIES AT YEAR END 2025 2024 2025 2024 2025 2024 General obligation bonds 42,540,000$ 46,395,000$ 1,940,000$ 2,750,000$ 44,480,000$ 49,145,000$ Certificate of obligation 66,500,000 42,275,000 46,550,000 21,150,000 113,050,000 63,425,000 Financing arrangements 27,307 54,614 81,922 163,843 109,229 218,457 Premium on bonds 6,850,688 5,763,094 3,293,508 1,954,620 10,144,196 7,717,714 Compensated absences 2,276,327 1,405,718 709,573 572,632 2,985,900 1,978,350 Totals 118,194,322$ 95,893,426$ 52,575,003$ 26,591,095$ 170,769,325$ 122,484,521$ GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES TOTAL Total debt increased compared to the prior year due to the issuance of the City’s Series 2025 Certificates of Obligation. Additional information on the City’s long-term liabilities can be found in note 2 to the basic financial statements. ECONOMIC FACTORS AND CURRENT YEAR BUDGETS AND RATES At the end of the fiscal year, the fund balance in the general fund increased to $24.4 million from $19.9 million after the starting balance was increased $1.9 million due to restatements. There was a planned decrease in fund balance budgeted of $2.6 million in the original adopted budget but due to the above expected performance of sales taxes collected that decrease turned into a $4.5 million increase. The sales tax increase was confirmed to be a limited increase due to unique business activity in the City beginning in 2025 and may continue into the second quarter of 2026. The City is aware these increased sales tax payments will not continue long term and is factoring this in to our financial forecasts and planning. The City of Schertz has appropriated $1.7 million of the fund balance for spending in the 2026 fiscal year budget in accordance to the City’s fund balance policy in an effort to reduce the fund balance level. The approved tax rate increased to $0.5118 from $0.4900 per $100 of valuation. Each year the City updates its five-year budgeting forecast and has implemented a long-term debt model to assist management in making informed financial decisions that will impact the community now and in the future. The City’s property tax base continues to expand at around 3% per year while the long term sales taxes are growing at 7% annually. In 2025, the City of Schertz experienced continued growth in commercial development. Final plans for Schertz Station were completed, and construction continued on the 250,000-square-foot retail center anchored by Home Depot, located adjacent to the entertainment district initiated by EVO. The Schertz Economic Development Corporation (EDC) supported the project with an initial $4,000,000 infrastructure investment to fund the extension of Ripps Kruesler Drive. Additional incentive payments will begin once Home Depot opens in 2027. On the industrial side, EastGroup Properties began development of eight warehouse distribution buildings. EastGroup currently operates six buildings on Lookout Road, and this expansion further strengthens Schertz’s industrial and logistics base. As part of the agreement, the Schertz Economic Development Corporation (SEDC) committed to reimburse EastGroup for nearly 10,000 linear feet of sewer line to connect with approximately 6,500 FINAL DRAFT 14 linear feet of sewer infrastructure previously committed to the Boomerang and Lovett developments. Together, these improvements will extend sewer service to a significant portion of the city north of IH-35, from FM 3009 to Friesenhahn Road. The SEDC also committed to assisting the property owners of the retail center that includes Murdoch’s Ranch & Home Supply and Bob Mills Furniture by funding the extension of Four Oaks Drive. The 1,330-linear-foot roadway extension will run north of Walmart and ultimately connect to Cibolo Valley Drive, improving access and supporting continued growth in this active commercial corridor. The property owner is planning an additional 100,000 square feet of retail, office, and commercial development behind the existing center. In addition to having the highest annual revenue on new residential building permits for the second year in a row with $694,500 from 463 different permits. Overall, the City of Schertz continues to be an extremely attractive option as a center for logistics and distribution being along the west side IH 35 where the current industrial development is centered with residential and residential businesses located along the east side. Continued development reinforces the City’s projection of continued growth in both the residential and commercial sectors of 3% and 7%, respectively. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government’s finances. Questions should be addressed to the Office of the Finance Director, City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154. FINAL DRAFT BASIC FINANCIAL STATEMENTS FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION September 30, 2025 The accompanying notes are an integral part of the financial statements. 17 GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL Cash and cash equivalents 139,792,981$ 51,825,274$ 191,618,255$ Investments 5,057,298 1,268,106 6,325,404 Internal balances - - - Receivables - net of allowances: Taxes 8,876,880 - 8,876,880 Accounts and other 2,206,976 8,939,385 11,146,361 Accrued interest - 37,244 37,244 Prepaids - 69,500 69,500 Inventories 171,259 295,316 466,575 Restricted assets: Cash and cash equivalents 311,791 11,186,680 11,498,471 Service concession arrangement receivable:- - - Due within one year 90,909 - 90,909 Due in more than one year 590,460 - 590,460 Investment in joint venture - 24,445,139 24,445,139 Capital assets: Land 15,443,457 2,861,843 18,305,300 Water rights - 70,245 70,245 Buildings and improvements 72,448,767 4,103,606 76,552,373 Equipment and vehicles 22,621,474 9,100,049 31,721,523 Infrastructure 194,375,915 180,190,441 374,566,356 Construction in progress 15,946,985 36,554,548 52,501,533 Accumulated depreciation (108,287,867) (52,826,483) (161,114,350) Total assets 369,647,285 278,120,893 647,768,178 Deferred loss on debt refunding 334,923 - 334,923 Deferred outflows related to OPEB 402,352 139,683 542,035 Deferred outflows related to pension 6,141,658 2,132,165 8,273,823 Total deferred outflows of resources 6,878,933 2,271,848 9,150,781 ASSETS DEFERRED OUTFLOWS OF RESOURCES (continued) FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION September 30, 2025 The accompanying notes are an integral part of the financial statements. 18 GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL Accounts payable 2,752,416$ 4,371,130$ 7,123,546$ Accrued liabilities 909,766 376,451 1,286,217 Retainage payable 134,024 1,014,481 1,148,505 Due to other governments 85,382 - 85,382 Unearned revenue 1,306,875 302,260 1,609,135 Accrued interest payable 950,946 397,770 1,348,716 Customer deposits 42,116 528,529 570,645 Noncurrent liabilities: Due within one year: Compensated absences 455,265 141,914 597,179 Total OPEB liability 91,273 32,874 124,147 Service concession arrangement 55,241 - 55,241 Long-term debt 7,526,508 2,385,000 9,911,508 Due in more than one year: Compensated absences 1,821,063 567,659 2,388,722 Total OPEB liability 2,336,743 810,048 3,146,791 Net pension liability 15,973,737 5,545,510 21,519,247 Service concession arrangement 358,795 - 358,795 Long-term debt 108,391,487 49,480,430 157,871,917 Total liabilities 143,191,637 65,954,056 209,145,693 Deferred service concession arrangement 267,333 - 267,333 Deferred inflows related to pension 968,687 - 968,687 Deferred inflows related to TMRS SDBF 238,946 304,223 543,169 Deferred inflows related to retiree healthcare 637,361 336,293 973,654 Total deferred inflows of resources 2,112,327 640,516 2,752,843 NET POSITION Net investment in capital assets 169,821,032 128,188,819 298,009,851 Restricted for: Police and municipal court 1,616,214 - 1,616,214 PEG capital fees 135,581 - 135,581 Tourism development 4,316,603 - 4,316,603 Economic development 43,923,192 - 43,923,192 Parks and tree mitigation 2,017,655 - 2,017,655 Debt service 1,231,229 - 1,231,229 Scholarships and other purposes 362,851 - 362,851 Construction - 7,679,648 7,679,648 Unrestricted 7,797,897 77,929,702 85,727,599 Total net position 231,222,254$ 213,798,169$ 445,020,423$ LIABILITIES DEFERRED INFLOWS OF RESOURCES FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF ACTIVITIES For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 20 OPERATING CAPITAL CHARGES FOR GRANTS AND GRANTS AND EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS Primary government Governmental activities General government 16,388,166$ 3,346,260$ 260,735$ -$ Public safety 26,692,587 765,098 2,546,879 - Public environment 8,145,230 177,313 724,878 18,408,023 Parks and recreation 5,208,597 569,727 100,000 - Cultural 1,627,098 452,580 25,173 - Administration 7,198,709 130,242 - - Interest 3,334,685 - - - Total governmental activities 68,595,072 5,441,220 3,657,665 18,408,023 Business-type activities Water and sewer 33,234,866 33,577,314 - 33,036,134 EMS 12,885,532 11,990,185 - - Total business-type activities 46,120,398 45,567,499 - 33,036,134 Total government 114,715,470$ 51,008,719$ 3,657,665$ 51,444,157$ General revenues Taxes: Ad valorem Sales taxes Franchise fees Hotel/motel taxes Mixed drink Investment earnings Miscellaneous Transfers Total general revenues Change in net position Net position - beginning Restatement Net position - ending FUNCTIONS/PROGRAM S PROGRAM REVENUE FINAL DRAFT 21 GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL (12,781,171)$ -$ (12,781,171)$ (23,380,610) - (23,380,610) 11,164,984 - 11,164,984 (4,538,870) - (4,538,870) (1,149,345) - (1,149,345) (7,068,467) - (7,068,467) (3,334,685) - (3,334,685) (41,088,164) - (41,088,164) - 33,378,582 33,378,582 - (895,347) (895,347) - 32,483,235 32,483,235 (41,088,164) 32,483,235 (8,604,929) 27,717,962 - 27,717,962 33,895,921 - 33,895,921 2,669,138 - 2,669,138 886,356 - 886,356 87,760 - 87,760 5,704,453 3,977,901 9,682,354 781,729 - 781,729 169,768 (169,768) - 71,913,087 3,808,133 75,721,220 30,824,923 36,291,368 67,116,291 200,296,128 173,541,652 373,837,780 101,203 3,965,149 4,066,352 231,222,254$ 213,798,169$ 445,020,423$ NET (EXPENSES) REVENUES AND CHANGES IN NET POSITION PRIMARY GOVERNMENT FINAL DRAFT CITY OF SCHERTZ, TEXAS BALANCE SHEET – GOVERNMENTAL FUNDS September 30, 2025 The accompanying notes are an integral part of the financial statements. 22 CAPITAL DEBT ECONOMIC GENERAL PROJECTS SERVICE DEVELOPMENT FUND FUND FUND FUNDS ASSETS Cash and cash equivalents 16,840,907$ 68,027,666$ 1,391,373$ 38,106,233$ Investments 2,638,072 - - 2,419,226 Receivables - net of allowances Taxes, net 6,127,744 - 196,164 2,552,972 Accounts and other 2,165,643 - - 41,333 Due from other funds 644,353 - - - Inventory 171,259 - - - Restricted assets:- - - Cash and cash equivalents 157,539 - - - Total assets 28,745,517$ 68,027,666$ 1,587,537$ 43,119,764$ LIABILITIES Accounts payable 1,899,625$ 386,325$ 400$ 4,071$ Accrued salaries and benefits 909,766 - - - Retainage payable - - - - Customer deposits 77,191 - - - Due to other governments 85,382 - - - Due to other funds - - - - Interest payable - - 159,744 - Unearned revenues 74,099 - - - Total liabilities 3,046,063 386,325 160,144 4,071 DEFERRED INFLOWS OF RESOURCES Unavailable revenue 1,280,910 - 196,164 - FUND BALANCES Nonspendable: Inventory 171,259 - - - Restricted for: Police and public safety/municipal court 416,416 - - - Municipal court 647,172 - - - PEG capital fees 135,581 - - - Capital improvement - 67,641,341 - - Debt service - - 1,231,229 - Tourism development - - - - Parks and tree mitigation - - - - Historical committee and library - - - - Economic development - - - 43,115,693 Animal control 79,234 - - - Scholarships 173,619 - - - Committed for: Capital projects - - - - Civic center/SIED 1,388,247 - - - Assigned for: Property replacement 1,054,301 - - - Subsequent year's budget 2,564,504 - - - Unassigned 17,788,211 - - - Total fund balances 24,418,544 67,641,341 1,231,229 43,115,693 Total liabilities, deferred inflows of resources and fund balances 28,745,517$ 68,027,666$ 1,587,537$ 43,119,764$ FINAL DRAFT 23 AMERICAN NONMAJOR TOTAL RESCUE PLAN GOVERNMENTAL GOVERNMENTAL ACT FUND FUNDS FUNDS 2,649,817$ 12,776,985$ 139,792,981$ - - 5,057,298 - - 8,876,880 - - 2,206,976 - - 644,353 - - 171,259 - - - - 154,252 311,791 2,649,817$ 12,931,237$ 157,061,538$ 458,055$ 4,824$ 2,753,300$ - - 909,766 134,024 - 134,024 - - 77,191 - - 85,382 - 644,353 644,353 - - 159,744 1,250,239 - 1,324,338 1,842,318 649,177 6,088,098 - - 1,477,074 - - 171,259 - 552,626 969,042 - - 647,172 - - 135,581 - 5,548,955 73,190,296 - - 1,231,229 - 4,316,603 4,316,603 - 2,017,655 2,017,655 - 109,998 109,998 807,499 - 43,923,192 - - 79,234 - - 173,619 - - - - - 1,388,247 - - 1,054,301 - - 2,564,504 - (263,777) 17,524,434 807,499 12,282,060 149,496,366 2,649,817$ 12,931,237$ 157,061,538$ FINAL DRAFT CITY OF SCHERTZ, TEXAS RECONCILIATION OF BALANCE SHEET – GOVERNMENTAL FUNDS TO STATEMENT OF NET POSITION September 30, 2025 The accompanying notes are an integral part of the financial statements. 24 Total fund balances - total governmental funds $ 149,496,366 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet.212,548,731 Bonds payable and accrued compensated absences will not be liquidated with current financial resources, and, therefore, have not been included in the fund financial statements.(111,343,634) Interest payable on long-term debt is accrued in the government-wide financial statements, whereas in the fund financial statements, these expenditures are reported when due.(791,202) Premiums on bond issuances and deferred losses on bond refunding are recorded as other financing sources and uses when paid in the fund financial statements but are capitalized and amortized in the government-wide financial statements over the life of the bonds.(6,515,765) Receivables from grants, property taxes and fines and fees are not available soon enough to pay for the current periods expenditures and are, therefore deferred in the fund financial statements Included in the items related to debt is the recognition of the City's net pension liability, total OPEB liability, and related deferred outflows and inflows or resources 1,530,495 Net pension liability (15,973,737) Deferred outflows related to pensions 6,141,658 Deferred inflows related to pensions (968,687) Total OPEB liability (2,428,016) Deferred outflows related to OPEB 402,352 Deferred inflows related to OPEB (876,307) Net position of governmental activities - statement of net position $ 231,222,254 FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 26 CAPITAL DEBT ECONOMIC GENERAL PROJECTS SERVICE DEVELOPMENT FUND FUND FUND CORPORATION REVENUES Taxes 43,833,937$ -$ 9,239,261$ 11,298,737$ Permits and fees 1,953,854 - - - Service fees 2,833,131 - - - Fines and fees 467,828 - - - Intergovernmental 2,552,069 - - - Investment earnings 940,915 2,166,319 100,303 1,736,318 Miscellaneous 996,957 - 100,000 - Total revenues 53,578,691 2,166,319 9,439,564 13,035,055 EXPENDITURES Current: General government 7,310,443 - - 7,774,577 Public safety 24,706,100 - - - Public environment 1,755,359 - - - Parks and recreation 3,800,651 - - - Cultural 1,533,945 - - - Administration 6,249,164 255,940 - 618,481 Capital outlay 2,516,318 7,877,460 - - Debt service: Principal - - 7,015,000 - Interest and fiscal charges - - 3,227,327 - Bond issue cost - 141,719 - - Total expenditures 47,871,980 8,275,119 10,242,327 8,393,058 Excess (deficiency) of revenues over (under) expenditures 5,706,711 (6,108,800) (802,763) 4,641,997 OTHER FINANCING SOURCES (USES) Issuance of bonds - 27,385,000 - - Premium on issuance of bonds - 1,531,795 - - Transfers in 282,976 3,493,792 4,079 - Transfers out (1,477,241) (204,079) - (1,849,500) Total other financing sources (uses) (1,194,265) 32,206,508 4,079 (1,849,500) Net change in fund balances 4,512,446 26,097,708 (798,684) 2,792,497 FUND BALANCES - BEGINNING 17,947,703 41,543,633 2,029,913 40,323,196 RESTATEMENT 1,958,395 - - - FUND BALANCES – ENDING 24,418,544$ 67,641,341$ 1,231,229$ 43,115,693$ FINAL DRAFT 27 AMERICAN NONMAJOR TOTAL RESCUE PLAN GOVERNMENTAL GOVERNMENTAL ACT FUND FUNDS FUNDS -$ 886,356$ 65,258,291$ - 278,598 2,232,452 - 745,136 3,578,267 - 31,147 498,975 5,263,208 42,253 7,857,530 269,071 491,527 5,704,453 - 46 1,097,003 5,532,279 2,475,063 86,226,971 - 196,024 15,281,044 - - 24,706,100 - 103,686 1,859,045 - - 3,800,651 - 13,423 1,547,368 - - 7,123,585 5,539,172 17,738 15,950,688 - - 7,015,000 - - 3,227,327 - - 141,719 5,539,172 330,871 80,652,527 (6,893) 2,144,192 5,574,444 - - 27,385,000 - - 1,531,795 - 2,717 3,783,564 - (82,976) (3,613,796) - (80,259) 29,086,563 (6,893) 2,063,933 34,661,007 814,392 10,218,127 112,876,964 - - 1,958,395 807,499$ 12,282,060$ 149,496,366$ FINAL DRAFT CITY OF SCHERTZ, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 28 Net change in fund balances - total governmental funds $ 34,661,007 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the governmental activities statement of activities, that cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay 15,950,688 Contributions of infrastructure 13,144,815 Depreciation expense (10,608,313) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes (1,154) Court fines (120,405) The issuance of long-term debt (e.g., bonds) provides current financial resources to governmental funds, while the repayment of the principal of long- term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas the amounts are deferred and amortized in the statement of activities. Repayment of principal of long-term debt 7,042,307 Amortization of loss on refunding (57,272) Current year changes in certain long-term liabilities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Issuance of bonds (27,385,000) Premium on issuance of bonds (1,087,594) Compensated absences 401,320 Net pension liability (661,421) Total OPEB liability (101,487) Interest payable on long-term debt is accrued in the government-wide financial statements, whereas in the fund financial statements, interest expenditures are reported when due.(352,568) Change in net position of governmental activities $ 30,824,923 FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2025 The accompanying notes are an integral part of the financial statements. 29 TOTAL WATER AND SCHERTZ ENTERPRISE SEWER SYSTEM EMS FUND ASSETS Current assets: Cash and cash equivalents 54,115,592$ (2,290,318)$ 51,825,274$ Investments 1,268,106 - 1,268,106 Accounts receivable, net of allowance: Customer accounts 3,293,392 5,645,993 8,939,385 Accrued interest 37,244 - 37,244 Prepaids - 69,500 69,500 Inventory 129,758 165,558 295,316 Total current assets 58,844,092 3,590,733 62,434,825 Noncurrent assets: Restricted assets: Cash and cash equivalents 11,186,680 - 11,186,680 Investment in joint ventures 24,445,139 - 24,445,139 Capital assets: Land 2,861,843 - 2,861,843 Water rights 70,245 - 70,245 Buildings and improvements 4,009,106 94,500 4,103,606 Machinery, equipment, and vehicles 5,328,981 3,771,068 9,100,049 Infrastructure 180,190,441 - 180,190,441 Construction in progress 36,554,548 - 36,554,548 Less accumulated depreciation (50,446,754) (2,379,729) (52,826,483) Total noncurrent assets 214,200,229 1,485,839 215,686,068 Total assets 273,044,321 5,076,572 278,120,893 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to OPEB 39,514 100,169 139,683 Deferred outflows related to pension 603,162 1,529,003 2,132,165 Total deferred outflows of resources 642,676 1,629,172 2,271,848 Total assets and deferred outflows of resources 273,686,997$ 6,705,744$ 280,392,741$ BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS September 30, 2025 The accompanying notes are an integral part of the financial statements. 30 TOTAL WATER AND SCHERTZ ENTERPRISE SEWER SYSTEM EMS FUND LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION Current liabilities: Accounts payable 3,996,201$ 374,929$ 4,371,130$ Accrued liabilities 109,050 267,401 376,451 Retainage payable 1,014,481 - 1,014,481 Customer deposits 528,529 - 528,529 Accrued interest 397,770 - 397,770 Due to other funds - - - Unearned revenue 300,000 2,260 302,260 Current portion of long-term liabilities: Compensated absences 44,048 97,866 141,914 Total OPEB liability 9,300 23,574 32,874 Long-term liabilities 2,385,000 - 2,385,000 Total current liabilities 8,784,379 766,030 9,550,409 Noncurrent liabilities: Compensated absences 176,194 391,465 567,659 Total OPEB liability 229,152 580,896 810,048 Net pension liability 1,568,753 3,976,757 5,545,510 Long-term liabilities 49,398,508 81,922 49,480,430 Total noncurrent liabilities 51,372,607 5,031,040 56,403,647 Total liabilities 60,156,986 5,797,070 65,954,056 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB 86,060 218,163 304,223 Deferred inflows related to pension 95,133 241,160 336,293 Total deferred inflows of resources 181,193 459,323 640,516 NET POSITION Net investment in capital assets 126,784,902 1,403,917 128,188,819 Restricted for construction 7,679,648 - 7,679,648 Unrestricted 78,884,268 (954,566) 77,929,702 Total net position 213,348,818 449,351 213,798,169 Total liabilities, deferred inflows of resources, and net position 273,686,997$ 6,705,744$ 280,392,741$ BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 31 TOTAL WATER AND SCHERTZ ENTERPRISE SEWER SYSTEM EMS FUND OPERATING REVENUES Fees charged to users 32,807,875$ 11,680,561$ 44,488,436$ Intergovernmental - - - Other charges 102,170 - 102,170 Miscellaneous 338,152 309,624 647,776 Total operating revenues 33,248,197 11,990,185 45,238,382 OPERATING EXPENSES Personnel services 4,186,867 9,676,961 13,863,828 General and administrative 3,723,446 1,187,290 4,910,736 Contractual services 18,992,151 872,643 19,864,794 Supplies and maintenance 1,400,585 737,280 2,137,865 Depreciation 3,946,072 305,784 4,251,856 Total operating expenses 32,249,121 12,779,958 45,029,079 Operating income (loss)999,076 (789,773) 209,303 NONOPERATING REVENUES (EXPENSES) Investment revenue 3,977,900 1 3,977,901 Loss on sale of asset - (105,574) (105,574) Rent revenue 329,117 - 329,117 Interest expense and fees (985,745) - (985,745) Total nonoperating revenues (expenses) 3,321,272 (105,573) 3,215,699 Income (loss) before contributions and transfers 4,320,348 (895,346) 3,425,002 Transfer in 1,232 - 1,232 Transfer out (171,000) - (171,000) Capital contributions - impact fees 2,454,275 - 2,454,275 Capital contributions - dedicated assets 30,581,859 - 30,581,859 Change in net position 37,186,714 (895,346) 36,291,368 TOTAL NET POSITION - BEGINNING 172,234,483 1,307,169 173,541,652 Restatement of net position 3,927,621 37,528 3,965,149 TOTAL NET POSITION - ENDING 213,348,818$ 449,351$ 213,798,169$ BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 32 TOTAL WATER AND SCHERTZ ENTERPRISE SEWER SYSTEM EMS FUND CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers and users 31,609,562$ 11,057,352$ 42,666,914$ Cash paid to employees for services (3,934,332) (9,604,735) (13,539,067) Cash paid to suppliers for goods and services (23,535,606) (3,030,578) (26,566,184) Net cash provided by (used in) operating activities 4,139,624 (1,577,961) 2,561,663 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from/to other funds (169,768) - (169,768) Net cash provided by (used in) noncapital financing activities (169,768) - (169,768) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase/construction of capital assets (5,650,590) (630,908) (6,281,498) Capital contributions - impact fees 2,454,275 - 2,454,275 Proceeds from issuance of debt 27,760,568 - 27,760,568 Interest paid on long-term debt (742,939) - (742,939) Principal paid on long-term debt (1,831,680) (81,921) (1,913,601) Net cash provided by (used in) capital and related financing activities 21,989,634 (712,829) 21,276,805 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investments (45,836) - (45,836) Payments from rentals 329,117 - 329,117 Interest and investment earnings 3,946,980 1 3,946,981 Net cash provided by (used in) investing activities 4,230,261 1 4,230,262 Net increase (decrease) in cash and cash equivalents 30,189,751 (2,290,789) 27,898,962 CASH AND CASH EQUIVALENTS - BEGINNING 35,112,521 471 35,112,992 CASH AND CASH EQUIVALENTS - ENDING 65,302,272$ (2,290,318)$ 63,011,954$ BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS For the year ended September 30, 2025 The accompanying notes are an integral part of the financial statements. 33 TOTAL WATER AND SCHERTZ ENTERPRISE SEWER SYSTEM EMS FUND RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES Operating income (loss)999,076$ (789,773)$ 209,303$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 3,946,072 305,784 4,251,856 Change in investment in joint venture (2,236,433) -(2,236,433) Decrease (increase) in accounts receivable 640,106 (989,233) (349,127) Decrease (increase) in inventory (20,008) (165,558) (185,566) Decrease (increase) in prepaids - (69,500) (69,500) Increase (decrease) in accounts payable (443,839) (57,874) (501,713) Increase (decrease) in accrued liabilities 1,044,423 57,307 1,101,730 Increase (decrease) in customer deposits (72,308) -(72,308) Increase (decrease) in unearned revenue - 2,260 2,260 Increase (decrease) in compensated absences 80,541 56,400 136,941 Increase (decrease) in net pension liability (948,422) 164,665 (783,757) Increase (decrease) in total OPEB liability 1,150,416 (92,439) 1,057,977 Net cash provided by (used in) operations 4,139,624$ (1,577,961)$ 2,561,663$ SCHEDULE OF NONCASH CAPITAL ACTIVITIES Developer contributions of capital asets 30,581,859$ -$ 30,581,859$ Total noncash capital activities 30,581,859$ -$ 30,581,859$ BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS FINAL DRAFT NOTES TO FINANCIAL STATEMENTS FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 37 (1) Summary of significant accounting policies The City of Schertz, Texas (the City) is a municipal corporation governed by an elected mayor and a seven- member council. The financial statements of the City have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below: Reporting entity Component units – As required by generally accepted accounting principles, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations; thus, data from these units are to be combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government- wide financial statements to emphasize it is legally separate from the government. The City reports the following component unit: Schertz Economic Development Corporation (SEDC) – The Corporation was organized for the purpose of promoting economic development in order to eliminate unemployment and underemployment and to promote and encourage employment and public welfare of, for, and on behalf of the City. The board of directors consists of seven (7) members appointed by the city council. The City is financially accountable for the Corporation because the city council approves the Corporation’s budget and appoints all board members. For financial reporting purposes, the SEDC is reported as a blended component unit due to the City having operational responsibility for the component unit, and that any debt issued by the SEDC would be expected to be paid using City resources. Thus, the SEDC is presented as a special revenue fund within the City’s financial statements. Complete financial statements for the Schertz Economic Development Corporation may be obtained from City Hall. Joint ventures – A joint venture is a legally separate entity that results from a contractual arrangement and that is owned, operated, or governed by two or more participating governments. The following entities meet the criteria as joint ventures. Separate financial statements for these entities may be obtained at City Hall. Schertz/Seguin Local Government Corporation – is a public, nonprofit corporation organized to aid, assist, and act on behalf of the cities of Schertz and Seguin in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase of services or by subsidizing the operations. Cibolo Valley Local Government Corporation – is a public, nonprofit corporation organized July 28, 2011 to aid, assist, and act on behalf of the cities of Cibolo, and Schertz in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase or services or by subsidizing the operations. Government-wide and fund financial statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely, to a significant extent, on fees and charges for support. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 38 (1) Summary of significant accounting policies (continued) Government-wide and fund financial statements (continued) The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to 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 revenue are reported instead as general revenues. Separate financial statements are provided for governmental and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 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, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as it is 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 City considers revenues to be available if collected within 60 days of the end of the current fiscal period. Nonexchange revenues that are measurable but not available are recorded as unavailable revenue (a deferred inflow of resources). These revenues are generally property taxes and warrants outstanding. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Exchange revenues (payments for services) received in advance of the services being provided are recorded as unearned revenue. The City reports the following major governmental funds: The general fund is the City’s primary operating fund which accounts for all financial resources of the general government, except those required to be accounted for in another fund. The capital projects fund accounts for the acquisition and construction of major capital facilities financed from bond proceeds, grants, and transfers from other funds. The debt service fund accounts for the resources accumulated and payments made and interest on long-term general obligation debt of governmental funds. The economic development corporation collects sales taxes to support business development and expansion within the City. The American Rescue Plan Act fund records revenue and expenditures related to the City’s COVID-19 funding from the American Rescue Plan Act. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 39 (1) Summary of significant accounting policies (continued) Measurement focus, basis of accounting and financial statement presentation (continued) The City reports the following major enterprise funds: The water and sewer system fund accounts for the water and sewer services provided to the citizens through user charges. The EMS fund accounts for the emergency medical services provided to the citizens of the City and other participating governments through user charges. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City’s general government function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenue reported for the various functions concerned. Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. General revenues include all taxes and investment earnings. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the water and sewer enterprise fund and the EMS enterprise fund are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. Cash and cash equivalents The City’s cash and cash equivalents are considered to be cash on hand and demand deposits. Cash is reported as restricted when it has restrictions on its use narrower than the purpose of the fund in which it is reported. This can result in differences in presentation between fund statements and government-wide statements. For purposes of the statement of cash flows, the City considers cash and other investments with maturities of three months or less from the date of purchase to be cash and cash equivalents. Investments The City is authorized to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal of and interest on which are unconditionally guaranteed or insured by the State of Texas of the United States; (4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated not less than “AA” or its equivalent; (5) certificates of deposit issued by state and national banks domiciled in Texas that are guaranteed or insured by the Federal Deposit Insurance Corporation (FDIC) or its successor, or secured by obligations mentioned above; and (6) fully collateralized direct repurchase agreements having a defined termination date. In addition, the City is authorized to invest in local government investment pools. The investment pools operate in accordance with appropriate state laws and regulations and have regulatory oversight from the Texas Public Funds Investment Act Sec. 2256.0016. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 40 (1) Summary of significant accounting policies (continued) Investments (continued) Investments for the City 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. The City categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: level 1 inputs are quoted prices in active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are significant unobservable inputs. Receivables and payables Activities between the funds that are representative of inter-fund loans outstanding at the end of the fiscal year are referred to as “due to/from other funds”. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Accounts receivables are reported net of allowances for uncollectible accounts. The allowance account represents management’s estimate of uncollectible accounts based upon experience and historical trends. Property taxes for the City are levied each October 1 on the taxable value as of the preceding January 1, the date a lien attaches, for all taxable real and personal property located in the City. Taxes are due by January 31 following the October 1 assessment date and become delinquent on February 1, at which time they begin accruing penalty and interest. The enforceable legal claim date for property taxes is the assessment date; therefore, the City did not record a receivable for accrual of future taxes at year end. Accordingly, no current taxes receivable are reported. Delinquent taxes have been reported in the financial statements net of the allowance for uncollectible taxes. Tax revenues are recognized as they become available. Accordingly, an amount equal to taxes not yet available has been reported as unavailable revenue (a deferred inflow of resources) at the government fund level. Inventories All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Restricted assets Certain proceeds from bonds, resources set aside for their repayment, and other restrictive agreements are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants and/or contractual arrangements. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 41 (1) Summary of significant accounting policies (continued) Capital assets Capital assets, which include land, buildings and improvements, machinery, equipment, vehicles, and infrastruture assets (i.e., roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City 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 and the proprietary fund 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 assets’ 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: ASSET USE LIVES (YEARS) Buildings and improvements 10 - 50 Machinery, equipment, and vehicles 2 - 20 Infrastructure 15 - 50 Deferred inflows / outflows of resources In addition to assets, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following items that qualify for reporting in this category:  Deferred charges on refunding – a deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.  Pension and OPEB contributions after measurement date – these contributions are deferred and recognized in the following fiscal year.  Difference in expected and actual pension and OPEB experience – the difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date.  Changes in actuarial assumptions and other inputs – this difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 42 (1) Summary of significant accounting policies (continued) Deferred inflows / outflows of resources (continued) In addition to liabilities, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following types of items that qualify for reporting in this category:  Unavailable revenue is reported only in the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.  Difference in projected and actual earnings on pension assets – this difference is deferred and amortized over a closed five-year period.  Difference in expected and actual pension and OPEB experience – this difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date.  Changes in actuarial assumptions and other inputs – this difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. Compensated absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Vacation is accrued depending on level of employment and years of service. Vacation can be accrued depending on years of service with the City. Accrued vacation is paid upon retirement or termination of employment in accordance with City policy. As of October 1, 2024 the City has implemented GASB Statement No. 101 Compensated Absences. This required all vacation and sick leave carried by employees at the City as well as the fringe benefits associated with the leave balances to be included in the calculation of compensated absences and required a restatement of net position of $1,493,374. Pensions The net pension liability, deferred inflows, and outflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Texas Municipal Retirement System (TMRS), and additional additions to and deductions from TMRS’s fiduciary net position have been determined on the same basis as they are reported by TMRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other postemployment benefits Supplemental Death Benefits Fund. For purposes of measuring the total Texas Municipal Retirement System Supplemental Death Benefits Fund (TMRS SDBF) OPEB liability, related deferred outflows and inflows of resources, and expense, City specific information about its total TMRS SDBF liability and additions to/deductions from the City’s total TMRS SDBF liability have been determined on the same basis as they are reported by TMRS. The TMRS SDBF expense and deferred (inflows)/outflows of resources related to TMRS SDBF, primarily result from changes in the components of the total TMRS SDBF liability. Most changes in the total TMRS SDBF liability will be included in TMRS SDBF expense in the period of the change. For example, changes in the total TMRS SDBF liability resulting from current-period service cost, interest on the TOL, and changes of benefit terms are required to be included in TMRS SDBF expense immediately. Changes in the total TMRS SDBF liability that have not been included in TMRS SDBF expense are required to be reported as deferred outflows of resources or deferred inflow of resources related to TMRS SDBF. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 43 (1) Summary of significant accounting policies (continued) Other postemployment benefits Retiree Health Insurance. For purposes of measuring the total OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB expense, benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Contributions are not required but are measured as payments by the City for benefits due and payable that are not reimbursed by plan assets. Information regarding the City’s total OPEB liability is obtained from a report prepared by a consulting actuary, Gabriel Roeder Smith and Company. Long-term obligations In the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and losses on defeasance are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Losses on defeasance are reported as deferred outflows of resources. Bond issuance costs are expensed as incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund balance Fund balances in governmental funds are classified as follows:  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 specific purposes because of a formal action by the government’s highest level of decision-making authority; an ordinance adopted by City Council prior to the end of the fiscal year. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is take (the adoption of another ordinance) to remove or revise the limitation.  Assigned: represents amounts which the City intends to use for a specific purpose but do not meet the criteria of restricted or committed. The City Council may make assignments through formal documentation in the minutes. The City Council authorized (by way of policy) the City Manager to also make assignments. The City Manager’s assignments do not require formal action.  Unassigned: represents the residual balance that may be spent on any other purpose of the City. Only the general fund reports positive unassigned fund balances; if another fund were to have unassigned fund balance, it would be in the event of a deficit. When an expenditure is incurred for a purpose in which multiple classifications are available, the City considers restricted balances spent first, committed second, and assigned third. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 44 (1) Summary of significant accounting policies (continued) Net position Net position represents the difference between assets plus deferred outflows of resources less liabilities and deferred inflows of resources. 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 creditors, grantors, or laws or regulations of other governments. 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 disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. Deficit equity At September 30, 2025, the City has a deficit unassigned fund balance of $263,777 in the grant fund. This deficit is due to timing differences between expenditures and reimbursements of grant funds. Budgetary information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the American Rescue Plan Act fund, library advisory board fund, grant special revenue fund, police department forfeiture special revenue fund, and the capital projects fund, which adopts project-length budgets. (2) Detailed notes on all funds and activities Cash, cash equivalents and investments As of September 30, 2025, the City had the following cash, cash equivalents, and investments: WEIGHTED AVERAGE FAIR VALUE REPORTED MATURITY MEASUREMENTS DESCRIPTION VALUE (DAYS) USING - LEVEL 2 Investment type: Logic 88,247,080$ 48 -$ Lone Star Investment Pool 32,525,504 21 - Texas CLASS 71,004,544 34 - Certificates of deposit 4,174,332 79 4,174,332 U.S. agency securities 1,902,072 487 - Subtotal 197,853,532 4,174,332$ Plus depository and petty cash 11,588,598 Total cash and investments 209,442,130$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 45 (2) Detailed notes on all funds and activities (continued) Cash, cash equivalents and investments (continued) LOGIC, Lone Star Investment Pool, and Texas CLASS are recorded as cash equivalents in the financial statements. All of the pools have 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. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant observable inputs other than quoted market prices for similar assets; Level 3 inputs are significant unobservable inputs. All of the City’s fair value investments were valued using either documented trade history in exact security pricing, option-adjusted discounted cash flow, or present value of expected future cash flow pricing models (Level 2 inputs). Interest rate risk – as a means of limiting its exposure to fair value losses arising from 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 – State law limits investments in certificates of deposit to guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor or the National Credit Union Share Insurance Fund, or its successor and investment pools continuously rated no lower than AAA or an equivalent rating by at least one nationally recognized rating service. The City’s investment policy does not further limit its investment choices. As of September 30, 2025, the City’s investments in the pooled investment funds were rated AAAM by Standard & Poor’s. The City has also invested in debt securities provided by the Federal Home Loan Bank, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Farm Credit Banks, and U.S. Treasury Notes. As of September 30, 2025, the City’s investments in debt securities were rated BBB+ 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. As of September 30, 2025, the City’s cash and cash equivalents (including certificates of deposit, and component unit holdings) were fully collateralized by the City’s depository by a combination of pledged collateral and FDIC insurance. All collateral is held in the City’s name. 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 investment or collateral securities that are in the possession of an outside party. All of the government securities owned by the City are held by its agent in the City’s name. Restricted cash – cash is restricted in the proprietary fund for construction projects, impact fees, and customer deposits. Property taxes Taxes are levied on and payable as of October 1. The City has contracted with the Guadalupe County Tax Assessor-Collector to collect taxes on its behalf. Current taxes become delinquent February 1. Current year delinquent taxes not paid by July 1 are turned over to attorneys for collection action. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 46 (2) Detailed notes on all funds and activities (continued) Property taxes (continued) The City is permitted by the Constitution of the State of Texas to levy taxes up to $2.50 per $100 of taxable assessed valuation for all governmental purposes. Pursuant to a decision of the Attorney General of the State of Texas, up to $1.50 per $100 of assessed valuation may be used for the payment of long-term debt. The combined tax rate to finance general governmental services, including the payment of principal and interest on long-term debt for the year ended September 30, 2025, was $0.4900 per $100 of assessed value. However, the City may not adopt a tax rate that exceeds the tax rate calculated in accordance with the Texas Property Tax Code without holding a public hearing. The Property Tax Code subjects an increase in the effective tax rate to a referendum election, if petitioned by registered voters, when the effective tax rate increase is more than 3.5% of the previous year’s effective tax rate. Property taxes are recorded as receivables and unearned revenues at the time the taxes are assessed. In governmental funds, revenues are recognized as the related ad valorem taxes are collected. Additional amounts estimated to be collectible in the time to be a resource for payment of obligations incurred during the fiscal year and therefore susceptible to accrual in accordance with generally accepted accounting principles have been recognized as revenue. In the government-wide financial statements, the entire levy is recognized as revenue, net of estimated uncollectible amounts (if any), at the levy date. Receivables Receivables as of September 30, 2025 for the government’s individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: GENERAL ECONOMIC DEBT WATER AND SCHERTZ FUND DEVELOPMENT SERVICE SEWER FUND EMS TOTAL Receivables: Property taxes 440,541$ -$ 208,685$ -$ -$ 649,226$ Sales tax 5,105,943 2,552,972 - - - 7,658,915 Occupancy taxes - - - - - - Franchise taxes 586,262 - - - - 586,262 Customers - - - 3,352,010 8,917,427 12,269,437 Court fines 2,129,735 - - - - 2,129,735 Other 1,400,103 41,333 - - 2,667 1,444,103 Gross receivables 9,662,584 2,594,305 208,685 3,352,010 8,920,094 24,737,678 Less allowance for uncollectible accounts (1,369,197) - (12,521) (58,618) (3,274,101) (4,714,437) Net receivables 8,293,387$ 2,594,305$ 196,164$ 3,293,392$ 5,645,993$ 20,023,241$ GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 47 (2) Detailed notes on all funds and activities (continued) Deferred inflows and outflows of resources Governmental funds report unavailable revenue in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue and unavailable revenue reported in governmental funds were as follows: General fund Delinquent property taxes receivable 414,108$ Court fines 866,802 Total general fund 1,280,910 Debt service fund Delinquent property taxes receivable 196,164 Total debt service fund 196,164 Total governmental funds 1,477,074$ Additionally, the proprietary funds and governmental activities statements of net position report various deferred outflows and inflows of resources, primarily due to pensions and OPEB, that are summarized by column. The following table presents the disaggregated amounts. GOVERNMENTAL WATER/ ACTIVITIES SEWER EMS TOTALS Deferred outflows: Charge on refunding 334,923$ -$ -$ 334,923$ Related to pensions 6,141,658 603,162 1,529,003 8,273,823 Related to OPEB-SDBF 104,101 10,223 25,917 140,241 Related to OPEB-retiree health plan 298,251 29,291 74,252 401,794 Total deferred outflows 6,878,933$ 642,676$ 1,629,172$ 9,150,781$ Deferred inflows: Service concession arrangement 267,333$ -$ -$ 267,333$ Related to pensions 968,687 95,133 241,160 1,304,980 Related to OPEB-SDBF 238,946 23,466 59,487 321,899 Related to OPEB-retiree health plan 637,361 62,594 158,676 858,631 Total deferred inflows 2,112,327$ 181,193$ 459,323$ 2,752,843$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 48 (2) Detailed notes on all funds and activities (continued) Interfund balances and transfers The composition of interfund balances as of September 30, 2025, is as follows: Due From Due To Amount Purpose Nonmajor governmental fund General fund 644,353$ Short-term pool cash loan The following schedule briefly summarizes the City’s transfer activity for the year ending September 30, 2025: Transfer From Transfer To Amount Purpose Nonmajor governmental fund General fund 82,976$ Supplement funds sources Capital projects fund General fund 200,000 Supplement funds sources Capital projects fund Debt service fund 4,079 Supplement funds sources Economic development corporation Capital projects fund 1,849,500 Funding for various capital projects General fund Capital projects fund 1,473,292 Funding for various capital projects General fund Water and sewer fund 1,232 Supplement funds sources Water and sewer fund Capital projects fund 171,000 Supplement funds sources General fund Nonmajor governmental fund 2,717 Supplement funds sources Capital assets Capital asset activity for the year ended September 30, 2025 was as follows: BALANCE TRANSFERS/ENDING AS RESTATED ADDITIONS DELETIONS BALANCE Governmental activities Capital assets not being depreciated Land 15,299,666$ 143,791$ -$ 15,443,457$ Construction in progress 5,624,109 13,135,971 (2,813,095) 15,946,985 Total capital assets not being depreciated 20,923,775 13,279,762 (2,813,095) 31,390,442 Capital assets being depreciated Buildings and improvements 70,157,099 2,291,668 - 72,448,767 Machinery, equipment, and vehicles 21,022,952 2,677,316 (1,078,794) 22,621,474 Street and infrastructure 180,716,063 13,659,852 - 194,375,915 Total capital assets being depreciated 271,896,114 18,628,836 (1,078,794) 289,446,156 Less accumulated depreciation: Buildings and improvements (25,386,017) (2,593,714) - (27,979,731) Machinery, equipment, and vehicles (11,769,989) (2,190,098) 1,040,998 (12,919,089) Street and infrastructure (61,564,546) (5,824,501) - (67,389,047) Total accumulated depreciation (98,720,552) (10,608,313) 1,040,998 (108,287,867) Total capital assets being depreciated - net 173,175,562 8,020,523 (37,796) 181,158,289 Governmental activities capital assets - net 194,099,337$ 21,300,285$ (2,850,891)$ 212,548,731$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 49 (2) Detailed notes on all funds and activities (continued) Capital assets (continued) BALANCE TRANSFERS/ENDING AS RESTATED ADDITIONS DELETIONS BALANCE Business-type activities Capital assets not being depreciated Land 2,684,967$ 176,876$ -$ 2,861,843$ Water rights 70,245 - - 70,245 Construction in progress 29,281,294 7,273,254 - 36,554,548 Total capital assets not being depreciated 32,036,506 7,450,130 - 39,486,636 Capital assets being depreciated Buildings and improvements 3,725,152 - 378,454 4,103,606 Machinery, equipment, and vehicles 7,978,454 1,748,742 (627,147) 9,100,049 Street and infrastructure 149,987,037 30,581,858 (378,454) 180,190,441 Total capital assets being depreciated 161,690,643 32,330,600 (627,147) 193,394,096 Less accumulated depreciaton: Buildings and improvements (1,556,681) (258,509) - (1,815,190) Machinery, equipment, and vehicles (5,178,544) (571,854) 521,573 (5,228,825) Street and infrastructure (42,416,972) (3,421,493) 55,997 (45,782,468) Total accumulated depreciation (49,152,197) (4,251,856) 577,570 (52,826,483) Total capital assets being depreciated - net 112,538,446 28,078,744 (49,577) 140,567,613 Business-type activities capital assets - net 144,574,952$ 35,528,874$ (49,577)$ 180,054,249$ Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities General government 1,113,873$ Public safety 1,707,938 Public environment 6,311,947 Parks and recreation 1,400,297 Cultural 63,650 Administration 10,608 Total depreciation expense - governmental activities 10,608,313$ Business-type activities Water and sewer system 3,946,072$ EMS 305,784 Total depreciation expense - business-type activities 4,251,856$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 50 (2) Detailed notes on all funds and activities (continued) Long-term debt The City issues a variety of long-term debt instruments in order to acquire and/or construct major capital facilities and equipment for governmental activities. These instruments include general obligation bonds and certificates of obligation. These debt obligations are secured primarily by future property tax revenues. In some cases, these bonds are also secured by a pledge of net revenues from the utility system, emergency medical services and economic development sales taxes. However, the amount of the formal pledge is generally limited to $1,000. Proprietary operating revenues for the year exceeded $45 million and sales tax revenues was $34 million. Additionally, certain obligations that were marketed as private placements have been separately identified; however, the terms of these obligations are not significantly different than other obligations and do not have substantive acceleration clauses. Should the City default on these bonds, any registered owner of the obligations is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make payment. Changes in long-term debt for the year ending September 30, 2025 are as follows: BALANCE REFUNDED/ENDING DUE WITHIN AS RESTATED ISSUED RETIRED BALANCE ONE YEAR Governmental activities General obligation bonds 42,630,000$ -$ (2,845,000)$ 39,785,000$ 2,970,000$ Certificates of obligation 42,275,000 27,385,000 (3,160,000) 66,500,000 3,050,000 General obligation bonds- private placement 3,765,000 - (1,010,000) 2,755,000 1,035,000 Premium from debt 5,763,094 1,531,795 (444,201) 6,850,688 444,201 Financing arrangement 54,614 - (27,307) 27,307 27,307 Compensated absences 2,531,848 - (255,521) 2,276,327 455,265 Total governmental activities long-term liabilities 97,019,556$ 28,916,795$ (7,742,029)$ 118,194,322$ 7,981,773$ Business-type activities General obligation bonds 2,535,000$ -$ (595,000)$ 1,940,000$ 615,000$ Certificates of obligation 21,150,000 26,290,000 (890,000) 46,550,000 1,770,000 General obligation bonds- private placement 215,000 - (215,000) - - Premium from debt 1,954,620 1,470,568 (131,680) 3,293,508 131,680 Financing arrangement 163,843 - (81,921) 81,922 81,922 Compensated absences 794,077 - (84,504) 709,573 141,914 Business-type activity - long-term liabilities 26,812,540$ 27,760,568$ (1,998,105)$ 52,575,003$ 2,740,516$ Prior year refunding of debt The City defeased certain outstanding bonds by placing proceeds of new bonds in irrevocable trusts to provide for all future debt service payments. Accordingly, the respective trust accounts and liability for the defeased bonds not included in the City’s financial statements. As of September 30, 2025, the City does not have bonds considered defeased and outstanding. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 51 (2) Detailed notes on all funds and activities (continued) Long-term debt (continued) A summary of the terms of long-term debt outstanding at September 30, 2025, is as follows: ISSUE INTEREST AMOUNT MATURITY RATES BALANCE Governmental activities General obligation bonds 2014 Series, refunding 8,450,000$ 2030 2.0%-4.0% 4,645,000$ 2015 Series, refunding 4,185,000 2031 2.0%-3.25% 1,140,000 2016 Series 5,880,000 2036 2.0%-4.0% 3,555,000 2017 Series 3,935,000 2037 2.0%-4.0% 2,645,000 2018 Series, refunding 5,830,000 2033 3.125%-5% 3,750,000 2020 Series, refunding 7,555,000 2036 1.5%-4.0% 4,360,000 2021 Series, refunding 4,070,000 2033 2.0%-4.0% 2,990,000 2022 Series 18,535,000 2042 4.0%-5.0% 16,700,000 Private Placement obligations 2007 Series GO 6,000,000 2027 4.07% 815,000 2018 Series GO refunding 6,035,000 2028 2.12%1,940,000 Certificates of obligation 2016 Series A 2,375,000 2036 2.0%-4.0%950,000 2016 Series B 1,475,000 2036 3.0%-3.75% 930,000 2017 Series 4,935,000 2037 3.0%-3.75% 2,695,000 2018 Series 4,845,000 2038 3.0%-5.0% 3,120,000 2019 Series 4,015,000 2039 2.5%-5.0% 2,400,000 2022 Series 4,740,000 2042 2.0%-5.0% 4,195,000 2022 Series A 8,265,000 2042 4.0%-5.0% 7,445,000 2024 Series 19,165,000 2044 4.0%-5.0% 17,380,000 2025 Series 27,385,000 2045 5.00% 27,385,000 Total governmental activities long-term obligations 109,040,000$ ISSUE INTEREST AMOUNT MATURITY RATES BALANCE Business-type activities General obligation bonds 2018 Series, refunding 2,740,000$ 2026 3.125%-5.0% 450,000$ 2021 Series, refunding 1,945,000 2033 2.0%-3.0% 1,490,000 Certificates of obligation 2018 Series 5,595,000 2028 3.0%-5.0% 4,160,000 2019 Series 3,480,000 2039 2.5%-5.0% 2,675,000 2022 Series 4,650,000 2042 2.0%-5.0% 4,175,000 2022 Series A 10,265,000 2042 1.5%-5.0% 9,250,000 2025 Series 26,290,000 2045 5.00% 26,290,000 Total business-type long-term obligations 48,490,000$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 52 (2) Detailed notes on all funds and activities (continued) Long-term debt (continued) YEAR ENDING SEPTEMBER 30, PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST TOTAL 2026 2,970,000$ 1,438,288$ 4,408,288$ 3,050,000$ 3,022,423$ 6,072,423$ 1,035,000$ 59,428$ 1,094,428$ 2027 3,090,000 1,291,038 4,381,038 2,275,000 2,784,456 5,059,456 1,060,000 29,274 1,089,274 2028 3,510,000 1,167,513 4,677,513 2,360,000 2,677,431 5,037,431 660,000 6,996 666,996 2029 3,540,000 1,038,322 4,578,322 2,915,000 2,555,631 5,470,631 - - - 2030 3,675,000 912,182 4,587,182 3,050,000 2,418,613 5,468,613 - - - 2031-2035 13,270,000 3,110,529 16,380,529 17,490,000 9,866,578 27,356,578 - - - 2036-2040 7,080,000 1,498,413 8,578,413 18,885,000 5,774,763 24,659,763 - - - 2041-2045 2,650,000 381,700 3,031,700 16,475,000 1,762,006 18,237,006 - - - 39,785,000$ 10,837,985$ 50,622,985$ 66,500,000$ 30,861,901$ 97,361,901$ 2,755,000$ 95,698$ 2,850,698$ GOVERNMENTAL ACTIVITIES GENERAL OBLIGATION BONDS CERTIFICATES OF OBLIGATION PRIVATE PLACEMENT DEBT- GO BONDS YEAR ENDING SEPTEMBER 30, PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST TOTAL 2026 615,000$ 50,200$ 665,200$ 1,770,000$ 2,168,854$ 3,938,854$ 2027 175,000 32,150 207,150 1,810,000 1,971,388 3,781,388 2028 180,000 25,950 205,950 1,900,000 1,880,263 3,780,263 2029 190,000 20,400 210,400 1,995,000 1,785,837 3,780,837 2030 195,000 14,625 209,625 2,090,000 1,689,088 3,779,088 2031-2035 585,000 16,850 601,850 11,985,000 6,913,962 18,898,962 2036-2040 - - - 13,755,000 4,109,134 17,864,134 2041-2045 - - - 11,245,000 1,266,416 12,511,416 1,940,000$ 160,175$ 2,100,175$ 46,550,000$ 21,784,942$ 68,334,942$ BUSINESS-TYPE ACTIVITIES GENERAL OBLIGATION BONDS CERTIFICATES OF OBLIGATION Financing arrangements The City enters into various agreements to finance machinery and equipment; they are classified as financing arrangements due to the title of the financed assets transferring to the City. Therefore, capital assets and a related financing arrangement obligation have been recorded at the present value of the future minimum payments at the inception date. This private placement debt is secured by the purchased equipment. FISCAL YEAR PRINCIPAL INTEREST TOTAL PRINCIPAL INTEREST TOTAL 2026 27,307$ 819$ 28,126$ 81,922$ 2,458$ 84,380$ 27,307$ 819$ 28,126$ 81,922$ 2,458$ 84,380$ GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 53 (2) Detailed notes on all funds and activities (continued) Net pension and total OPEB liabilities and expenses Amounts are aggregated into a single net pension liability and total OPEB liability, and expenses for certain columns. Below is the detail of net pension liability and total OPEB liability and expenses for governmental and business-type activities. Governmental Water/ Activities Sewer EMS Totals Net pension liability 15,973,737$ 1,568,753$ 3,976,757$ 21,519,247$ Total OPEB liability TMRS SDBF 645,297 63,374 160,651 869,322 Retiree health plan 1,782,719 175,078 443,819 2,401,616 Total OPEB liability 2,428,016$ 238,452$ 604,470$ 3,270,938$ Business-Type Activities Governmental Water/ Activities Sewer EMS Totals Pension expense 4,998,100$ 490,855$ 1,244,307$ 6,733,262$ OPEB expense: TMRS SDBF 34,798$ 3,417$ 8,663$ 46,878$ Retiree health plan 167,084 16,409 41,596 225,089 Total OPEB expense 201,881$ 19,826$ 50,260$ 271,967$ Business-Type Activities FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 54 (3) Other information Retirement plan Plan description - The City of Schertz participates as one of 934 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the system with a six-member, Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues a publicly available annual comprehensive financial report (ACFR) that can be obtained at www.tmrs.com. All eligible employees of the City are required to participate in TMRS. Benefits provided - TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the member’s contributions, with interest, and the City- financed monetary credits with interest, were used to purchase an annuity. Members may choose to receive a portion of their benefit as a partial lump sum distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits and interest. The City grants monetary credits for service rendered of a theoretical amount equal to two times what would have been contributed by the employee, with interest. Monetary credits, also known as the matching ratio, are 200% of the employee’s accumulated contributions and are only payable in the form of an annuity. Beginning in 2008, the City granted an annually repeating (automatic) basis monetary credit referred to as an updated service credit (USC) which is a theoretical amount that takes into account salary increases or plan improvements. If at any time during their career an employee earns a USC, this amount remains in their account earning interest at 5% until retirement. At retirement, the benefit is calculated as if the sum of the employee’s accumulated contributions with interest and the employer match plus employer-financed monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, initiated in 2008, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index (CPI). At the December 31, 2024 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 168 Inactive employees entitled to but not yet receiving benefits 320 Active employees 417 Total 905 Contributions - Member contribution rates in TMRS are either 5%, 6%, or 7% of the member’s total compensation, and the City matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the entry age normal (EAN) actuarial cost method. The City’s contribution rate is based on the liabilities created from the benefit plan options selected by the City and any changes in benefits or actual experience over time. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 16.81% and 17.25% for calendar years 2024 and 2025, respectively. The City’s total contributions to TMRS for the year ended September 30, 2025 was $5,875,394, which were equal to the required contributions. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 55 (3) Other information (continued) Retirement plan (continued) Net pension liability - The City’s net pension liability (NPL) was measured as of December 31, 2024, and the total pension liability (TPL) used to calculate the net pension liability was determined by an actuarial valuation as of that date. The net pension liability is typically liquidated through the general fund and enterprise funds. Actuarial assumptions: The total pension liability in the December 31, 2024 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 2.75% per year, adjusted down for population declines, if any Investment rate of return 6.75% net of pension plan investment expense, including inflation Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB(10) mortality tables with 110% of the Public Safety table used for males and 100% of the General Employee table used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender- distinct 2019 Municipal Retirees of Texas mortality tables. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by the most recent Scale MP-2021 to account for future mortality improvements. For disabled annuitants, the same mortality tables for healthy retirees are used with a 4-year set-forward for males and a 3- year set-forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and females respectively, to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by the most recent Scale MP-2021 to account for future mortality improvements subject to the 3% floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2018 to December 31, 2022. The assumptions were adopted in 2023 and first used in the December 31, 2023, actuarial valuation. The post-retirement mortality assumption for Annuity Purchase Rates (APRs) is based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined by best estimated ranges of expected returns for each major asset class. The long-term expected rate of return is determined by weighting the expected return for each major asset class by the respective target asset allocated percentage. The target allocation and best estimates of expected return for each major asset class in fiscal year 2023 are summarized in the following table: LONG-TERM EXPECTED REAL TARGET RATE OF RETURN ASSET CLASS ALLOCATION (ARITHMETIC) Global Equity 35.0% 7.10% Core Fixed Income 6.0% 5.00% Non-Core Fixed Income 6.0% 6.80% Hedge funds 5.0% 6.40% Private Equity 13.0% 8.50% Private Debt 13.0% 8.20% Real Estate 12.0% 6.70% Infrastructure 6.0% 6.00% Other Private Markets 4.0% 7.30% Total 100.0% FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 56 (3) Other information (continued) Retirement plan (continued) Discount rate - The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that member and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Changes in the net pension liability Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a)(b)(a) - (b) Balance at December 31, 2023 112,090,714$ 90,096,861$ 21,993,853$ Changes for the year: Service cost 5,987,060 - 5,987,060 Interest 7,650,458 - 7,650,458 Change of benefit terms - - - Difference between expected and actual experience 2,869,702 - 2,869,702 Changes of assumptions - - - Contributions - employer - 5,383,484 (5,383,484) Contributions - employee - 2,271,513 (2,271,513) Net investment income - 9,388,272 (9,388,272) Benefit payments, including refunds of employee contributions (3,488,246) (3,488,246) - Administrative expense - (60,039) 60,039 Other changes - (1,404) 1,404 Net changes 13,018,974 13,493,580 (474,606) Balance at December 31, 2024 125,109,688$ 103,590,441$ 21,519,247$ Increase (Decrease) Sensitivity of the net pension liability to changes in the discount rate The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage- point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (5.75%)(6.75%)(7.75%) Net pension liability 41,903,862$ 21,519,247$ 5,036,587$ Pension plan fiduciary net position Detailed information about the pension plan’s fiduciary net position is available in the schedule of changes in fiduciary net position, by participant city. The report may be obtained at www.tmrs.com. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 57 (3) Other information (continued) Retirement plan (continued) Pension expense and deferred outflows of resources and deferred inflows of resources related to pensions For the year ended September 30, 2025, the City recognized pension expense of $6,733,262. Also, as of September 30, 2025, the City reported deferred outflows of resources an deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual economic experience 3,740,014$ 3,032$ Changes in actuarial assumptions - 74,869 Difference between projected and actual investment earnings - 1,227,079 Contributions subsequent to the measurement date 4,533,809 - Total 8,273,823$ 1,304,980$ The City reported $4,533,809 as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date, and will be recognized as a reduction of the net pension liability for the year ending September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: For the Year Ended September 30, 2025 1,515,205$ 2026 2,014,030 2027 (681,821) 2028 (412,380) 2029 - Thereafter - Total 2,435,034$ The City participates in two defined-benefit other postemployment benefit (OPEB) plans: the Texas Municipal Retirement System Supplemental Death Benefits Fund (TMRS SDBF), and its own single-employer retiree health plan. Both are described in detail below. The total OPEB liabilities of both plans are typically liquidated through the general fund and enterprise funds. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 58 (3) Other information (continued) Other postemployment benefits (OPEB) (continued) TMRS Supplemental Death Benefits Fund Plan description – The City voluntarily participates in a single-employer, other postemployment benefit (OPEB) plan administered by TMRS. The plan is a group-term life insurance plan known as the Supplemental Death Benefits Fund (SDBF). The plan is established and administered in accordance with the TMRS Act identically to the City’s pension plan. SDBF includes coverage for both active and retired members, and assets are commingled for the payment of such benefits. Therefore, the plan does not qualify as an OPEB Trust in accordance with paragraph 4 of GASB Statement No. 75. Benefits provided – The SDBF provides group-term life insurance to City employees who are active members in TMRS, including or not including retirees. The City Council opted into this program via an ordinance, and may terminate coverage under, and discontinue participation in, the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. Payments from this fund are similar to group-term life insurance benefits and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides a lump-sum payment approximately equal to the employee’s annual salary (calculated based on the employee’s actual earnings for the 12-month period preceding the month of death). The death benefit for retirees is considered an other postemployment benefit and is a fixed amount of $7,500. Membership in the plan at December 31, 2024, the valuation and measurement date, consisted of: Inactive employees or beneficiaries currently receiving benefits 132 Inactive employees entitled to but not yet receiving benefits 79 Active employees 417 Total 628 Contributions - The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation, which was 0.19% for 2025 and 0.22% for 2023, of which 0.07% represented the retiree only portion for each year, as a percentage of annual covered payroll. The rate is equal to the cost of providing one- year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death payments for the upcoming year; the intent is not to prefund retiree term life insurance during employee’s entire careers. The City’s contributions to the SDBF for the year ended September 30, 2024, were $23,455 representing contributions for both active and retiree coverage, which equaled the required contributions each year. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 59 (3) Other information (continued) Other postemployment benefits (OPEB) (continued) OPEB liability - The City’s total OPEB liability in the December 31, 2024 actuarial valuation was determined using the following actuarial assumptions and inputs: Inflation 2.50% Salary increases 3.6% to 11.85% including inflation Discount rate*4.08% Retirees' share of benefit-related costs $0 Administrative expenses All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. Mortality rates - service retirees 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. Mortality rates - disabled retirees 2019 Municipal Retires of Texas Mortality Tables with a 4 year set-forward for males and a 3 year set-forward for females. In addition, a 3.5% and 3% minimum mortality rate will be applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements subject to the floor. Other information There were no benefit changes during the year. * The discount rate was based on the Bond Buyer "20-Bond GO Index" rate closet to, but not later than December 31, 2024. Note: The actuarial assumptions used in the December 31, 2024 valuation were based on the results of an actuarial experience study for the period ending December 31, 2022. Changes in the total OPEB liability – Total City’s Total OPEB liability (TOL), based on the above actuarial factors, as of December 31, 2024, the measurement and actuarial valuation date, was calculated as follows: Balance at December 31, 2023 857,430$ Changes for the year: Service cost 45,430 Interest on the total OPEB liability 32,814 Changes of benefit terms - Difference between expected and actual experience 6,200 Change of assumptions (53,082) Benefit payments (19,470) Net changes 11,892 Balance at December 31, 2024 869,322$ Changes in assumptions and other inputs reflect a change in the discount rate from 3.77% to 4.08%. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 60 (3) Other information (continued) Other postemployment benefits (OPEB) (continued) OPEB expense and deferred outflows of resources and deferred inflows of resources related to OPEB - For the year ended September 30, 2025, the City recognized OPEB expense of $46,878. Also, as of September 30, 2025, the City reported deferred outflows and inflows of resources related to the TMRS OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual economic experience 9,009$ 23,262$ Changes in actuarial assumptions 112,629 298,637 Difference between projected and actual investment earnings - - Contributions subsequent to the measurement date - - Total 121,638$ 321,899$ $0 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability for the year ended September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to the TMRS OPEB will be recognized in OPEB expense in future periods as follows: For the Year Ended September 30, 2025 (37,489)$ 2026 (46,313) 2027 (67,583) 2028 (41,904) 2029 (3,836) Thereafter (3,136) Total (200,261)$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 61 (3) Other information (continued) City of Schertz retiree health other postemployment benefit plan In addition to the TMRS OPEB, the City administers a single employer defined benefit healthcare plan for retirees, established under legal authority of the City Charter. The City is the only employer participating in the Plan. The Plan does not issue a publicly available financial report. No assets are accumulated in a trust that meets the criteria in GASB Statement No. 75. The City provides postemployment benefits for eligible participants enrolled in City-sponsored plans. The benefits are provided in the form of an implicit rate subsidy where the City contributes towards the retiree health premiums before achieving Medicare eligibility. While the plan offers retiree only rates, a very small implicit liability still exists. Membership in the plan as of December 31, 2024, the valuation date, consisted of: Inactive employees or beneficiaries currently receiving benefits 8 Inactive employees entitled to but not yet receiving benefits - Active employees 376 Total 384 Current active employees must be eligible for service retirement under the Texas Municipal Retirement System. To attain this eligibility, active employees must be at least age 60 with 5 years of service or have at least 20 years of employment with a City participating in TMRS. When a regular, full-time employee retires, they are eligible to maintain their coverage in the City’s group health coverage. The City does not provide an explicit subsidy for retiree medical insurance. The liability for the City is due to the implicit rate. The City made no direct contributions for monthly premiums. The retirees pay 100% of the monthly premiums, which range based on the type of plan, from $5 for retiree only to $1,737 for a retiree and their family. The City’s Retiree Health OPEB Liability (TOL) as of December 31, 2024 was calculated as follows: Balance at December 31, 2023 2,242,715$ Changes for the year: Service cost 207,210 Interest 86,564 Changes of benefit terms - Difference between expected and actual experience 33,237 Change of assumptions (67,709) Benefit payments (100,401) Net changes 158,901 Balance at December 31, 2024 2,401,616$ Changes of assumptions reflect a change in the discount rate from 3.77% as of December 31, 2024, to 4.08% as of December 31, 2025. Additionally, the demographic and salary increase assumptions were updated to reflect the 2023 TMRS Experience Study, and both the participation assumption and health care trend rates assumptions were updated to reflect the plan’s anticipated experience. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 62 (3) Other information (continued) City of Schertz retiree health other postemployment benefit plan (continued) The following presents the TOL of the City, calculated using the discount rate of 4.08% as well as what the City’s TOL would be if it were calculated using a discount rate that is 1-percentage point lower (3.08%) and 1- percentage point higher (5.08%) than the current rate. 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (3.08%)(4.08%)(5.08%) Total OPEB liability - retiree health 2,626,813$ 2,401,616$ 2,197,418$ The following presents what the total OPEB of the City would be if it were calculated using healthcare cost trend rates that are 1-percentage point lower or 1-percentage point higher than the current healthcare cost trends: Current Health Cost Trend Rate 1% Decrease Assumption 1% Increase Total OPEB liability - retiree health 2,115,278$ 2,401,616$ 2,741,036$ For the year ended September 30, 2025, the City recognized OPEB expense of $225,089. Also, as of September 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual economic experience 137,997$ 133,239$ Changes in actuarial assumptions 201,602 725,393 Difference between projected and actual investment earnings - - Contributions subsequent to the measurement date 62,195 - Total 401,794$ 858,632$ $62,125 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the total OPEB liability for the year ending September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to the City’s retiree health OPEB will be recognized in OPEB expense as follows: For the Year Ended September 30, 2026 (68,685)$ 2027 (68,685) 2028 (76,961) 2029 (70,084) 2030 (71,757) Thereafter (162,861) Total (519,033)$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 63 (3) Other information (continued) Joint ventures Schertz/Seguin Local Government Corporation The Schertz/Seguin Local Government Corporation is a public, nonprofit corporation organized to aid, assist, and act on behalf of the cities of Schertz and Seguin in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase of services or by subsidizing the operations. Payments to the corporation are generally for the purchase of water treatment and for covering the Corporation’s debt service requirements; they are reflected as “operating expenses” in the water and sewer fund and totaled $3,556,918 for the year ended September 30, 2025. Separate financial statements for the Schertz/Seguin Local Government Corporation may be obtained from the City of Seguin, 210 East Gonzales Street, Seguin, Texas 78156. The City of Schertz is jointly liable, together with the City of Seguin, for operating deficits and long-term debt of the Schertz/Seguin Local Government Corporation. The Corporation had net revenue bonds outstanding in the amount of $150,537,292 (as of September 30, 2024, the most recent year for which information is available) to provide funds to build, improve, extend, enlarge and repair the Corporation’s utility system, fund a reserve, and pay the costs of bond issuance. The bond resolution pledges intergovernmental contract revenues from the cities of Schertz and Seguin (the participating governments) to bond holders. Under the intergovernmental water supply contract, the participating governments are unconditionally obligated to pay their respective shares of annual contract revenue bond debt service from the operation of their respective utility systems. The organizing documents for the Corporation provide that, in the event of dissolution, the net assets of the Corporation will be equally divided among the Cities of Schertz and Cibolo. As such, the City’s net investment in the joint venture has been recorded in the water and sewer fund in the amount of $23,360,862 as of September 30, 2025. Cibolo Valley Local Government Corporation The Cibolo Valley Local Government Corporation (CVLGC) is a public, nonprofit corporation organized to aid, assist, and act on behalf of the cities of Schertz and Cibolo in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the Corporation through either purchase of services or by subsidizing the operations. Payments to the Corporation are generally for the purchase of water treatment and for covering the Corporation’s debt service requirements; they are reflected as “operating expenses” in the water and sewer fund and totaled $300,000 for the year ended September 30, 2025. Separate financial statements for the CVLGC may be obtained from the City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154. The City of Schertz is jointly liable, together with the City of Cibolo, for operating deficits and long-term debt of CVLGC. In the event of dissolution, the net assets of the Corporation will be equally divided among the Cities of Schertz and Cibolo. As such, the City’s net investment in the joint venture has been recorded in the water and sewer fund in the amount of $1,084,277 as of September 30, 2025. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 64 (3) Other information (continued) Commitments and contingencies Tax increment financing - the Zone The City is a principal in the City of Schertz Tax Increment Reinvestment Zone #2 (TIRZ), pursuant to Chapter 311 of the Texas Tax Code. Under the terms of the Zone agreement, the City of Schertz, Bexar County, and San Antonio River Authority are funding infrastructure improvements through tax increment financing to the Sedona Development Project. At the time the Zone was created, the property tax base was “frozen” and increment taxes resulting from the increases to property tax base are being used to finance Zone improvements. The total projected cost is a combined figure of $66,000,000. Project costs of the developer will be funded up to 100% of the tax increment generated by the City of Schertz, Bexar County, and San Antonio River Authority (SARA). The City of Schertz (combined with SARA) have committed up to $46,177,456 of the total $66,000,000. The Zone has a statutory termination date of December 31, 2041. The TIRZ has collected $8,378,436 from taxing entities (net administrative reimbursements) and remitted $1,500,000 to the developer as of September 30, 2025. 380 agreements The Chapter 380 Incentive program, authorized by Chapter 380 of the Texas Local Government Code, enables the City of Schertz to provide grants or reimbursements from the City’s general fund. To become eligible for Chapter 380 incentives, projects must: create at least $100 million in new real and personal property; or generate at least $35 million in gross sales that is subject to the collection of local sales and use tax. Businesses that have a 380 incentive agreement with the City are eligible to receive a reimbursement of taxes paid for the year if they have met the requirements outlined in the agreement by a certain date each year. For the fiscal year ended September 30, 2025, the City did not reimburse any property taxes paid under the terms of a Chapter 380 agreement. Economic development incentive agreements The City of Schertz Economic Development Corporation (the SEDC) negotiates economic development incentive agreements on behalf of the SEDC and the City of Schertz (the City) on an individual basis. As of September 30, 2025, the City had 16 active incentive agreements. On May 2, 2017, the City and the SEDC 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 with 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. The SEDC incentive program, authorized by Chapters 501, 502, and 505 of the Texas local Government Code, enables the SEDC to fund allowable projects from the collection of one-half 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 $100 million in taxable property). FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 65 (3) Other information (continued) Commitments and contingencies (continued) Economic development incentive agreements (continued) The City and SEDC’s outstanding incentive agreement grants are as follows: FY 2024-2025 Estimated Amount Remaining Grant SEDC - 501.101 (Primary Jobs): Ace Mart 33,818$ -$ Caterpillar Expansion 127,722 233,838 Project Caterpillar - 1,633,870 Sysco 25,000 - 186,540 1,867,708 SEDC - 501.103 (Infrastructure) Boom Connect Upsize - 1,900,000 Boomerang Lovette - 4,700,000 Core 5 - 350,000 Freckles Schertz - 50,000 Kellum Medical 350,000 - Lookout Road - 6,150,000 Main Street - 7,500,000 MOB 30,000 - Palapas Schertz 77,050 77,050 Schertz 312 Phase II 2,500,000 - Schertz Station, Ripps 4,419,259 4,000,000 7,376,309 24,727,050 SEDC - 501.152 (Parks): Parks CIP 1,849,500 10,675,600 Total 9,412,349$ 37,270,358$ Service concession agreement The City entered into an agreement with Young Men’s Christian Association of Greater San Antonio (YMCA), under which YMCA will operate and collect user fees from the Natatorium and outdoor pools through 2037. YMCA will pay the City $100,000 annually over the course of the arrangement to cover costs of debt service related to the facility; the present value of these installment payments is estimated to be $710,336. The City will approve the rates and services that YMCA will provide, however, YMCA will retail all revenues earned from the operation of the Natatorium. The YMCA will remit all revenues received from operating the outdoor pools to the City with the exception of revenues earned from YMCA specific programs. The City reports the outdoor pools and related equipment as capital assets recorded at historical cost. The City reports a receivable in the amount of $710,336 on the government-wide statements at year end pursuant to the service concession arrangement, and a deferred inflow of $278,698 for the present value of maintenance costs estimated over the life of the service concession arrangement. The balance of these two amounts is recorded as deferred inflow of resources. FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 66 (3) Other information (continued) Litigation The City is the subject of various claims and litigation that have arisen in the course of its operations. Management is of the opinion that the City’s liability in these cases, if decided adversely to the City, will not have a material effect on the City’s financial position. Cibolo Creek Municipal Authority The Cibolo Creek Municipal Authority (CCMA) provides sewage treatment for the area in and around the City. In fiscal year 2014, the City entered into an agreement with CCMA to construct a sewage treatment facility in the southern portion of the City to primarily serve citizens of the City but also neighboring cities and future development. Because the City would be the primary customer at this time, the agreement stipulates that the City will pay all future debt service on the bonds issued by CCMA and will begin sharing costs of the project. Should additional members join, the City’s share of the costs would be reduced. Future commitments to CCMA are as follows: Year Ended September 30, 2026 505,725$ 2027 510,775 2028 356,325 2029 356,325 2030 358,500 2031-2035 1,781,750 2036-2037 300,975 Tota l 4,170,375$ Restatements and changes in accounting principles The beginning net positions and fund balances have been corrected for the following: Governmental Business-Type General Water and Activities Activities Fund Sewer System EMS Beginning net position 200,296,128$ 173,541,652$ 17,947,703$ 172,234,483$ 1,307,169$ Correction of error-accounts receivable 1,790,782 - 1,790,782.00 - - Correction of error-capital assets 167,613 4,186,594 167,613.00 4,006,518 180,076 Correction of error-capital assets (585,262) - - - - Change in accounting principle - GASB 101 (1,271,930) (221,445) - (78,897) (142,548) Total restatements 101,203 3,965,149 1,958,395 3,927,621 37,528 Beginning net position, as restated 200,397,331$ 177,506,801$ 19,906,098$ 176,162,104$ 1,344,697$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 67 (3) Other information (continued) Construction commitments The City of Schertz has entered into commitments for various projects as follows: Project Cost Extended Future Primary Government to the City to Date Commitment Governmental activities Lookout Road Reconstruct 7,309,092$ 437,015$ 6,872,077$ Main Street Improvements 25,880,893 2,875,948 23,004,945 Soccer Complex Irrigation 29,100 9,754 19,346 FIRE STATION 4 14,267,056 3,169,957 11,097,099 Energy Efficient Projects 1,264,323 14,323 1,250,000 Lower Seguin Road Reconstruction 18,200,000 2,394,887 15,805,113 Boening Road Reconstruction 3,240,000 203,920 3,036,080 2025 SPAM Projects 1,282,231 72,976 1,209,255 Kramer Farms Subdivision Rehabilitation 1,446,562 73,598 1,372,964 2024 SPAM RESURFACING 5,970,978 2,358,416 3,612,562 Buffalo Valley South Utility Replacement and Rehab 5,977,000 2,896,700 3,080,300 FM 1518 Aztec Lane 1,000,000 916,002 83,998 FM78 S. CHANNEL 300,000 12,226 287,775 Lookout Rd Signalization 60,000 52,285 7,715 Paving Grassy Areas 250,000 52,016 197,984 Building 11 Renovation 81,300 71,269 10,031 Total government commitments 86,558,535 15,611,290 70,947,244 FM1518 City Park Underground Drainage Upgrade 6,545,000$ 4,291$ 6,540,709$ Wendy Swan Drainage Improvements 1,225,000 24,686 1,200,314 Woman Hollering Creek Wastewater Interceptor Main 13,438,870 12,668,967 769,903 Corbett Ground Storage 9,212,320 7,424,931 1,787,389 RIATA LIFT STATION RELOC 3,278,000 2,701,184 576,816 IH 35 Dedicated Water Transmission Main 32,075,000 1,327,060 30,747,940 FM1518 Utility Relocation 14,507,417 10,251,397 4,256,020 Northcliffe Country Club Estates Water Main Replac 8,733,400 54,253 8,679,147 IH 35 NEX North Utility Relocations 12,448,906 1,206,393 11,242,513 Backflow prevention device 80,000 54,181 25,819 CIBOLO WEST WASTEWATER TRUNK MAIN 26,743,000 242,924 26,500,076 Schwab Road to Eckhardt Road 1,620,000 12,540 1,607,460 Robin Hood Way Waterline Replacement 5,350,000 426,505 4,923,495 Bell North Drive Gravity Sewer Main Construction 1,000,000 69,250 930,750 Schertz Parkway 16" Replacement Waterline 1,795,000 45,621 1,749,379 Elevated Storage Tank Pipe Replacement 2,600,000 471 2,599,529 Elevated and Ground Storage Tank Painting 6,000,000 11,725 5,988,275 IH35 Ground Storage Tank and Pumping Station 14,550,000 24,136 14,525,865 Ware Seguin/Lower Seguin/Graytown/Pfeil Loop Line 4,892,302 223,557 4,668,745 Total business-type commitments 166,094,215 36,774,072 129,320,143 Total estimated future commitments 252,652,750$ 52,385,362$ 200,267,388$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO FINANCIAL STATEMENTS For the year ended September 30, 2025 68 (3) Other information (continued) Risk management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City contracts with the Texas Municipal League Intergovernmental Risk Pool, a public entity risk pool currently operating as a common risk management and insurance program providing insurance coverage in the following areas: general liability, automobile liability and physical damage, law enforcement liability, worker’s compensation, real and personal property, mobile equipment, and errors and omissions liability. TML is a multi-employer group that provides for a combination of risk sharing amount pool participants and stop loss coverage. Contributions are set annually by the provider. Liability by the City is generally limited to the contributed amounts. There were no significant increases or decreases in coverage from the prior year. For the past three fiscal years, no claims or settlements have exceeded deductible amounts. New accounting guidance Significant new accounting guidance issued by the Governmental Accounting Standards Board (GASB) not yet implemented by the City include the following: GASB Statement No. 102, Certain Risk Disclosures – the objective of this statement is to provide users of governmental financial statements with information about risks related to a government’s vulnerabilities due to certain concentrations or constraints that is essential to their analyses for making decisions or assessing accountability. This statement will become effective for reporting periods beginning after June 15, 2024, and the impact has not yet been determined. GASB Statement No. 103, Financial Reporting Model Improvements – the objective of this statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This statement also addresses certain application issues. This statement will become effective for reporting periods beginning after June 15, 2025, and the impact has not yet been determined. GASB Statement No. 104, Disclosure of Certain Capital Assets – the objective of this statement is to provide users of governmental financial statements with essential information about certain types of capital assets. This statement requires certain types of capital assets to be presented separately in the note disclosures, including right-to-use assets related to leases. Subscription-based information technology arrangements, and public- private or public-public partnerships. Other intangible assets are also required to be presented separately by major class. Additional disclosures have also been required for capital assets held for sale. This statement will become effective for reporting periods beginning June 15, 2025, and the impact has not yet been determined. FINAL DRAFT REQUIRED SUPPLEMENTARY INFORMATION FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL – GENERAL FUND For the year ended September 30, 2025 70 VARIANCE WITH FINAL BUDGET - ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes 38,313,308$ 38,313,308 43,833,937$ 5,520,629$ Permits and fees 2,065,700 2,065,700 1,953,854 (111,846) Service fees 2,906,022 2,906,022 2,833,131 (72,891) Fines and fees 404,840 404,840 467,828 62,988 Intergovernmental 2,959,148 2,959,148 2,552,069 (407,079) Investment earnings 950,000 950,000 940,915 (9,085) Miscellaneous 692,000 692,000 996,957 304,957 Total revenues 48,291,018 48,291,018 53,578,691 5,287,673 EXPENDITURES General government: Council 215,639 215,639 232,779 (17,140) City manager 1,032,488 1,032,488 1,067,877 (35,389) Municipal court 452,060 452,060 431,358 20,702 311 customer service 96,039 96,039 132,994 (36,955) Planning and zoning 462,611 462,611 434,833 27,778 Legal 90,000 90,000 84,497 5,503 City secretary 373,045 373,045 289,858 83,187 Nondepartmental 2,552,107 2,552,107 1,915,311 636,796 Public affairs 699,073 699,073 618,019 81,054 Engineering 1,348,659 1,348,659 1,261,099 87,560 Economic development 609,589 609,589 526,452 83,137 Citizens assistance 192,687 67,666 265,299 (197,633) Special events 55,000 55,000 50,067 4,933 Total general government 8,178,997 8,053,976 7,310,443 743,533 Public safety: Police department 14,604,882 14,604,882 14,355,552 249,330 Fire department 9,412,656 9,412,656 8,894,949 517,707 Inspection 1,495,647 1,495,647 1,455,599 40,048 Total public safety 25,513,185 25,513,185 24,706,100 807,085 Public environment: Streets 2,071,616 2,071,616 1,755,359 316,257 Total public environment 2,071,616 2,071,616 1,755,359 316,257 Parks and recreation: Parks 2,612,911 2,737,932 2,510,589 227,343 Pools 666,368 666,368 658,327 8,041 Community/civic center 638,452 638,452 631,735 6,717 Total parks and recreation 3,917,731 4,042,752 3,800,651 242,101 Cultural: Library 1,558,704 1,558,704 1,533,945 24,759 Total cultural 1,558,704 1,558,704 1,533,945 24,759 BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL – GENERAL FUND For the year ended September 30, 2025 71 VARIANCE WITH FINAL BUDGET - ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) EXPENDITURES (CONTINUED) Administration: Information technology 4,016,670$ 4,146,720$ 3,744,641$ 402,079$ Human resources 908,937 908,937 871,104 37,833 Finance 877,866 877,866 866,874 10,992 Purchasing and asset management 316,274 316,274 315,775 499 Building maintenance 1,855,208 1,960,208 2,233,320 (273,112) Fleet service 1,458,231 1,458,231 1,611,048 (152,817) Interfund charges (3,394,458) (3,394,458) (3,393,598) (860) Total administration 6,038,728 6,273,778 6,249,164 24,614 Capital outlay 2,348,623 2,348,625 2,516,318 (167,693) Total expenditures 49,627,584 49,862,636 47,871,980 1,990,656 Excess (deficiency) of revenues over (under) expenditures (1,336,566) (1,571,618) 5,706,711 7,278,329 OTHER FINANCING SOURCES (USES) Transfers in 98,940 98,940 282,976 184,036 Transfers out (28,818) (28,818) (1,477,241) (1,448,423) Total other financing sources (uses) 70,122 70,122 (1,194,265) (1,264,387) NET CHANGE IN FUND BALANCE (1,266,444) (1,501,496) 4,512,446 6,013,942 FUND BALANCE - BEGINNING 17,947,703 17,947,703 17,947,703 - RESTATEMENT - - 1,958,395 1,958,395 FUND BALANCE - ENDING 16,681,259$ 16,446,207$ 24,418,544$ 7,972,337$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES EXPENDITURES, AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL – ECONOMIC DEVELOPMENT CORPORATION For the year ended September 30, 2025 72 VARIANCE WITH FINAL BUDGET - ACTUAL POSITIVE ORIGINAL FINAL AMOUNTS (NEGATIVE) REVENUES Taxes 7,668,608$ 7,668,608$ 11,298,737$ 3,630,129$ Investment earnings 1,260,000 1,260,000 1,736,318 476,318 Miscellaneous - - - - Total revenues 8,928,608 8,928,608 13,035,055 4,106,447 EXPENDITURES Current: General government 9,170,960 9,170,960 7,774,577 1,396,383 Administration 710,503 710,503 618,481 92,022 Total expenditures 9,881,463 9,881,463 8,393,058 1,488,405 Excess (deficiency) of revenues over (under) expenditures (952,855) (952,855) 4,641,997 5,594,852 OTHER FINANCING SOURCES (USES) Transfers out (6,820,000) (6,820,000) (1,849,500) 4,970,500 Total other financing sources (uses) (6,820,000) (6,820,000) (1,849,500) 4,970,500 NET CHANGE IN FUND BALANCE (7,772,855) (7,772,855) 2,792,497 10,565,352 FUND BALANCE - BEGINNING 37,067,781 37,067,781 40,323,196 - FUND BALANCE - ENDING 29,294,926$ 29,294,926$ 43,115,693$ 13,820,767$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTE TO BUDGETARY SCHEDULES September 30, 2025 73 Budgetary information – the budget is prepared in accordance with accounting principles generally accepted in the United States of America. The City 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 City Council and as such is a good management control device. Annual budgets are adopted for the general fund, debt service fund, economic development corporation fund, hotel occupancy tax fund, park fund tree mitigation fund, police forfeiture fund, library advisory board fund, and the historical committee fund. Project length financial plans are adopted for capital projects funds. Budgetary preparation and control are exercised at the department level. Actual expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year end. For the fiscal year ended September 30, 2025, actual expenditures did not exceed budgeted expenditures at the fund level for any of the City’s funds. Encumbrance accounting, in which appropriations are recorded as budgetary expenditures, is not utilized by the City. FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS TEXAS MUNICIPAL RETIREMENT SYSTEM For the year ended September 30, 2025 74 2024 2023 2022 2021 Total pension liability Service cost 5,987,060$ 4,835,113$ 4,576,714$ 4,211,795$ Interest (on the total pension liability)7,650,458 7,004,394 6,323,215 5,766,957 Changes of benefit terms - - - - Difference between expected and actual experience 2,869,702 820,236 2,387,281 1,060,260 Change of assumptions - (133,135) - - Benefit payments, including refunds of employee contributions (3,488,246) (3,574,272) (3,075,473) (2,885,733) Net change in total pension liability 13,018,974 8,952,336 10,211,737 8,153,279 Total pension liability - beginning 112,090,714 103,138,378 92,926,641 84,773,362 Total pension liability - ending (a) 125,109,688$ 112,090,714$ 103,138,378$ 92,926,641$ Plan fiduciary net position Contributions - employer 5,383,484$ 4,384,538$ 4,133,310$ 3,831,461$ Contributions - employee 2,271,513 1,896,896 1,783,798 1,643,398 Net investment income 9,388,272 9,095,570 (5,958,648) 9,113,755 Benefit payments, including refunds of employee contributions (3,488,246) (3,574,272) (3,075,473) (2,885,733) Administrative expense (60,039) (57,691) (51,455) (42,101) Other (1,404) (402) 61,401 288 Net change in plan fiduciary net position 13,493,580 11,744,639 (3,107,067) 11,661,068 Plan fiduciary net position - beginning 90,096,862 78,352,223 81,459,290 69,798,222 Plan fiduciary net position - ending (b) 103,590,442$ 90,096,862$ 78,352,223$ 81,459,290$ Net pension liability (a) - (b) 21,519,246$ 21,993,852$ 24,786,155$ 11,467,351$ Plan fiduciary net position as a percentage of total pension liability 82.80%80.38%75.97%87.66% Covered payroll 32,450,187$ 27,072,303$ 25,497,976$ 23,477,118$ Net pension liability as a percentage of total covered payroll 66.31%81.24%97.21%48.84% FINAL DRAFT 75 2020 2019 2018 2017 2016 2015 3,761,994$ 3,421,878$ 3,301,265$ 3,073,538$ 2,855,745$ 2,724,337$ 5,326,206 4,898,478 4,505,483 4,111,517 3,763,562 3,556,428 - - - - - - (154,592) (108,478) 34,393 416,585 139,216 120,434 - 263,015 - - - 59,193 (2,372,023) (2,244,447) (1,914,159) (1,843,774) (1,581,272) (1,570,211) 6,561,585 6,230,446 5,926,982 5,757,866 5,177,251 4,890,181 78,211,777 71,981,331 66,054,349 60,296,483 55,119,232 50,229,051 84,773,362$ 78,211,777$ 71,981,331$ 66,054,349$ 60,296,483$ 55,119,232$ 3,327,434$ 3,163,340$ 3,033,936$ 2,793,644$ 2,627,335$ 2,542,565$ 1,474,466 1,380,585 1,326,518 1,232,232 1,152,864 1,095,260 4,760,749 8,093,416 (1,540,890) 5,999,805 2,602,572 53,742 (2,372,023) (2,244,447) (1,914,159) (1,843,774) (1,581,272) (1,570,211) (30,767) (45,681) (29,768) (31,080) (29,385) (32,727) (1,200) (1,373) (1,554) (1,575) (1,583) (1,616) 7,158,659 10,345,840 874,083 8,149,252 4,770,531 2,087,013 62,639,563 52,293,723 51,419,640 43,270,388 38,499,857 36,412,844 69,798,222$ 62,639,563$ 52,293,723$ 51,419,640$ 43,270,388$ 38,499,857$ 14,975,140$ 15,572,214$ 19,687,608$ 14,634,709$ 17,026,095$ 16,619,375$ 82.34%80.09%72.65%77.84%71.76%69.85% 21,063,794$ 19,722,641$ 18,896,766$ 17,603,310$ 16,478,620$ 15,648,114$ 71.09%78.96%104.19%83.14%103.32%106.21% FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF EMPLOYER CONTRIBUTIONS TEXAS MUNICIPAL RETIREMENT SYSTEM For the year ended September 30, 2025 76 2025 2024 2023 2022 Actuarially determined contributions 5,875,394$ 5,206,428$ 4,349,322$ 4,245,872$ Contributions in relation to the actuarially determined contributions 5,875,394 5,206,428 4,349,322 4,245,872 Contribution deficiency (excess)-$ -$ -$ -$ Covered payroll 34,662,376$ 31,140,466$ 26,535,541$ 26,163,046$ Contributions as a percentage of covered payroll 16.95%16.72%16.39%16.23% Valuation date: Actuarially determined contribution rates are calculated as of December 31 and become effective in January, 13 months later. Methods and assumption used to determine contribution rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll, closed Remaining amortization period 21 years (longest amortization ladder) A sset valuation method 10 year smooth ed mar ket, 12% soft corrid or Inflation 2.50% Salary increases 3.60% to 11.85% including inflation Investment rate of return 6.75% Retirement age Mortality Other information:There were no benefit changes during the year. Note to Schedule of Contributions Experience-based table of rates that vary by age. Last updated for the 2023 valuation pursuant to an experience study of the period ending 2022. Post-retirement: 2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by 103% and female rates are mutliplied by 105%. The rates are projected on a fully generational basis with scale MP-2021 (with immediate convergence). Pre-retirement: PUB(10) mortality tables, with the 110% of the Public Safety table used for males and 100% of the General Employee table used for females. The rates are projected on a fully generational basis with scale MP-2021 (with immediate convergence). FINAL DRAFT 77 2021 2020 2019 2018 2017 2016 3,700,948$ 3,235,479$ 3,129,413$ 2,971,592$ 2,756,511$ 2,592,593$ 3,700,948 3,235,479 3,129,413 2,971,592 2,756,511 2,592,593 -$ -$ -$ -$ -$ -$ 22,879,083$ 20,401,412$ 19,521,269$ 18,605,654$ 17,347,849$ 16,175,988$ 16.18%15.86%16.03%15.97%15.89%16.03% FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN TMRS OTHER POSTEMPLOYMENT BENEFIT LIABILTIY AND RELATED RATIOS For the year ended September 30, 2025 78 2024 2023 2022 2021 Total OPEB liability Service cost 45,430$ 37,901$ 73,900$ 70,429$ Interest on the total OPEB liability 32,814 31,378 21,768 21,248 Changes of benefit terms - - - - Difference between expected and actual experience 6,200 (5,407) (7,347) (1,360) Change of assumptions (53,082) 45,858 (462,756) 42,012 Benefit payments (19,470) (16,243) (15,290) (11,739) Net change in total OPEB liability 11,892 93,487 (389,725) 120,590 Total OPEB liability - beginning 857,430 763,943 1,153,668 1,033,078 Total OPEB liability - ending 869,322$ 857,430$ 763,943$ 1,153,668$ Covered-employee payroll 32,450,187$ 27,072,303$ 25,497,946$ 23,477,118$ Total OPEB liability as a percentage of covered payroll 2.68%3.17%3.00%4.91% GASB 75 requires 10 fiscal years of data to be provided in this schedule. This is the eighth year of implementation of GASB 75. The City will develop the schedule prospectively. FINAL DRAFT 79 2020 2019 2018 2017 50,554$ 33,528$ 37,794$ 29,926$ 22,915 26,904 21,182 20,123 - - - - (4,382) (105,282) 86,276 - 158,118 148,494 (54,027) 57,257 (4,213) (3,945) (3,779) (3,521) 222,992 99,699 87,446 103,785 810,086 710,387 622,941 519,156 1,033,078$ 810,086$ 710,387$ 622,941$ 21,063,794$ 19,722,641$ 18,896,766$ 17,603,310$ 4.90%4.11%3.76%3.54% FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN CITY RETIREE HEALTH OTHER POSTEMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS For the year ended September 30, 2025 80 2024 2023 2022 2021 Total OPEB liability Service cost 207,210$ 207,231$ 230,479$ 161,830$ Interest on the total OPEB liability 86,564 93,119 48,122 50,064 Changes of benefit terms - - - - Difference between expected and actual experience 33,237 28,527 (4,764) 134,106 Change of assumptions (67,709) (231,625) (495,992) (191,684) Benefit payments (100,401) (100,296) (64,389) (88,569) Net change in total OPEB liability 158,901 (3,044) (286,544) 65,747 Total OPEB liability - beginning 2,242,715 2,245,759 2,532,303 2,466,556 Total OPEB liability - ending 2,401,616$ 2,242,715$ 2,245,759$ 2,532,303$ Covered-employee payroll 32,278,495$ 26,795,229$ 25,255,936$ 22,290,477$ Total OPEB liability as a percentage of covered payroll 7.44% 8.37% 8.89% 10.87% GASB 75 requires 10 fiscal years of data to be provided in this schedule. This is the eighth year of implementation of GASB 75. The City will develop the schedule prospectively. Valuation date:December 31, 2023 Methods and assumption used to determine contribution rates: Actuarial cost method Entry age normal Discount rate 4.08% as of December 31, 2024 Inflation 2.50% Salary increases 3.60% to 11.85% including inflation Demographic assumptions Based on the 2023 experience study co nducted for the Texas Municipal Retirement System (TMRS). Mortality Health care trend rates Initial rate of 7.20% declining to an ultimate rate of 4.25% after 15 years. Participation rates For all non-Medicare retirees, 25% if retiring from age 50 to 64. Other information The discount rate changed from 3.77% as of December 31, 2023 to 4.25% as of December 31, 2024. Note to Schedule For healthy retirees, the gender-distinct 2019 Municipal Retirees of texas mortality tables are used, with male rates multiplied by 103% and female rates multiplied by 105%. The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP-2021 table to account for future mortality improvements. FINAL DRAFT 81 2020 2019 2018 2017 141,084$ 125,648$ 121,821$ 107,517$ 60,561 78,646 67,947 69,435 - - - - 4,341 (343,086) 14,962 - 161,146 275,398 (81,106) 96,092 (64,499) (59,401) (57,530) (42,189) 302,633 77,205 66,094 230,855 2,163,923 2,086,718 2,020,624 1,789,769 2,466,556$ 2,163,923$ 2,086,718$ 2,020,624$ 20,870,983$ 19,521,924$ 18,974,951$ 16,068,891$ 11.82% 11.08% 11.00% 12.57% FINAL DRAFT OTHER SUPPLEMENTARY INFORMATION FINAL DRAFT FINAL DRAFT 85 COMPARATIVE SCHEDULES – GOVERNMENTAL FUNDS General Fund is the City’s primary operating fund which accounts for all financial resources of the general government, except those required to be accounted for in another fund. Economic Development Corporation collects sales taxes to support business development and expansion within the City. Debt Service Fund accounts for the resources accumulated and payments made and interest on long-term general obligation debt of governmental funds. Capital Projects Fund accounts for the acquisition and construction of major capital facilities financed from bond proceeds, grants, and transfers from other funds. American Rescue Plan Act Fund records revenue and expenditures related to the City’s COVID-19 funding from the American Rescue Plan Act. COMBINING STATEMENTS AND INDIVIDUAL FUND SCHEDULES – NONMAJOR GOVERNMENTAL FUNDS Hotel Occupancy Fund – will account for proceeds of hotel occupancy taxes to be used strictly for those kinds of programs that promote the tourism industry. Park Fund – will account for revenues from developer’s fees (in lieu of park land dedication), grants, and donations and is designed to monitor and manage improvement of the City’s park system. Tree Mitigation Fund – will account for revenues from permits, grants, and donations to preserve and replace trees in the City. Treasury Forfeiture Fund – will account for revenue received from drug related cases in conjunction with other law enforcement agencies within the jurisdiction of the U.S. Treasury department. Justice Forfeitures Fund – will account for revenue received from drug related cases in conjunction with other law enforcement agencies within the jurisdiction of the U.S. Department of Justice. State Forfeiture Fund – will account for revenue received from drug related cases in conjunction with other law enforcement agencies within the jurisdiction of the State Forfeiture Fund. Grant Fund – will account for revenue and expenditures related to federal and state grant programs. Library Advisory Board – to account for certain fees generated at the library to be used by the Board for general improvements to the library. Historical Committee Fund – will account for funds received for the preservation of the history of the City. Capital Recovery Roadways Fund – to account for a fee assessed for capital recovery on new construction. FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS GENERAL FUND September 30, 2025 (with comparative totals for 2024) 86 2025 2024 ASSETS Cash and cash equivalents 16,840,907$ 14,004,790$ Investments 2,638,072 2,499,161 Receivables (net of allowances) Taxes 6,127,744 3,293,402 Accounts and othe r 2,165,643 1,134,923 Due from other funds 644,353 1,376,444 Inventor y 171,259 285,571 Restricted assets: Cash and cash equivalents 157,539 110,791 Total assets 28,745,517$ 22,705,082$ LIABILITIES Accounts payable 1,899,625$ 2,446,518$ Accrued salaries and benefits 909,766 777,467 Retainage Payable - - Customer deposits 77,191 33,027 Due to other governments 85,382 50,043 Due to other funds - - Unearned revenues 74,099 31,498 Total liabilities 3,046,063 3,338,553 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 1,280,910 1,418,826 Total deferred inflows of resources 1,280,910 1,418,826 FUND BA LA NCES Nonspendable for: Inventor y 171,259 285,571 Restricted for: Police and public safety/municipal court 416,416 409,637 Municipal cour t 647,172 715,579 PEG capital fees 135,581 136,899 Animal control 79,234 47,461 Scholarships 173,619 149,097 Committed for: Civic center/SIED 1,388,247 1,260,939 Assigned for: Property replacement 1,054,301 1,007,626 Subsequent year's budge t 2,564,504 2,596,149 Unassigned 17,788,211 11,338,745 Total fund balances 24,418,544 17,947,703 Total liabilities, deferred inflows of resources, and f und balances 28,745,517$ 22,705,082$ FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GENERAL FUND For the year ended September 30, 2025 (with comparative totals for 2024) 87 2025 2024 REVENUES Taxes 43,833,937$ 34,041,974$ Permits and fees 1,953,854 2,627,370 Service fees 2,833,131 2,339,769 Fines and fees 467,828 366,823 Intergovernmenta l 2,552,069 2,940,640 Investment earnings 940,915 1,251,166 Miscellaneous 996,957 897,538 Total revenues 53,578,691 44,465,280 EXPENDITURES Current General government 7,310,443 7,106,636 Public safet y 24,706,100 23,365,331 Public environment 1,755,359 2,518,012 Parks and recreation 3,800,651 4,161,603 Cultural 1,533,945 1,429,406 Administration 6,249,164 5,688,426 Capital outla y 2,516,318 1,771,018 Total expenditures 47,871,980 46,040,432 Excess (deficiency) of revenues over (under) expenditures 5,706,711 (1,575,152) OTHER FINANCING SOURCES (USES) Transfers in 282,976 285,239 Transfers out (1,477,241) - Total other financing sources (uses) (1,194,265) 285,239 NET CHANGE IN FUND BALAN CE 4,512,446 (1,289,913) FUND BALANCES - BEGINNING 17,947,703 19,237,616 RESTATEMENT 1,958,395 - FUND BALANCES - ENDING 24,418,544$ 17,947,703$ FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS ECONOMIC DEVELOPMENT CORPORATION September 30, 2025 (with comparative totals for 2024) 88 2025 2024 ASSETS Cash and cash equivalents 38,106,233$ 36,851,691$ Investments 2,419,226 2,330,549 Receivables (net of allowances) Taxes 2,552,972 1,141,814 Accounts and other 41,333 7,949 Total assets 43,119,764$ 40,332,003$ LIABILITIES Accounts payable 4,071$ 8,807$ Total liabilities 4,071 8,807 FUND BALANCES Restricted for: Economic development 43,115,693 40,323,196 Total fund balances 43,115,693 40,323,196 Total liabilities and f und balances 43,119,764$ 40,332,003$ FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE ECONOMIC DEVELOPMENT CORPORAITON For the year ended September 30, 2025 (with comparative totals for 2024) 89 2025 2024 REVENUES Taxes 11,298,737$ 6,698,059$ Investment earnings 1,736,318 1,868,124 Miscellaneous - 1,101 Total revenues 13,035,055 8,567,284 EXPENDITURES Current General government 7,774,577 384,286 Administration 618,481 557,505 Total expenditures 8,393,058 941,791 Excess (deficiency) of revenues over (under) expenditures 4,641,997 7,625,493 OTHER FINANCING SOURCES (USES) Transfers out (1,849,500) (298,131) Total other financing sources (uses)(1,849,500) (298,131) NET CHANGE IN FUND BALAN CE 2,792,497 7,327,362 FUND BALANCES - BEGINNING 40,323,196 32,995,834 FUND BALANCES - ENDING 43,115,693$ 40,323,196$ FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS DEBT SERVICE FUND September 30, 2025 (with comparative totals for 2024) 90 2025 2024 ASSETS Cash and cash equivalents 1,391,373$ 2,029,913$ Receivables, net of allowance Taxes 196,164 195,433 Total assets 1,587,537$ 2,225,346$ LIABILITIES Accounts payable 400$ -$ Total liabilities 400 - DEFERRED INFLOWS OF RESOURCES Interest payable 159,744 - Unavailable revenues 196,164 195,433 Total deferred inflows of resources 355,908 195,433 FUND BALANCES Restricted for: Debt service 1,231,229 2,029,913 Total fund balances 1,231,229 2,029,913 Total liabilities, deferred inflows of resources, and fund balances 1,587,537$ 2,225,346$ FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE DEBT SERVICE FUND – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 91 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Property taxes 10,270,000$ 10,270,000$ 9,239,261$ (1,030,739)$ 8,917,461$ Investment income 105,000 105,000 100,303 (4,697) 195,912 Miscellaneous 100,000 100,000 100,000 - 221,136 Total revenues 10,475,000 10,475,000 9,439,564 (1,035,436) 9,334,509 EXPENDITURES Debt service: Principal 7,055,000 7,055,000 7,015,000 40,000 5,850,000 Interest and fiscal charges 4,486,012 4,486,012 3,227,327 1,258,685 2,667,861 Bond issue costs 4,200 4,200 - 4,200 5,000 Total expenditures 11,545,212 11,545,212 10,242,327 1,302,885 8,522,861 Excess (deficiency) of revenues over (under) expenditures (1,070,212) (1,070,212) (802,763) 267,449 811,648 OTHER FINANCING SOURCES (USES) Issuance of bonds - - - - - Premium on issuance of bonds - - - - - Transfers in - - 4,079 4,079 104,407 Transfers out - - - - - Total other financing sources (uses)- - 4,079 4,079 104,407 NET CHANGE IN FUND BALANCE (1,070,212) (1,070,212) (798,684) 271,528 916,055 FUND BALANCE - BEGINNING 1,846,111 1,846,111 2,029,913 - 1,113,858 FUND BALANCE - ENDING 775,899$ 775,899$ 1,231,229$ 455,330$ 2,029,913$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS CAPITAL PROJECTS FUND September 30, 2025 (with comparative totals for 2024) 92 2025 2024 ASSETS Cash and cash equivalents 68,027,666$ 41,622,628$ Total assets 68,027,666$ 41,622,628$ LIABILITIES Accounts payable 386,325$ 78,995$ Retainage payable - - Total liabilities 386,325 78,995 FUND BALANCES Restricted for: Capital improvement 67,641,341 37,654,911 Committed for: Capital projects - 3,888,722 Total fund balances 67,641,341 41,543,633 Total liabilities and fund balances 68,027,666$ 41,622,628$ FINAL DRAFT CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE CAPITAL PROJECTS FUND For the year ended September 30, 2025 (with comparative totals for 2024) 93 2025 2024 REVENUES Intergovernmental -$ -$ Investment earnings 2,166,319 1,379,778 Total revenues 2,166,319 1,379,778 EXPENDITURES Administration 255,940 240,989 Capital outlay 7,877,460 2,256,823 Debt service: Bond issue costs 141,719 163,613 Total expenditures 8,275,119 2,661,425 Excess (deficiency) of revenues over (under) expenditures (6,108,800) (1,281,647) OTHER FINANCING SOURCES (USES) Issuance of debt 27,385,000 19,165,000 Premium on issuance of debt 1,531,795 998,613 Transfers in 3,493,792 (94,609) Transfers out (204,079) 3,094 Total other financing sources (uses) 32,206,508 20,072,098 NET CHANGE IN FUND BALANCE 26,097,708 18,790,451 FUND BALANCES - BEGINNING 41,543,633 22,753,182 FUND BALANCES - ENDING 67,641,341$ 41,543,633$ FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS September 30, 2025 94 HOTEL OCCUPANCY PARK TREE TREASURY FUND FUND MITIGATION FORFEITURES ASSETS Cash and cash equivalents 4,162,351$ 608,811$ 1,408,844$ 201,329$ Accounts receivable, net of allowance 154,252 - - - Total assets 4,316,603$ 608,811$ 1,408,844$ 201,329$ LIABILITIES AND FUND BALANCES Liabilities Accounts payable -$ -$ -$ -$ Due to other funds - - - - Total liabilities - - - - Fund balances Restricted for Tourism development 4,316,603 - - - Parks and tree mitigation - 608,811 1,408,844 - Police forfeiture - - - 201,329 Roadways - - - - Historical committee and library - - - - Unassigned - - - - Total fund balances 4,316,603 608,811 1,408,844 201,329 Total liabilities and fund balances 4,316,603$ 608,811$ 1,408,844$ 201,329$ SPECIAL REVENUE FUNDS FINAL DRAFT 95 CAPITAL PROJECTS FUND TOTAL LIBRARY HISTORICAL CAPITAL NONMAJOR JUSTICE STATE GRANT ADVISORY COMMITTEE RECOVERY GOVERNMENTAL FORFEITURES FORFEITURES FUND BOARD FUND ROADWAYS FUNDS 272,270$ 79,027$ 380,576$ 86,075$ 23,923$ 5,553,779$ 12,776,985$ - - - - - - 154,252 272,270$ 79,027$ 380,576$ 86,075$ 23,923$ 5,553,779$ 12,931,237$ -$ -$ -$ -$ -$ 4,824$ 4,824$ - - 644,353 - - - 644,353 - - 644,353 - - 4,824 649,177 - - - - - - 4,316,603 - - - - - - 2,017,655 272,270 79,027 - - - - 552,626 - - - - - 5,548,955 5,548,955 - - - 86,075 23,923 - 109,998 - - (263,777) - - - (263,777) 272,270 79,027 (263,777) 86,075 23,923 5,548,955 12,282,060 272,270$ 79,027$ 380,576$ 86,075$ 23,923$ 5,553,779$ 12,931,237$ SPECIAL REVENUE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS For the year ended September 30, 2025 96 HOTEL OCCUPANCY PARK TREE TREASURY FUND FUND MITIGATION FORFEITURE REVENUES Occupancy tax 886,356$ -$ -$ -$ Permits and fees - 60,116 218,482 - Service fees - - - - Fines and fees - - - - Intergovernmenta;- - - - Investment earnings 165,507 24,310 58,676 - Miscellaneous - - - - Total revenues 1,051,863 84,426 277,158 - EXPENDITURES Current General government 92,142 - - - Public safety - - - - Public environment - - 103,686 - Cultural - - - - Administration - - - - Capital outlay - 17,738 - - Total expenditures 92,142 17,738 103,686 - Excess (deficiency) of revenues over (under) expenditures 959,721 66,688 173,472 - OTHER FINANCING SOURCES (USES) Transfers in - - - - Transfers out (82,976) - - - Total other financing sources (uses)(82,976) - - - NET CHANGE IN FUND BALANCES 876,745 66,688 173,472 - FUND BALANCES - BEGINNING 3,439,858 542,123 1,235,372 201,329 FUND BALANCES - ENDING 4,316,603$ 608,811$ 1,408,844$ 201,329$ SPECIAL REVENUE FUNDS FINAL DRAFT 97 CAPITAL PROJECTS FUND TOTAL LIBRARY HISTORICAL CAPITAL NONMAJOR JUSTICE STATE GRANT ADVISORY COMMITTEE RECOVERY GOVERNMENTAL FORFEITURES FORFEITURES FUND BOARD FUND ROADWAYS FUNDS -$ -$ -$ -$ -$ -$ 886,356$ - - - - - - 278,598 - - - 19,937 321 724,878 745,136 31,147 - - - - - 31,147 - - 42,253 - - - 42,253 10,401 - - 3,553 - 229,080 491,527 - - - 46 - - 46 41,548 - 42,253 23,536 321 953,958 2,475,063 - - 42,253 - 1,829 59,800 196,024 - - - - - - - - - - - - - 103,686 - - - 13,423 - - 13,423 - - - - - - - - - - - - - 17,738 - - 42,253 13,423 1,829 59,800 330,871 41,548 - - 10,113 (1,508) 894,158 2,144,192 - - 2,717 - - - 2,717 - - - - - - (82,976) - - 2,717 - - - (80,259) 41,548 - 2,717 10,113 (1,508) 894,158 2,063,933 230,722 79,027 (266,494) 75,962 25,431 4,654,797 10,218,127 272,270$ 79,027$ (263,777)$ 86,075$ 23,923$ 5,548,955$ 12,282,060$ SPECIAL REVENUE FUNDS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE HOTEL OCCUPANCY FUND – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 98 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Occupancy tax 1,100,000$ 1,100,000$ 886,356$ (213,644)$ 849,265$ Investment earnings 126,500 126,500 165,507 39,007 154,833 Total revenues 1,226,500 1,226,500 1,051,863 (174,637) 1,004,098 EXPENDITURES Current: General government 170,322 170,322 92,142 78,180 100,389 Administration - - - - 80,265 Capital outlay - - - - - Total expenditures 170,322 170,322 92,142 78,180 180,654 OTHER FINANCING SOURCES (USES) Transfers out - - (82,976) (82,976) - Net change in fund balance 1,056,178 1,056,178 959,721 (252,817) 823,444 FUND BALANCES - BEGINNING 3,439,858 3,439,858 3,439,858 182,809 2,616,414 FUND BALANCES - ENDING 4,496,036$ 4,496,036$ 4,316,603$ (70,008)$ 3,439,858$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE PARK FUND – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 99 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Licenses and permits 150,000$ 150,000$ 60,116$ (89,884)$ 446,138$ Investment earnings 4,750 4,750 24,310 19,560 8,975 Total revenues 154,750 154,750 84,426 (70,324) 455,113 EXPENDITURES Capital outlay - - 17,738 (17,738) - Total expenditures - - 17,738 (17,738) - NET CHANGE IN FUND BALANCE 154,750 154,750 66,688 (52,586) 455,113 FUND BALANCES - BEGINNING 87,010 87,010 542,123 - 87,010 FUND BALANCES - ENDING 241,760$ 241,760$ 608,811$ 367,051$ 542,123$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TREE MITIGATION FUND – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 100 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Licenses and permits 100,000$ 100,000$ 218,482$ 118,482$ 555,380$ Investment earnings 49,250 49,250 58,676 9,426 62,728 Total revenues 149,250 149,250 277,158 127,908 618,108 EXPENDITURES Current: Parks and recreation 85,000 85,000 103,686 (18,686) 81,429 Total expenditures 85,000 85,000 103,686 (18,686) 81,429 NET CHANGE IN FUND BALANCE 64,250 64,250 173,472 146,594 536,679 FUND BALANCES - BEGINNING 709,443 709,443 1,235,372 - 698,693 FUND BALANCES - ENDING 773,693$ 773,693$ 1,408,844$ 146,594$ 1,235,372$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE TREASURY FORFEITURES FUND For the year ended September 30, 2025 (with comparative totals for 2024) 101 2025 2024 REVENUES Fines and fees -$ 195,925$ Total revenues - 195,925 EXPENDITURES Total expenditures - - NET CHANGE IN FUND BALANCE - 195,925 FUND BALANCES - BEGINNING 201,329 5,404 FUND BALANCES - ENDING 201,329$ 201,329$ FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE JUSTICE FORFEITURES FUND For the year ended September 30, 2025 (with comparative totals for 2024) 102 2025 2024 REVENUES Fines and fees 31,147$ 23,519$ Investment earnings 10,401 11,312 Total revenues 41,548 34,831 EXPENDITURES Current: Public safety - 43,544 Total expenditures - 43,544 NET CHANGE IN FUND BALANCE 41,548 (8,713) FUND BALANCES - BEGINNING 230,722 239,435 FUND BALANCES - ENDING 272,270$ 230,722$ FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE STATE FORFEITURES FUND For the year ended September 30, 2025 (with comparative totals for 2024) 103 2025 2024 REVENUES Fines and fees -$ 4,707$ Total revenues - 4,707 EXPENDITURES Total expenditures - - NET CHANGE IN FUND BALANCE - 4,707 FUND BALANCES - BEGINNING 79,027 74,320 FUND BALANCES - ENDING 79,027$ 79,027$ FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE LIBRARY ADVISORY BOARD – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 104 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Service fees 20,000$ 20,000$ 19,937$ (63)$ 19,008$ Investment earnings 1,500 1,500 3,553 2,053 4,115 Miscellaneous - - 46 46 69 Total revenues 21,500 21,500 23,536 2,036 23,192 EXPENDITURES Current: Cultural 20,500 31,500 13,423 18,077 16,880 Capital outlay - - - - 6,585 Total expenditures 20,500 31,500 13,423 18,077 23,465 NET CHANGE IN FUND BALANCE 1,000 (10,000) 10,113 (16,041) (273) FUND BALANCES - BEGINNING 75,962 75,962 75,962 - 76,235 FUND BALANCES - ENDING 76,962$ 65,962$ 86,075$ (16,041)$ 75,962$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE HISTORIAL COMMITTE BOARD – BUDGET AND ACTUAL For the year ended September 30, 2025 (with comparative actual totals for 2024) 105 VARIANCE WITH 2025 FINAL BUDGET - 2024 ACTUAL POSITIVE ACTUAL ORIGINAL FINAL AMOUNTS (NEGATIVE) AMOUNTS REVENUES Sale of merchandise 1,000$ 1,000$ 321$ (679)$ 215$ Miscellaneous - - - - - Total revenues 1,000 1,000 321 (679) 215 EXPENDITURES Current: General government 11,750 11,750 1,829 9,921 4,217 Total expenditures 11,750 11,750 1,829 9,921 4,217 Excess of revenues over expenditures (10,750) (10,750) (1,508) (10,600) (4,002) OTHER FINANCING SOURCES (USES) Transfers in 10,750 10,750 - 10,750 - Total other financing sources (uses) 10,750 10,750 - 10,750 - NET CHANGE IN FUND BALANCE - - (1,508) 150 (4,002) FUND BALANCES - BEGINNING 25,431 25,431 25,431 - 29,433 FUND BALANCES - ENDING 25,431$ 25,431$ 23,923$ 150$ 25,431$ BUDGETED AMOUNTS FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE CAPITAL RECOVERY ROADWAYS For the year ended September 30, 2025 (with comparative totals for 2024) 106 2025 2024 REVENUES Service fees 724,878$ 1,483,039$ Investment earnings 229,080 217,401 Total revenues 953,958 1,700,440 EXPENDITURES Current: General government 59,800 - Capital outlay - 57,305 Total expenditures 59,800 57,305 NET CHANGE IN FUND BALANCE 894,158 1,643,135 FUND BALANCES - BEGINNING 4,654,797 3,011,662 FUND BALANCES - ENDING 5,548,955$ 4,654,797$ FINAL DRAFT FINAL DRAFT STATISTICAL SECTION FINAL DRAFT 109 STATISTICAL SECTION This part of the City of Schertz, Texas’ annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents Page Numbers Financial Trends These schedules contain trend information to help readers understand how the City’s financial performance and well-being have changed over time. 110 - 119 Revenue Capacity These schedules contain information to help the reader assess the City’s most significant local revenue sources. 120 - 126 Debt Capacity These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 128 - 138 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 139 - 140 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 142 - 149 FINAL DRAFT CITY OF SCHERTZ, TEXAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 110 2016 2017 2018 2019 GOVERNMENTAL ACTIVITES Net investment in capital assets 74,237,004$ 84,537,238$ 89,266,885$ 89,869,766$ Restricted 17,095,325 20,437,116 23,391,047 28,088,355 Unrestricted 2,231,341 1,673,567 2,351,236 2,920,717 Total governmental activities - Net position 93,563,670$ 106,647,921$ 115,009,168$ 120,878,838$ BUSINESS-TYPE ACTIVITIES Net investment in capital assets 64,210,231$ 70,361,035$ 64,871,629$ 68,271,075$ Restricted - 10,565,463 12,626,526 13,232,638 Unrestricted 15,737,470 20,781,291 20,870,671 33,254,008 Total business-type activities - Net position 79,947,701$ 101,707,789$ 98,368,826$ 114,757,721$ PRIMARY GOVERNMENT Net investment in capital assets 138,447,235$ 154,898,273$ 154,138,514$ 158,140,841$ Restricted 17,095,325 31,002,579 36,017,573 41,320,993 Unrestricted 17,968,811 22,454,858 23,221,907 36,174,725 Total primary government net position 173,511,371$ 208,355,710$ 213,377,994$ 235,636,559$ FINAL DRAFT 111 TABLE 1 2020 2021 2022 2023 2024 2025 88,959,102$ 98,444,714$ 109,746,340$ 136,442,093$ 142,891,901$ 169,821,032$ 28,664,438 28,342,438 32,745,688 40,311,118 50,212,797 53,603,325 4,157,801 10,744,127 11,055,015 7,768,985 7,191,430 7,797,897 121,781,341$ 137,531,279$ 153,547,043$ 184,522,196$ 200,296,128$ 231,222,254$ 75,969,319$ 83,941,882$ 94,997,863$ 114,831,425$ 125,867,091$ 128,188,819$ 15,071,599 5,408,320 5,408,320 6,640,756 6,640,756 7,679,648 30,570,717 39,406,798 42,791,680 39,140,966 41,033,805 77,929,702 121,611,635$ 128,757,000$ 143,197,863$ 160,613,147$ 173,541,652$ 213,798,169$ 164,928,421$ 182,386,596$ 204,744,203$ 251,273,518$ 268,758,992$ 298,009,851$ 43,736,037 33,750,758 38,154,008 46,951,874 56,853,553 61,282,973 34,728,518 50,150,925 53,846,695 46,909,951 48,225,235 85,727,599 243,392,976$ 266,288,279$ 296,744,906$ 345,135,343$ 373,837,780$ 445,020,423$ FINAL DRAFT CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 112 2016 2017 2018 2019 EXPENSES Governmental activities General government 6,557,778$ 6,253,926$ 7,421,918$ 6,534,013$ Public safety 12,141,968 13,061,120 13,899,278 15,448,886 Public environment 4,147,653 4,460,540 4,930,723 5,495,192 Parks and recreation 2,034,964 2,859,974 2,707,292 3,022,278 Cultural 954,871 1,004,747 1,042,085 1,119,650 Health 570,204 776,494 724,780 516,890 Administration 1,954,276 3,052,102 3,067,983 3,853,255 Interest and other fees 2,240,783 2,355,714 2,125,687 2,196,180 Total governmental activities expeses 30,602,497 33,824,617 35,919,746 38,186,344 Business-type activities Water and sewer 20,269,111 21,346,078 23,579,854 25,608,390 EMS 5,004,110 6,006,178 6,110,407 6,529,631 Total business-type activities expenses 25,273,221 27,352,256 29,690,261 32,138,021 Total primary government expenses 55,875,718 61,176,873 65,610,007 70,324,365 PROGRAM REVENUES Governmental activities Charges for services General government 1,507,252 874,737 1,013,698 947,538 Public safety 2,415,537 4,131,548 4,104,911 3,177,329 Public environment - - - 138,920 Parks and recreation 788,727 544,460 640,231 484,495 Cultural 326,079 330,412 313,668 311,575 Health 30,308 29,742 27,930 21,101 Operating grants and contributions 342,485 552,878 776,942 692,042 Capital grants and contributions 6,227,664 10,043,483 4,744,489 1,319,793 Total governmental activities program revenues 11,638,052 16,507,260 11,621,869 7,092,793 Business-type activities Charges for services Water and sewer 22,003,794 25,390,713 27,099,237 27,333,475 EMS 5,921,223 6,366,894 6,092,559 6,596,618 Capital grants and contributions 2,831,126 6,111,474 3,132,348 1,975,524 Total business-type activities program revenues 30,756,143 37,869,081 36,324,144 35,905,617 Total primary government program revenues 42,394,195 54,376,341 47,946,013 42,998,410 FINAL DRAFT 113 TABLE 2 2020 2021 2022 2023 2024 2025 10,310,363$ 7,298,193$ 7,093,652$ 8,244,956$ 8,678,145$ 16,388,166$ 16,575,191 19,008,871 19,580,703 22,195,399 22,719,864 26,692,587 8,825,099 5,364,408 8,545,834 6,188,351 8,802,846 8,145,230 3,012,134 3,395,458 3,543,978 4,253,278 5,539,108 5,208,597 1,089,564 1,087,975 1,168,815 1,380,793 1,520,759 1,627,098 596,288 - - - - - 3,419,407 4,360,229 4,455,947 5,363,700 6,343,146 7,198,709 2,028,065 1,797,520 2,490,474 2,555,917 2,508,098 3,334,685 45,856,111 42,312,654 46,879,403 50,182,394 56,111,966 68,595,072 24,349,219 25,280,964 27,833,986 30,088,159 32,088,184 33,234,866 6,051,296 7,784,670 8,234,500 10,176,945 11,718,474 12,885,532 30,400,515 33,065,634 36,068,486 40,265,104 43,806,658 46,120,398 76,256,626 75,378,288 82,947,889 90,447,498 99,918,624 114,715,470 836,246 651,211 686,470 470,879 418,302 3,346,260 3,276,129 3,079,945 3,922,957 4,067,387 4,068,931 765,098 850,201 902,712 798,955 661,078 2,038,419 177,313 331,174 528,886 652,727 753,302 932,437 569,727 299,944 285,792 310,859 315,222 324,597 452,580 26,304 - - - - 130,242 2,113,673 1,925,939 3,970,029 2,425,937 3,579,794 3,657,665 531,096 7,959,576 6,987,788 18,456,911 3,293,373 18,408,023 8,264,767 15,334,061 17,329,785 27,150,716 14,655,853 27,506,908 29,709,279 27,724,929 30,677,566 31,589,783 32,562,394 33,577,314 6,114,891 7,709,027 9,420,909 9,503,821 10,231,081 11,990,185 292,408 6,935,191 6,143,957 14,180,619 8,431,343 33,036,134 36,116,578 42,369,147 46,242,432 55,274,223 51,224,818 78,603,633 44,381,345 57,703,208 63,572,217 82,424,939 65,880,671 106,110,541 FINAL DRAFT CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 114 2016 2017 2018 2019 Net (expense) revenues Governmental activities (18,964,445)$ (17,317,357)$ (24,297,877)$ (31,093,551)$ Business-type activities 5,482,922 10,516,825 6,633,883 3,767,596 Total primary government net expenses (13,481,523) (6,800,532) (17,663,994) (27,325,955) GOVERNMENTAL REVENUES AND OTHER CHANGES IN NET POSITION Governmental activities Taxes Ad valorem 15,131,997 16,166,006 17,018,950 19,151,005 Sales taxes 10,921,489 10,844,503 12,668,555 12,506,879 Franchise fees 2,250,815 2,208,373 2,393,182 2,357,150 Hotel/motel 544,871 499,466 520,424 514,679 Mixed drink 43,073 42,699 43,395 60,518 Investment income 187,847 448,408 909,985 1,470,258 Miscellaneous 309,275 182,754 283,496 984,257 Transfers 29,211 9,399 19,186 (81,525) Total governmental activities 29,418,578 30,401,608 33,857,173 36,963,221 Business-type activities Interest and investment earnings 102,642 211,466 532,367 855,216 Miscellaneous 522,221 475,733 453,374 267,788 Transfers (29,211) (9,399) (19,186) 81,525 Total business-type activities 595,652 677,800 966,555 1,204,529 Total primary government 30,014,230 31,079,408 34,823,728 38,167,750 CHANGES IN NET POSITION Governmental activities 10,454,133 13,084,251 9,559,296 5,869,670 Business-type activities 6,078,574 11,194,625 7,600,438 4,972,125 Total primary government 16,532,707$ 24,278,876$ 17,159,734$ 10,841,795$ FINAL DRAFT 115 TABLE 2 (continued) 2020 2021 2022 2023 2024 2025 (37,591,344)$ (26,978,593)$ (29,549,618)$ (23,031,678)$ (41,456,113)$ (41,088,164)$ 5,716,063 9,303,513 10,173,946 15,009,119 7,418,160 32,483,235 (31,875,281) (17,675,080) (19,375,672) (8,022,559) (34,037,953) (8,604,929) 19,844,912 21,463,804 22,495,628 25,118,429 27,147,745 27,717,962 14,432,152 16,838,731 18,075,733 19,646,841 20,095,955 33,895,921 2,305,225 2,305,108 2,574,041 2,593,660 2,354,657 2,669,138 268,946 518,921 804,132 1,059,808 849,265 886,356 70,139 68,730 83,391 88,347 93,524 87,760 804,674 104,613 709,898 4,678,690 5,569,055 5,704,453 767,779 1,408,270 1,138,775 820,465 1,119,844 781,729 - - (316,216) - - 169,768 38,493,827 42,708,177 45,565,382 54,006,240 57,230,045 71,913,087 431,555 68,354 314,546 1,927,277 4,535,559 3,977,901 706,296 754,268 675,739 479,479 974,786 - - - 316,216 - - (169,768) 1,137,851 822,622 1,306,501 2,406,756 5,510,345 3,808,133 39,631,678 43,530,799 46,871,883 56,412,996 62,740,390 75,721,220 902,503 15,729,584 16,015,764 30,975,153 15,773,932 30,824,923 6,853,914 10,126,135 11,480,447 17,415,284 12,928,505 36,291,368 7,756,417$ 25,855,719$ 27,496,211$ 48,390,437$ 28,702,437$ 67,116,291$ FINAL DRAFT CITY OF SCHERTZ, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 116 2016 2017 2018 2019 GENERAL FUND Nonspendable 220,503$ 98,263$ $ 94,876 131,925$ Restricted 1,929,636 1,994,905 2,027,125 2,196,037 Committed - - - - Assigned 752,503 854,198 3,080,557 5,580,626 Unassigned 8,509,467 9,976,169 12,548,013 9,228,612 Total general fund 11,412,109$ 12,923,535$ 17,750,571$ 17,137,200$ ALL OTHER GOVERNMENTAL FUNDS Restricted 27,252,908$ 35,721,031$ 37,772,240$ 39,009,399$ Committed 342,519 454,376 454,376 687,779 Assigned 6,743 - - - Unassigned - - - - Total all other governmental funds 27,602,170$ 36,175,407$ 38,226,616$ 39,697,178$ FINAL DRAFT 117 TABLE 3 2020 2021 2022 2023 2024 2025 114,787$ 162,463$ 182,186$ 342,248$ 285,571$ 171,259$ 1,996,357 2,151,411 2,260,350 2,220,694 1,458,673 1,452,022 687,780 907,676 1,021,594 1,155,078 1,260,939 1,388,247 1,972,479 1,501,398 1,356,230 3,518,655 3,603,775 3,618,805 12,197,575 11,755,619 12,246,539 12,000,941 11,338,745 17,788,211 16,968,978$ 16,478,567$ 17,066,899$ 19,237,616$ 17,947,703$ 24,418,544$ 32,024,252$ 33,329,710$ 69,222,391$ 60,666,303$ 91,307,033$ 125,341,599$ 4,071,942 7,985,798 5,543,146 3,888,722 3,888,722 - - - - - - - (2,071,518) (675,043) (648,630) (644,974) (266,494) (263,777) 34,024,676$ 40,640,465$ 74,116,907$ 63,910,051$ 94,929,261$ 125,077,822$ FINAL DRAFT CITY OF SCHERTZ, TEXAS CHANGE IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 118 2016 2017 2018 2019 REVENUES Taxes 28,865,727$ 29,720,578$ 32,632,702$ 34,590,008$ Permits and fees 1,493,336 2,540,045 2,557,056 1,635,461 Service fees 1,789,321 2,132,299 2,159,193 2,070,293 Fines and fees 1,441,474 1,217,621 1,049,989 953,614 Intergovernmental 401,494 397,073 609,131 1,057,681 Other revenues 1,741,436 1,897,153 1,761,285 2,454,515 Total revenues 35,732,788 37,904,769 40,769,356 42,761,572 EXPENDITURES Current: General government 5,657,998 5,394,918 6,327,133 5,881,647 Public safety 11,048,767 11,870,636 12,728,222 13,985,443 Public environment 1,007,326 1,128,979 1,136,052 1,112,041 Parks and recreation 1,528,356 1,885,915 1,697,872 2,393,487 Cultural 869,162 921,870 955,153 1,018,109 Health 480,175 672,934 628,054 498,871 Administration 2,015,573 2,912,855 3,015,239 3,795,233 Capital outlay 10,192,398 5,492,196 7,708,625 9,083,572 Debt service: Principal 4,040,975 4,473,174 4,744,116 4,565,000 Interest and fiscal charges 1,896,911 2,113,679 2,099,190 2,069,215 Bond issue costs 449,358 214,280 129,417 189,082 Payment to refund agent - - - 5,489,912 Total expenditures 39,186,999 37,081,436 41,169,073 50,081,612 Excess (deficiency) of revenues over (under) expenditures (3,454,211) 823,333 (399,717) (7,320,040) OTHER FINANCING SOURCES (USES) Bond and debt issuances 10,750,000 8,870,000 4,887,829 4,620,000 Refunding bond issuance 4,185,000 - 6,035,000 5,225,000 Premium (discount) on bond issue 590,432 381,931 269,212 640,115 Payment to refund agent (4,215,482) - (6,159,623) - Transfers in 863,583 438,803 777,487 120,503 Transfers out (834,371) (429,404) (758,302) (202,028) Total other financing sources (uses 11,339,162 9,261,330 5,051,603 10,403,590 Net change in fund balances 7,884,951$ 10,084,663$ 4,651,886$ 3,083,550$ Debt service as a percentage of noncapital expenditures 20.5%20.4%22.2%17.3% FINAL DRAFT 119 TABLE 4 2020 2021 2022 2023 2024 2025 36,802,913$ 41,150,087$ 43,905,170$ 48,455,688$ 50,506,759$ 65,258,291$ 1,807,264 1,812,895 2,341,493 2,329,324 3,628,888 2,232,452 2,583,598 2,540,995 2,953,707 2,806,284 3,842,031 3,578,267 880,657 643,482 754,558 659,885 590,974 498,975 951,604 4,582,874 4,247,523 3,061,631 4,013,661 7,857,530 1,572,473 1,512,883 1,848,673 5,499,155 6,688,899 6,801,456 44,598,509 52,243,216 56,051,124 62,811,967 69,271,212 86,226,971 10,364,369 6,580,915 6,515,632 7,324,976 7,547,457 15,281,044 15,366,593 18,107,418 19,098,373 19,579,764 23,408,875 24,706,100 1,270,894 1,382,185 1,766,558 1,782,809 2,599,441 1,859,045 2,102,083 2,534,679 2,659,914 3,227,365 4,161,603 3,800,651 1,044,891 1,059,984 1,159,024 1,294,948 1,446,286 1,547,368 589,616 - - - - - 3,353,634 4,459,223 4,597,488 5,202,419 6,326,196 7,123,585 9,276,886 5,215,256 13,096,740 24,142,094 5,075,332 15,950,688 4,929,544 4,955,000 4,805,000 5,850,000 5,850,000 7,015,000 2,136,523 1,801,467 1,779,157 2,893,986 2,667,861 3,227,327 4,200 140,140 558,911 4,200 168,613 141,719 - - - - - - 50,439,233 46,236,267 56,036,797 71,302,561 59,251,664 80,652,527 (5,840,724) 6,006,949 14,327 (8,490,594) 10,019,548 5,574,444 - 136,535 31,540,000 - 19,165,000 27,385,000 - 7,555,000 4,070,000 - - - - 629,992 3,200,544 - 998,613 1,531,795 - (8,223,452) (4,443,881) - - - 4,500,169 6,395,386 3,339,565 869,840 402,538 3,783,564 (4,500,169) (6,375,032) (3,655,781) (869,249) (402,538) (3,613,796) - 118,429 34,050,447 591 20,163,613 29,086,563 (5,840,724)$ 6,125,378$ 34,064,774$ (8,490,003)$ 30,183,161$ 34,661,007$ 16.2% 19.9% 17.1% 30.3% 17.6% 16.0% FINAL DRAFT CITY OF SCHERTZ, TEXAS GOVERNMENTAL FUNDS TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) 120 FISCAL SALES AND USE FRANCHISE MIXED YEAR PROPERTY TAX TAX TAX BEVERAGE BINGO 2016 15,105,480$ 10,921,489$ 2,250,815$ 43,072$ 1$ 2017 16,125,537 10,844,503 2,208,373 42,668 31 2018 17,007,148 12,668,555 2,393,182 43,384 11 2019 19,150,782 12,506,879 2,357,150 60,518 24 2020 19,726,451 14,432,152 2,305,225 70,139 24 2021 21,418,597 16,838,731 2,305,108 68,730 24 2022 22,367,873 18,075,733 2,574,041 83,391 24 2023 25,067,032 19,646,841 2,593,660 88,347 - 2024 27,122,341 20,095,955 2,354,657 93,524 - 2025 27,717,962 33,895,921 2,669,138 87,760 - FINAL DRAFT 121 TABLE 5 HOTEL OCCUPANCY TOTAL 544,870$ 28,865,727$ 499,466 29,720,578 520,424 32,632,704 514,679 34,590,032 268,946 36,802,937 518,921 41,150,111 804,132 43,905,194 1,059,808 48,455,688 849,265 50,515,742 886,356 65,257,137 FINAL DRAFT CITY OF SCHERTZ, TEXAS TOTAL WATER AND SEWER CONSUMPTION AND RATES LAST TEN FISCAL YEARS 122 TABLE 6 FISCAL TOTAL WATER AND WATER AND SEWER YEAR ENDED SEWER CONSUMPTION WATER AND SEWER INITIAL RATE PER SEPTEMBER 30, (IN GALLONS) BASE RATE 1,000 GALLONS 2025 2,257,230,800 42.81 8.56 2024 2,425,608,700 42.35 8.41 2023 2,363,742,000 40.85 8.13 2022 1,700,418,300 39.04 7.79 2021 1,629,336,300 38.15 6.97 2020 1,982,664,200 38.15 6.97 2019 1,622,930,500 37.15 6.84 2018 1,583,312,400 35.61 6.53 2017 1,583,462,300 34.35 6.21 2016 1,509,250,000 30.11 5.73 Source: Schertz Utility System FINAL DRAFT CITY OF SCHERTZ, TEXAS PRINCIPAL WATER AND SEWER CONSUMERS LAST TEN FISCAL YEARS 123 TABLE 7 PERCENTAGE OF PERCENTAGE OF TOTAL WATER TOTAL CITY TOTAL WATER TOTAL CITY CONSUMPTION WATER CONSUMPTION WATER TAXPAYER (IN GALLONS) RANK CONSUMPTION (IN GALLONS RANK CONSUMPTION City of Cibolo 15,031,600 1 0.62% WHC Schertz Apts, LLC 12,848,700 2 0.41% Homestead Residential Master 9,970,800 3 0.38% Sycamore Creek Apartments 9,277,000 4 0.34% Pecan Grove TxLLC 8,293,700 5 0.28% 8,690,000 2 0.58% Crossvine Master Community 6,830,500 6 0.25% Sebastian Apartments 6,025,200 7 0.22% 4,678,100 10 0.31% Apg Texas 1 LP 5,441,400 8 0.22% 4,868,800 9 0.33% QT South, LLC 5,362,700 9 0.22% Legacy Oaks Apartments 5,023,000 10 0.21% Caterpillar Inc.15,108,800 1 1.01% Big Time Management Properties 8,248,200 3 0.55% SYSCO 5,389,300 4 0.36% Legacy at Forest Ridge 5,387,700 5 0.36% Caterpillar Inc.5,384,600 6 0.36% Wal-Mart Supercenter #3391 5,022,100 7 0.34% Manco Structures LTD 1,921,100 8 0.33% Total 84,104,600 3.22% 64,698,700 4.52% Total City Water Consumption 2,425,608,700 1,497,065,900 Source: Schertz Utility System 2025 2016 FINAL DRAFT CITY OF SCHERTZ, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 124 TABLE 8 SCHERTZ- CIBOLO FISCAL BASIC DEBT UNIVERSAL COMAL YEAR RATE SERVICE TOTAL CITY ISD ISD 2025 0.3326 0.1574 0.4900 1.1256 1.0748 2024 0.3324 0.1548 0.4872 1.1392 1.2746 2023 0.3470 0.1480 0.4950 1.3246 1.2746 2022 0.3517 0.1604 0.5121 1.3950 1.2920 2021 0.3470 0.1651 0.5121 1.4106 1.2757 2020 0.3496 0.1650 0.5146 1.4200 1.3200 2019 0.3497 0.1649 0.5146 1.4900 1.3200 2018 0.3248 0.1662 0.4910 1.4900 1.3900 2017 0.3168 0.1743 0.4911 1.4700 1.3900 2016 0.3159 0.1752 0.4911 1.4900 1.3900 COMMUNITY FISCAL BEXAR HOSPITAL RIVER COLLEGE COMAL GUADALUPE YEAR COUNTY DISTRICT AUTHORITY DISTRICT COUNTY COUNTY 2025 0.2763 0.2762 0.0183 0.1492 0.2690 0.2627 2024 0.2763 0.2762 0.0184 0.1492 0.2262 0.2731 2023 0.2624 0.2762 0.0184 0.1492 0.2847 0.3439 2022 0.2763 0.2762 0.0186 0.1492 0.3140 0.3799 2021 0.2624 0.2762 0.0186 0.1492 0.3224 0.3854 2020 0.2774 0.2762 0.0186 0.1492 0.3224 0.3319 2019 0.2774 0.2762 0.0186 0.1492 0.2952 0.3319 2018 0.2928 0.2762 0.0173 0.1492 0.3078 0.3799 2017 0.2928 0.2762 0.0173 0.1492 0.2928 0.3851 2016 0.2929 0.2762 0.0173 0.1492 0.2929 0.3851 OVERLAPPING SCHOOL DISTRICTSCITY DIRECT RATES BEXAR OVERLAPPING COUNTIES FINAL DRAFT CITY OF SCHERTZ, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT AND NINE YEARS AGO (UNAUDITED) 125 TABLE 9 PERCENTAGE PERCENTAGE OF TOTAL CITY OF TOTAL CITY TAXABLE TAXABLE TAXABLE TAXABLE ASSESSED ASSESSED ASSESSED ASSESSED TAXPAYER VALUE RANK VALUE VALUE RANK VALUE SYSCO Central Texas 153,333,010$ 1 1.94%98,606,500$ 3 2.92% Caterpillar Inc.138,438,996 2 1.75%148,835,540 1 4.41% Sun Life Assurance Company of Canada 113,370,335 3 1.43% Amazon Com Services Inc.86,066,000 4 1.09%130,180,924 2 3.86% Republic Beverage Company 63,862,720 5 0.81%47,547,466 5 1.41% HGIT Schertz Parkway LP 59,581,077 6 0.75% Eastgroup Properties LP 46,781,521 7 0.59% WHC Schertz Apts LLC 32,600,000 8 0.41% DG Industrial Portfolio II Property Owner LP 25,661,224 9 0.32% AR AMZ 1150 Schwab Rd LLC 22,500,000 10 0.28% US Real Estate, LP 57,155,244 4 1.69% Shell US Gas and Power LLC 27,250,420 6 0.81% San Antonnio MTA LP 24,351,699 7 0.72% SC Schertz LLC 23,430,800 8 0.69% H.E. Butt Grocery Co.20,524,572 9 0.61% Visionary Properties 15,736,627 10 0.47% Totals 742,194,883$ 9.39%593,619,792$ 17.59% Total taxable assessed value 7,900,676,187$ 3,375,850,131$ Source: Guadalupe, Bexar, and Comal Appraisal Districts 2025 2016 FINAL DRAFT CITY OF SCHERTZ, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) 126 TABLE 10 FISCAL TAXES LEVIED COLLECTIONS YEAR ENDED FOR THE PERCENTAGE IN SUBSEQUENT PERCENTAGE SEPTEMBER 30,FISCAL YEAR AMOUNT OF LEVY YEARS AMOUNT OF LEVY 2025 28,969,659$ 28,699,318$ 99.07%-$ 28,699,318$ 99.07% 2024 28,354,039 28,021,525 98.83%(56,314) 27,965,210 98.63% 2023 26,144,518 25,757,953 98.52%(36,735) 25,721,218 98.38% 2022 22,951,478 22,775,565 99.23%115,380 22,890,945 99.74% 2021 22,011,090 21,787,625 98.98%26,406 21,814,031 99.10% 2020 20,854,329 20,758,493 99.54%6,527 20,765,020 99.57% 2019 19,922,568 19,825,244 99.51%92,209 19,917,453 99.97% 2018 18,010,824 17,899,825 99.38%75,000 17,974,825 99.80% 2017 17,356,822 17,241,556 99.34%74,923 17,316,479 99.77% 2016 16,238,180 16,160,248 99.52%59,242 16,218,083 99.88% FISCAL YEAR OF LEVY COLLECTED WITHIN TOTAL COLLECTIONS TO DATE FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS TAXABLE ASSESSED VALUE LAST TEN FISCAL YEARS (UNAUDITED) 128 FISCAL TAXABLE YEAR ENDED VALUE RESIDENTIAL COMMERCIAL TAX-EXEMPT OTHER SEPTEMBER 30, JANUARY 1, PROPERTY PROPERTY PROPERTY PROPERTY 2025 2024 3,784,470,844$ 2,263,909,270$ 1,656,208,660$ 196,087,413$ 2024 2023 4,664,462,438 2,345,387,513 (386,038,551) 222,037,649 2023 2022 4,734,929,478 2,047,253,554 (784,132,143) 742,293,503 2022 2021 3,618,134,708 1,317,486,482 (961,929,765) 232,196,469 2021 2020 3,060,963,760 1,505,592,717 (716,028,336) 276,109,231 2020 2019 3,004,686,341 1,613,615,732 (716,028,336) 250,185,870 2019 2018 2,860,333,982 1,401,636,211 (621,773,006) 260,571,835 2018 2017 2,049,067,806 2,344,365,139 (757,265,921) 146,860,809 2017 2016 1,895,085,016 2,269,590,522 (649,173,041) 132,002,406 2016 2015 1,702,601,947 2,087,223,204 (544,328,535) 130,353,515 *Taxable Assessed Value is before any applicable freeze adjustments Source: Bexar, Comal and Guadalupe County Appraisal Districts FINAL DRAFT 129 TABLE 11 TOTAL TAXABLE TOTAL ASSESSED DIRECT VALUE* TAX RATE 7,900,676,187$ 0.4900 7,617,926,151 0.4872 6,740,344,392 0.4950 4,205,887,894 0.5121 4,126,637,372 0.5121 4,152,459,607 0.5146 3,900,769,022 0.5146 3,783,027,833 0.4911 3,647,504,903 0.4911 3,375,850,131 0.4974 FINAL DRAFT CITY OF SCHERTZ, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 130 GENERAL CERTIFICATES CERTIFICATES FISCAL OBLIGATION OF FINANCING REVENUE OF YEAR BONDS OBLIGATION TAX NOTES ARRANGEMENT BONDS OBLIGATION 2025 42,540,000$ 39,115,000$ -$ -$ -$ 20,260,000$ 2024 49,860,745 44,612,349 - 54,614 - 22,590,898 2023 54,504,618 25,983,440 - 81,921 - 23,529,237 2022 58,837,302 27,869,333 - 109,228 - 24,216,388 2021 40,390,000 14,200,000 155,000 136,535 - 10,655,000 2020 44,620,000 15,415,000 345,000 25,695 - 11,200,000 2019 48,320,000 16,235,000 530,000 25,699 - 12,330,000 2018 52,752,896 13,636,966 715,000 34,264 - 13,211,178 2017 56,613,614 9,011,415 1,230,000 25,147 - 8,174,779 2016 56,352,272 4,057,189 1,740,000 58,321 - 8,331,966 GOVERNMENTAL ACTIVITIES BUSINESS-TYPE ACTIVITIES FINAL DRAFT 131 TABLE 12 BUSINESS-T YPE ACT IVIT IES GENERAL TOTAL PERCENTAGE OBLIGATION FINANCING TAX PRIMARY OF GROSS PER BONDS ARRANGEMENT NOTES GOVERNMENT INCOME CAPITA 1,940,000$ -$ -$ 103,855,000$ 5.40% 2,371 3,263,722 163,843 - 120,546,171 6.73% 2,742 4,087,062 245,764 - 108,432,042 5.82% 2,521 5,111,592 327,685 - 116,471,528 5.24% 2,729 2,895,000 475,121 - 68,906,656 4.25% 1,628 3,685,000 134,662 150,000 75,575,357 4.50% 1,799 4,445,000 199,421 460,000 82,545,120 5.60% 1,932 2,127,657 289,553 765,000 83,532,514 5.98% 2,028 2,533,626 92,721 1,065,000 78,746,302 6.22% 1,996 3,014,595 162,262 1,360,000 75,076,605 6.39% 1,979 FINAL DRAFT CITY OF SCHERTZ, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS 132 LESS: GENERAL CERTIFICATES AMOUNTS FISCAL OBLIGATION OF AVAILABLE FOR YEAR BONDS OBLIGATION DEBT SERVICE TOTAL 2025 44,480,000$ 59,375,000$ (1,231,229)$ 102,623,771$ 2024 53,124,467 67,203,247 (1,786,712) 118,541,002 2023 58,591,680 49,512,677 (867,965) 107,236,392 2022 63,948,894 52,085,721 (1,550,080) 114,484,535 2021 43,285,000 24,855,000 (934,899) 67,205,101 2020 46,223,908 15,801,473 (1,051,874) 60,973,507 2019 54,687,960 16,834,029 (1,084,908) 70,437,081 2018 54,880,553 13,636,966 (809,427) 67,708,092 2017 59,147,240 9,011,415 (924,989) 67,233,666 2016 59,366,897 4,057,189 (813,306) 62,610,780 GENERAL BONDED DEBT OUTSTANDING FINAL DRAFT 133 TABLE 13 PERCENTAGE OF ACTUAL TAXABLE TAXABLE VALUE OF PER ASSESSED PROPERTY CAPITA POPULATION VALUE 1.30%2,310$ 44,428 7,900,676,187$ 1.56%2,742 43,239 7,617,926,151 1.59%2,493 43,010 6,740,344,392 2.72%2,683 42,673 4,205,887,894 1.63%1,587 42,337 4,306,840,068 1.47%1,481 42,000 4,152,459,607 1.81%1,785 41,948 3,900,769,022 1.86%1,785 41,182 3,647,504,903 1.99%1,776 39,453 3,375,850,131 2.06%1,716 37,938 3,037,267,611 FINAL DRAFT CITY OF SCHERTZ, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT CURRENT YEAR 134 TABLE 14 ESTIMATED ESTIMATED DEBT PERCENTAGE SHARE OF GOVERNMENT UNIT OUTSTANDING APPLICABLE OVERLAPPING DEBT Debt repaid with property taxes Alamo CCD 688,781,519$ 0.44%3,030,639$ Bexar County 1,811,473,106 0.44%7,970,482 Bexar County Hospital District 1,238,865,000 0.44%5,451,006 Comal County 93,665,900 4.09%3,830,935 Comal ISD 1,440,220,214 3.79%54,584,346 East Central ISD 368,946,301 2.98%10,994,600 Guadalupe County 5,405,000 15.81%854,531 Judson ISD 783,928,458 0.03%235,179 Randolph Field ISD 2,102,000 89.24%1,875,825 Schertz-Cibolo-Universal ISD 299,475,612 43.78%131,110,422 Subtotal overlapping debt 219,937,965 City Governmental Activities Direct Debt 81,655,000 Total net overlapping debt 301,592,965$ The overlapping debt was received from the Municipal Advisory Council of Texas. Details regarding the City's outstanding debt can be fund in the notes to the financial statements. Overlapping debt is the proportionate share of the debts of local jurisdictions located wholly or in part within the limits of the City of Schertz. This schedule is intended to demonstrate the total debt that the City of Schertz property owners will be expected to repay. The amount of debt applicable to the City of Schertz is computed by (a) determining what portion of total assessed value of the overlapping jurisdiction lies within the limits of the City and (b) applying this percentage to the total governmental activities debt of the overlapping jurisdiction. FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 136 2015 2016 2017 2018 Assessed value 3,037,267,611$ 3,375,850,131$ 3,647,504,903$ 3,783,027,833$ Debt limit 303,726,761 337,585,013 364,750,490 378,302,783 Total net debt applicable to limit 53,424,303 61,181,169 65,792,916 66,329,699 Total debt margin 250,302,458$ 276,403,844$ 298,957,574$ 311,973,084$ Total net debt as a percentage of debt margin 21.34% 22.13% 22.01% 21.26% FINAL DRAFT 137 TABLE 15 Assessed value, 2024 tax roll 7,900,676,187$ Debt limit (10% of assessed value)790,067,619 Amount of applicable debt: General bonded debt 81,655,000$ - Less debt service net position (1,231,229) 80,423,771 Debt margin 709,643,848$ 2019 2020 2021 2022 2023 2024 3,900,769,022$ 4,152,459,607$ 4,070,815,340$ 6,740,344,392$ 7,617,926,151$ 7,900,676,187$ 390,076,902 415,245,961 407,081,534 674,034,439 761,792,615 790,067,619 66,019,954 61,318,507 53,946,636 93,659,743 92,497,795 80,423,771 324,056,948$ 353,927,454$ 353,134,898$ 580,374,696$ 669,294,820$ 709,643,848$ 20.37% 17.33% 15.28% 16.14% 13.82% 11.33% LEGAL DEBT MARGIN CALCULATION FOR FISCAL YEAR 2024 FINAL DRAFT CITY OF SCHERTZ, TEXAS PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS 138 TABLE 16 UTILITY LESS:NET FISCAL SERVICE OPERATING AVAILABLE YEAR CHARGES EXPENSES REVENUE PRINCIPAL INTEREST COVERAGE 2025 33,248,197$ 28,303,049$ 4,945,148$ 1,700,000$ 985,745$ 1.84 2024 32,811,920 31,257,030 1,554,890 1,630,000 967,183 0.60 2023 31,283,976 29,200,652 2,083,324 1,580,000 1,017,794 0.80 2022 30,876,559 24,362,098 6,514,461 1,180,000 912,019 3.11 2021 28,030,614 22,231,246 5,799,368 1,856,953 515,413 2.44 2020 29,735,911 24,032,772 5,703,139 1,961,953 612,643 2.22 2019 27,246,250 22,622,986 4,623,264 1,845,132 561,880 1.92 2018 27,099,237 20,802,263 6,296,974 1,671,134 391,609 3.05 2017 25,390,713 18,697,162 6,693,551 1,554,541 368,390 3.48 2016 22,003,794 17,603,487 4,400,307 1,441,741 417,346 2.37 DEBT SERVICE WATER REVENUE BONDS Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. Operating expenses do not include the depreciation, interest, or amortization expenses. FINAL DRAFT CITY OF SCHERTZ, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS 139 TABLE 17 EDUCATION PER CAPITA LEVELS IN FISCAL PERSONAL PERSONAL MEDIAN YEARS OF SCHOOL UNEMPLOYMENT YEAR POPULATION INCOME INCOME AGE SCHOOLING ENROLLMENT RATE 2025 43,811 1,922,993,256$ 43,896$ 38.9 16.0 14,946 4.1% 2024 43,239 1,790,872,902 41,418 42.0 16.0 15,758 3.2% 2023 43,010 1,734,335,240 40,324 39.0 15.9 15,573 3.6% 2022 42,673 1,656,664,147 38,822 37.9 15.9 15,877 3.3% 2021 42,337 1,611,714,563 38,069 37.6 16.2 15,887 3.9% 2020 42,000 1,651,272,000 39,316 37.4 16.2 15,675 5.1% 2019 41,948 1,473,255,708 35,121 38.0 16.2 15,925 2.7% 2018 41,182 1,396,481,620 33,910 37.3 15.9 15,817 3.2% 2017 39,453 1,266,046,770 32,090 37.2 15.9 15,497 3.8% 2016 37,938 1,175,319,240 30,980 36.9 15.8 15,460 3.4% Poplulation, personal income, median age, and education level information provided by City Economic Development Corporation. School enrollment provided by Schertz-Cibolo-Universal City Independent School District. Unemployment data provided by Texas Workforce Commission. FINAL DRAFT CITY OF SCHERTZ, TEXAS TOP TEN PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 140 TABLE 18 PERCENTAGE PERCENTAGE OF TOTAL CITY OF TOTAL CITY EMPLOYER EMPLOYEES EMPLOYMENT EMPLOYEES EMPLOYMENT Schertz-Cibolo-Universal City ISD 2,100 9.08% 1,877 10.85% Amazon 800 3.46% 1,256 7.26% Sysco Central Texas, Inc.700 3.03%815 4.71% FedEx Ground - Doerr Lane, Schertz 700 3.03%500 2.89% Republic National Distributing Company 700 3.03%408 2.36% Brandt Companies 600 2.60%396 2.29% City of Schertz 600 2.60%351 2.03% Visionworks 480 2.08% Hollingsworth Logistics Group 403 1.74% H.E.B. Grocery Company 400 1.73%350 2.02% GE Oil and Gas 552 3.19% HVHC 420 2.43% TOTAL 7,483 32.38%6,925 40.03% Source: City Economic Development Corporation 2025 2016 FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 142 FUNCTION 2016 2017 2018 2019 2020 General Government City Manager 5 5 5 5 5 Municipal Court 6 6 6 4 4 Customer Relations 5 5 5 3 3 Planning and Zoning 4 4 4 3 3 General Services - - - - - City Secretary 2 2 2 2 2 Public Affairs 4 4 5 5 5 Records Management 1 1 - - - Schertz Magazine 2 2 - - - Engineer 7 7 7 7 8 GIS 2 2 2 2 2 Information Technology 6 7 8 8 8 Human Resources 5 5 5 5 5 Finance 8 8 8 7 7 Purchasing 3 3 3 3 3 Fleet Service 6 6 6 7 8 Building Maintenance - - - - - Facility Services 16 16 17 10 10 Public Safety Police 78 81 86 86 87 Fire 36 39 45 45 46 Inspections 8 8 11 12 12 Marshall Services 8 5 - - - Health Animal Control 8 8 7 7 8 Environmental Health 3 3 4 4 4 Parks and Culture Parks and Culture 9 10 12 11 11 Pools - - - - - Event Facilities 1 1 1 5 5 Library 14 14 15 14 14 Public Environment Streets 14 14 14 14 17 Public Works Public Works 4 4 4 4 4 Business Office 10 10 10 9 9 Water and Sewer 16 16 19 19 19 Drainage 6 6 8 8 8 EMS 39 41 45 45 45 Economic Development 4 4 4 4 4 TOTAL 340 347 368 358 366 Source: City adopted budgets FULL-TIME EQUIVALENT EMPLOYEES AS OF SEPTEMBER 30, FINAL DRAFT 143 TABLE 19 2021 2022 2023 2024 2025 5 5 5 4 4 4 4 4 4 4 3 3 2.5 2.5 2 4 4 4 4 4 - - - - - 2 2 2 3 3 4 4 4 3 4 - - - - - - - - - - 8 8 10 11 11 2 2 3 3 3 8 8 9 9 9 5 5 5 5 5 7 7 7 7 7 3 3 3 3 3 8 8 9 9 9 - - - - - 11 11 11 11 11 88 90 94 95 100 46 46 50 53 53 12 12 14 14 14 - - - - - 9 9 9 9 9 5 5 6 6 6 11 11 15 16 16 - - - - - 6 6 6.5 6.5 6 14 14 15 15 9 17 17 17 17 17 4 4 4 4 4 9 9 9 10 11 21 21 21 21 26 8 8 8 8 8 55 55 65 70 71 4 4 4 4 4 383 385 416 427 433 FULL-TIME EQUIVALENT EMPLOYEES AS OF SEPTEMBER 30, FINAL DRAFT CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 144 FUNCTION/PROGRAM 2016 2017 2018 2019 2020 General Government Building Project Permits Issued 5,919 4,800 5,251 4,748 2,993 Food Establishment Permits 145 201 181 55 189 Food Establishment Inspection 153 133 211 96 209 Foster/Adoption Inspections 21 21 18 8 10 Schertz Magazine Number of Magazines Printed 180,000 180,000 180,000 180,000 187,500 Police CFS 39,064 34,428 45,190 41,327 57,149 Arrests 603 423 624 603 527 Traffic Violations 8,960 8,001 11,359 12,541 8,326 Accidents 2,119 2,057 2,244 2,304 1,752 Fire Number of Rescue/Other Responses 2,327 2,758 3,055 3,804 3,953 Number of Fire Responses 67 86 161 100 108 Number of Inspections 440 519 562 528 500 Number of Training Classes Conducted 460 340 600 804 763 Number of Pre-Plan Inspections 867 922 788 865 814 EMS Requests for Transport 9,723 9,956 10,059 10,759 10,713 Actual Transports 6,123 6,201 6,165 6,738 6,549 EMT Students 89 90 90 90 84 Marshal's Office Warrants Issues 2,587 2,816 1,598 2,036 1,738 Warrants Cleared 3,492 2,822 2,022 1,834 664 Parks Facility Reservations 240 251 248 241 75 Community and Civic Centers Civic Center Reservations 483 590 516 441 293 Community Center Reservations 370 455 381 326 193 North Community Center Reservations 185 230 235 188 92 Animal Services Number of Animals Handled 1,313 1,283 926 1,157 1,015 Number of Adoptions 410 348 319 366 450 Number of Return to Owners 205 228 218 233 335 Number of Transfers 316 326 297 227 188 Library Annual Circulation 399,622 385,206 414,790 447,379 254,643 Library Visits 255,109 235,428 258,695 237,821 102,297 Library Program Attendance 15,282 16,814 16,945 18,412 6,524 Registered Users 30,702 31,432 30,806 33,104 31,296 FISCAL YEAR FINAL DRAFT 145 TABLE 20 20212022202320242025 4,474 4,000 3,500 4,000 3,900 159 173 172 189 175 192 142 146 237 287 11 5 9 - 3 189,700 191,700 192,000 192,000 192,000 29,007 32,170 30,667 32,622 39,925 416 326 355 456 323 6,980 6,504 5,924 5,159 8,644 2,076 2,341 2,085 2,143 1,892 4,837 4,895 4,994 5,296 5,585 205 232 182 234 189 548 547 674 599 858 770 632 1,032 698 842 848 324 320 1,007 810 12,251 13,520 14,495 14,997 16,474 7,444 8,332 9,154 9,612 10,054 123 154 136 141 146 2,095 1,708 1,083 810 1,195 1,451 1,373 4,243 877 802 237 294 334 441 601 353 354 416 430 318 291 299 276 299 489 153 197 196 199 335 1,070 1,125 1,217 1,275 1,238 329 371 419 377 486 284 252 279 228 228 152 205 202 317 228 281,659 359,272 397,156 411,073 400,774 91,291 157,428 194,260 223,391 254,099 2,541 11,357 14,700 19,686 21,413 30,291 29,612 28,734 30,788 34,883 FISCAL YEAR FINAL DRAFT CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 146 FUNCTION/PROGRAM 2016 2017 2018 2019 2020 Water New Connections 213 303 235 300 357 Water Main Breaks 45 45 50 52 65 Total Consumption (hundreds of gallons) 16,097,931 15,222,373 15,833,124 17,602,330 19,766,870 Daily Average Consumption (thousand of gallons)43,942 41,705 42,378 48,225 54,155 Peak Daily Consumption (thousands of gallons) 10,985 11,000 9,083 11,094 14,011 Total Customers 13,877 14,124 14,678 16,434 13,683 Average Use Per Connection 5,352 5,244 5,294 4,587 5,600 Sewer Total Customers 12,282 12,398 12,866 12,853 13,112 Facilities Maintenance Number of Buildings Maintained 21 21 25 26 27 Square Footage 234,202 234,202 245,218 257,218 257,218 Source: Various City Departments FISCAL YEAR FINAL DRAFT CITY OF SCHERTZ, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 147 TABLE 20 (Continued) 2021 2022 2023 2024 2025 342 291 460 257 389 38 64 - 63 46 16,171,200 21,606,589 23,637,420 19,724,748 24,803,990 59,377 59,190 64,760 54,040 67,956 9,160 8,429 14,309 10,730 8,390 15,524 15,719 15,869 16,504 16,257 101,955 133,143 5,156 1,195 1,526 10,879 11,954 13,016 14,181 14,988 26 28 24 24 24 257,218 257,218 273,970 273,970 273,970 FISCAL YEAR FINAL DRAFT CITY OF SCHERTZ, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS 148 FUNCTION 2016 2017 2018 2019 2020 Police Stations 1 1 1 1 1 Police Vehicles 50 64 69 68 72 Fire Stations 2 2 3 3 3 Training Facility - - - - - Fire Vehicles 16 16 18 19 20 EMS Ambulances 9 8 8 9 9 Marshal's Office Vehicles 7 7 7 7 7 Streets Streets, paved (miles)153 159 153 165 165 Streets, unpaved (miles)5 5 5 5 5 Sidewalks (miles)- - - - - Parks and Recreation Parks - Developed 15 20 21 21 21 Parks - Undeveloped 10 4 4 4 4 Playground 19 19 19 20 21 Swimming Pools 2 4 4 4 4 Baby Pools 2 2 2 2 2 Baseball/Softball Diamonds 15 15 15 15 15 Soccer Fields 12 12 12 12 12 Community Centers 4 4 4 4 4 Splash Pads - - - - - Animal Services Control Vehicle 4 3 4 4 6 Library Facility 1 1 1 1 1 Volumes in Collection 97,412 107,382 110,266 150,972 139,447 Water Number of Reservoirs - - - - - Number of Pump Stations 5 5 5 5 6 Water Mains (miles)213 221 225 228 229 Sewer Sanitary Sewers (miles)98 110 113 116 116 Storm Sewers (miles)12 12 14 14 14 Facilities Services Vehicles 6 6 11 11 10 Fleet Generators 4 4 7 10 7 Vehilces and Equipment N/A N/A 384 352 341 Source: Various City Departments Notes: No capital asset indicators are available for the general government or EMS function. FISCAL YEAR FINAL DRAFT 149 TABLE 21 2021 2022 2023 2024 2025 1 1 1 1 1 66 76 90 97 92 3 3 3 3 3 - - - - - 20 24 24 25 25 10 11 12 13 13 7 3 N/A N/A N/A 168 172 180 182 190 5 5 5 5 5 - - - - - 21 21 21 21 21 5 5 5 5 5 21 36 36 36 36 4 3 3 3 3 2 1 1 1 1 15 15 15 15 15 12 12 12 12 12 4 4 4 4 4 - - 2 2 2 6 8 8 8 6 1 1 1 1 1 149,965 155,715 160,533 170,265 229,943 - - - - - 7 6 6 6 6 231 236 246 251 259 120 124 133 142 146 15 16 17 18 19 8 10 9 10 10 811111321 376 373 420 428 440 FISCAL YEAR FINAL DRAFT COMPLIANCE SECTION FINAL DRAFT FINAL DRAFT 153 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 To the Honorable Mayor and Members of City Council City of 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, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Schertz, Texas, as of and for the year ended September 30, 2025, and the related notes to the financial statements, which collectively comprise the City of Schertz, Texas’ basic financial statements, and have issued our report thereon dated March 17, 2026. Report on Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the City of Schertz, Texas’ internal control over financial reporting (internal control) to determine 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 City of Schertz, Texas’ internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Schertz, Texas’ 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 were not identified. FINAL DRAFT 154 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the City of Schertz, Texas’ 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. San Antonio, Texas March 17, 2026 FINAL DRAFT 155 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Mayor and Members of City Council City of Schertz, Texas Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program We have audited the City of Schertz, Texas’ compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City of Schertz, Texas’ major federal programs for the year ended September 30, 2025. The City of Schertz, Texas’ major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. In our opinion, the City of Schertz, Texas complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2025. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City of Schertz, Texas and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City of Schertz, Texas’ compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City of Schertz, Texas’ federal programs. FINAL DRAFT 156 Auditor’s Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City of Schertz, Texas’ compliance based on our audit. 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 generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City of Schertz, Texas’ compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, 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 City of Schertz, Texas’ compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of the City of Schertz, Texas’ internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City of Schertz, Texas’ internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. FINAL DRAFT 157 Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. San Antonio, Texas March 17, 2026 FINAL DRAFT FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the year ended September 30, 2025 159 FEDERAL GRANTOR'S FEDERAL GRANTOR/PASS-THROUGH ASSISTANCE LISTING PASS-THROUGH FEDERAL GRANTOR/PROGRAM TITLE NUMBER NUMBER EXPENDITURES U.S. Department of Treasury Passed through the Texas Division of Emergency Management: COVID-19 State and Local Fiscal Recovery Fund (ARP Act)21.027 TX2511 5,405,147$ Total Texas Division of Emergency Management 5,405,147 Total U.S. Department of Treasury 5,405,147 National Endowment for the Humanities (NEH) Passed through the Texas State Library and Archives Commission: Grants to States - Interlibrary Loan Program (ILL) 45.310 902524 5,190 Total Texas State Library and Archives Commission 5,190 Total National Endowment for the Humanities (NEH) 5,190 U.S. Department of Health and Human Services Passed through the Texas Health and Human Services Commission: Medicaid Cluster - Ambulance Services - Uncompensated Care Costs 93.778 N/A 90,141 Total Texas Health and Human Services Commission 90,141 Total U.S. Department of Health and Human Services 90,141 U.S. Department of Homeland Security Passed through the Texas Division of Emergency Management: Disaster Grants - Public Assistance 97.036 FEMA-4871-DR 173,035 Total Texas Division of Emergency Management 173,035 Total U.S. Department of Homeland Security 173,035 TOTAL FEDERAL AWARDS 5,673,513$ FINAL DRAFT CITY OF SCHERTZ, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the year ended September 30, 2025 160 (1) General The accompanying schedule of expenditures of federal awards presents the activity of all applicable federal awards for the City of Schertz, Texas (the City). The City’s reporting entity is defined in note 1 to the City’s basic financial statements. Federal awards received directly from federal and state agencies as well as federal awards passed through other government agencies are included in the respective schedule. (2) Basis of accounting The accompanying schedule of expenditures of federal awards is presented using modified accrual basis of accounting, which is described in note 1 to the City’s basic financial statements. (3) Relationship to federal financial reports Grant expenditure reports of September 30, 2025, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of year end accruals. The reports will agree at termination of the grant as the discrepancies noted are timing differences. (4) Indirect costs The City has not elected to use the de minimis indirect cost rate as allowed in the Uniform Guidance, Section 414. (5) Pass-through expenditures None of the federal programs expended by the City were passed through to subrecipients. FINAL DRAFT CITY OF SCHERTZ, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the year ended September 30, 2025 161 Summary of Auditor’s Results Financial Statements: Type of auditor’s report issued Unmodified Internal Control Over Financial Reporting: Material weakness(es) identified? No Significant deficiency(ies) identified? None Reported Noncompliance material to financial statements noted? None Federal Awards: Internal control over major programs: Material weakness(es) identified? No Significant deficiency(ies) identified? None Reported Type of auditor’s report issued on compliance for major programs Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR Section 200.516(a)? None Identification of Major Programs: Federal Assistance Listing Number Name of Federal Program or Cluster: #21.027 Coronavirus State and Local Fiscal Recovery Funds – American Rescue Plan Act of 2021 Dollar threshold used to distinguish between Type A and Type B programs $1,000,000 Auditee qualified as low-risk auditee? Yes Findings Relating to the Financial Statements Which are Required to be Reported in Accordance with Generally Accepted Government Auditing Standards None Findings and Questioned Costs for Major Federal Award Programs None FINAL DRAFT CITY OF SCHERTZ, TEXAS SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS For the year ended September 30, 2025 162 None FINAL DRAFT Agenda No. 8.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Executive Team Subject: Ordinance 26-M-009 - Conduct a public hearing to consider amending Chapter 90 Article V. Water and Wastewater Capital Recovery Fees, Section 90-155 Appeals. (S.Williams/B.James) BACKGROUND On April 1, 2025 the City Council adopted an update to the City water and sewer impact fees. This ordinance set a June 1, 2025 date that properties platted on or after this date would be assessed water and sewer impact fees at the new rate  ($8,814 water and $5,556 sewer) versus the old rate ($2,934 and $1,668). Previously with regard to roadway impact fees the City phased in impact fee increases to allow developers in process to factor in this change in fee amount. At the time, the State Legislature was considering bills that would not have allowed these types of phase-ins (the language was subsequently amended to allow them). The goal of the process for adopting impact fees is to provide ample notice that fee increases will occur. Generally, staff has worked with developers with plats in process to get their plats filed if possible before this date. That being said, there can be some unusual circumstances where the facts of the situation — a large portion of the property was already platted, the property owner had subdivision improvement agreements in place and/or were working with staff on them, the owner had started the process of platting and likely could have moved to file the plat if they had ample notice of the impact of not doing so on the fees due. As such, staff is proposing to amend the appeals section to authorize an appeal to the amount of the fee due from the current amount to the prior amount.  GOAL Develop water and wastewater infrastructure.  COMMUNITY BENEFIT Provide an adequate water and wastewater supply now and in the future.  SUMMARY OF RECOMMENDED ACTION Approval of Ordinance 26-M-009 amending Section 90-155 Appeals   RECOMMENDATION Approval of Ordinance 26-M-009.  Attachments Ordinance 26-M-009 w attachment Redline ORDINANCE 26-M-009 AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS TO AMEND CHAPTER 90 ARTICLE V. WATER AND WASTEWATER CAPITAL RECOVERY FEES, SCHERTS CODE OF ORDINANCES, SECTION 90-155 - APPEALS WHEREAS, Texas State legislature passed updates at the last legislative session amending local government code Chapter 395 and the requirements for local Capital Improvement Advisory Committee’s (CIAC) regarding the minimum committee size and who is allowed to be part of this committee; and WHEREAS, the Capital Improvement Advisory Committee (CIAC) for the City of Schertz assists with the approval and planning of how impact fees are used; and WHEREAS, the City of Schertz, collects impact fees from new developments to finance needed Capital Improvements that support these new developments; and WHEREAS, the City ordinance needs updated to better meet the intent of the legislation as to the applicability of the fee amounts while continuing to collect impact fees from new developments to help fund public infrastructure improvements; and NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City shall amend Chapter 90 Article V. Water and Wastewater Capital Recovery Fees, Section 90-155 Appeals is amended as set forth on Exhibit A hereto. 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 Ordinance for all purposes and are adopted as a part of the judgment and findings of the Council. Section 3. All ordinances and codes, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters resolved herein. Section 4. This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Ordinance or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Ordinance and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City hereby declares that this Ordinance would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Ordinance 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 Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code. Section 7. This Ordinance shall be effective upon the date of final adoption hereof and any publication required by law. PASSED AND APPROVED on the _______ day of _________________________, 2026. CITY OF SCHERTZ, TEXAS ______________________________________ Ralph Rodriguez, Mayor ATTEST: ______________________________________ Sheila Edmondson, TRMC City Secretary EXHIBIT “A” PART II - CODE OF ORDINANCES  Chapter 90 - UTILITIES  ARTICLE V. WATER AND WASTEWATER CAPITAL RECOVERY FEES    ------------------------------------------------------------------------------------------------------------------------------------------------------------   ARTICLE V. WATER AND WASTEWATER CAPITAL RECOVERY FEES1  Sec. 90-155. Appeals. (a) The property owner or applicant for new development may appeal the following decisions to the superintendent: (1) The applicability of a capital recovery fee to the development. (2) The amount of the capital recovery fee due. (3) The application of an offset or credit against a capital recovery fee due. (4) The amount of the refund due, if any. (b) The burden of proof shall be on the appellant to demonstrate that the amount of the capital recovery fee or the amount of the offset or credit was not calculated according to the applicable capital recovery fee schedule or the guidelines established from determining offsets and credits or the applicant could have reasonably filed a replat of a portion of the property prior to the effective date of the new fee amount given the stage of submittals including improvement agreements in process (c) The appellant may appeal the decision of the superintendent, in writing, to the city manager. If the appeal is accompanied by a bond or other sufficient surety satisfactory to the city manager in an amount equal to the original determination of the capital recovery fee due, the development application or tap purchase may be processed while the appeal is pending. (Code 1976, § 19-122; Ord. No. 21-F-30, § 1(Exh. A), 8-10-2021; Ord. No. 25-F-017, § 2(Exh. B), 4-1-2025) Created: 2026-01-26 10:41:05 [EST] (Supp. No. 26) Page 1 of 1 Sec. 90-155. Appeals. (a) The property owner or applicant for new development may appeal the following decisions to the superintendent: (1) The applicability of a capital recovery fee to the development. (2) The amount of the capital recovery fee due. (3) The application of an offset or credit against a capital recovery fee due. (4) The amount of the refund due, if any. (b) The burden of proof shall be on the appellant to demonstrate that the amount of the capital recovery fee or the amount of the offset or credit was not calculated according to the applicable capital recovery fee schedule or the guidelines established from determining offsets and credits or the applicant could have reasonably filed a replat of a portion of the property prior to the effective date of the new fee amount given the stage of submittals including improvement agreements in process (c) The appellant may appeal the decision of the superintendent, in writing, to the city manager. If the appeal is accompanied by a bond or other sufficient surety satisfactory to the city manager in an amount equal to the original determination of the capital recovery fee due, the development application or tap purchase may be processed while the appeal is pending. (Code 1976, § 19-122; Ord. No. 21-F-30, § 1(Exh. A), 8-10-2021; Ord. No. 25-F-017, § 2(Exh. B), 4-1-2025) Formatted: Font color: Red Agenda No. 11.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Engineering Subject:March 2026- Major Projects Update Memo Attachments March 2026 Project Updates Informational Only CITY COUNCIL MEMORANDUM City Council Meeting: March 17, 2026 Department: City Manager Subject: Update on Major Projects in Progress Background This is the monthly update on large projects that are in progress or in the planning process. This update is being provided so Council will be up to date on the progress of these large projects. If Council desires more information on any project or on projects not on this list, please reach out to staff and that information will be provided. Facilities Projects: 1. Fleet Building Parking Lot Project Description – Pave the open grassy area located at 27 Commercial Place o Project Status: Site Plan Development and Construction Design o Projected Completion: To be determined o Consultant: Unintech Consulting Engineers, Inc. o Contractor: To be determined Project Update: This project is being pushed back to FY26-27 due to the need to reallocate funding from this project to help fund the repairs of the retention wall and pavers at the Schertz Library. In the interim, Public Works has started grading a small area of the lot to provide additional improved surface for parking and storage of vehicles and equipment in order to comply with the City’s regulations regarding the use of unimproved surfaces. 2. Library Retention Wall (Pavers) Project Description – Replacing the failing plastic panels around the library foundation with concrete panels. This includes removal and replacement of some of the concrete pavers in the rear courtyard. o Project Status: Design o Projected Completion: Spring 2026 o Project Cost: $350,000 o Consultant: Unintech Consulting Engineering o Contractor: To be determined Project Update: Nothin new to report. The revised scope of the work has been determined and has been provided to our consultant. The consultant is working on the final tweaks to the bid package. Once complete, the project will be ready for bid. 3. Fire Station 4 Project Description – Fire Station 4 Build o Project Status: Full building and development phase going. CPS is good to go, and we are in the queue for power to the site. Tree clearing for CPS has been successful and approved. o Projected Completion: March 2027 o Total Project Cost: Estimated $13.25 million o Building Cost: Estimated $10 million o Consultant: AGCM – Owner Rep o Architect: Martinez Architecture o Contractor: Marksman – CMAR Project Update: The groundbreaking ceremony was outstanding and thank you to all for attending. Clearing has been completed, and dirt is being moved every day. Finishing of Rough in for underground subpanel electric to Main Distribution Panel (supposed to finish 3/4) Trench grade beams and footings in the main living quarters (supposed to finish 3/5) Installation of beam & footing rebar in the Apparatus Bay (supposed to finish 3/5) Trench and install South storm drain (supposed to finish 3/17) Termite protection at grade beams and footings in the main living quarters (supposed to finish 3/6) Lay vapor barrier at beams and footings in main living quarters (supposed to finish 3/6) Rough in underground secondary power (supposed to finish 3/11) Install beam and footing rebar in the main living quarters (supposed to finish 3/12) 4. FM 78 Build Out PD CID Property Room Project Description – Remodel a portion of the County Building that PD will utilize for CID and Property o Project Status: Approved by the County o Projected Completion: TBD o Consultant: TBD o Contractor: TBD Project Update: We have successfully evaluated the RFQs, and the next critical step is to meet with the purchasing team to select the most qualified contractor. 5. Police Department Building Remodel Project Description – Remodel office areas within building #6 where the Police Department operates. Areas to remodel may include the current CIS division, P&E holding area, and possibly other offices along that hallway. o Project Status: Once the FM 78 project is nearing completion, we can move forward. o Projected Completion: TBD o Consultant: TBD o Contractor: TBD Project Update: In a holding status until administrative tasks with the FM 78 build out for the property room and CID are completed. Drainage Projects: 1. FM 78 South Channel Silt Removal Project Description – Silt removal for the existing FM 78 South Drainage channel to include permitting, easement acquisition and construction. o Project Status: Easement Acquisition o Projected Completion: Spring 2027 o Project Cost: Design $32,100, Drainage Report $4,600 o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: After a lengthy pause, the City’s professional services consultant is actively working to survey the properties, create easement documents and negotiate access and temporary construction easements for the project. After easements are acquired, the project will be rebid, and construction will proceed. 2. Pickrell Park & FM 1518 Drainage Project Description – Installation of underground drainage, upgraded creek outfalls and provide localized surface drainage swales. Sanitary sewer relocation within areas of conflict with proposed drainage improvements o Project Status: Preliminary Engineering Study o Projected Completion: TBD o Project Cost: $41,987 - $47,500 NTE (study only) o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: Staff has reviewed the preliminary study and has provided comments back to Unintech. Unintech is working to include these comments and will meet with staff when complete to finalize the report. Recommendations from the study will be used to develop a project to improve the drainage in this area of the City. 3. Wendy Swan Drainage Project Description – Removal of an existing concrete retaining wall, install underground drainage and fill to grade with localized surface drainage. o Project Status: Design o Projected Completion: Summer 2026 o Project Cost: Design $108,500 ($125,000 NTE), Construction Estimate $1,100,000 o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: Final design plans have been received, and staff is currently reviewing the plans. 4. Friesenhahn Lift Station Drainage Improvements Project Description – Drainage study of Friesenhahn Lift Station site will be performed and used to develop plans for construction of recommended improvements to remedy poor drainage conditions around the site. o Project Status: Study and Design o Projected Completion: TBD o Project Cost: Design $74,815 Construction Estimate TBD o Consultant: Utility Engineering Group o Contractor: TBD Project Update: UEG has completed the initial analysis of the drainage concerns near the lift station. Staff will meet with UEG to discuss options to improve the drainage situation and begin developing a separate project for improvements. Water and Wastewater Projects: 1. Woman Hollering Creek Wastewater Interceptor Main and Lift Station Project Description – Design and construction of a sanitary sewer system to collect and convey wastewater to the future CCMA water reclamation plant off Trainer Hale Road in Southern Schertz. The system consists of approximately 19,000 linear feet of 30” gravity wastewater line running generally along Woman Hollering Creek from the existing Sedona lift station on FM 1518 to a new lift station on IH 10 and approximately 6,000 feet of force main from the lift station to CCMA plant. It also includes an additional 18” gravity line approximately 1,500 feet in length that will first serve the Hallie’s Cove Subdivision. The system is necessary for the new CCMA plant to begin operation and to allow the existing Woman Hollering Lift Station at Sedona to be taken out of service. o Project Status: Construction o Projected Completion: Summer 2026 o Project Cost: Engineering/Design $1,187,594, Land purchases, ROW, legal and advertising $700,810, Construction $11,200,000, and miscellaneous costs for a project total of $13,088,404 o Design Engineer: Cobb Fendley & Associates, Inc. o Owner’s Representative: AGCM, Inc. o Contractor: Thalle Construction Co, Inc. Project Update: No change from the last update. The collection and conveyance system including the lift station was put into operation March 3, 2025. The CCMA South Plant is operational. The Woman Hollering Package Treatment Plant has been shut down and is being cleaned and removed from the leased property location. The Sedona Lift Station and the pump and haul operation at Hallie’s Cove have been decommissioned. The contractor continues to work on correction of items identified on the punchlist for the project to be completed. Work remaining includes correction of pump issues, relocation and elevation of main disconnect, crane and crane foundation testing and potential correction. It is estimated that the remainder of the work on the project may still take several months to complete but as stated, the project is operational. 2. Riata Lift Station Relocation Project Description – Relocation of the Riata Lift Station ahead of TxDOT’s IH 35 NEX project to remove it from conflict with the proposed highway improvements. The design phase included identification of a new site for the list station, design of new lift station and design of the abandonment of the existing lift station. Property and easement acquisitions were required. The new lift station is needed to maintain sewer services. o Project Status: Begin Construction 4th Quarter of 2024. o Projected Completion: Summer 2026 o Project Cost: Design & Acquisition of easements and existing lift station $478,000; Construction: $2,800,000 o Consultant: Utility Engineering Group, PLLC o Contractor: Keystone Construction Project Update: The generator for the site was delivered on March 3rd, and Keystone is working to get this set and the last of the electrical wiring installed. Once complete, flow will be diverted to the new lift station and Keystone will begin abandonment of the old lift station. The latest timeline provided by the contractor is to complete the project by the end of March. Riata Lift Station Location 3. FM 1518 Utility Relocations Project Description – Relocation of water and sewer utilities to avoid conflicts as part of the TxDOT FM 1518 Improvement Project. o Project Status: Construction o Projected Completion: The City’s utility relocation portion of the project is expected to be completed in the Fall of 2026. o Project Cost: Design NTE $980,000, Construction Joint Bid $8,986,837/Aztec 16” Line $884,270 o Consultant: Halff Associates o Contractor: SER Construction Partners (TxDOT’s General Contractor)/Qro Mex Construction (Aztec 16” Line-completed) Project Update: No change since last update. SER has slowed down on the installation of water and sewer on the north end of the project due to CCMA working on their utility relocations within the same area. Once CCMA is completed in the area, SER will resume utility installation. 4. Corbett Ground Storage Tank Project Description – Construction of a new 3-million-gallon Ground Storage Tank (GST). The GST will be used to fill the existing Corbett Elevated Storage Tank and provide additional water storage capacity. This new GST will receive water directly from the Schertz Seguin Local Government Corporation. o Project Status: Construction Phase o Projected Completion: Spring 2026 o Project Cost: Design $547,100, Construction $8,665,220 o Consultant: Unintech Consulting Engineers o Contractor: Pesado Construction Co. Project Update: SSLGC has installed a pressure transducer at the plant to aid in the controls. Pesado is finishing other electrical installation and is nearly ready to fully start up the new pumps and have the new tank placed into service. 5. Water Loop Lines Project Description – Install 12” water main lines to provide a looped distribution system from Ware Seguin to Lower Seguin and Pfeil Road to N Graytown Road. o Project Status: Design/Easement Acquisition o Projected Completion: Fall 2026 o Project Cost: Design NTE $254,974, Construction Estimate $4,400,000 Project Update: Staff continues to work on the easement acquisition for this project. A resolution to use the City’s power of eminent domain for an easement for which negotiations have been futile will likely be brought before Council in an upcoming meeting. Our consultant is looking further into the conservation easement that is the concern of the landowner and also compiling his correspondence and offers made to support the need for eminent domain should this be the City’s only option to secure the necessary easement. The project is being broken into two separate construction projects so that the line between Graytown and Pfeil can proceed to construction while outstanding work acquiring easements for the line between Lower Seguin and Ware Seguin is still being done. 6. IH 35 NEX-North Utility Relocations Project Description – Relocation of water and sewer utilities to avoid conflicts as part of the TxDOT IH 35 NEX project. o Project Status: Design - Construction o Projected Completion: Joint Bid Construction is planned for Fall 2027 o Project Cost: Design & Easement Acquisition Services - $1,250,000 o Project Cost: Construction Sewer Only - $1,787,074 ($2,000,000 NTE) o Consultant: Halff Associates Project Update: Blackrock Construction has begun the construction effort along IH 35. They are completing a 30-inch bore under IH 35 and have also begun the installation of one of the gravity main segments. Halff is looking into bore pit locations for the 24-inch bores due to existing utilities from other providers not yet being relocated. Extent of IH 35 NEX – Northern Segment 7. Robin Hood Way Waterline Replacement Project Description – Replacement and upsizing of water line in Robin Hood Way, Sherlock Lane, and Nottingshire. The main replacement is to increase flows in the area, particularly to meet fire flow requirements. The project also includes street resurfacing and rehabilitation work that was previously removed from the SPAM project. o Project Status: Design o Projected Completion: Spring 2027 o Project Cost: $5,350,000 o Consultant: Kimley- Horn & Associates Project Update: The project scope has increased slightly to add a segment of water line replacement along Ware Seguin Road to the project. This segment is being added to the project since the waterline is being replaced/relocated near the FM 1518 and Ware Seguin Intersection and with replacement of the water main in the Schertz Forest Subdivision, it would leave a relatively short segment of “older” water main in place between the two project efforts. A design amendment will be added on to be on a later agenda for Council consideration. A revised Engineer’s Estimate and project bid schedule will be provided in the next couple of months. This month, the consultant is performing subsurface utility engineering (SUE) services for additional survey in the area. 8. Bell North Sewer Extension Project Description – Ten commercial properties on the west end of Bell North Drive are served by private grinder pumps that pump into a public wastewater force main that discharges into a manhole near 17316 Bell North Drive. This project is the construction of a gravity sewer main within Bell North Drive that will flow toward and discharge into the main on Doerr Lane. o Project Status: Contractor selected, pre-construction meeting to be scheduled in the near future o Projected Completion: Summer 2026 o Project Cost: Design $95,000 o Project Cost: Construction $513,900 ($575,000 NTE) o Consultant: Freeland Turk Engineering Group LLC o Contractor: RL Jones, LP Project Update: The construction contract was approved by council on February 17th to award the construction contract to RL Jones, LP. The city has received and is reviewing submittals from the contractor. A pre-construction meeting will be held before the end of the month and construction will begin shortly. 9. Northcliffe Country Club Estates Water and Wastewater Main Replacement Project Description – replacement of the water and wastewater mains and rehabilitation of the streets in the Northcliffe Country Club Estates subdivision. o Project Status: Design o Projected Completion: Spring 2027 o Project Cost: $8,733,400 (estimated) o Consultant: Unintech Consulting Engineers, Inc. Project Update: No change from previous update. Staff has reviewed the preliminary plans and provided comments to our consultant. Our consultant is revising the plans, and staff expects the final plan submittal in March. Northcliffe Country Club Estates 10. Cibolo West Wastewater Trunk Main Project Description – Installation of approximately 21,680 LF of gravity wastewater trunk main that will collect wastewater at the location of the Saddlebrook Wastewater Lift Station as well as areas north of Schaefer Road and convey flows south along a route including along Weir and Trainer Hale Roads and the west side of Cibolo Creek to the CCMA South Water Reclamation Plant. Having this line in place will ultimately allow the decommissioning of the Corbett and Saddlebrook Lift Stations. The project is a collaboration between the City of Schertz and Green Valley Special Utility District (GVSUD). o Project Status: Easement Acquisition o Projected Completion: Fall 2027 o Total Project Cost: $26,743,000 o Consultant for Route Study: Lockwood, Andrews, & Newnam, Inc. o Consultant for Easement Acquisition: TBD Project Update: No change since last update. Staff continues working on a scope to request a task order proposal for the next phase of this project – easement acquisition. The scope will likely include a preliminary design to further refine the specific route of the trunk main in order to identify the necessary easements. 11. Elevated Storage Tank Pipe Replacement and Tank Painting Project Description – Rehabilitation of vertical fill and drain line piping in the East Live Oak and Northcliffe elevated storage tanks due to increased signs of fatigue at the welded joints. The project also includes the painting of the interior and exterior of the East Live Oak and Northcliffe elevated tanks and the Ware Seguin ground storage tank. o Project Status: Design o Projected Completion: Design expected to be complete by Spring 2026. o Total Project Cost: $2,600,000 Estimated Total o Consultant for Study: Unintech Consulting Engineers, Inc. Project Update: The inspection of the tanks and final report is complete. Samples from the pipes have been analyzed and replacement pipe selection is currently under review. 12. Schertz Parkway 16” Water Transmission Main Replacement Project Description – Replacement of approximately 1,200 linear feet of 16” water transmission main along Schertz Parkway between Mare Way and Maske Road. o Project Status: Design o Projected Completion: Winter 2026 o Project Cost: Design $180,824 ($245,000 NTE), Easements $50,000, Construction Estimate $1,500,000 o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: Final design plans have been received, and staff is currently reviewing the design. Staff and consultant have made contact with the property owner for the necessary easement for the new waterline and will continue to negotiate and work on obtaining the necessary easement. 13. FM 3009 18” Water Transmission Main Replacement Project Description – Replacement of approximately 7,600 linear feet of 18” water transmission main. o Project Status: Design o Projected Completion: Fall 2027 o Project Cost: Design $431,752 ($550,000 NTE), Construction Estimate (including easement acquisition) $4,800,000 o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: No change from previous update. Unintech has completed the survey and is working on the preliminary design for the transmission main. Staff expects preliminary plans will be ready in March for review. 14. IH 35 Ground Storage Tank and Pump Station Project Description – Construction of a 3-million-gallon ground storage tank and pump station adjacent to the existing IH 35 elevated storage tank to provide storage capacity that can be filled during non-peak hours of the day. o Project Status: Design o Projected Completion: Fall 2027 o Project Cost: Design $728,068 ($800,000 NTE), Construction Estimate (including land acquisition $13,750,000 o Consultant: Unintech Consulting Engineers, Inc. o Contractor: TBD Project Update: Unintech has recently submitted the engineering report for the tank and support facilities. This is under review by staff from engineering and public works and we plan to meet with the consultant after the initial review to discuss proposed system operations. 15. Lift Station Decommissioning Project Description – Decommissioning of Elbel and Whisper Branch Lift Stations including regulatory documentation and physical demolition and abandonment. The project also includes the development of a lift station decommissioning standard guidance document that can be used by the City for future lift station decommissioning projects. o Project Status: Design o Projected Completion: TBD o Project Cost: Design $49,635 Construction Estimate TBD o Consultant: Utility Engineering Group o Contractor: TBD Project Update: UEG is working on the preliminary design for the decommissioning and a draft of the guidance document. Staff has provided some decommissioning needs of the electrical components at each site. A submittal is expected from UEG within the next few weeks. Street Projects: 1. Main Street Improvements Project Project Description – The project will improve sidewalks, provide street lighting, way-finding signage, landscaping, utility relocations, and architectural elements such as decorative concrete, decorative lighting, screening, and area signage. This project will also replace aging water and sanitary sewer mains and reconstruct the street with a new, stronger pavement section. Additionally, Lindbergh between Main and Exchange will be reconstructed. o Project Status: Design o Projected Completion: Spring 2028 o Project Cost: $25,880,893 o Consultant: Kimley- Horn Associates Project Update: No change from last update. Our consultant is continuing to revise the project plans. The plans and bid package are expected to be completed in a few months. This will put the project on track to bid by early Summer and construction starting before the end of this fiscal year. As the plans get close to being finalized, more detailed public outreach for the project will begin. Staff will also start acquiring the GVEC easements needed for relocating the electrical lines underground. 2. Lookout Road Reconstruction Project Description – The project involves reconstruction of Lookout Road from Schertz Parkway to Doerr Lane. A traffic signal at the Lookout Road/Schertz Parkway intersection will also be installed. The project also includes the replacement and upsizing the existing sanitary sewer main in Lookout Road from Doerr Lane to Schertz Parkway. o Project Status: Design o Projected Completion: Summer 2027 o Project Cost: Design $571,000 ($20,000 from Selma), Construction estimate $6,738,092 ($100,000 from Selma) o Design Consultant: Halff Associates Project Update: The construction plans are undergoing final plan review now. We’ve also requested the City of Selma review the plans and there are some construction elements that extend into their jurisdiction. Once this review is complete, the plans will also be complete for the project. The right- of-way acquisition is still in process and we’re hopeful two parcels will be completed in a couple of months. Additionally, staff is coordinating with CPS regarding the need for an encroachment agreement for the relocation of a sign outside the proposed right of way. 3. Lower Seguin Road Reconstruction Project Description – The project will reconstruct a 2.9-mile segment of Lower Seguin Road to widen and improve the street to the section identified in the Master Thoroughfare Plan. The City intends to pursue Federal DCIP funding for project construction. o Project Status: Design o Projected Completion: Fall 2027 o Project Cost: $18,200,000 o Consultant: Halff & Associates Project Update: No change from last update. Our consultant has identified a grant program that could be used to pay for the water line relocations needed for the project. Staff is working with our consultant to identify the effort needed to apply for the grant. Grant applications are due this Summer. Staff will bring a grant recommendation to Council in the near future for consideration. Work continues on refining the project plans and addressing utility conflicts. 4. Buffalo Valley South Resurfacing and Rehabilitation and Utility Replacements Project Description – Water and sanitary sewer main replacements and street rehabilitation of Buffalo Valley South, specifically Mill Street, 1st St, 2nd St, Bowman St, Lee St, Church St, Zuehl St, and Wuest. PCI data was used to select the streets in the project. Project will be funded with a combination of SPAM funding (for the street rehabilitation) and ARP funding for the utility replacement. o Project Status: Construction o Projected Completion: Winter 2026 o Project Cost: $5,977,000 o Design Consultant: Unintech Consulting Engineering o Contractor: E-Z Bel Construction, LLC Project Update: The consultant and Staff have been coordinating with the contractor on the additional curb replacement needed for the project. This effort has been completed, and work is occurring to complete the curb replacement and prepare for paving. The final section of sewer main replacement, which will be replaced by pipe bursting (no trenching needed), is underway and should be scheduled before the end of the month. 5. Boenig Drive Reconstruction Project Description – Reconstruction of Boenig Drive between Ware Seguin Road and Graytown Road. The reconstruction includes reconfiguration of the intersection with Ware Seguin Road to improve efficiencies and eliminate having two street intersections side-by side on Ware Seguin Road. o Project Status: Design o Projected Completion: Winter 2026 o Project Cost: $3,240,000 o Consultant: Unintech Consulting Engineers, Inc. Project Update: Nothing new to report. A couple of segments of water line need to be relocated to accommodate the new street section and profile. These relocations are being incorporated into the plans. Plans are expected to be completed in early 2026. 6. 2024 SPAM Rehabilitation Project Description – Rehabilitation of St. Andrews, Maple, and part of the Silvertree Subdivision streets. Rehabilitation involves removing the existing pavement, applying cement stabilizing to the material underneath, and placing a new layer of pavement on the street. o Project Status: Construction o Projected Completion: Spring/Summer 2026 o Project Cost: $3,581,000 o Consultant: Kimley-Horn Associates o Contractor: E-Z Bel Construction, LLC Project Update: The contractor has assigned additional personnel to the project to speed up the completion of the concrete work in Dove Meadows. Paving is expected to be completed later this month, depending on the weather. Staff has conducted additional public outreach for the future portions of the project as well as met on site with residents currently affected by construction in their neighborhood. The remaining portions of Silvertree and Maple have just started. 7. 2025 SPAM Resurfacing Project Description – Resurfacing of the streets in the Ashley Woods, Woodbridge, and Rio Vista subdivisions. Resurfacing involves performing localized concrete repairs; base repairs; asphalt level up; crack sealing; and applying a slurry seal to the surface of the streets. o Project Status: Design o Projected Completion: Summer 2026 o Project Cost: $1,282,231 o Consultant: Kimley-Horn Associates Project Update: The bid package continues to be further refined to try to reduce the project costs. Construction costs continue to increase and there may not be enough project budget available to do all the originally planned work. Staff is working to identify what can be completed now and what portions will need to shift to the next SPAM Resurfacing project. 8. Kramer Farm Rehabilitation Project Description – Rehabilitation of the western streets in Kramer Farm Subdivision. Rehabilitation involves removing the existing pavement, applying cement stabilizing to the material underneath, and placing a new layer of pavement on the street. o Project Status: Design o Projected Completion: Fall 2026 o Project Cost: $1,446,582 o Consultant: Kimley-Horn Associates Project Update: Nothing new to report. Comments on plans have been sent to our consultant and the bid package is still being refined. Kramer Farm Rehabilitation 9. 2026 SPAM Resurfacing Project Description – resurfacing of the streets in the Fairway Ridge; Woodland Oaks; and Horseshoe Oaks Subdivisions. The project also includes the TSAC-recommended crosswalk improvements. o Project Status: Design o Projected Completion: Fall 2026 o Project Cost: $1,780,000 o Consultant: Kimley-Horn Associates Project Update: No change from last update. All the design fieldwork has been completed, and plan preparation is nearing completion. The consultant expects to submit plans to the City this month. The project scope is expected to change as portion as the 2025 SPAM Resurfacing are delayed due to funding constraints. As those elements are added to this project, some of these elements may need to shift to a future SPAM Resurfacing project. 10. Savannah Drive Overlay Project Description – Resurfacing of Savannah Drive from the Selma City Limits to FM 3009. o Project Status: Construction o Projected Completion: Fall 2026 o Project Cost: $1,460,000 o Consultant: Kimley-Horn Associates Project Update: No change from last update. This project is “bundled” with the 2026 SPAM Resurfacing project. The geotechnical testing has been completed, and the project plans are being refined based on the testing results. Plans are expected for Staff review next month. 11. FM 3009 Overpass Project Description – TxDOT project for overpass construction at the FM 3009/FM 78 intersection to elevate the main lanes of FM 3009 over the railroad tracks and FM 78. On and off ramps will be provided so vehicles can travel between FM 3009 and FM 78 at the intersection. The project includes some improvements to FM 78 to improve operational efficiencies of the on and off ramps. o Project Status: Schematic Design and Environmental Clearance o Projected Completion: TBD o Project Cost: $100,000,000 (TxDOT) o Consultant: Kimley-Horn Associates Project Update: Staff received additional information related to the project and that was provided to Council. Highlights of that information is a more up-to-date cost estimate of the project ($100 million), and the timeframe for construction – if the grant request is successful, construction may start in 2032, if not funded, the construction timeline is unknown. Parks & Recreation Projects: 1. Schertz Soccer Complex Irrigation Water Storage Project Project Description – Upgrading electrical components, upsizing well pump and piping, and adding storage capacity for irrigation of the Schertz Soccer Complex. o Project Status: Under Construction o Projected Completion: Spring 2026 o Project Cost: $200,000 (estimated total) o Consultant: Unintech Engineering o Contractor: Kutscher Drilling Project Update: No change from last update. Drilling construction for the new well has been completed and the old well has been capped. Staff is acquiring bids for the storage tanks to finish up the project. Still pending bids for the storage tanks as there is a complication in the float valves available versus what was designed. I.T. Projects: 1. Asset Management- Work Order System – Open Gov Project Description- Replace the current work order and asset management systems o Project Status: In progress o Projected Completion: Fall 2025 o Project Cost: Approximately $470,000 o Contractor: Open Gov Project Update: Parks, Drainage, and Streets are actively working on providing information on the start-up data templates in order for OpenGov to upload each department’s work-related resources, task titles, activities, equipment, etc. into the sandbox site. Studies and Plans: 1. Master Thoroughfare Plan and Roadway Impact Fee Update Project Description – Update to City’s Master Thoroughfare Plan and Roadway Impact Fee Program. o Project Status: Study o Projected Completion: Schedule Pending o Total Project Cost: $149,460 ($170,000 NTE) o Consultant for Study: Kimley-Horn Associates Project Update: Staff and the consultant met to review the CIP projects in advance of the consultant beginning costing of all the projects. Information is being shared back and forth for this effort. 2. Southern Schertz Interim Sewer Service Study Project Description – Until the completion of expansion of the CCMA South Water Reclamation Plant, treatment capacity in southern Schertz is severely limited. This project is a study to identify potential short-term and long-term sewer service treatment options for the City’s southern service area. o Project Status: Study o Projected Completion: Schedule Pending o Total Project Cost: $59,695 o Consultant for Study: Utility Engineering Group Project Update: Staff and the consultant continue to evaluate the potential for retrofitting existing systems to function in an interim capacity. The consultant expects to have a preliminary report within the next few weeks. 3. Regional Flood Planning A Master Drainage Plan for the City of Schertz has been selected as one of the top projects recommended for funding and performance by the Texas Water Development Board (TWDB) through the Flood Management Evaluation (FME) program. Staff will present a resolution to Council at the March 17, 2026, meeting to authorize the execution of a FME Community Affirmation form in order to confirm that the City desires to have TWDB move ahead with the study. TxDOT Roadway Projects: Note: If links do not work, please contact engineering@schertz.com 1. FM 1103 Improvement Project: Construction officially began in November 2022 and was originally expected to be complete in fall 2026. Minor progress is being made on the roadway while utility relocation continues. General project updates are available by signing up at this link: FM 1103 Construction Newsletter 2. FM 1518 Improvement Project: SER Construction, LLC, formally began construction on April 9, 2024. The contractor has leased property owned by the City on Schaefer Road to stage construction activities. The first few months of the project will be mainly underground utility construction and will mostly take place outside travel lanes. While there may be some delays, major traffic disruptions should not be experienced much during this phase of the project. The project is currently anticipated to be completed in 2028. Updates regarding the FM 1518 project are available by visiting and subscribing at the following link: FM 1518 Expansion 3. IH-35 NEX (I-410 South to FM 1103): The central segment of the I-35 Northeast Expansion project continues with Alamo NEX Construction handling the design-build project. The central section runs from 410 N to FM 3009. Utility coordination work for the northern segment of the project is underway. TxDOT consultants have met with Public Works and Engineering Staff to begin establishing relocation needs. The City will be reimbursed for the costs of all relocations needed except for any upsizing or improvements above current conditions. Updates about the project can be obtained by signing up at the following link: I 35 NEX Project Updates 4. IH-10 Graytown Road to Guadalupe County Line: Work for the widening of the main lanes and utility relocations continues. Work on the FM 1518 bridge over IH 10 continues and will involve numerous episodes of the rerouting of traffic including shifting lanes and detours as necessary. Updates regarding the IH 10 project are available by signing up at the following link: IH 10 Expansion Information Agenda No. 12.   CITY COUNCIL MEMORANDUM    City Council Meeting:March 17, 2026 Department:Parks, Recreation & Community Servic Subject:Schertz Area Senior Center Policy Updates - Political Campaigns and Bingo Sponsorships (S.Gonzalez/L.Shrum) BACKGROUND The Schertz Area Senior Center (SASC) did not previously have a written policy regarding political campaigns and active campaigning in the Senior Center. There were long-standing practices, but it has been needed to formalize them in the Policy Manual. The SASC also has a long-standing practice of hosting bingo games with nominal prizes provided by sponsors.  This process needed to be formalized as there were some inconsistencies in what sponsors were providing, as well as some requests from political candidates who desired to sponsor bingo. Staff have provided clear guidelines in the attached policies that can be interrelated when political candidates sponsor bingo games. The SASC Advisory Board discussed the Bingo Policy at their January 15 meeting and at the March 19 meeting, staff will review the Campaign Policy.    Attachments Schertz Area Senior Center Campaign Policy Schertz Area Senior Center Bingo Policy 1 Created 01/15/25 Schertz Area Senior Center Policy: Political Campaign Activities Purpose The Schertz Area Senior Center is a welcoming, inclusive space designed to serve all older adults and community members in a respectful and comfortable environment. In order to maintain a neutral setting for participants, the Senior Center does not permit political campaigning, electioneering, or partisan activity inside the facility, except as speciflcally outlined in this policy. This policy is intended to: • Protect the comfort and privacy of Senior Center participants • Ensure fair and equal access for all candidates • Prevent disruption of daily programs and services • Maintain the Senior Center’s neutral and nonpartisan environment General Policy Individuals who are running for public office are not permitted to openly campaign at the Senior Center. This policy applies to all candidates, including sitting elected officials who are seeking re- election or running for a different office. The Senior Center is not an appropriate venue for campaigning, political solicitation, or infiuencing voting decisions during regular operations, programs, or events. Prohibited Activities The following activities are not permitted at the Senior Center at any time: • Open political campaigning or electioneering, including requesting votes or public support • Soliciting donations, fundraising, or collecting campaign contributions • Campaign-related speeches, presentations, or group addressing, including use of microphones or making building-wide announcements • Distributing, posting, displaying, or leaving behind campaign materials, including: o Flyers, brochures, postcards, and mailers o Yard signs, banners, posters, or table displays 2 Created 01/15/25 o Stickers, buttons, shirts, or promotional giveaways intended for campaign purposes • Campaign-related messaging during Senior Center programs, activities, or classes • Disrupting scheduled activities by engaging members in political conversations that interfere with programming or participant enjoyment • Schertz Area Senior Center does not endorse any political candidate. Use of the Center’s name or logo in any way that suggests endorsement or affiliation is not permitted. Permitted Activities The following activities are allowed only if all guidelines are followed and the activity does not interfere with Senior Center operations: 1. Individual Visits Candidates may sign in as a guest and visit with Senior Center members on an individual and informal basis. Guidelines: • Visits must remain respectful, non-disruptive, and conversational • Candidates may not approach members in a way that feels pressuring or solicit votes • Candidates may not distribute campaign materials during individual visits 2. Program Sponsorship (Bingo) Candidates may sponsor and host Bingo events. During these events: • Candidates may briefiy introduce themselves by name and office they are running for • Candidates may participate in the event and interact with members respectfully • Campaigning, political speeches, fundraising, or promotion of platforms using a microphone or addressing the group is not permitted • No campaign materials may be displayed, distributed, or left behind 3. Possible Meet the Candidates Event The Senior Center may host a Meet the Candidates event in cooperation with other community organizations interested in voter education such as League of Women Voters or local chambers. 3 Created 01/15/25 • All candidates for a speciflc office are invited • Candidates are given equal opportunity to participate • The event is structured and facilitated by Senior Center staff to remain neutral Guidelines: • The event will follow a set format (time limits, question structure, equal speaking time) • Candidates may discuss their platforms and answer questions in a respectful manner • Disruptive behavior, personal attacks, or harassment will not be allowed • No fundraising or solicitation is permitted during the event Scheduling & Approval All candidate visits beyond informal individual attendance (including sponsorships or participation in special events) must be coordinated in advance with Senior Center staff. The Senior Center reserves the right to: • Limit the frequency or timing of visits to avoid disruption • Deny requests that confiict with programming, capacity, or member comfort • Require candidates to follow additional guidelines as needed Enforcement Senior Center staff reserve the right to enforce this policy to ensure compliance and to maintain a neutral and respectful environment for all participants. Failure to comply may result in: • A verbal reminder of the policy • Immediate removal from the facility • Denial of future access during the campaign period • Cancellation of scheduled sponsorships or participation opportunities 1 Created 03/09/2026 Schertz Area Senior Center: BINGO Sponsorship Policy Program Overview The Schertz Area Senior Center hosts BINGO for Senior Center members on the following days and times: • Mondays, Wednesdays, and Fridays • 12:30 PM – 1:30 PM • Location: Schertz Area Senior Center (608 Schertz Pkwy, Schertz, TX 78154) • Membership: 800+ Members • Average Attendance: 120+ Participants BINGO is a popular activity that promotes social connection, engagement, and fun for older adults in our community. Sponsorships help us continue providing quality programming and prizes for participants. Who May Sponsor BINGO sponsorship is open to: • Individuals • Businesses • Community organizations • Civic groups and partners • Candidates for public office (subject to additional restrictions outlined below) All sponsorships must align with the Senior Center’s mission and maintain a welcoming, respectful, neutral, and non-disruptive environment for participants. The Schertz Area Senior Center is a nonpartisan facility and does not endorse any political candidate. Sponsorship Options Option 1: Sponsor-Hosted BINGO Sponsors may select an available date to attend and host (call out) BINGO. 2 Created 03/09/2026 Sponsor Responsibilities: • Provide 10 prizes (one prize per game) • Each prize must have a minimum value of $10 • Prizes must be appropriate for adults and suitable for a Senior Center environment Sponsor Participation Guidelines: • Sponsors may briefiy introduce themselves and share a short overview of their business or organization • Candidates for public office may state their name and the office they are running for • Interaction with participants must remain friendly, respectful, and non-disruptive • Remarks must be brief and must not interrupt or delay game play Political & Campaign Restrictions To maintain a neutral and welcoming environment: • BINGO may not be used for political campaigning or electioneering • Sponsors may not request votes, public support, or endorsements • Fundraising, solicitation of donations, or collection of campaign contributions is strictly prohibited • No campaign materials may be distributed, displayed, or left behind (including fiyers, brochures, postcards, signs, buttons, stickers, promotional giveaways, etc.) • Sponsors may not use microphones or address the group for campaign messaging or platform discussion • Sponsors may not imply endorsement by the Senior Center • The Senior Center name, logo, or likeness may not be used in campaign materials Guest Speaker Restriction Once a sponsor has secured a date to host BINGO: • The sponsor may not bring in a guest speaker, surrogate, representative, or third party to call BINGO • The secured host must be the approved sponsor 3 Created 03/09/2026 Option 2: Staff-Hosted BINGO Sponsors may choose to support BINGO without attending in person. Sponsorship Contribution Options: • Donate $150, and Senior Center staff will purchase prizes and host BINGO on the sponsor’s behalf OR • Drop off 10 prizes (in lieu of the $150 donation) Sponsor Recognition Includes: • Special acknowledgment of the sponsor at the beginning and end of BINGO • Sponsor name announced during recognition (business name and/or individual name only) For political candidates, recognition will include name and office sought only. No campaign messaging, slogans, or platform statements will be included. Prize Guidelines All donated prizes must be: • New and unused • Appropriate for a senior audience • Easy to distribute and safe for participants • Minimum value: $10 per prize Examples of recommended prizes include: • Small household items • Personal care items • Snacks or treats (non-perishable) • Games, puzzles, or activity items Senior Center staff reserve the right to decline prizes that are unsafe, inappropriate, expired, or not aligned with program standards. Gift cards or cash prizes are not permitted as prizes. 4 Created 03/09/2026 Scheduling & Availability Sponsor-hosted dates are scheduled on a flrst-come, flrst-served basis and must be reserved in advance. To schedule a date, sponsors must: • Contact Senior Center staff to conflrm availability • Conflrm which sponsorship option they are selecting • Submit prizes or donation prior to the scheduled date (timeline set by staff) All candidate sponsorships must also comply with the Schertz Area Senior Center Political Campaign Activities Policy. All sponsors are limited to hosting BINGO no more than once per month. Sponsor Conduct Expectations To ensure a positive experience for all participants, sponsors are expected to: • Treat all members and staff with respect • Follow staff direction during the program • Maintain a welcoming and inclusive environment • Avoid behavior that interferes with programming • Refrain from partisan or campaign-related activity Senior Center staff reserve the right to: • Issue a verbal reminder of policy • Immediately end a sponsorship visit if conduct becomes disruptive or inappropriate • Remove individuals from the facility • Cancel or deny future sponsorship opportunities 5 Created 03/09/2026 Questions or Scheduling Requests To sponsor BINGO or inquire about available dates, please contact: Schertz Parks and Recreation – Senior Center Team Schertz Area Senior Center 210-619-1970 Samantha Raby – Senior Center Supervisor sraby@schertz.com Amie Stevens – Senior Center Recreation Specialist astevens@schertz.com SPONSOR ACKNOWLEDGMENT By signing below, I acknowledge that I have read and understand this addendum and agree to comply with the Schertz Area Senior Center’s BINGO Sponsorship Policy Business/Group Name (If applicable): _____________________________________ Name (Printed): __________________________________________________________ Phone Number: __________________________________________________________ Email Address: ___________________________________________________________ Signature: ________________________________________________________________ Date: _____________________________________________________________________