CAFR FY 2016-2017CITY OF SCHERTZ, TEXAS
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED SEPTEMBER 30, 2017
OFFICIALS ISSUING REPORT
Brian James
Acting City Manager
James Walters
Director of Finance
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CITY OF SC0FD{TZ,TEXA8
TABLE 0PCONTENTS
SEPTEMBER 3O,2017
INTRODUCTORY SECTION .......................................................................................................... i
LETTER [)F ----------------------------------------.d
CITYOFFICIALS ............................................................................................................................................ Lz
`/muAN/ZA//OmaL CruAu/ ----------------------------------------.x
CERTIFICATE OF ACHIEVEMENT ------------------------------------.ni
FINANCIAL SECTION
B/\8[C FINANCIAL STATEMENTS ------------------------------------|4
STATEMENT (}F NET POSITION ................................................................................................................
]5
STATEMENT ()F ACTIVITIES .....................................................................................................................
l7
BALANCE SHEET - GOVERNMENTAL FUNDS ......................................................................................
|9
RECONCILIATION OF BALANCE SRIIET--------------------------------.
21
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
F[[NI]8 .......................................................................................................................
22
RECONCILIATION OF THE STATEMENT OF REVENUES, GOVERNMENTAL FUNDS TO
THE STATEMENT ()F ACTIVITIES .........................................................................................................
24
STATEMENT (}P NET POSITION - PROPRIETARY FUNDS ...................................................................
25
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NETPOSITION -
PROPRIETARY FUNDS .............................................................................................................................
27
SCHEDULE ()PREVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL -GENERAL FUND ...................................................................................... 6U
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL - ECONOMIC DEVELOPMENT CORPORATION .'''''''''''''''''.62
NOTES TO SCHEDULE OP REVENUES, EXPENDITURES AND CHANGES lN FUND
BALANCE - BUDGET AND ACTUAL ................................................................................................. 03
SCHEDULE [)p CHANGES - NET PENSION LIABILITY AND RELATED RATIOS ''''''''''''.64
SCHEDULE OP CITY CONTRIBUTIONS .'''''''''''''''''''''''''''''''''''''''''''''''.65
RETIREE HEALTH INSURANCE PLAN - ANALYSIS OF FUNDING PROGRESS ............................. 66
SUPPLEMENTARY INFORMATION -----------------------------------'67
COMPARATIVE BALANCE SHEETS -GENERAL FUND----------------------'60
STATEMENTS COMPARATIVE OF REVENUES, EXPENDITURES AND CHANGES IN F[IN[]
BALANCE -GENERAL FUND .............................................................................................................. 69
COMPARATIVE BALANCE SHEETS - ECONOMIC DEVELOPMENT CORPORATION .................. 70
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CITY OF SCHERTZ, TEXAS
TABLE OF CONTENTS
SEPTEMBER 30, 2017
FINANCIAL SECTION (Continued)
PAGE
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - ECONOMIC DEVELOPMENT CORPORATION ................................................
71
COMPARATIVE BALANCE SHEETS - DEBT SERVICE FUND ...........................................................
72
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - DEBT SERVICE FUND ................................................................................
73
COMPARATIVE BALANCE SHEETS - CAPITAL PROJECTS FUND ..................................................
74
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCE - CAPITAL PROJECTS FUND ............................................................................................
75
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS ....................................
76
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES — NONMAJOR GOVERNMENTAL FUNDS ....................................................................
78
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANZCE
BUDGET
TO ACTUAL - HOTEL OCCUPANCY FUND .......................................................................................
80
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - PARK FUND ..................................................................................................
81
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - TREE MITIGATION FUND .........................................................................
82
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - TREASURY FORFEITURES FUND ............................................................
83
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - JUSTICE FORFEITURES FUND .................................................................
84
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - STATE FORFEITURES FUND ....................................................................
85
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - LIBRARY ADVISORY BOARD ..................................................................
86
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - HISTORICAL COMMITTEE FUND ............................................................
87
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE -
BUDGET TO ACTUAL - PARKS AND RECREATION FOUNDATION ............................................
88
STATISTICAL SECTION
NET POSITION, BY COMPONENT .......................................................................................................... 90
CHANGE IN NET POSITION ..................................................................................................................... 92
FUND BALANCES - GOVERNMENTAL FUNDS ................................................................................... 96
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS ........................................................... 98
TAX REVENUE BY SOURCE — GOVERNMENTAL FUNDS .............................................................. 100
TOTAL WATER AND SEWER CONSUMPTION AND RATES ............................... ............................101
PRINCIPAL WATER AND SEWER CONSUMERS ............................................................................... 102
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY ..................103
DIRECT AND OVERLAPPING PROPERTY TAX RATES ................................................................... 104
PRINCIPAL PROPERTY TAX PAYERS ................................................................................................. 105
PROPERTY TAX LEVIES AND COLLECTIONS .................................................................................. 106
TAXABLE ASSESSED VALUE ............................................................................................................... 107
RATIOS OF OUTSTANDING DEBT BY TYPE ..................................................................................... 108
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CITY OF SC0FD{TZ,TEXA8
TABLE 0PCONTENTS
SEPTEMBER 3O,2017
STATISTICAL SECTION (Continued)
RATIOS {lp GENERAL BONDED DEBT OUTSTANDING .................................................................. ||0
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT ........................................... |||
DEBT MARGIN INFORMATION ------------------------------------ll2
PLEDGED REVENUE COVERAGE ........................................................................................................ ||3
TOP TEN PRINCIPAL EMPLOYERS ----------------------------------U5
FULL-TIME CITY D��F[Jy4CTl(}�� 116
OPERATING INDICATORS Bl' ||7
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GO VERNMENTA UDITING STANDARDS ...................... 122
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INTRODUCTORY SECTION
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March 6, 2018
To the Honorable Mayor, City Council, and the Citizens of 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 comprehensive
annual financial report of the City of Schertz for the fiscal year ended September 30, 2017.
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 respects.
The City of Schertz's financial statements have been audited by Armstrong, Vaughan & Associates P.C. a
firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the City of Schertz for the fiscal year ended September 30, 2017,
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 upon 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,
2017, 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 Analysis (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 areas in the country. The City of Schertz currently
occupies a land area of 32.21 square miles with a population of 39,453 in 2016 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 also is empowered by state statue to extend its corporate limits by annexation, which
occurs periodically when deemed appropriate by the governing body.
1400 Schertz Parkway Schertz, Texas 78154 214.619.1000 °f h rtz.c�
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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 Mayor 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 teen. The
mayor and all seven council members are elected at large.
The City of Schertz provides a full range of services, including police and fire protection, EMS services, the
construction and maintenance of streets, recreational facilities, cultural events, 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 30t''. The fiscal year for 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 60 -63 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 Schertz remained strong in 2017. As of September, the Federal Reserve Bank of Dallas
reported that the San Antonio Business -Cycle Index, of which Schertz data is incorporated, was 5.4 percent
in October 2017 which is above the long term growth average of 3.1 percent showing strong growth is
continuing in the area. The increase was due to a 3.9 percent increase in job growth in the metro area helping
to maintain the unemployment rate at 3.8 percent, which is the lowest rate since the data began in 1975.
The City of Schertz realized 0.5% percent year- over -year decrease in sales tax collection during the fiscal
year. The decrease was a result of two audit adjustments by the State Comptroller's Office, one during FY
2015 -16 and one during FY 2016 -17. The September 2016 deposit included an additional $1.77,435.53 owed
to the City of Schertz from the State Comptroller's Office while April 2017 saw a withdraw of $167,973.47
for payments improperly granted to the City of Schertz by the State. These two audit adjustments were
unrelated. Without these two adjustments, sales taxes would have grown by 2% instead.
During the 2017 . calendar year, there were three major construction projects completed in Schertz. Each of
the projects were built as speculative projects to help absorb increased demand for industrial space within the
San Antonio market. The projects included: 9850 Doerr Lane (215,000 square feet), 7377 Doerr Lane
(147,499 square feet), and 6729 Guada -Coma Drive (60,700 square feet). Currently those new constructions
are 10% occupied. According to the 2017 Q4 Xceligent Market Report, the Far North East market has a total
vacancy rate of 13.8 percent, up from 10.6 percent for the previous quarter. Despite the increased supply,
average asking rates continue to increase by $0.27 to $5.28 NNN.
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Long -term financial planning. The community approved bond propositions in November 2010 for quality
of life projects which included an aquatics facility, improvements to the baseball fields and soccer fields,
building a new animal adoption facility, and improvements to Main Street. The only remaining project are
the Main Street improvements. Construction was completed for the aquatic facility in January 2017 while the
Main Street improvements continue to be developed.
In November 2015, the City placed 2 bond propositions before the voters totaling $15 million. $7 million
was for FM road ways which the City will partner with the Texas Department of Transportation, who will
provide matching funds, and $8 million for a new Fire Station located in the southern portion of Schertz. In
June 2017, the second $4 million was issued for the Fire Station to begin construction. Currently the Fire
Station is estimated to be completed in 2019.
Current Year Budget Initiatives. In FY 2016 -17, the City's main initiatives that had a major budget
impact were the implementation of the second -year recommendation of the Classification and Compensation
Study to bring the wages up to a more competitive level, hiring 3 additional Fire Fighters that will be needed
with the opening of Fire Station #3, and opening the new Aquatics Facility. The City also preformed its first
citizen satisfaction survey which will provide valuable insight for the FY 2017 -18 Budget. FY 2016 -17 also
saw a grant award by the State for additional trail connections and sidewalks throughout the City. Estimated
benefit to the City will be $800,000 received for the $1,000,000 project.
Financial Information:
Internal Control. Management is responsible for establishing and maintaining internal controls designed to
ensure that assets of the City are 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 on pages 109, 110 and 104. A more detailed
summary of the City's Financial Performance is available in the Management Discussion and Analysis
section on page 5.
Independent Audit. An independent audit is performed every year 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 Armstrong, Vaughan, & Associates P.C. Certified Public Accountants, has
been included in this report.
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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
comprehensive annual financial report for the fiscal year ended September 30, 2016. This was the 32nd
consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of
Achievement, the City must publish an easily readable and efficiently organized comprehensive annual
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 comprehensive
annual financial report continues to meet the Certificate of Achievement Program's requirements and we are
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 the City Council during the
strategic planning, pre- budget, and budget approval process.
Respectfully submitted,
Brian C. James
Acting City Manager
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James P. Walters
Finance Director
CITY OF SCHERTZ, TEXAS
CITY OFFICIALS
MAYOR MICHAEL CARPENTER.
MAYOR PRO -TEM CEDRIC EDWARDS, SR.
CITY COUNCIL MARK DAVIS
RALPH GUTIERREZ
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ROBIN THOMPSON
ANGELINA KISER
CITY MANAGER JOHN KESSEL
DIRECTOR OF FINANCE JAMES WALTERS
CITY ATTORNEY CHARLES ZECH,
DENTON, NAVARRO, ROCHA, BERNAL, HYDE & ZECH, P.C.
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CITY OF SCHERTZ
ORGANIZATIONAL CHART
� Appointed by City Count I
A
1 ;10
Government Finance Officers Association
Presented to
Cit-v of Sj�hertz
Fur its ConVrehensive,Annual
Financial Report
for the Fiscal Year Ended
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FINANCIAL SECTION
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Schertz, Texas
Report on the Financial Statements
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 City of Schertz, as of and for
the year ended September 30, 2017, and the related notes to the financial statements, which collectively
comprise City of Schertz's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
City of Schertz's management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. 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. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the financial statements 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 entity's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of significant accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
941 West Byrd Blvd., Brute 101. - Universal City, Texas 78148
Phone. 210 - 658 -0229 - Fax: 210. 659 -7611 Email. info@avacpa.cotn www.avacpa.com
Opinions
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 City of Schertz, as of September 30, 2017, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that management's
discussion and analysis, budgetary comparison information, schedule of changes in net pension liabilities and
related ratios and the schedule of contributions, as listed in the table of contents, be presented to supplement
the basic financial statements. Such infonnation, although not a 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. The budgetary comparison information is the responsibility of management and was
derived from and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the audit of
the basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the budgetary
comparison information is fairly stated, in all material respects, in relation to the basic financial statements as
a whole. We have applied certain limited procedures to required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for consistency
with management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on management's discussion and analysis, budgetary comparison information, and schedule of
changes in net pension liabilities and related ratios and the schedule of contributions because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise City of Schertz's basic financial statements. The comparative financial statements, combining and
individual nonmajor fund financial statements, introductory section, and statistical section are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
The comparative financial statements and combining and individual nonmajor fund financial statements are
the responsibility of management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and other
records used to prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the comparative, combining and individual nonmajor fund financial statements are
fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory
and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic
financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 6, 2018 on
our consideration of City of Schertz's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial reporting
and compliance and the results of that testing, and not to provide an opinion on 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 City of Schertz's internal control over financial reporting and
compliance.
Armstrong, Vaughan & Associates, P.C.
March 6, 2018
rd
MANAGEMENTS DISCUSSION AND ANALYSIS
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 of the City of Schertz for the fiscal year ended
September 30, 2017. 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 of the City of Schertz exceeded its liabilities at the close of the most recent fiscal year by
$197.8 million (net position). Of this amount, $23.0 million (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 $24.3 million. A significant portion of this increase, 66.4 %, is
attributable to capital contributions from developers.
As of the close of the current fiscal year, the City's governmental funds reported combined ending fund
balances of $49.1 million, an increase of $10.1 million in comparison with the prior year.
At the end of the fiscal year, the combined total of the General Fund assigned and unassigned fund
balances was $10.8 million which is 45.5% of the general fund expenditures not including capital outlay.
The fund balance policy is to reserve a 26% balance.
During the fiscal year, the City issued $9.41 million in general obligation bonds and certificates of
obligation of which $540,000 is allocated to the proprietary fund.
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 comprise three components: 1) government -wide financial
statements, 2) fund financial statements, and 3) notes to the financial statements. This report 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, in a manner similar to a private- sector business.
The statement of net position presents information on all of the City's assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of the 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 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 unused vacation leave).
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
5
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 on balances of spendable resources available at the end of the fiscal
year. Such information is useful in evaluating a government's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental fiends 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 thirteen 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 and the capital projects fund, all of which are considered to be major fiends. Data from the
other seven governmental funds are combined into a single, aggregated presentation. Individual fund data
for each of these non -major governmental funds is provided in the form of combining statements
elsewhere in this report.
Proprietary funds. The City of Schertz maintains one type of proprietary fund. 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 fiends 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 fiend. 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.
The combining statements referred to earlier in connection with non -major 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 exceeded liabilities by $197.8 million at the close of the
most recent fiscal year.
The largest portion of the City's total net position (78 %) 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 signed. 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 (10.4 %) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net position, $23.0
million, 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 A -1
NET POSITION
7
Governmental Activities
Business -Type Activities
Total
2017
2016
2017
2016
2017
2016
Current and Other Assets
$ 53,489,898
$ 45,626,048
$ 34,305,074
$ 28,142,800
$ 87,794,972 $
73,768,848
Capital Assets
133,989,421
125,109,658
75,578,798
71,023,364
209,568,219
196,133,022
Total Assets
187,479,319
170,735,706
109,883,872
99,166,164
297,363,191
269,901,870
Deferred Outflows
3,637,434
3,985,590
997,659
1,082,823
4,635,093
5,068,413
Current Liabilities
7,331,101
9,650,691
5,029,905
4,646,767
12,361,006
14,297,458
Long -Tenn Liabilities
76,793,511
71,506,935
14,709,300
15,654,519
91,502,811
87,161,454
Total Liabilities
84,124,612
81,157,626
19,739,205
20,301,286
103,863,817
101,458,912
Deferred Inflows
344,220
-
-
-
344,220
-
Net Investment in
Capital Assets
84,537,238
74,237,004
70,361,035
64,210,231
154,898,273
138,447,235
Restricted
20,437,116
17,095,325
-
-
20,437,116
17,095,325
Unrestricted
1,673,567
2,231,341
20,781,291
15,737,470
22,454,858
17,968,811
Total Net Position
$106,647,921
$ 93,563,670
$ 91,142,326
$ 79,947,701
$ 197,790,247 $
173,511,371
7
The government's net position increased by $24.3 million during the current fiscal year. Sixty -six percent
of this increase represents capital contributions from developers. 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 A -2
CHANGES IN NET POSITION FOR GOVERNMENTAL AND BUSINESS -TYPE ACTIVITIES
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
TOTAL REVENUES- GOVERNMENT -WIDE
Charges for Operating Capital Grants Property Taxes Other Taxes Unrestricted Miscellaneous
Services Grants and and Investment
Contributions Contributions Earnings
g
Governmental Activities
Business -Type Activities
Total
Revenues:
2017
2016
2017
2016
2017
2016
Program Revenues:
Charges for Services
$ 5,910,899
$ 5,067,903
$ 31,757,607
$ 27,925,017
$ 37,668,506 $
32,992,920
Operating Contributions
552,878
342,485
-
-
552,878
342,485
Capital Contributions
10,043,483
6,227,664
6,111,474
2,831,126
16,154,957
9,058,790
General Revenues
Property Taxes
16,166,006
15,131,997
-
-
16,166,006
15,131,997
Other Taxes
13,595,041
13,760,248
-
-
13,595,041
13,760,248
Investment Earnings
448,408
187,847
211,466
102,642
659,874
290,489
Miscellaneous
182,754
309,275
475,733
522,221
658,487
831,496
Total Revenues
46,899,469
41,027,419
38,556,280
31,381,006
85,455,749
72,408,425
Expenses:
General Government
6,253,926
6,557,778
-
-
6,253,926
6,557,778
Public Safety
13,061,120
12,141,968
13,061,120
12,141,968
Public Environment
4,460,540
4,147,653
4,460,540
4,147,653
Parks and Recreation
2,859,974
2,034,964
2,859,974
2,034,964
Cultural
1,004,747
954,871
-
-
1,004,747
954,871
Health
776,494
570,204
-
-
776,494
570,204
Administration
3,052,102
1,954,276
3,052,102
1,954,276
Interest and Other Fees
2,355,714
2,240,783
-
-
2,355,714
2,240,783
Water and Sewer
-
-
21,346,078
20,269,111
21,346,078
20,269,111
EMS
-
-
6,006,178
5,004,110
6,006,178
5,004,110
Total Expenses
33,824,617
30,602,497
27,352,256
25,273,221
61,176,873
55,875,718
INCREASE IN NET POSITION
BEFORE TRANSFERS
13,074,852
10,424,922
11,204,024
6,107,785
24,278,876
16,532,707
Transfers
9,399
29,211
(9,399)
(29,211)
-
-
CHANGE IN NET POSITION
13,084,251
10,454,133
11,194,625
6,078,574
24,278,876
16,532,707
BEGINNING NET POSITION
93,563,670
83,109,537
79,947,701
73,869,127
173,511,371
156,978,664
ENDING NET POSITION
$ 106,647,921
$ 93,563,670
$ 91,142,326
$ 79,947,701
$ 197,790,247 $
173,511,371
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
TOTAL REVENUES- GOVERNMENT -WIDE
Charges for Operating Capital Grants Property Taxes Other Taxes Unrestricted Miscellaneous
Services Grants and and Investment
Contributions Contributions Earnings
g
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
TOTAL EXPENSES - GOVERNMENT -WIDE
General Public Safety Public Parks and Cultural Health Interest and
Government Environment Recreation Administration Other Fees
Revenues- Governmental Activities (Continued)
General Revenue by Source - Governmental Activities
Sales and Use Tax, 38%
Tax, 51 %
®2017
®2016
Business -Type Activities
Business -Type activities accounted for 45.9% of the growth in the net position of the City of Schertz. Of
this increase, 54.6% is the result of capital contributions from developers. For the most part, increases in
expenses closely paralleled inflation and the change in revenues was primarily related to fluctuations in
capital contributions from developers.
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000, 000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$(5,000,000)
2017 2016
Water and Sewer Utilities EMS
10
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's 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's governmental funds reported combined ending fund
balances of $49.1 million. Of this total amount, $10.0 million constitutes unassigned fund balance, which
is available for spending at the government's discretion. The remainder of fund balance is non- spendable,
restricted, 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 chief operating fund of the City of Schertz. At the end of the current fiscal year,
unassigned fund balance of the general fund was $10.0 million, while total fund balance was $13.0 million,
an increase of $1.5 million from the prior year. As a measure of the general fund's liquidity, it may be
useful to compare both unassigned fund balance and total fiend balance to total fund expenditures.
Unassigned fund balance represents 41.8% of total general fund expenditures, not including capital.
The debt service fund has a total fund balance of $1_5 million all of which is restricted for the payment of
debt service. The net increase in fund balance during the current year in the debt service fund was $0.1
million.
The capital projects fund has a total fund balance of $16.9 million, an increase of $5.3 million. The City
issued $8.87 million in new governmental bonds to supplement capital project activity during the year.
Proprietary funds. The City's proprietary funds provide the same type of information found in the
government -wide financial statements, but in more detail. Unrestricted net position of the water and sewer
fund at the end of the year amounted to $20.2 million and those for the Schertz EMS fund amounted to
$1.1 million. The proprietary fund issued $540 thousand in new bonds to supplement capital project
activity during the year.
General Fund Budgetary Highlights
The General Fund expenditures were $939 thousand less than the $25.5 million budget. This was the
result of cost savings across most of the General Fund. Revenues were higher by $796 thousand than
budgeted. Overall, the fund balance increased by $1.5 million higher than budgeted.
11
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, 2017, amounts to $209.6 million (net of accumulated depreciation). Developers
contributed $15.4 million in infrastructure during the year. The City also has several projects in progress
from voter approved bonds. Additional information on the City's capital assets can be found in the note 7
to the basic financial statements.
TABLE A -3
CAPITAL ASSETS
(Net of Depreciation)
Long -Term Debt. At the end of the current fiscal year, the City of Schertz had total bonded debt
outstanding of $76.7 million. The related principal and interest payment for the bonds are backed by an
annual ad valorem tax levied against all taxable property within the City. The City of Schertz maintains a
"AA +" rating from Standard and Poors. Additional information on the City's long -term debt can be found
in note 10 to the basic financial statements.
1 .Ql
Governmental
Business -Type
Activities
Activities
Total
2017
2016
2017
2016
2017
2016
Land
$ 7,499,108
$ 7,499,108
$ 1,354,138
$ 1,354,138
$ 8,853,246
$ 8,853,246
Water Rights
-
-
70,245
70,245
70,245
70,245
Buildings and Improvements
43,677,947
43,607,412
4,660,001
4,660,001
48,337,948
48,267,413
Machinery, Equipment,
$65 ,O 15,000
$ 60,585,000
$11,645,000
$12,590,000
$ 76,660,000
$ 73,175,000
and Vehicles
10,347,015
9,282,067
5,013,077
5,095,324
15,360,092
14,377,391
Infrastructure
109,303,478
100,003,048
92,807,350
85,890,831
202,110,828
185,893,879
Construction in Progress
13,632,514
9,832,153
2,907,404
2,681,683
16,539,918
12,513,836
Accumulated Depreciation
(50,470,641)
(45,114,130)
(31,233,417)
(28,728,858)
(81,704,058)
(73,842,988)
TOTALS
$ 133,989,421
$ 125,109,658
$ 75,578,798
$ 71,023,364
$209,568,219
$ 196,133,022
Long -Term Debt. At the end of the current fiscal year, the City of Schertz had total bonded debt
outstanding of $76.7 million. The related principal and interest payment for the bonds are backed by an
annual ad valorem tax levied against all taxable property within the City. The City of Schertz maintains a
"AA +" rating from Standard and Poors. Additional information on the City's long -term debt can be found
in note 10 to the basic financial statements.
1 .Ql
12
Governmental
Business -Type
Activities
Activities
Total
2017
2016
2017
2016
2017
2016
General Obligation Bonds
$ 55,225,000
$ 54,995,000
$ 2,530,000
$ 3,010,000
$ 57,755,000
$ 58,005,000
Certificates of Obligation
8,560,000
3,850,000
8,050,000
8,220,000
16,610,000
12,070,000
Tax Notes and Leases
1,230,000
1,740,000
1,065,000
1,360,000
2,295,000
3,100,000
TOTALS
$65 ,O 15,000
$ 60,585,000
$11,645,000
$12,590,000
$ 76,660,000
$ 73,175,000
12
Economic Factors and Next Year's Budgets and Rates
At the end of the last fiscal year, the assigned and unassigned fund balance in the general fund increased to
$10.0 million. The City of Schertz has appropriated $1.5 million of this amount for spending in the 2018
fiscal year budget. The approved tax rate decreased marginally to $0.4910 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.
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 concerning any of the information provided in this report
or requests for additional financial information should be addressed to the Office of the Finance Director,
City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154.
13
I rz/,� �N
CITY
OA
1,
BASIC FINANCIAL STATEMENTS
14
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET POSITION
SEPTEMBER 30, 2017
ASSETS
Current Assets:
Cash and Cash Equivalents
Investments
Receivables (net of allowances)
Taxes
Accounts and Other
Current Service Concession Arrangement Receivable
Accrued Interest Income
Inventories
Internal Balances
Total Current Assets
Noncurrent Assets:
Restricted Assets:
Cash and Cash Equivalents
Investments
Service Concession Arrangement Receivable
Capital Assets:
Land
Water Rights
Buildings and Improvements
Equipment and Vehicles
Infrastructure
Construction in Progress
Accumulated Depreciation
Total Noncurrent Assets
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Debt Refundings
Deferred Pension Related Outflows
TOTAL DEFERRED OUTFLOWS
OF RESOURCES
See Accompanying notes to basic financial statements.
15
Primary Government
Governmental Business -Type
Activities Activities Total
$ 5,265,632
42,160,733
2,751,71.4
1,678,1.32
90,909
7,949
98,263
59,044
52,112,376
617,075
760,447
7,499,108
43,677,947
10,347,015
109,303,478
13,632,514
(50,470,641)
135,366,943
187,479,319
$ 2,353,733
10,277,545
5,812,200
6,324
133,430
(59,044)
18,524,188
1,444,226
14,336,660
1,354,138
70,245
4,660,001
5,013,077
92,807,350
2,907,404
(31,233,417)
91,359,684
109,883,872
$ 7,619,365
52,438,278
2,751,71.4
7,490,332
90,909
1.4,273
231,693
70,636,564
2,061,301
14,336,660
760,447
8,853,246
70,245
48,337,948
15,360,092
202,110,828
16,539,918
(81,704,058)
226,726,627
297,363,191
733,620 89,998 823,61.8
2,903,81.4 907,661 3,811,475
$ 3,637,434
$ 997,659 $ 4,635,093
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET POSITION (CONTINUED)
SEPTEMBER 30, 2017
Noncurrent Liabilities
Compensated Absences
855,879
Primary Government
1,104,379
Net Other Post - Employment Benefit Payable
Governmental
Business -Type
655,755
Net Pension Liability
Activities
Activities
Total
LIABILITIES
452,983
-
452,983
Current Liabilities:
62,009,570
10,254,029
72,263,599
Accounts Payable
$ 884,1.88
$ 2,094,236 $
2,978,424
Accrued Liabilities
654,1.1.7
176,1.60
830,277
Due to Other Governments
1.19,1.49
-
119,1.49
Unearned Revenue
35,346
431,098
466,444
Accrued Interest Payable
445,372
63,571
508,943
Compensated Absences
213,970
62,125
276,095
Customer Deposits
54,200
590,618
644,818
Current Service Concession Arrangement (Liability)
54,153
-
54,153
Current Portion of Long -Term Debt
4,870,606
1,612,097
6,482,703
Total Current Liabilities
7,331,1.01
5,029,905
12,361,006
Noncurrent Liabilities
Compensated Absences
855,879
248,500
1,104,379
Net Other Post - Employment Benefit Payable
506,934
148,821
655,755
Net Pension Liability
12,968,145
4,057,950
17,026,095
Service Concession Arrangement (Liability)
452,983
-
452,983
Long -Term Debt
62,009,570
10,254,029
72,263,599
Total Noncurrent Liabilities
76,793,511
14,709,300
91,502,811
Scholarships and Other Purposes
TOTAL LIABILITIES
84,124,612
19,739,205
103,863,817
DEFERRED INFLOWS OF RESOURCES
Deferred Service Concession Arrangement 344,220 - 344,220
TOTAL DEFERRED INFLOWS
OF RESOURCES 344,220 - 344,220
NET POSITION
Net Investment In Capital Assets
84,537,238
70,361,035 154,898,273
Restricted For:
Police and Municipal Court
1,243,281
- 1,243,281
PEG Capital Fees
638,506
- 638,506
Tourism Development
1,503,873
- 1,503,873
Economic Development
15,069,420
- 15,069,420
Parks and Tree Mitigation
699,725
- 699,725
Debt Service
1,087,260
- 1,087,260
Scholarships and Other Purposes
195,051
- 195,051
Unrestricted
1,673,567
20,781,291 22,454,858
TOTAL NET POSITION
$ 106,647,921
$ 91,142,326 $ 197,790,247
See Accompanying notes to basic financial statements.
16
CITY OF SCHERTZ, TEXAS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Functions and Programs Expenses
Primary Government:
Governmental Activities:
General Government
Public Safety
Public Environment
Parks and Recreation
Cultural
Health
Administration
Interest
Total Governmental Activities
Business -Type Activities
Water and Sewer
EMS
Total Business -Type Activities
Total Primary Government
General Revenues:
Taxes:
Ad Valorem
Sales
Franchise Fees
Hotel /Motel
Mixed Drink
Investment Earnings
Miscellaneous
Total General Revenues
Transfers
Change in Net Position
Net Position at Beginning of Year
Net Position at End of Year
Program Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
$ 6,253,926
$ 874,737 $
189,264
$ 10,042,931
13,061,120
4,131,548
210,681
-
4,460,540
-
-
-
2,859,974
544,460
129,148
-
1,004,747
330,412
4,144
-
776,494
29,742
19,641
552
3,052,1.02
-
-
-
2,355,71.4
-
-
-
33,824,61.7
5,910,899
552,878
1.0,043,483
21,346,078
25,390,713
-
6,111,474
6,006,178
6,366,894
-
-
27,352,256
31,757,607
-
6,111,474
$ 61,176,873
$ 37,668,506 $
552,878
$ 16,154,957
See Accompanying notes to basic financial statements.
17
Net (Expense) Revenue and
Changes in Net Position
Primary Government
Governmental
Business -Type
16,166,006
Activities
Activities
Total
$ 4,853,006
-
$ 4,853,006
(8,71 8,891)
-
(8,71 8,891)
(4,460,540)
-
(4,460,540)
(2,186,3 66)
211,466
(2,186,3 66)
(670,191)
475,733
(670,191)
(726,559)
687,199
(726,559)
(3,052,1.02)
(3,052,1.02)
(2,355,71.4)
(9,399)
(2,355,71.4)
( 17,317,357)
( 17,317,357)
13,084,251
$ 10,156,109
10,156,109
93,563,670
360,716
360,716
10,516,825
10,516,825
(17,317,357) 10,516,825 (6,800,532)
16,166,006
-
16,166,006
10,844,503
-
10,844,503
2,208,373
-
2,208,373
499,466
-
499,466
42,699
-
42,699
448,408
211,466
659,874
182,754
475,733
658,487
30,392,209
687,199
31,079,408
9,399
(9,399)
-
13,084,251
11,194,625
24,278,876
93,563,670
79,947,701
173,511,371
$ 106,647,921
$ 91,142,326
$ 197,790,247
18
CITY OF SCHERTZ, TEXAS
BALANCE SHEET — GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
See Accompanying notes to basic financial statements.
19
General
Capital
Debt
Fund
Projects
Service
ASSETS
Cash and Cash Equivalents
$ 2,062,393
$
1,753,815
$
59,148
Investments
9,485,725
15,546,171
1,390,934
Receivables (net of allowances)
Taxes
1,970,300
-
82,550
Accounts and Other
1,677,633
-
-
Inventory
98,263
-
-
Restricted Assets:
Cash and Cash Equivalents
617,075
-
-
TOTAL ASSETS
$ 15,911,389
$
17,299,986
$
1,532,632
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts Payable
$ 544,406
$
267,949
$
-
Accrued Salaries and Benefits
653,700
-
-
Customer Deposits
54,200
-
-
Due to Other Governments
119,149
-
-
Due to Other Funds
(175,084)
116,040
-
Unearned Revenues
35,346
-
-
Total Liabilities
1,231,717
383,989
-
Deferred Inflows of Resources:
Unavailable Revenues
1,710,054
-
82,550
Fund Balances:
Nonspendable:
Inventory
98,263
-
-
Restricted for:
Police and Public SafetytMuncipal Court
101,842
-
-
Municipal Court
728,350
-
-
PEG Capital Fees
638,506
-
-
Capital Improvement
-
16,915,997
-
Debt Service
-
-
1,450,082
Tourism Development
-
-
-
Parks and Tree Mitigation
-
-
-
Historical Committee and Library
-
-
-
Eeonomic Development
-
-
-
Animal Control
35,660
-
-
Veterans
4,796
-
-
Scholarships
77,458
-
-
Committed for Civic CenterlClED
454,376
-
-
Assigned for:
Property Replacement
854,198
-
-
Unassigned
9,976,169
-
-
Total Fund Balances
12,969,618
16,915,997
1,450,082
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES
$ 15,911,389
$
17,299,986
$
1,532,632
See Accompanying notes to basic financial statements.
19
Economic
Nonmajor
Total
Development
Governmental
Governmental
Corporation
Funds
Funds
$ 893,858
$ 496,421
$ 5,265,635
13,506,156
2,231,747
42,160,733
665,316 33,548 2,751,714
8,448 - 1,686,081
- - 98,263
- 617,075
$ 15,073,778 $ 2,761,716 $ 52,579,501
$ 3,940 $ 67,892 $ 884,187
417 - 654,117
- - 54,200
- - 119,149
- - (59,044)
- - 35,346
4,357 67,892 1,687,955
- - 1,792,604
- 98,263
- 413,089
514,931
- -
728,350
- -
638,506
- -
16,915,997
- -
1,450,082
- 1,503,873
1,503,873
- 699,725
699,725
- 77,137
77,137
15,069,421 -
15,069,421
- -
35,660
- -
4,796
- -
77,458
- -
454,376
- -
854,198
- -
9,976,169
15,069,421 2,693,824
49,098,942
$ 15,073,778 $ 2,761,716
$ 52,579,501
20
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CITY OF SCHERTZ, TEXAS
RECONCILIATION OF BALANCE SHEET
SEPTEMBER 30, 2017
TOTAL FUND BALANCE - TOTAL GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital Assets used in governmental activities are not financial resources
and, therefore, are not reported in the funds.
Other long -term assets are not available to pay for current - period expenditures
and, therefore, are not recognized as revenue in the funds.
The governmental funds report other post - employment benefit contributions as
expenditures when they become due and payable. However, in the statement of
activities differences between other post - employment benefit contributions and
actuarially determined costs are reported as an obligation.
Long -term liabilities, including bonds payable and capital leases, are not due and
payable in the current period and therefore, not reported in the funds:
Bonds Payable
Unamortized Premiums, Discounts, Losses on Refundings
Capital Lease Payable
Accrued Interest Payable
Compensated Absences
Service Concession Arrangements (and related deferred inflows and outflows
of resources) do not consume current financial resources and are
not reported in governmental funds:
Service Concession Arrangement (Liability)
Service Concession Arrangement Receivable
Deferred Service Concessions
Net Pension Liabilities (and related deferred inflows and outflows of
resources) do not consume current financial resources are not
reported in governmental funds:
Net Pension Liability
Pension Related Deferred Outflows
TOTAL NET POSITION - GOVERNMENTAL ACTIVITIES
See accompanying notes to basic financial statements.
21
(65,015,000)
(1,106,409)
(25,151)
(445,372)
(1,069,849)
(507,136)
851,356
(344,220)
$ 49,098,942
133,989,421
1,'792,604
(506,934)
(67,661,781)
(12,968,145)
2,903,814 (10,064,331)
$ 106,647,921
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES —
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
REVENUES
Taxes
Permits and Fees
Service Fees
Fines and Fees
Intergovernmental
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Public Safety
Public Environment
Parks and Recreation
Cultural
Health
Administration
Capital Outlay
Debt Service:
Principal
Interest and Fiscal Charges
Bond Issue Costs
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds From Issuance of Debt
Premiums from Issuance of Debt
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
Fund Balances at Beginning of Year
Fund Balances at End of Year
General
Fund
Capital
Projects
Debt
Service
Fund
$ 19,450,338 $
- $
6,149,844
2,367,929
-
-
2,107,844
-
-
1,021,965
-
-
307,809
89,264
-
128,158
123,920
47,758
603,477
745,050
100,000
25,987,520
958,234
6,297,602
5,171,635 - -
11,846,184 - -
1,128,979 - -
1,682,955 - -
901,992 - -
672,934 - -
2,395,926 - -
644,773 4,757,930 -
33,174
- 4,440,000
36,513
- 2,077,166
-
211,330 2,950
24,515,065
4,969,260 6,520,116
1,472,455
(4,011,026) (222,514)
8,870,000 -
- 381,931 -
68,385 9,399 361,019
68,385 9,261,330 361,019
1,540,840 5,250,304 138,505
11,428,778 11,665,693 1,311,577
$ 12,969,618 $ 16,915,997 $ 1,450,082
See accompanying notes to basic financial statements.
22
Economic
Development
Corporation
Other
Nonmaj or
Governmental
Funds
Total
Governmental
Funds
$ 3,620,930 $ 499,466
$ 29,720,578
- 172,116
2,540,045
- 24,455
2,132,299
- 195,656
1,217,621
- -
397,073
125,684 22,897
448,417
- 209
1,448,736
3,746,614 914,799
37,904,769
92,829 1.30,454
5,394,918
- 24,452
11,870,636
- -
1,128,979
- 202,960
1,885,91.5
- 19,878
921,870
- -
672,934
450,524 66,405
2,912,855
- 89,493
5,492,196
4,473,174
2,113,679
- - 21.4,280
543,353 533,642 37,081,436
3,203,261 381 ,157 823,333
8,870,000
381,931
438,803
(361,019) (68,385) (429,404
(361,01.9) (68,385) 9,261,330
2,842,242 312,772 10,084,663
12,227,179 2,381,052 39,014,279
$ 15,069,421 $ 2,693,824 $ 49,098,942
23
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CITY OF SCHERTZ, TEXAS
RECONCILIATION OF THE STATEMENT OF REVENUES,
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
NET CHANGE IN FUND BALANCES - GOVERNMENTAL FUNDS
Amounts reported for governmental activities in the Statement of Activities
are different because:
Governmental funds report capital outlays as expenditures. However, in the statement
of activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense. In addition, capital assets contributed to governmental
activities are not recorded on the fund statements.
Capital Outlay
Capital Contributions
Depreciation Expense
4,821,788
10,042,931
(5,734,405)
Proceeds from capital asset dispositions produce current financial resources in the fund
statements, while the net gain (loss) is recognized in the Statement of Activities. This
is net book value of capital assets disposed.
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds.
The issuance of long -term debt (e.g. bonds, leases) provides current financial resources
to governmental funds, which the repayment of the principal of long -term debt consumes
the current financial resources of governmental funds. Neither transaction, however, has
any affect on net position. This amount is the net effect of these differences in the
treatment of long -term debt and related items.
Proceeds from the Issuance of Debt (8,870,000)
Premiums Received from the Issuance of Debt (381,931)
Principal Repayments 4,473,174
Amortization of Premiums, Discounts, Losses 27,898
Governmental funds report required contributions to employee pensions
as expenditures. However, in the Statement of Activities the cost of
the pension is recorded based on the actuarially determined cost of the
plan. This is the amount that actuarially determined pension
expense exceeded contributions.
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and, therefore, are not reported as expenditures in
governmental funds:
Compensated Absences (47,306)
Net Other Postemployment Benefits (100,056)
Accrued Interest (92,169)
CHANGE IN NET POSITION - GOVERNMENTAL ACTIVITIES
See accompanying notes to basic financial statements.
24
10,084,663
9,130,314
(250,551)
(305,723)
(4,750,859)
(584,062)
(239,531)
$ 13,084,251
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
SEPTEMBER 30, 2017
ASSETS
CurrentAssets:
Cash and Cash Equivalents
Investments
Accounts Receivable, Net of Allowance:
Customer Accounts
Due from Other Funds
Accrued Interest
Inventory
Total Current Assets
Noncurrent Assets:
Restricted Assets:
Cash and Cash Equivalents
Investments
Capital Assets:
Land
Water Rights
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
Construction in Progress
Less: Accumulated Depreciation
Total Noncurrent Assets
TOTAL ASSETS
Governmental
Business -Type
Activities - Enterprise
Funds
Activities
Water
14,336,660 -
1,354,138
Internal
and Sewer
Sehertz
-
Service
System
EMS
Total
Fund
2,198,639
5,013,077 -
92,807,350
$ 2,353,733
$ -
$ 2,353,733
$ -
9,725,719
551,826
10,277,545
-
2,719,495
3,092,705
5,812,200
-
116,040
-
116,040
-
6,324
-
6,324
-
51,790
81,640
133,430
-
14,973,101
3,726,171
1.8,699,272
-
1,444,226
-
1,444,226 -
14,246,632
90,028
14,336,660 -
1,354,138
-
1,354,138 -
70,245
-
70,245 -
4,653,501
6,500
4,660,001 -
2,814,438
2,198,639
5,013,077 -
92,807,350
-
92,807,350 -
2,907,404
-
2,907,404 -
(29,835,794)
(1,397,623)
(31,233,417) -
90,462,140
897,544
91,359,684 -
105,435,241 4,623,715 110,058,956 -
DEFERRED OUTFLOWS OF RESOURCES
Deferred Loss on Refunding 89,998 - 89,998
Deferred Pension Related Outflows 359,249 548,412 907,661 _
TOTAL DEFERRED OUTFLOWS $ 449,247 $ 548,412 $ 997,659 $
See accompanying notes to basic financial statements.
25
CITY OF SCHERTZ, TEXAS
STATEMENT OF NET POSITION - PROPRIETARY FUNDS (CONTINUED)
SEPTEMBER 30, 2017
LIABILITIES
Current Liabilities:
Accounts Payable
Accrued Liabilities
Customer Deposits
Accrued Interest Payable
Due to Other Funds
Unearned Revenue
Current Portion of Compensated Absences
Current Portion of Long -Term Debt
Total Current Liabilities
Noncurrent Liabilities:
Compensated Absences
Net Other Post - Employment Benefit Payable
Net Pension Liability
Long -Term Debt (Net of Current
Portion)
Total Noncurrent Liabilities
TOTAL LIABILITIES
NET POSITION
Net Investment in Capital Assets
Unrestricted
TOTAL NET POSITION
Governmental
Business -Type Activities - Enterprise Funds Activities
Water
Internal
and Sewer
Schertz
Service
System
EMS
Total Fund
$ 2,037,480
$ 56,756
$ 2,094,236 $
45,370
130,790
176,160 -
590,618
-
590,618 -
55,618
7,953
63,571 -
-
175,084
175,084 -
431,088
10
431,098 -
1.9,212
42,913
62,125 -
1,282,556
329,541
1,612,097 -
4,461,942
743,047
5,204,989 -
76,847
171,653
248,500 -
48,451
100,370
148,821 -
1,603,324
2,454,626
4,057,950 -
9,441,450
812,579
10,254,029 -
11,1.70,072
3,539,228
14,709,300 -
15,632,01.4
4,282,275
19,914,289 -
70,065,611
295,424
70,361,035 -
20,186,863
594,428
20,781,291 -
$ 90,252,474
$ 889,852
$ 91,142,326 $ -
See accompanying notes to basic financial statements.
26
CITY OF SCHERTZ, TEXAS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Business -Type Activities - Enterprise Funds
Water
and Sewer Sehertz
System EMS Total
OPERATING REVENUES
Governmental
A
internal
Service
Fund
Fees Charged to Users
$ 25,079,280
$ 6,366,894
$ 31,446,174
$ -
Charges for Premiums
-
-
-
2,690,926
Other Charges
311,433
-
311,433
-
TOTAL OPERATING REVENUES
25,390,713
6,366,894
31,757,607
2,690,926
OPERATING EXPENSES
Personnel Services
1,861,475
3,976,190
5,837,665
2,690,926
Contribution to Joint Ventures
2,542,314
-
2,542,314
-
Water Purchase
2,918,214
-
2,918,214
-
Garbage Contractor
4,342,077
-
4,342,077
-
Sewage Treatment
3,763,487
-
3,763,487
-
General and Administrative
2,454,165
541,006
2,995,171
-
Contractual Services
356,891
651,726
1,008,617
-
Supplies and Maintenance
458,539
480,692
939,231
-
Depreciation
2,282,145
339,171
2,621,316
-
TOTAL OPERATING EXPENSES
20,979,307
5,988,785
26,968,092
2,690,926
OPERATING INCOME (LOSS)
4,411,406
378,109
4,789,515
-
NONOPERATING REVENUES (EXPENSES)
Investment Earnings
207,817
3,649
211,466
-
Lease Income
232,754
-
232,754
-
Miseellaneous
122,373
120,606
242,979
-
Interest Expense
(368,390)
(17,393)
(385,783)
-
Amortization
1,619
-
1,619
-
TOTAL NONOPERATING
REVENUES (EXPENSES)
196,173
106,862
303,035
-
INCOME BEFORE CONTRIBUTIONS
AND TRANSFERS
4,607,579
484,971
5,092,550
-
Transfers In (Out)
-
(9,399)
(9,399)
-
Capital Contributions
6,111,474
-
6,111,474
-
CHANGE IN NET POSITION
10,719,053
475,572
11,194,625
-
NET POSITION AT BEGINNING OF YEAR
79,533,421
41.4,280
79,947,701
-
NET POSITION AT END OF YEAR
$ 90,252,474
$ 889,852
$ 91,142,326
$ -
See accompanying notes to basic financial statements.
27
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Cash Flows From Operating Activities:
Cash Received From Customers and Users
Cash Received from Interfund Services
Cash Paid to Employees for Services
Cash Paid to Supplier for Goods & Services
Net Cash Provided (Used) by
Operating Activities
Cash Flows From Noncapital Financing Activities:
Cash Advances From /(To) Other Funds _
Net Cash Provided (Used) by
Noncapital Financing Activities
Cash Flows From Capital and Related
Financing Activities:
Acquisition and Construction of Capital Assets
Interest Paid on Long -Term Debt
Principal Paid on Long -Term Debt
Net Cash Provided (Used) by Capital and
Related Financing Activities
Cash Flows From Investing Activities:
Purchase of Investments
Premium from Issuance of Debt
Proceeds from Issuance of Debt
Payments from Leases
Interest and Investment Earnings
Net Cash Provided (Used) by
Investing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year:
Cash and Cash Equivalents
Restricted Cash and Cash Equivalents
Cash and Cash Equivalents at End of Year:
Cash and Cash Equivalents
Restricted Cash and Cash Equivalents
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
Governmental
A ,,; +; _
mmemai
Service
Fund
$ 25,048,982 $ 5,591,596 $ 30,640,578 $ -
- - - 2,690,926
(1,836,377) (3,810,177) (5,646,554) (2,690,926)
(16,460,515) (1,704,734) (18,165,249) -
6,752,090 76,685 6,828,775
- 165,685 165,685
- 165,685 165,685
(1,030,767)
(34,510)
(1,065,277) -
(365,973)
(11,336)
(377,309) -
(1,332,556)
(229,541)
(1,562,097) -
(2,729,296)
(275,387)
(3,004,683) -
(4,904,577)
(552,751)
(5,457,328) -
-
19,399
19,399 -
-
540,000
540,000 -
232,754
-
232,754 -
207,817
3,649
211,466 -
(4,464,006)
10,297
(4,453,709) -
(441,212)
(22,720)
(463,932) -
1,779,941
22,720
1,802,661 -
2,459,230
-
2,459,230 -
4,239,1.71
22,720
4,261,891 -
2,353,733
-
2,353,733 -
1,444,226
-
1,444,226 -
$ 3,797,959
$ - $
3,797,959 $ -
See accompanying notes to basic financial statements.
28
CITY OF SCHERTZ, TEXAS
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS (CONTINUED)
FOR THE YEAR ENDED SEPTEMBER 30, 2017
Reconciliation of Operating Income
to Net Cash Provided (Used) by
Operating Activities:
Operating Income
Revenues from Other Sources
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided
(Used) by Operating Activities:
Depreciation
Decrease (Increase) in Assets:
Accounts Receivable (net)
Prepaid Expenses
Inventory
Deferred Pension Outflows
Increase (Decrease) in Liabilities:
Accounts Payable
Accrued Liabilities
Customer Deposits
Unearned Revenue
Compensated Absences
Net Pension Liability
Net Other Post - employment Benefit Payable
Net Cash Provided (Used) by
Operating Activities
Noncash Capital and Related Financing Transactions:
Developer Contributions of Capital Assets
See accompanying notes to basic financial statements.
Business -Type Activities - Enterprise Funds
Water
and Sewer Schertz
System EMS Total
Governmental
Activities
Internal
Service
Fund
$ 4,411,406
$ 378,109
$ 4,789,515 $ -
122,373
120,606
242,979 -
2,282,145
339,171
2,621,316 -
(494,473)
(895,886)
(1,390,359) -
17,189
19,327
36,516 -
9,928
(47)
9,881 -
25,794
53,434
79,228
348,055
(50,590)
297,465 -
(7,659)
11,302
3,643 -
20,868
-
20,868 -
9,501
(1.8)
9,483 -
(11,920)
15,727
3,807 -
30,066
62,286
92,352
(11,183)
23,264
12,081 -
$ 6,752,090
$ 76,685
$ 6,828,775 $ -
$ 6,111,474
$ -
$ - $ -
29
NOTES TO BASIC FINANCIAL STATEMENTS
30
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Schertz is a municipal corporation governed by an elected mayor and five- member council. The
financial statements of the City have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB)
is the accepted standard setting body for establishing governmental accounting and financial reporting
principles. The more significant of the City's accounting policies are described below:
A. 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 govermuent's operations; thus, data from these units are 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 blended component units:
Schertz Economic Development Corporation - 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. For
financial reporting purposes, the SEDC is reported as if it were part of the City's operations because its
purpose is to benefit the citizens of the City. Complete financial statements for the Schertz Economic
Development Corporation may be obtained from City Hall.
Parks and Recreation Foundation — The Foundation was organized to improve and expand the
community parks, trails, venues, and recreational programs providing fun leisure and healthy activities.
The Foundation's governing board is comprised of Schertz residents and employees of the City, the
accounting records are maintained by the finance department, cash is held by the City and the City
provides financing for the Foundation. In addition, the City includes the Foundation as part of the City
budget process. The Foundation qualifies as a blended component unit as it provides services entirely
to the City and its citizens. The Foundation was dissolved by the City in the current year.
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.
1. 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, Converse 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 of
services or by subsidizing the operations.
31
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
3. Cibolo Creek Municipal Authority (CCMA) — was created in 1971 and provides regional wastewater
services to the area northeast of San Antonio. The City and CCMC entered into a joint project to
develop a new treatment facility that will currently only serve the City. The project will have excess
capacity to serve other users in the future. The City is solely responsible for funding the project until
other users need capacity.
B. 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.
The statement of activities demonstrates the degree to which the direct expenses of a given function or
segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. Program revenues include 1) charges of customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
segment. Taxes and other items not properly included among program revenues are reported instead as
general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental fiends and major individual enterprise funds are reported as separate columns in the fund
financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting, as are the proprietary fiend 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 they are both measurable
and available. Revenues are considered to be available when they are collectible within the current period or
soon thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be
available if they are 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 service being provided are recorded as
unearned revenue.
32
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
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 Debt Service Fund accounts for the resources accumulated and payments made for principal and
interest on long -term general obligation debt of governmental funds.
The Capital Proiects Fund accounts for financial resources to be used for the acquisition and
construction of major capital facilities and is principally financed by the sale of bonds or certificates of
obligation and grants.
Economic Development Corporation collects sales taxes to support business development and
expansion within the City.
Nonmaior Funds include Special Revenue funds (other than major projects and grants).
The government reports the following major proprietary 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.
Internal Service Fund accounts for the City's group medical insurance program.
As a general rule the effect of interfund activity has been eliminated from the government -wide financial
statements. Exceptions to this are charges between the City's general government function and various other
functions of the City. Eliminations of these charges would distort the direct costs and program revenues
reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applications 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 fiend'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 revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
33
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Measurement Focus. Basis of Accountina. and Financial Statement Presentation (Continued
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.
D. Cash and Cash Eauivalents
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.
E. 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 of 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. The fair value of the City's position
in each pool is the same as the fair value of the pool shares.
F. Receivables and Payables
Activities between the funds that are representative of interfund 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 receivable 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.
34
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. Inventories and Prepaid Items
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.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid
items in both governmental -wide and fund financial statements and in the fund financial statements are offset
by a nonspendable fund balance which indicates they do not represent "available spendable resources ".
H. 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 they are maintained in separate bank accounts and
their use is limited by applicable bond covenants and/or contractual arrangements.
I. Capital Assets
Capital assets, which include land, buildings and improvements, machinery, equipment, vehicles, and
infrastructure 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. All other donated capital assets are valued at their
estimated fair market value at the date of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset
lives are not capitalized. Improvements to capital assets that materially extend the life of the asset or add to
the value are capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during construction will not be capitalized in the governmental activities on the
government -wide financial statements; however capitalization of interest is required for business -type
activities. There was no capitalized interest during the current fiscal year.
Capital assets are depreciated over their useful lives on a straight -line basis as follows:
Useful Lives
Assets (Years)
Buildings and Improvements 10-50
Machinery, Equipment, and Vehicles 2-20
Infrastructure 15-30
35
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. Deferred Inflows /Outflows of Resources
A deferred outflow of resources is a consumption of net position by the government that is applicable to a
future reporting period while a deferred inflow of resources is an acquisition of net position. These items are
presented in separate sections following assets (deferred outflows) or liabilities (deferred inflows) on the
statement of net position.
K. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation and compensatory time
benefits. There is no liability for unpaid accumulated sick leave since the City does not have a policy to pay
any amounts when employees separate from service with the City. All vacation and compensatory time pay
is accrued when incurred in the government -wide and proprietary fund financial statements. A liability for
these amounts is reported in governmental funds only if they have matured, for example, as a result of
employee resignations and retirements.
L. 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 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.
M. 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 effective interest
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.
N. Fund Equity
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.
36
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
N. Fund Equity(Continued)
Restricted — Represents amounts that are constrained by external parties, constitutional provisions or
enabling legislation.
Committed — Represents amounts that can only be used for a specific purpose because of a formal action
by the 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 taken (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 fonnal
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; however, the City
Manager has not assigned any funds at this time.
Unassigned — Represents the residual balance that may be spent on any other purpose of the City.
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.
O. 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 assets are reported as restricted when
there are limitations imposed by creditors, grantors, or laws or regulations of other governments.
P. 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.
Q. Budgetary Information
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all
governmental funds except the library grant special revenue fund, police department forfeiture special
revenue fund and the capital projects fund, which adopts project - length budgets.
R. Reclassifications
Certain reclassifications have been made in the presentation of the September 30, 2017 financial statements.
All comparative information for prior periods has been reclassified to match the new presentation. The
changes in presentation had no impact on the changes in net position or fund balance.
37
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 2 - CASH, CASH EQUIVALENTS AND INVESTMENTS
The City's operating deposits are held at one institution. The institution provides a combination of pledged
collateral and FDIC insurance to completely collateralize the City's deposits.
As of September 30, 2017, the City had the following pooled investment funds:
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates,
the City's investment policy limits the City's investment portfolio to highly liquid investments to meet
unanticipated cash requirements, and/or to redeploy cash into other investments expected to outperfonn
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, 2017, 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, 2017, 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, 2017, 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.
38
Weighted
Average
Fair
Maturity
Investment Type
Value
in Days
LOGIC
$ 17,541,325
40
Lone Star Investment Pool
21,322,949
47
Texas CLASS
21,623,633
79
Schertz Bank & Trust -
Certificates of Deposit
3,153,510
180
Capital One -
U.S. Agency Securities
3,133,521
676
Total
$ 66,774,938
91
Interest Rate Risk. As a means of limiting its exposure to fair value losses arising from rising interest rates,
the City's investment policy limits the City's investment portfolio to highly liquid investments to meet
unanticipated cash requirements, and/or to redeploy cash into other investments expected to outperfonn
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, 2017, 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, 2017, 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, 2017, 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.
38
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 3 - FAIR VALUE MEASUREMENT
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 other observable inputs; Level 3 inputs are significant unobservable inputs.
As of September 30, 2017, . the City's recurring fair value measurement assets consist of Fixed Income U.S.
Agency Securities. These investments are valued using prices quoted in active markets for those securities.
The following table summarizes the assets for which fair values are determined on a recurring basis as of
September 30, 2017:
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. The total taxable value
as of October 1, 2016, upon which the fiscal 2017 levy was based, was $3,647,504,903 (i.e., market value
less exemptions). The estimated market value was $4,296,677,844 making the taxable value 85% of the
estimated market value.
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, 2017, was $0.4911 per $100 of assessed value, which
means that the City has a tax margin of $2.0089 for each $100 value and could increase its annual tax levy by
approximately $73,274,726 based upon the present assessed valuation before the limit is reached.
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 eight percent (8 %) of the previous year's effective tax rate.
39
Quoted Prices in
Significant
Significant
Active Markets for
Observable
Unobservable
Identical Assets
Inputs
Inputs
Investment Type
(Level 1)
(Level 2)
(Level 3)
Fair Value
Fixed Income Securities
$ 3,133,521
$ -
$ -
$ 3,133,521
Municipal Investment Pools
60,487,907
-
-
60,487,907
Total
$ 63,621,428
$ -
$ -
$ 63,621,428
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. The total taxable value
as of October 1, 2016, upon which the fiscal 2017 levy was based, was $3,647,504,903 (i.e., market value
less exemptions). The estimated market value was $4,296,677,844 making the taxable value 85% of the
estimated market value.
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, 2017, was $0.4911 per $100 of assessed value, which
means that the City has a tax margin of $2.0089 for each $100 value and could increase its annual tax levy by
approximately $73,274,726 based upon the present assessed valuation before the limit is reached.
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 eight percent (8 %) of the previous year's effective tax rate.
39
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 4 - PROPERTY TAX (Continued)
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 as September 30, 2017 for the government's individual major funds and nonmajor funds in the
aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Receivables:
Property Taxes
Sales Taxes
Occupancy Taxes
Franchise Taxes
Customers
Court Fines
Grants
Other
Gross Receivables
Less: Allowance for
Uncollectibles
Net Total Receivables
2,284,486 - 5,269 - 94,474 20,294,324
$ 3,647,933 $ 673,764 -L--82 ,550 -L--33 ,548 -J-2,2 19,495 -J-L092 ,705
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. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end of
the current fiscal year, the various components of unearned/ unavailable revenue and unavailable revenue
reported in the governmental funds were as follows:
Unavailable
General Fund
Delinquent Property Taxes Receivable $ 148,630
Court Fines 1,561,424
Total General Fund 1,710,054
Debt Service Fund
Delinquent Property Taxes Receivable 82,550
Total Debt Service Fund 82,550
Total Governmental Funds $ 1,792,604
40
Governmental Funds
Proprietary Funds
Economic
Debt
Nonmajor
Water and
Schertz
General
Development
Service
Funds
Sewer Fund
EMS
$ 158,116
$ -
$ 87,819
$ -
$ -
$
1,330,632
665,316
-
-
-
-
-
-
-
33,548
-
-
491,039
-
-
-
-
-
116,209
-
-
-
2,813,969
23,335,745
3,836,423
-
-
-
-
-
-
8,448
-
-
-
51,284
5,932,419
673,764
87,819
33,548
2,813,969
23,387,029
2,284,486 - 5,269 - 94,474 20,294,324
$ 3,647,933 $ 673,764 -L--82 ,550 -L--33 ,548 -J-2,2 19,495 -J-L092 ,705
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. Governmental funds also defer
revenue recognition in connection with resources that have been received, but not yet earned. At the end of
the current fiscal year, the various components of unearned/ unavailable revenue and unavailable revenue
reported in the governmental funds were as follows:
Unavailable
General Fund
Delinquent Property Taxes Receivable $ 148,630
Court Fines 1,561,424
Total General Fund 1,710,054
Debt Service Fund
Delinquent Property Taxes Receivable 82,550
Total Debt Service Fund 82,550
Total Governmental Funds $ 1,792,604
40
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
The composition of interfund balances as of September 30, 2017 is as follows:
Due From
Capital Projects Fund
EMS
Due To Amount Purpose
Water & Sewer $ 116,040 Structured funding for Waterline Project
General 175,084 Short -term pooled cash loan
The following schedule briefly summarizes the City's transfer activity for the year ending September 30,
201'7:
Transfer From
Transfer To
Nonmajor Governmental General
EMS Capital Projects
Economic Development Debt Service
NOTE 7 - CAPITAL ASSETS
Amount
Purpose
$ 68,385
Supplement DEA expenditures
9,399
Supplement capital purchases
361,019
Pledge in support of debt service
Capital asset activity for the year ended September 30, 2017 was as follows:
Governmental Activities:
Capital Assets, Not Being Depreciated.•
Land
Construction in Progress
Total Capital Assets Not Being Depreciated
Capital Assets, Being Depreciated.•
Buildings and Improvements
Machinery, Equipment, and Vehicles
Streets and Infrastructure
Total Capital Assets Being Depreciated
Accumulated Depreciation:
Buildings and Improvements
Machinery, Equipment, and Vehicles
Streets and Infrastructure
Total Accumulated Depreciation
Total Capital Assets Being Depreciated, Net
Governmental Activities Capital Assets, Net
Beginning Ending
Balance Increases Deletions Transfers Balance
$ 7,499,108 $ - $ - $ $ 7,499,108
9,832,153 4,858,158 (1,057,797) 13,632,514
17,331,261 4,858,158 (1,057,797) 21,131,622
43,607,412 - - 70,535 43,677,947
9,282,067 706,131 (628,445) 987,262 10,347,015
100,003,048 9,300,430 - 109,303,478
152,892,527 10,006,561 (628,445) 1,057,797 163,328,440
(10,743,693) (1,536,428) - - (12,280,121)
(5,257,401) (934,052) 377,894 (5,813,559)
(29,113,036) (3,263,925) - (32,376,961)
(45,114,130) (5,734,405) 377,894 (50,470,641)
107,778,397 4,272,156 (250,551) 1,057,797 112,857,799
$ 125,109,658 $ 9,130,314 $ (250,551) $ $ 133,989,421
41
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 7 - CAPITAL ASSETS (Continued)
Capital asset activity for the year ended September 30, 2017 was as follows:
Business -Type Activities:
Capital Assets, Not Being Depreciated:
Land
Water Rights
Construction in Progress
Total Assets Not Being Depreciated
Capital Assets, Being Depreciated.•
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
Total Capital Assets Being Depreciated
Accumulated Depreciation:
Buildings and Improvements
Machinery, Equipment, and Vehicles
Infrastructure
Total Accumulated Depreciation
Total Capital Assets Being Depreciated, Net
Business -Type Activities Capital Assets, Net
Beginning
Ending
Balance
Increases
Deletions
Transfers
Balance
$ 1,354,138
$
$
$
$ 1,354,138
70,245
-
70,245
2,681,683
1,030,767
(805,046)
2,907,404
4,106,066
1,030,767
(805,046)
4,331,787
4,660,001
-
-
4,660,001
5,095,324
34,510
(116,757)
-
5,013,077
85,890,831
6,111,473
805,046
92,807,350
95,646,156
6,145,983
(116,757)
805,046
102,480,428
(2,226,657)
(247,349)
-
-
(2,474,006)
(2,503,456)
(608,901)
116,757
(2,995,600)
(23,998,745)
(1,765,066)
-
-
(25,763,811)
(28,728,858)
(2,621,316)
116,757
-
(31,233,417)
66,917,298
3,524,667
-
805,046
71,247,011
$ 71,023,364
$ 4,555,434
$ -
$ -
$ 75,578,798
Depreciation expense was charged to functions /programs of the primary government as follows:
Governmental Activities:
General Government
Public Safety
Public Environment
Parks and Recreation
Cultural
Health
Administration
Total Depreciation Expense - Governmental Activities
Business -Type Activities:
Water and Sewer System
EMS
Total Depreciation Expense - Business Type Activities
42
$ 671,298
744,936
3,296,787
851,154
58,617
84,359
27,254
$ 5,734,405
$ 2,282,145
339,171.
$ 2,621,316
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 8 - OPERATING LEASE
The City has agreements with several telecommunication companies to place cellular towers on City water
towers. The following schedule represents the future minimum lease payments.
Fiscal Year Ending
September 30,
Total
2018
$ 248,161
2019
260,569
2020
273,597
2021
287,277
2022
301,641
2023 -2027
1,740,127
2028 -2032
404,227
$ 3,515,599
In 2014, the City entered into two lease agreements qualifying as capital leases for accounting purposes
based on a bargain purchase option. Therefore, capital assets and a related capital lease obligation have been
recorded at the present value of the future minimum lease payments at the inception date. The assets
acquired through capital lease are reported in capital assets with the following accumulated depreciation at
September 30, 2017:
Assets:
Equipment
Less Accumulated Depreciation
Total
Future minimum lease payments are as follows:
Year Ending September 30,
2018
2019
Total Payments
Less: Amount Representing Interest
Present Value of Minimum Lease Payments
43
Governmental
Activities
$ 1.33,715
(40,15)
$ 93,600
Governmental
Activities
$ 25,505
25,505
(358)
$ 25,147
Business -type
Activities
$ 347,705
(250,218)
$ 97,487
Business -type
Activities
$ 70,041
23,347
93,388
(667)
$ 92,721
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 10 - 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,
certificates of obligation, and capital leases. These debt obligations are secured by primarily 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.
In June 2017, the City issued $3,935,000 in General Obligation Bonds Series 2017 and $5,475,000
Certificates of Obligations Series 2017 pursuant to the constitution and general laws of the State of Texas,
particularly, Subchapter C of Chapter 271 of the Texas Local Government Code, as amended, and in
ordinance adopted by the City Council. The certificates constitute direct and general obligations of the City
payable from ad valorem taxes levied against all payable property within the City, as well as pledged revenue
of up to $1,000 of the surplus revenues from proprietary funds. The bonds and certificates were issued for the
purpose of paying contractual obligations of the City for street improvements, renovations of the Municipal
Complex, Senior Center and recreational facilities, purchase of ambulances and fire apparatuses, and the
construction of Fire Station No. 2.
A summary of the terms of general obligation bonds and combination of tax and revenue certificates of
obligation outstanding at September 30, 2017, follows:
Total Governmental Long -Term Obligations $ 65,015,000
44
Issue Amount
Maturity
Rate
Balance
Primary Government
General Obligation Bonds
2007 Series
$ 6,000,000
2027
4.07%
$ 3,495,000
2008 Series
9,900,000
2028
4.13%
6,510,000
2009 Series
9,500,000
2033
2.0%-5.50%
5,465,000
2010 Series, Refunding
2,865,000
2021
2.0%-4.0%
1,215,000
2011 Series
8,250,000
2036
3.0%-6.0%
7,070,000
2011A Series, Refunding
6,745,000
2024
2.33%
4,085,000
2012 Series
7,625,000
2032
2.00%
6,120,000
2014 Series, Refunding
8,450,000
2030
2.0 % -4.0%
8,200,000
2015 Series, Refunding
4,1.85,000
2031
2.0% -3.25%
3,655,000
2016 Series
5,880,000
2036
2.0 % -4.0%
5,475,000
2017 Series
3,935,000
2037
2.0 % -4.0%
3,935,000
Tax Notes
2013 Notes
835,000
2018
0.7%-1.7%
170,000
2013A Notes
800,000
2018
1.30%
165,000
2015 Notes
245,000
2021
1.75%
145,000
2015A Notes
1,020,000
2023
1.54%
750,000
Certificates of Obligation
2016 . Series A
2,375,000
2036
2.0%-4.0%
2,205,000
2016 . Series B
1,475,000
2036
3.0% -3.75%
1,420,000
2017 Series
4,935,000
2037
3.0% -3.75%
4,935,000
Total Governmental Long -Term Obligations $ 65,015,000
44
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 10 - LONG -TERM DEBT (Continued)
Changes in long -term debt for the year ending September 30, 2017 are as follows:
Governmental Activities:
General Obligation Bonds
Unamortized Premium
General Obligation Refunding Bonds
Unamortized Premium
Certificates of Obligation
Unamortized Premium
Tax Notes
Capital Lease
Compensated Absences
Total Governmental Activities
Business -Type Activities:
General Obligation Refunding Bonds
Unamortized Premium
Certificates of Obligation
Unamortized Premium
Tax Notes
Capital Lease
Compensated Absences
Total Business -Type Activities
Balance
Issue Amount
Maturity
Rate
Balance
Primary Government (Continued)
Additions
Reductions
9/30/2017
One Year
General Obligation Bonds
$ 3,935,000
$ (2,250,000)
$ 38,070,000
$ 2,230,000
2011 Series, Refunding
$ 2,675,000
2021
2.0%-3.0%
$ 930,000
2013 Series, Refunding
2,1.30,000
2025
2.58%
1,600,000
Certificates of Obligation
-
(58,650)
637,446
58,650
2007 Series CIB 1
6,600,000
2026
4.01%
3,880,000
2013 Series
4,965,000
2033
2.0 % -4.0%
3,630,000
2017 Series
540,000
2022
3.0% -3.75%
540,000
Tax Notes
-
(33,174)
25,147
25,147
2015 Notes
1,880,000
2021
1.75%
1,065,000
Total Business -Type Long -Term
Obligations
$ 11,645,000
Changes in long -term debt for the year ending September 30, 2017 are as follows:
Governmental Activities:
General Obligation Bonds
Unamortized Premium
General Obligation Refunding Bonds
Unamortized Premium
Certificates of Obligation
Unamortized Premium
Tax Notes
Capital Lease
Compensated Absences
Total Governmental Activities
Business -Type Activities:
General Obligation Refunding Bonds
Unamortized Premium
Certificates of Obligation
Unamortized Premium
Tax Notes
Capital Lease
Compensated Absences
Total Business -Type Activities
Balance
-
$ (480,000)
Balance
Due Within
9/30/2016
Additions
Reductions
9/30/2017
One Year
$ 36,385,000
$ 3,935,000
$ (2,250,000)
$ 38,070,000
$ 2,230,000
661,176
126,800
(36,808)
751,168
43,148
18,610,000
-
(1,455,000)
17,155,000
1,510,000
696,096
-
(58,650)
637,446
58,650
3,850,000
4,935,000
(225,000)
8,560,000
465,000
207,189
255,130
(10,904)
451,415
23,661
1,740,000
-
(510,000)
1,230,000
515,000
58,321
-
(33,174)
25,147
25,147
1,022,543
251,815
(204,509)
1,069,849
213,970
$ 63,230,325 $ 9,503,745 $ (4,784,045) $ 67,950,025 $ 5,084,576
$ 3,010,000 $
-
$ (480,000)
$ 2,530,000
$ 405,000
4,595
-
(969)
3,626
969
8,220,000
540,000
(710,000)
8,050,000
830,000
111,966
19,400
(6,587)
124,779
6,587
1,360,000
-
(295,000)
1,065,000
300,000
162,262
-
(69,541)
92,721
69,541
306,818
65,170
(61,363)
310,625
62,125
$ 13,175,641 $
624,570
$ (1,623,460)
$ 12,176,751
$ 1,674,222
45
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 10 - LONG -TERM DEBT (Continued)
Annual debt service requirements of bonded debt as of September 30, 2017, are as follows:
NOTE 11 - RETIREMENT PLAN
Plan Description
The City of Schertz participates as one of 872 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 Service Code. TMRS issues a
publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
46
Governmental Activities
September 30,
Principal
Interest
Total
2018
$
4,720,000
$ 2,417,491
$ 7,137,491
2019
4,210,000
2,201,637
6,411,637
2020
4,355,000
2,038,287
6,393,287
2021
4,415,000
1,860,579
6,275,579
2022
4,270,000
1,697,788
5,967,788
2023 -2027
1.9,625,000
6,369,435
25,994,435
2028 - 2032
1.6,165,000
2,974,153
19,139,1.53
2033 -2037
7,255,000
533,363
7,788,363
Total
$
65,015,000
$ 20,092,733
$ 85,107,733
Business -Type Activities
September 30,
Principal
Interest
Total
2018
$
1,535,000
$ 366,416
$ 1,901,416
2019
1,580,000
322,858
1,902,858
2020
1,620,000
279,902
1,899,902
2021
1,500,000
233,599
1,733,599
2022
875,000
191,146
1,066,146
2023 -2027
3,270,000
540,361
3,810,361
2028 -2032
1,03 5,000
152,900
1,187,900
2033 -2037
230,000
4,600
234,600
Total
$
11,645,000
$ 2,091,782
$ 13,736,782
NOTE 11 - RETIREMENT PLAN
Plan Description
The City of Schertz participates as one of 872 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 Service Code. TMRS issues a
publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
46
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
Texas Municipal Retirement System (Continued)
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 employee's contributions, with interest, and the
City - financed monetary credits with interest were used to purchase an annuity. Members may choose to
receive their retirement benefit in one of seven payment options. Members may also 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.
At the December 31, 2016 valuation and measurement date, the following employees were covered by the
benefit terms:
Inactive Employees or Beneficiaries Currently Receiving Benefits
Inactive Employees Entitled to but Not Yet Receiving Benefits
Active employees
Contributions
2015 2016
79 84
138 155
312 317
529 556
The contribution rates for employees in TMRS are either 5 %, 6 %, or 7% of employee gross earnings, 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 actuarially determined rate is the
estimated amount necessary to finance the cost of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability.
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 15.94% and 15.87% in calendar years 2016 and 2017, respectively.
The City's contributions to TMRS for the year ended September 30, 2017 . were $2,756,511 and were equal to
the required contributions.
Net Pension Liability
The City's Net Pension Liability (NPL) was measured as of December 31, 2016, and the Total Pension
Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of
that date.
47
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
Texas Municipal Retirement System (Continued)
Actuarial Assumptions
The Total Pension Liability in the December 31, 2016 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.5% per year
Overall Payroll Growth 3.0% per year
Investment Rate of Return* 6.75%
* Presented net of pension plan investment expense, including inflation
Salary increases were based on a service - related table. Mortality rates for active members, retirees, and
beneficiaries were based on the gender - distinct RP2000 Combined Health Mortality Table, with male rates
multiplied by 109% and female rates multiplied by 103 %. The rates are projected on a fully generational
basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender - distinct
RP2000 Disabled Retiree Mortality Tables with Blue Collar adjustment are used with males rates multiplied
by 109% and female rates multiplied by 103% with a 3 -year set - forward for both males and females. IN
addition, a 3% minimum mortality rate is applied to reflect the impairment for younger members who
become disabled. The rates are projected on a fully generational basis by scale BB to account for future
mortality improvements subject to the 3% floor.
Actuarial assumptions used in the December 31, 2016 valuation were based on the results of actuarial
experience studies. The experience study in TMRS was for the period December 31, 2010 through.
December 31, 2014. Healthy post - retirement mortality rates and annuity purchase rates were updated based
on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013.
These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age
Normal (EAN) actuarial cost method. Assumptions are reviewed annually. Plan assets are managed on a
total return basis with an emphasis on both capital appreciation as well as the production of income, in order
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 using a building -block
method in which best estimate ranges of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges are combined
to produce the long -term expected rate of return by weighting the expected future rates of return by the target
asset allocation percentage and by adding the expected inflation. In determining their best estimate of a
recommended investment return assumption under the various alternative asset allocation portfolios, GRS
focused on the area between (1) arithmetic mean (aggressive).
48
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
Texas Municipal Retirement System (Continued)
Actuarial Assumptions (Continued)
The target allocation and best estimates of arithmetic real rates of return for each major asset class in fiscal
year 2017 are summarized in the following table:
Asset Class
Domestic Equity
International Equity
Core Fixed Income
Non -Core Fixed Income
Real Return
Real Estate
Absolute Return
Private Equity
Discount Rate
Target Allocation
17.50%
17.50%
10.00%
20.00%
1.0.00%
10.00%
10.00%
5.00%
100.00%
Long -Term
Expected Real
Rate of Return
(Arithmetic)
4.55%
6.35%
1.00%
4.15%
4.15%
4.75%
4.00%
7.75%
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 employee 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 employees. 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.
49
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
Texas Municipal Retirement System (Continued)
Changes in the Net Pension Liability
The below schedule presents the changes in the Net Pension Liability as of December 31, 2016:
Balance at December 31, 2015
Changes for the year:
Service Cost
Interest
Change of Benefit Terms
Difference Between Expected and
Actual Experience
Changes of Assumptions
Contributions - Employer
Contributions - Employee
Net Investment Income
Benefit Payments, Including Refunds
of Employee Contributions
Administrative Expense
Other Changes
Net Changes
Balance at December 31, 2016
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
$ 55,119,232 $ 38,499,857 $ 16,619,375
2,855,745 - 2,855,745
3,763,562 - 3,763,562
139,216 - 139,216
- 2,627,335 (2,627,335)
1,152,864 (1,152,864)
2,602,572 (2,602,572)
(1,581,272) (1,581,272) -
(29,385) 29,385
(1,583) 1,583
5,177,251 4,770,531 406,720
$
60,296,483 $ 43 270 388 $ 17 026 095
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:
Discount Rate Discount Rate Discount Rate
5.75% 6.75% 7.75%
Net Pension Liability $ 27,443,427 $ 17,026,095 $ 8,668,647
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in a separately- issued
TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
W
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
Texas Municipal Retirement System Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended September 30, 2017, the City recognized pension expense of $3,512,360. Also as of
September 30, 2017, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Differences between Expected and
Actual Economic Experience
Changes in Actuarial Assumptions
Differences Between Projected and
Actual Investment Earnings
Contributions Subsequent to the
Measurement Date
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 132,647 $
39,689
1,658,421
1,980,718
$ 3.811.475 $
Deferred outflows of resources in the amount of $1,980,718 is 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 plan year ending December 31, 2017. The City liquidates their Net Pension Liability through
payments from the general fund. 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 December 31,
2017
$ 613,689
2018
613,689
2019
531,495
2020
45,274
2021
25,004
Thereafter
1,606
$ 1,830,757
C. Other Post - Employment Benefits
The City also participates in the cost sharing multiple- employer defined benefit group -term life insurance
plan operated by TMRS known as Supplemental Death Benefits Fund (SDBF). The City elected, by
ordinance, to provide group -term life insurance coverage to both current and retired employees. The City
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.
51
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 11 - RETIREMENT PLAN (Continued)
C. Other Post - Employment Benefits (Continued)
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); retired employees are insured for $7,500; this coverage is an "other postemployment
benefit," or OPEB.
The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial
valuation. 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 benefit payments for the
upcoming year; the intent is not to pre -fund retiree life insurance during the employees' entire careers.
The City's contributions to the TMRS SDBF for the years ended 2017, 2016, and 2015 were $22,066,
$20,324, and $21,681, respectively, which equaled the required contributions each year.
NOTE 12 — RETIREE HEALTH INSURANCE PLAN
A. Plan Description
The City provides another post - employment benefit to eligible retirees of the City whereby they can stay on
the City's health insurance plan by paying the full premium.
B. Contributions
The City's annual other post - employment benefits (OPEB) cost is calculated based on the annual required
contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of
GASB Statement No. 45. The ARC represents a level of accrual that, if paid on an ongoing basis, is
projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities (or funding
excesses) over a period not to exceed thirty years. The City's annual OPEB cost for the fiscal year ending
September 30, 2017 is as follows:
Annual Required Contribution
Interest on OPEB obligation
Adjustment to ARC
Annual OPEB cost
Contributions
Increase in net OPEB obligation
Beginning Net OPEB Obligation
Ending Net OPEB Obligation
52
$ 139,51.5
17,912
(21,183)
136,244
(24,107)
112,137
543,618
$ 655,755
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 12 — RETIREE HEALTH INSURANCE PLAN (Continued)
B. Contributions (Continued)
The City's annual OPEB cost, the amount contributed by the employer, the percentage of annual OPEB cost
contributed to the plan, and the net OPEB obligation for fiscal year ending September 30, 2017 and the
preceding two fiscal years were as follows:
September 30,
Cost
Contributions
Contributed
Obligation
2017
$ 136,244
$ 24,107
17.7%
$ 655,755
2016
136,557
23,519
17.2%
543,618
2015
81,159
1.5,485
19.1%
430,580
The Projected Unit Credit Cost Method is used to calculate the actuarial required contribution (ARC) for the
City's retiree health care plan. Using the plan benefits, the present health premiums and a set of actuarial
assumptions, the anticipated future payments are projected. The actuarial cost method then provides for a
systematic funding for these anticipated payments. The yearly ARC is computed to cover the cost of benefits
being earned by covered members as well as to amortize a portion of the unfunded accrued liability.
Projections of health benefits are based on the plan as understood by the City and include the types of
benefits in force at the valuation date and the pattern of sharing benefit costs between the City and the City's
employees to that point. Actuarial calculations reflect a long -term perspective and employ methods and
assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial
value of assets. Significant methods and assumptions were as follows:
Inflation Rate 2.5%
Investment Rate of Return 4.0 %, net of expenses
Actuarial Cost Method Projected Unit of Credit
Amortization Method Level as a percent of payroll
Amortization Period 30 -year open period
Payroll Growth 3.0%
Medical Trend Initial rate of 7.50 %, declining to an ultimate rate of 4.25% after 15 years
Actuarial valuations involve estimates of the value of reported amounts and assumptions about the
probability of events in the future. Amounts determined regarding the funded status and the annual required
contributions of the City's retiree health care plan are subject to continual revision as actual results are
compared to past expectations and new estimates are made about the future. The required schedule of
funding progress presented as required supplementary information provides multiyear trend information that
shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits.
The funded status as of December 31, 2015, the most recent actuarial valuation date, is as follows:
Actuarial Actuarial Value
Valuation Date of Assets
12/31/2015
Actuarial
Accrued
Liability (AAL) Funded Ratio
$ 1,055,757 0.0%
53
Unfunded
AAL (UAAL) Covered Payroll
$ 1,055,757 $ 14,356,845
UAAL as a
Percentage of
Covered Payroll
7.4%
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 13 - 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.
Contributions to the corporation are reflected as "operating expenses" in the water and sewer fund and
totaled $2,242,314 for the year ended September 30, 2017. 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. Following is a summary of financial data as
reported in the Corporation's audited financial statements dated September 30, 2016:
ASSETS:
Current Assets
$ 14,027,427
Restricted Cash and Cash Equivalents
6,859,879
Property, Plant & Equipment (net)
95,187,724
Other Assets
108,809
TOTAL ASSETS
116,183,839
Deferred Charges on Refunding
2,546,875
LIABILITIES:
Current Liabilities
4,858,647
Revenue Bonds (Less Current Maturities)
100,976,449
TOTAL LIABILITIES
105,835,096
NET POSITION:
Net Investment in Capital Assets
(2,288,897)
Restricted
5,364,082
Unrestricted
9,820,433
TOTAL NET POSITION
$ 12,895,618
The Corporation had net revenue bonds outstanding in the amount of $103,281,449 (as of September 30,
2016) 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.
54
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 13 - JOINT VENTURES (Continued)
Cibolo Valley Local Government Corporation
The Cibolo Valley Local Government Corporation (CVLGC) is a public nonprofit corporation incorporated
in March 2012 to assist and act on behalf of the cities of Schertz, and Cibolo to obtain additional water
sources. 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. Contributions to the
corporation are reflected as "operating expenses" in the water and sewer fiend. Separate financial statements
for the CVLGC 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 Cibolo, for operating deficits and long -term
debt of CVLGC. Following is a summary of financial data as reported in the Corporation's audited financial
statements dated September 30, 2016:
ASSETS:
Current Assets $ 613,204
Noncurrent Assets 1,268,516
TOTAL ASSETS 1,881,720
LIABILITIES:
Current Liabilities 92,012
TOTAL LIABILITIES 92,012
NET POSITION:
Net Investment in Capital Assets 1,268,516
Unrestricted 521,192
TOTAL NET POSITION $ 1,789,708
Cibolo Creek Municipal Authority
Cibolo Creek Municipal Authority (CCMA) provides sewage treatment for the area in and around the City.
CCMA has agreed 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 City agreed to enter into a regional wastewater treatment contract in
September 2014. CCMA will issue bonds to finance the project and the City has agreed to make payments to
CCMA to cover operation expenses, maintenance expenses, and debt service. The City is the sole member at
this time, so it is responsible for 100% of the project costs. Should other members join, the City's share of
the costs would be reduced.
55
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 13 - JOINT VENTURES (Continued)
Ciholo Creek Municipal Authority (Continued)
In September 2014, CCMA issued bonds for the project in the amount of $6,950,000 with debt service
requirements as follows:
Fiscal Year Ending
September 30,
Principal
2018
$ 150,000
2019
155,000
2020
160,000
2021
160,000
2022
165,000
2023 -2027
905,000
2028 -2032
1,090,000
2033 -2037
1,340,000
2038 -2042
1,680,000
2043 -2044
775,000
$ 6,580,000
NOTE 14 - COMMITMENTS AND CONTINGENCIES
Tax Increment Financing (the "Zone')
Interest
Total
$ 260,250
$ 410,250
257,250
412,250
254,150
41.4,150
250,950
410,950
247,750
410,950
1,156,050
2,061,050
966,450
2,056,450
721,950
2,061,950
372,050
2,052,050
46,800
821,800
$ 4,533,650 $ 11,111,850
The City is a principal in the City of Schertz Tax Increment Reinvestment Zone #2, 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 $45,000,000. 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 $32,877,000 of the total $45,000,000. The
Zone has a statutory termination date of December 31, 2027. The TIRZ has collected $949,976 from taxing
entities (net of administrative reimbursements) and remitted $771,928 to the developer as of
September 30, 2017.
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 of $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, 2017, the City reimbursed $965,674 in property taxes paid.
56
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued)
Economic Development Incentive Agreements
The City of Schertz Economic Development Corporation (the SEDC) negotiates economic development
incentive agreement on behalf of the SEDC and the City of Schertz (the City) on an individual basis. As of
September 30, 2017, the City had nine active incentive agreements.
On May 2, 2017, the City and the Corporation approved the Schertz Incentive Policy which outlines the
City's primary tools to attract commercial investment and promote economic development. Projects are
selected on a case -by -case basis in accordance current policy and state laws at the discretion of the governing
body. All incentive agreements are formalized through a performance agreement with specified terms and
recapture criteria.
The SEDC Incentive program, authorized by Chapters 501, 502 and 505 of the Texas Local Government
Code, enables the Corporation to fund allowable projects from the collection of one -half of one percent of
sales tax proceeds collected in the City of Schertz. In accordance with state law, the SEDC Incentive Policy
establishes grants and loans for businesses that create Primary Jobs for the following categories: Existing
Businesses (3 years of operation within. City), Small Businesses (fewer than 50 full -time jobs or annual sales
less than $10 million), Large Impact Businesses (Up to $100 million in taxable property), and Extra Large
Businesses (over $100 million in taxable property).
The City and Corporation's outstanding incentive agreement grants are as follows:
FY 2016 -17 Amt. Est. Remaining Grant
City of Schertz - LGC 380.001 $ 965,674 $ 2,736,572
SEDC - LGC 501.101 - 451,552
Service Concession Arrangements
The City entered into an agreement with YMCA, under which YMCA will operate and collect user fees from
the Natatorium and Outdoor Pools for the next 20 years. YMCA will pay the city $100,000 annually over the
course of the arrangement; the present value of these installment payments is estimated to be $851,356. The
City will approve the rates and services that YMCA will provide, however, YMCA will retain 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. As of
September 30, 2017, the Natatorium is still under construction and is reported by the City as Construction in
Progress in the amount of $9,801,311. The City reports the Outdoor Pools and related equipment as capital
assets with a total carrying amount of $778,529. The City reports a receivable and deferred inflow of
resources in the amount of $851,356 on the government -wide statements at year -end pursuant to the service
concession arrangement. Additionally, a liability of $507,136 for the present value of maintenance costs
estimated over the life of the Service Concession arrangement.
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.
W
CITY OF SCHERTZ, TEXAS
NOTES TO BASIC FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 2017
NOTE 14 - COMMITMENTS AND CONTINGENCIES (Continued)
Construction Commitments
The City of Schertz has entered into commitments for various projects as follows:
Primary Government:
Estimated Project
Town Creek Sewer Project (Phase III)
Cost to City
Governmental Activities:
1,650,000
Lower Seguin Road Improvements
$ 304,841
Natatorium Project
9,812,363
FM 78 and Main Street
1,000,000
Fire Station 3
8,000,000
FM 1103 Street Improvements
2,000,000
Building Improvements
1,600,000
Main Street Improvements
407,057
FM 1518 Street Improvements
5,000,000
Total Governmental Commitments
28,124,261
Business -Type Activities:
Woman Hollering WasteWater
5,940,424
Town Creek Sewer Project (Phase III)
931,740
Corbett Ground Storage Tank & Pumps
1,650,000
Corbett Elevated Water Tank
2,982,052
Trainer Hale Road Distribution Main
500,000
Total Business -Type Activities
12,004,216
Total Estimated Future Commitments
$ 40,1 28,477
Risk Management
Expended to Estimated Future
Date Commitment
$ 263,598
9,812,363
7,513
435,007
181,226
30,364
10,730,071
504,684
931,740
930
286,563
1,723,917
$ 12,453,988
$ 41,243
992,487
7,564,993
1,818,774
1,569,636
407,057
5,000,000
17,394,190
5,435,740
1,649,070
2,695,489
500,000
10,280,299
$ 27,674,489
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 among pool participants and stop loss coverage. Contributions are set annually
by the provider. Liability by the City is generally limited to the contributed amounts. Annual contributions
for the year ended September 30, 2017 were $435,914 for property and casualty and workers compensation
coverage. There were no significant increases or decreases in coverage from fiscal year 2016.
58
I rz/,� �N
CITY
OA
1,
REQUIRED SUPPLEMENTARY INFORMATION
59
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL
GENERAL FUND
YEAR ENDED SEPTEMBER 30, 2017
Variance With
Public Safety.
Police Department
6,994,853
7,021,097
2017
Final Budget -
Fire Department
Budgeted Amounts
Actual
Positive
5,829
Original
Final
Amounts
(Negative)
REVENUES
Marshal Service
503,837
503,837
481,980
Taxes
$ 19,912,226
$ 1.9,912,226
$ 19,450,338
$ (461,888)
Permits and Fees
1,283,660
1,455,660
2,367,929
912,269
Service Fees
1,523,530
1,523,530
2,107,844
584,31.4
Fines and Fees
1,232,858
1,232,858
1,021,965
(210,893)
Intergovernmental
318,000
378,000
307,809
(70,191)
Investment Earnings
60,800
60,800
128,158
67,358
Miscellaneous
561,502
627,502
603,477
(24,025)
TOTAL REVENUES
24,892,576
25,190,576
25,987,520
796,944
EXPENDITURES
General Government:
Council
116,982
106,982
93,412
13,570
City Manager
1,122,395
1,112,395
1,078,187
34,208
Municipal Court
390,363
390,363
342,585
47,778
311 Customer Relations
114,369
119,269
117,777
1,492
Planning & Zoning
218,124
224,024
214,454
9,570
Legal
240,000
172,000
150,698
21,302
City Secretary
195,762
195,762
190,571
5,191
Nondepartmental
1,543,640
1,191,940
1,135,288
56,652
Community & Media Relations
324,789
331,789
319,030
12,759
Records Management
65,682
55,682
47,680
8,002
Schertz Magazine
392,668
392,668
349,950
42,71.8
Engineering
553,751
560,551
540,453
20,098
Geographic Information Systems
160,959
165,159
163,735
1,424
Citizens Assistance
245,260
312,545
298,164
14,381.
Special Events
119,600
175,600
130,375
45,225
Total General Government
5,804,344
5,506,729
5,172,359
334,370
Public Safety.
Police Department
6,994,853
7,021,097
6,870,568
150,529
Fire Department
3,963,560
4,082,360
4,076,531
5,829
Inspection
638,929
847,529
811,916
35,613
Marshal Service
503,837
503,837
481,980
21,857
Total Public Safety
12,101,179
12,454,823
12,240,995
213,828
Public Environment:
Streets
1,133,776
1,267,162
1,264,787
2,375
Total Public Environment
$ 1,133,776
$ 1,267,162 $
1,264,787 $
2,375
60
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES -
BUDGET AND ACTUAL)
GENERAL FUND (CONTINUED
YEAR ENDED SEPTEMBER 30, 2017
Administration:
Information Technology
1,570,102
1,582,166
1,535,541
Variance With
Human Resources
470,531
457,569
2017
Final Budget -
Finance
Budgeted Amounts
Actual
Positive
21,829
Original
Final
Amounts
(Negative)
EXPENDITURES (Continued)
Building Maintenance
1,271,334
1,437,558
1,405,157
Parks and Recreation:
Fleet Service
745,927
745,927
695,951
Parks
$ 1,016,070
$ 1,082,749
$ 1,003,804
$ 78,945
Pools
717,978
657,278
629,056
28,222
Community /Civic Center
1.64,216
154,216
117,289
36,927
Total Parks and Recreation
1,900,764
1,896,743
1,752,642
144,101
Cultural:
Library
865,661
904,661
901,992
2,669
Total Cultural
865,661
904,661
901,992
21669
Health:
Animal Control
568,209
602,834
555,661
47,173
Environmental Health
219,645
219,645
204,879
14,766
Total Health
787,854
822,479
760,540
61,939
Administration:
Information Technology
1,570,102
1,582,166
1,535,541
46,625
Human Resources
470,531
457,569
428,739
28,830
Finance
602,032
602,032
580,203
21,829
Purchasing & Asset Management
201,620
191,620
1.91.,914
(294)
Building Maintenance
1,271,334
1,437,558
1,405,157
32,401
Fleet Service
745,927
745,927
695,951
49,976
Interfund Charges
(2,415,755)
(2,415,755)
(2,415,755)
-
Total Administration
2,445,791
2,601,117
2,421,750
179,367
TOTAL EXPENDITURES
25,039,369
25,453,714
24,515,065
938,649
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING
(146,793) (263,138) 1,472,455 1,735,593
232,095 1,308,440
(72,450) (1,022,450)
68,385 (1,240,055)
- 1,022,450
159,645 285,990 68,385 (217,605)
12,852 22,852 1,540,840 1,517,988
11,428,778 1.1,428,778 11,428,778
FUND BALANCE - ENDING $11,441,630 $ 11,451,630 $ 12,969,61.8 $ 1,517,988
61
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES —
BUDGET AND ACTUAL
ECONOMIC DEVELOPMENT CORPORATION
YEAR ENDED SEPTEMBER 30, 2017
REVENUES
Taxes
Investment Earnings
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Administration
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
►_ ■ :► 1► 1�� -IN
I W.1110m,
111110► 01.11IF_\ikl[e =C3K"10101 ►[!I
FUND BALANCE - ENDING
Budgeted Amounts
Original Final
2017
Actual
Amounts
Variance With
Final Budget -
Positive
(Negative)
$ 3,692,710 $ 3,692,710 $ 3,620,930 $ (71,780)
45,550 45,550 125,684 80,134
3,738,260 3,738,260 3,746,614 8,354
733,900 733,900 92,829 641,071
961,929 961,929 450,524 511,405
1,695,829 1,695,829 543,353 1,152,476
2,042,431 2,042,431 3,203,261 1,160, 830
(366,788) (366,788) (361,019) 5,769
(366,788) (366,788) (361,019) 5,769
1,675,643 1,675,643 2,842,242 1,166,599
12,227,179 12,227,179 12,227,179
$ 13,902,822 $ 13,902,822 $ 15,069,421 $ 1,166,599
62
CITY OF SCHERTZ, TEXAS
NOTES TO SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE — BUDGET AND ACTUAL
SEPTEMBER 30, 2017
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; hotel motel tax, park fund, tree mitigation; police
forfeiture fund, library advisory board fund, and the historical committee fund. Project - length financial
plans are adopted for capital projects funds. Of these budgets, only the General Fund, Debt Service and
Economic Development Corporation are legally adopted.
Budgetary preparation and control is exercised at the department level. Actual expenditures may not
legally exceed appropriations at the fund level.
The City did not exceed the budgeted expenditures in any funds with legally adopted budgets during 2017.
The City does not use encumbrances.
63
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES — NET PENSION LIABILITY AND RELATED RATIOS
LAST THREE PLAN YEARS
Service Cost
Interest (on the Total Pension Liability)
Changes of Benefit Terms
Difference between Expected
and Actual Experience
Change of Assumptions
Benefit Payments, Including Refunds of
Employee Contributions
Net Change in Total Pension Liability
Total Pension Liability - Beginning
Total Pension Liability - Ending
Total Pension Liability
2014 2015 2016
$ 2,558,743
3,245,266
(1.22,286)
$ 2,724,337
3,556,428
120,434
59,193
$ 2,855,745
3,763,562
1.39,216
(1,068,487)
(1,570,211)
(1,581,272)
4,613,236
4,890,181
5,177,251
45,615,815
50,229,051
55,119,232
$ 50,229,051
$ 55,119,232
$ 60,296,483
Plan Fiduciary Net Position
Note: The schedule above reflects the changes in the net pension liability for the current year and the
previous two plan years. GASB Statement No. 68 requires 10 fiscal years of data to be provided in this
schedule. The City will build this schedule over the 10 -year period beginning December 31, 2014 as data
becomes available.
64
2014
2015
2016
Contributions - Employer
$ 2,403,929
$ 2,542,565
$
2,627,335
Contributions - Employee
1,077,097
1,095,260
1,152,864
Net Investment Income
1,841,586
53,742
2,602,572
Benefit Payments, Including Refunds of
Employee Contributions
(1,068,487)
(1,570,211)
(1,581,272)
Administrative Expense
(19,219)
(32,727)
(29,385)
Other
(1,580)
(1,616)
(1,583)
Net Change in Plan Fiduciary Net Position
4,233,326
2,087,013
4,770,531
Plan Fiduciary Net Position - Beginning
32,179,518
36,412,844
38,499,857
Plan Fiduciary Net Position - Ending
$ 36,412,844
$ 38,499,857
$
43,270,388
Net Pension Liability - Ending
$ 13,81.6,207
$ 16,619,375
$
17,026,095
Plan Fiduciary Net Position as a
Percentage of Total Pension Liability
72.49%
69.85%
71.76%
Covered Employee Payroll
$ 15,389,154
$ 15,648,114
$
16,478,620
Net Pension Liability as a Percentage
of Covered Employee Payroll
89.78%
106.21%
1.03.32%
Note: The schedule above reflects the changes in the net pension liability for the current year and the
previous two plan years. GASB Statement No. 68 requires 10 fiscal years of data to be provided in this
schedule. The City will build this schedule over the 10 -year period beginning December 31, 2014 as data
becomes available.
64
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CITY CONTRIBUTIONS
LAST THREE FISCAL YEARS
Actuarially Determined Contribution
Contributions in Relation to the Actuarially
Determined Contribution
Contribution Deficiency (Excess)
Covered Employee Payroll
Contributions as a Percentage of Covered
Employee Payroll
2015 2016
$ 2,487,856 $ 2,592,593
2017
$ 2,756,511
2,487,856 2,592,593 2,756,511.
$ 15,486,735
16.06%
$ 16,175,988
16.03%
$ 17,347,849
15.89%
Note: The schedule above reflects the TMRS contributions made by the City for the current year and the
previous two fiscal years. GASB Statement No. 68 requires 10 fiscal years of data to be provided in this
schedule. The City will build this schedule over the 10 -year period beginning December 31, 2014 as data
becomes available.
Valuation Date:
Actuarially determined contribution rates are calculated as of December 31 and become effective in January, thirteen
(1.3) months later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll, Closed
Remaining Amortization Period 29 Years
Asset Valuation Method 10 Year Smoothed Market; 15% Soft Corridor
Inflation 2.50%
Salary Increases 3.50% to 10.5% Including Inflation
Investment Rate of Return 6.75%
Retirement Age Experience -based table of rates that are specific to the City's plan of
benefits. Last updated for the 2015 valuation pursuant to an experience
study of the period 2010 - 2014.
Mortality RP2000 Combined Mortality Table with blue Collar Adjustment with
male rates multiplied by 109% and femal rates multiplied by 103% and
projected on a fully generational basis with scale BB.
65
CITY OF SCHERTZ, TEXAS
REQUIRED SUPPLEMENTARY INFORMATION
RETIREE HEALTH INSURANCE PLAN
ANALYSIS OF FUNDING PROGRESS
LAST TWO ACTUARIAL VALUATIONS
66
UNFUNDED
ACTUARIAL
ACCRUED
LIABILITY
UNFUNDED
ASA
ACTUARIAL
ACTUARIAL
ACTUARIAL
ANNUAL
PERCENTAGE
ACTUARIAL
VALUE OF
ACCRUED
ACCRUED
FUNDING
COVERED
OF COVERED
VALUATION
ASSETS
LIABILITY*
LIABILITY
RATIO
PAYROLL
PAYROLL
DATE
(a)
(b)
(b -a)
(a/b)
(d)
(b -a) /d
12/31/2013
$ -
$ 493,114
$ 493,114
0.0%
$14,356,845
3.4%
12/31/2015
$ -
$ 1,055,757
$ 1,055,757
0.0%
$15,648,114
6.7%
66
SUPPLEMENTARY INFORMATION
• Comparative Statements
• General Fund
• Economic Development Corporation
• Debt Service Fund
• Capital Projects Fund
Combining and Comparative Individual Fund Statements - Nonmajor Governmental Funds
• Hotel Occupancy - 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 developers' fees (in lieu of park land dedication),
grants, and donations and is designed to monitor and manage improvement of park system.
• Tree Mitigation Fund - will account for revenues from permits, grants and donations to preserve
and replace trees in the City.
• Treasury 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. 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 US Department of
Justice.
• State Forfeitures Fund - will account for revenue received from drug related cases in conjunction
with other law enforcement agencies within the jurisdiction of the State Forfeiture Program.
• Library Advisory Board - to account for certain fees generated at the library to be used by the
Board for general improvements to the Library.
• Parks and Recreation Foundation - to account for revenues from events, fundraisers and
donations to improve and maintain City parks.
• Historical Committee Fund - will account for funds received for the preservation of the history
of the city.
67
CITY OF SCHERTZ, TEXAS
COMPARATIVE BALANCE SHEETS
GENERAL FUND
SEPTEMBER 30, 2017 AND 2016
68
2017
2016
ASSETS
Cash and Cash Equivalents
$
2,062,393
$
1,174,602
Investments
9,485,725
9,365,670
Receivables (net of allowances):
Taxes
1,970,300
1,955,953
Accounts and Other
1,677,633
1,949,153
Inventory
98,263
107,529
Prepaid Items
-
112,974
Restricted Cash
617,075
554,657
TOTAL ASSETS
$
15,911,389
$
1.5,220,538
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Liabilities:
Accounts Payable
$
544,406
$
1,000,892
Accrued Salaries and Benefits
653,700
552,820
Customer Deposits
54,200
48,067
Due to Other Governments
119,149
120,321
Unearned Revenue
35,346
39,572
Total Liabilities
1,231,717
1,761,672
Deferred Inflows of Resources:
Unavailable Revenue
1,710,054
2,030,088
Fund Balance:
Nonspendable:
Inventory
98,263
107,529
Prepaid Items
-
112,974
Restricted for:
Police and Public Safety
101,842
218,144
Municipal Court
728,350
714,609
PEG Capital Fees
638,506
577,590
Animal Control
35,660
18,667
Veterans
4,796
4,985
Scholarships
77,458
63,048
Committed for Civic CenterlCIED
454,376
342,519
Assigned for:
Property Replacement
854,198
752,503
Special Events
-
6,743
Unassigned
9,976,169
8,509,467
Total Fund Balance
12,969,618
11,428,778
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
$
15,911,389
$
15,220,538
68
CITY OF SCHERTZ, TEXAS
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GENERAL FUND
FOR THE YEARS ENDED SEPTEMBER 30, 2017 AND 2016
REVENUES
Taxes
Permits and Fees
Service Fees
Fines and Fees
Intergovernmental
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Public Safety
Public Environment
Parks and Recreation
Cultural
Health
Administration
Capital Outlay
Debt Service:
Principal
Interest and Fiscal Charges
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
69
2017
$ 1.9,450,338
2,367,929
2,107,844
1,021,965
307,809
128,158
603,477
25,987,520
5,1.71,635
11,846,184
1,128,979
1,682,955
901,992
672,934
2,395,926
644,773
33,1.74
36,513
24,515,065
2016
$ 18,850,031
1,234,048
1,610,940
1,343,236
293,727
58,724
599,791.
23,990,497
4,323,209
11,010,802
1,007,326
1,173,070
843,643
480,175
2,557,257
498,251
33,175
38,214
21,965,122
1,472,455 2,025,375
68,385
3,019
(216,103)
68,385 (213,084)
1,540,840 1,812,291
11,428,778 9,616,487
$ 12,969,618 $ 11,428,778
CITY OF SCHERTZ, TEXAS
COMPARATIVE BALANCE SHEETS
ECONOMIC DEVELOPMENT CORPORATION
SEPTEMBER 30, 2017 AND 2016
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net of allowances):
Taxes
Accounts and Other
Prepaid Items
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts Payable
Accrued Salaries and Benefits
Total Liabilities
Fund Balance:
Restricted for:
Economic Development
Total Fund Balance
TOTAL LIABILITIES AND FUND BALANCE
ME
2017
$ 893,858
13,506,156
665,316
8,448
2016
$ 393,738
11,181,434
666,534
7,949
1,120
$ 15,073,778 $ 1.2,250,775
$ 3,940 $ 16,295
417 7,301
4,357 23,596
15,069,421 1.2,227,179
15,069,421 12,227,179
$ 15,073,778 $ 12,250,775
CITY OF SCHERTZ, TEXAS
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
ECONOMIC DEVELOPMENT CORPORATION
FOR THE YEARS ENDED SEPTEMBER 30, 2017 AND 2016
REVENUES
Taxes
Investment Earnings
Miscellaneous Revenue
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Administration
Debt Service:
Principal
Interest and Fiscal Charges
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
71
2017 2016
$ 3,620,930 $ 3,660,101
125,684 52,546
3,746,614 3,712,647
92,829 286,943
450,524 322,596
1.55,000
- 6,215
543,353 770,754
3,203,261 2,941,893
(361,019) (536,461)
(361,019) (536,461)
2,842,242 2,405,432
12,227,179 9,821,747
$ 1.5,069,421 $ 12,227,179
CITY OF SCHERTZ, TEXAS
COMPARATIVE BALANCE SHEETS
DEBT SERVICE FUND
SEPTEMBER 30, 2017 AND 2016
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net of allowances):
Taxes
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
Deferred Inflows of Resources:
Unavailable Revenue
Fund Balance:
Restricted for:
Debt Service
Total Fund Balance
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
72
2017 2016
$ 59,148 $ 37,717
1,390,934 1,273,860
82,550 68,239
$ 1,532,632 $ 1,379,816
82,550 68,239
1,450,082 1,311,577
1,450,082 1,311,577
$ 1,532,632 $ 1,379,816
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
DEBT SERVICE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
73
Variance with
2017
Final Budget-
2016
Budgeted
Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Property Taxes
$ 6,102,433
$ 6,102,433
$ 6,149,844
$ 47,411
$ 5,810,724
Investment Earnings
4,500
4,500
47,758
43,258
34,438
Miscellaneous
100,000
100,000
100,000
-
-
TOTAL REVENUES
6,206,933
6,206,933
6,297,602
90,669
5,845,162
EXPENDITURES
Debt Service:
Principal
3,810,000
3,810,000
4,440,000
(630,000)
3,852,800
Interest and Fiscal Charges
1,777,092
1,777,092
2,077,166
(300,074)
1,852,482
Bond Issue Costs
1,027,489
1,027,489
2,950
1,024,539
84,774
TOTAL EXPENDITURES
6,614,581
6,614,581
6,520,116
94,465
5,790,056
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
EXPENDITURES
(407,648)
(407,648)
(222,514)
185,134
55,106
OTHER FINANCING SOURCES
Transfers In
407,648
407,648
361,019
(46,629)
356,119
Issuance of Refunding Debt
-
-
-
-
4,185,000
Premiums from Refunding Bonds
-
-
-
-
83,656
Payments to Refund Escrow Agents
-
-
-
-
(4,215,482)
TOTAL OTHER FINANCING
SOURCES
407,648
407,648
361,019
(46,629)
409,293
Net Change in Fund Balance
-
-
138,505
138,505
464,399
FUND BALANCE, BEGINNING
1,311,577
1,311,577
1,311,577
-
847,178
FUND BALANCE, ENDING
$ 1,311,577
$ 1,311,577
S 1,450,082
$ 138,505
$ 1,311,577
73
CITY OF SCHERTZ, TEXAS
COMPARATIVE BALANCE SHEETS
CAPITAL PROJECTS FUND
SEPTEMBER 30, 2017 AND 2016
ASSETS
Cash and Cash Equivalents
Investments
Receivables (net of allowances):
Accounts and Other
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts Payable
Due to Other Funds
Total Liabilities
Fund Balance:
Restricted for Capital Improvement
Total Fund Balance
TOTAL LIABILITIES AND FUND BALANCE
74
2017 2016
$ 1,753,815 $ 2,908,320
1.5,546,171 11,573,240
- 18,781
$ 17,299,986 $ 14,500,341
$ 267,949 $ 2,718,608
1.1.6,040 116,040
383,989 2,834,648
16,915,997 11,665,693
16,915,997 1.1,665,693
$ 17,299,986 $ 14,500,341
CITY OF SCHERTZ, TEXAS
COMPARATIVE STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
CAPITAL PROJECTS FUND
FOR THE YEARS ENDED SEPTEMBER 30, 2017 AND 2016
REVENUES
Intergovernmental
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Capital Outlay
Debt Service:
Bond Issue Costs
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Proceeds from Issuances of Debt
Premiums From Issuance of Debt
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
Fund Balance at Beginning of Year
Fund Balance at End of Year
75
2017 2016
$ 89,264 $ 107,767
123,920 34,384
745,050 929,250
958,234 1,071,401
4,757,930 9,641,290
211,330 364,584
4,969,260 10,005,874
(4,011,026) (8,934,473)
8,870,000 10,750,000
381,931 506,776
9,399 452,610
- (33,807)
9,261,330 11,675,579
5,250,304 2,741,106
11,665,693 8,924,587
$ 1.6,915,997 $ 11,665,693
CITY OF SCHERTZ, TEXAS
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
SEPTEMBER 30, 2017
Special Revenue Funds
Hotel
Occupancy Park Tree Treasury
Fund Fund Mitigation Forfeitures
ASSETS
Cash and Cash Equivalents
$
183,537
$
96,587
$
19,515
$
21,015
Investments
1,295,228
330,364
312,398
-
Accounts Receivable, Net of Allowance
Taxes
33,548
-
-
-
Other
-
-
-
-
TOTAL ASSETS
$
1,512,313
$
426,951
$
331,913
$
21,015
LIABILITIES AND FUND BALANCE
Liabilities
Accounts Payable
$
8,440
$
59,139
Total Liabilities
8,440
59,139
-
-
Fund Balance
Restricted for:
Tourism Development
1,503,873
-
-
-
Tree Mitigation
-
-
331,913
-
Parks
-
367,812
-
-
Police Forfeiture
-
-
-
21,015
Library
-
-
-
-
Historical Committee
-
-
-
-
Total Fund Balances
1,503,873
367,812
331,913
21,015
TOTAL LIABILITIES AND
FUND BALANCE
$
1,51.2,313
$
426,951
$
331,913
$
21,015
76
Special Revenue Funds
Library Parks & Historical
Justice State Advisory Recreation Committee
Forfeitures Forfeitures Board Foundation Fund Totals
$ 132,658 $ 11,270 $ 22,382 $ - $ 9,457 $ 496,421
248,146 - 45,611 - - 2,231,747
- - - - - 33,548
$ 380,804 $ 11,270 $ 67,993 $ - $ 9,457 $ 2,761,716
125
125 -
380,804 11,270 -
- - 67,868
380,804 11,270 67,868
188 $ 67,892
188 67,892
- 1,503,873
- - 331,913
- - 367,812
- - 413,089
- - 67,868
- 9,269 9,269
9,269 2,693,824
$ 380,804 $ 11,270 $ 67,993 $ - $ 9,457 $ 2,761,716
0
CITY OF SCHERTZ, TEXAS
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES — NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED SEPTEMBER 30, 2017
EXPENDITURES
Current:
General Government
127,545
Special Revenue Funds
-
-
Hotel
-
-
-
Occupancy
Park Tree
Treasury
19,487
Fund
Fund Mitigation
Forfeiture
REVENUES
-
-
-
Occupancy Tax
$ 499,466
$ - $ -
$ -
Permits and Fees
-
98,000 74,116
-
Service Fees
-
- -
-
Fines and Fees
-
- -
51143
Investment Earnings
12,295
3,716 3,312
46
Miscellaneous
-
- -
-
TOTAL REVENUES
511,761
101,716 77,428
5,189
EXPENDITURES
Current:
General Government
127,545
-
-
-
Public Safety
-
-
-
-
Parks and Recreation
-
19,487
85,901
-
Cultural
-
-
-
-
Administration
66,405
-
-
Capital Outlay
-
59,139
-
-
TOTAL EXPENDITURES
193,950
78,626
85,901
-
Excess (Deficiency) of Revenues
Over (Under) Expenditures
317,811
23,090
(8,473)
5,189
OTHER FINANCING SOURCES (USES)
Transfers Out
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
-
-
-
-
Net Change in Fund Balance
317,811
23,090
(8,473)
5,189
Fund Balances, Beginning
1,186,062
344,722
340,386
15,826
Fund Balances, Ending
$ 1,503,873 $
367,812 $
331,913 $
21,015
78
- - - - 2,909 130,454
19,418 5,034 - - - 24,452
- - - 97,572 - 202,960
19,878 - - 19,878
- - - - - 66,405
24,154 6,200 - - - 89,493
43,572 11,234 19,878 97,572 2,909 533,642
138,708 (1) 4,127 (96,884) (2,410) 381,157
(68,385) - - - - (68,385)
(68,385) - - - - (68,385)
70,323 (1) 4,127 (96,884) (2,410) 312,772
310,481 11,271 63,741 96,884 11,679 2,381,052
$ 380,804 $ 11,270 $ 67,868 $ - $ 9,269 $ 2,693,824
0
Special Revenue Funds
Library
Parks &
Historical
Justice
State
Advisory
Recreation
Committee
Forfeiture
Forfeiture
Board
Foundation
Fund
Totals
499,466
-
-
-
-
-
172,116
-
-
23,381
575
499
24,455
179,308
11,205
-
-
-
195,656
2,972
28
516
12
-
22,897
-
-
108
101
-
209
182,280
11,233
24,005
688
499
914,799
- - - - 2,909 130,454
19,418 5,034 - - - 24,452
- - - 97,572 - 202,960
19,878 - - 19,878
- - - - - 66,405
24,154 6,200 - - - 89,493
43,572 11,234 19,878 97,572 2,909 533,642
138,708 (1) 4,127 (96,884) (2,410) 381,157
(68,385) - - - - (68,385)
(68,385) - - - - (68,385)
70,323 (1) 4,127 (96,884) (2,410) 312,772
310,481 11,271 63,741 96,884 11,679 2,381,052
$ 380,804 $ 11,270 $ 67,868 $ - $ 9,269 $ 2,693,824
0
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
HOTEL OCCUPANCY FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016) .
Excess (Deficiency) of Revenues
Over (Under) Expenses 464,862 464,862 317,811 (147,051) 369,093
OTHER FINANCING SOURCES
(USES)
Transfers Out (114,405) (114,405) - 114,405 (48,000)
TOTAL OTHER FINANCING
SOURCES (USES) (114,405) (114,405) - 114,405 (48,000)
Net Change in Fund Balance
350,457
350,457
317,811
Variance with
FUND BALANCE, BEGINNING
1,186,062
1,186,062
1,186,062
2017
Final Budget-
2016
Budgeted Amounts
Actual
Positive
Actual
$ (32,646) $ 1,186,062
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Occupancy Tax
$ 609,302
$ 609,302
$ 499,466
$ (109,836)
$ 544,871
Investment Earnings
2,150
2,150
12,295
10,145
3,953
TOTAL REVENUES
611,452
611,452
511,761
(99,691)
548,824
EXPENDITURES
Current:
General Government
146,590
146,590
127,545
19,045
179,731
Administration
-
-
66,405
(66,405)
-
TOTAL EXPENDITURES
1.46,590
146,590
193,950
(47,360)
179,731
Excess (Deficiency) of Revenues
Over (Under) Expenses 464,862 464,862 317,811 (147,051) 369,093
OTHER FINANCING SOURCES
(USES)
Transfers Out (114,405) (114,405) - 114,405 (48,000)
TOTAL OTHER FINANCING
SOURCES (USES) (114,405) (114,405) - 114,405 (48,000)
Net Change in Fund Balance
350,457
350,457
317,811
(32,646) 321,093
FUND BALANCE, BEGINNING
1,186,062
1,186,062
1,186,062
- 864,969
FUND BALANCE, ENDING
$ 1,536,51.9
$ 1,536,519
$ 1,503,873
$ (32,646) $ 1,186,062
80
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
PARK FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
REVENUES
Licenses and Permits
Investment Earnings
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
Parks and Recreation
Capital Outlay
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
15,000
22,700
19,487
Variance with
147
170,000
168,000
2017
Final Budget-
2016
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
$ 145,000
$ 145,000
$ 98,000
$ (47,000)
$ 132,000
1,250
1,250
3,716
2,466
728
-
-
-
-
870
146,250
146,250
101,716
(44,534)
133,598
15,000
22,700
19,487
3,213
147
170,000
168,000
59,139
108,861
22,857
85,000
190,700
78,626
112,074
23,004
Over (Under) Expenditures (38,750) (44,450) 23,090 (67,540) 110,594
OTHER FINANCING USES
Transfers In 38,750 44,450 - 44,450 -
TOTAL OTHER FINANCING 38,750 44,450 - 44,450 -
Net Change in Fund Balance
23,090 (23,090) 110,594
FUND BALANCE, BEGINNING
344,722
344,722
344,722
- 234,128
FUND BALANCE, ENDING
$ 344,722
$ 344,722
$ 367,812
$ (23,090) $ 344,722
81
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
TREE MITIGATION FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
EXPENDITURES
Current:
Parks and Recreation 142,000 142,000 85,901 56,099 119,564
TOTAL EXPENDITURES 142,000 142,000 85,901 56,099 119,564
Excess (Deficiency) of Revenues
Over (Under) Expenditures (54,950) (54,950) (8,473) 46,477 9,237
OTHER FINANCING USES
Transfers In 54,950 54,950
TOTAL OTHER FINANCING 54,950 54,950
Net Change in Fund Balance
(54,950) -
(54,950) -
(8,473) (8,473) 9,237
FUND BALANCE, BEGINNING 340,386 340,386 340,386 - 331,149
FUND BALANCE, ENDING $ 340,386 $ 340,386 $ 331,913 $ (8,473) $ 340,386
82
Variance with
2017
Final Budget-
2016
Budgeted
Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Licenses and Permits
$ 85,300
$ 85,300
$ 74,116
$ (11,184)
$ 127,288
Miscellaneous
1,750
1,750
3,312
1,562
1,513
TOTAL REVENUES
87,050
87,050
77,428
(9,622)
128,801.
EXPENDITURES
Current:
Parks and Recreation 142,000 142,000 85,901 56,099 119,564
TOTAL EXPENDITURES 142,000 142,000 85,901 56,099 119,564
Excess (Deficiency) of Revenues
Over (Under) Expenditures (54,950) (54,950) (8,473) 46,477 9,237
OTHER FINANCING USES
Transfers In 54,950 54,950
TOTAL OTHER FINANCING 54,950 54,950
Net Change in Fund Balance
(54,950) -
(54,950) -
(8,473) (8,473) 9,237
FUND BALANCE, BEGINNING 340,386 340,386 340,386 - 331,149
FUND BALANCE, ENDING $ 340,386 $ 340,386 $ 331,913 $ (8,473) $ 340,386
82
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
TREASURY FORFEITURES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
REVENUES
Fines and Fees
Investment Earnings
TOTAL REVENUES
EXPENDITURES
Current:
Public Safety
TOTAL EXPENDITURES
Net Change in Fund Balance
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Final
$ - $ -
Variance with
2017 Final Budget -
Actual Positive
Amounts (Negative)
$ 5,143 $ 5,1.43
5,189 5,189
2016
Actual
Amounts
2
2
- - 5,189 5,189 2
15,826 15,826 15,826 - 15,824
$ 15,826 $ 15,826 $ 21,015 $ 5,189 $ 15,826
83
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
JUSTICE FORFEITURES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
OTHER SOURCES (USES)
Transfers Out - - (68,385) (68,385) -
TOTAL OTHER SOURCES - - (68,385) (68,385) -
Net Change in Fund Balance 147,000 147,000 70,323 (76,677) 37,170
FUND BALANCE, BEGINNING 310,481 310,481 310,481 - 273,311
FUND BALANCE, ENDING $ 457,481 $ 457,481 $ 380,804 $ (76,677) $ 310,481
84
Variance with
2017
Final Budget-
2016
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Fines and Fees
$ 47,000
$ 47,000
$ 179,308
$ 132,308
$ 71,378
Investment Earnings
-
-
2,972
2,972
1,259
TOTAL REVENUES
47,000
47,000
182,280
135,280
72,637
EXPENDITURES
Current:
Public Safety
(100,000)
(100,000)
19,418
(119,418)
6,637
Capital Outlay
-
-
24,154
(24,154)
28,830
TOTAL EXPENDITURES
(100,000)
(100,000)
43,572
(143,572)
35,467
Excess (Deficiency) of Revenues
Over (Under) Expenditures
1.47,000
147,000
138,708
(8,292)
37,170
OTHER SOURCES (USES)
Transfers Out - - (68,385) (68,385) -
TOTAL OTHER SOURCES - - (68,385) (68,385) -
Net Change in Fund Balance 147,000 147,000 70,323 (76,677) 37,170
FUND BALANCE, BEGINNING 310,481 310,481 310,481 - 273,311
FUND BALANCE, ENDING $ 457,481 $ 457,481 $ 380,804 $ (76,677) $ 310,481
84
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
STATE FORFEITURES FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
REVENUES
Fines and Fees
Investment Earnings
TOTAL REVENUES
EXPENDITURES
Current:
Public Safety
TOTAL EXPENDITURES
Net Change in Fund Balance
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Final
$ - $ -
Variance with
2017
Final Budget-
2016
Actual
Positive
Actual
Amounts
(Negative)
Amounts
$ 11,205
$ 11,205
$ 26,860
11,233 11,233 26,861
- - 5,034 (5,034) 31,328
11,234 (11,234) 31,328
- - (1) (1) (4,467)
11,271 11,271 11,271 - 15,738
$ 11,271 $ 11,271 $ 11,270 $ (1) $ 11,271
85
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
LIBRARY ADVISORY BOARD
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
:.
Variance with
2017
Final Budget-
2016
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Service Fees
$ 22,000
$ 22,000
$ 23,381
$ 1,381
$ 21,846
Investment Earnings
60
60
516
456
241.
Miscellaneous
1,000
1,000
108
(892)
390
TOTAL REVENUES
23,060
23,060
24,005
945
22,477
EXPENDITURES
Current:
Cultural
22,000
22,000
19,878
2,122
25,519
TOTAL EXPENDITURES
22,000
22,000
19,878
2,122
25,519
Net Change in Fund Balance
1,060
1,060
4,127
3,067
(3,042)
FUND BALANCE, BEGINNING
63,741
63,741
63,741
-
66,783
FUND BALANCE, ENDING
$ 64,801
$ 64,801
$ 67,868
$ 3,067
$ 63,741
:.
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
HISTORICAL COMMITTEE FUND
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
Excess (Deficiency) of Revenues
Over (Under) Expenditures (10,750) (10,750) (2,410) 8,340 (2,160)
OTHER FINANCING SOURCES
(USES)
Transfers In 10,750 10,750 - (10,750) 3,835
TOTAL OTHER FINANCING
SOURCES (USES) 10,750 10,750 - (10,750) 3,835
Net Change in Fund Balance
(2,410) (2,410) 1,675
FUND BALANCE, BEGINNING
1.1,679
11,679
11,679 -
Variance with
FUND BALANCE, ENDING
2017
Final Budget-
2016
11,679
Budgeted Amounts
Actual
Positive
Actual
Original
Final
Amounts
(Negative)
Amounts
REVENUES
Sale of Merchandise
$ 1,000
$ 1,000
$ 499
$ (501)
1,675
TOTAL REVENUES
1,000
1,000
499
(501)
1,675
EXPENDITURES
Current
General Government
11,750
11,750
2,909
8,841
3,835
TOTAL EXPENDITURES
11,750
11,750
2,909
8,841
3,835
Excess (Deficiency) of Revenues
Over (Under) Expenditures (10,750) (10,750) (2,410) 8,340 (2,160)
OTHER FINANCING SOURCES
(USES)
Transfers In 10,750 10,750 - (10,750) 3,835
TOTAL OTHER FINANCING
SOURCES (USES) 10,750 10,750 - (10,750) 3,835
Net Change in Fund Balance
(2,410) (2,410) 1,675
FUND BALANCE, BEGINNING
1.1,679
11,679
11,679 -
10,004
FUND BALANCE, ENDING
$ 11,679
$ 11,679
$ 9,269 $ (2,410) $
11,679
M
CITY OF SCHERTZ, TEXAS
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
BUDGET TO ACTUAL
PARKS AND RECREATION FOUNDATION
FOR THE YEAR ENDED SEPTEMBER 30, 2017
(WITH COMPARATIVE ACTUAL TOTALS FOR 2016)
REVENUES
Charges and Fees at Events
Investment Earnings
Miscellaneous Income and Donations
TOTAL REVENUES
EXPENDITURES
Current
Parks and Recreation
Capital Outlay
TOTAL EXPENDITURES
Excess (Deficiency) of Revenues
Over (Under) Expenditures
OTHER FINANCING SOURCES
(USES)
Transfers In
TOTAL OTHER FINANCING
SOURCES (USES)
Net Change in Fund Balance
FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
Budgeted Amounts
Original Final
Q e
2017
Actual
Amounts
- $
575
-
12
-
101
$ 575
688
Variance with
Final Budget-
2016
Positive
Actual
(Negative)
Amounts
$ 575
$ 154,860
12
50
101
23,296
688
178,206
- 97,572 (97,572) 235,575
- - 1,170
97,572 (97,572) 236,745
(96,884) (96,884) (58,539)
48,000
- - - - 48,000
- - (96,884) (96,884) (10,539)
96,884 96,884 96,884 - 107,423
$ 96,884 $ 96,884 $ - $ (96,884) $ 96,884
::
STATISTICAL SECTION
This part of the City of Schertz's annual 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.
Financial Trends (Tables 1 through 4)
Net Position by Component
Change in Net Position
Fund Balances, Governmental Funds
Changes in Fund Balances, Governmental Funds
These schedules contain trend information to help reader understand how the City's financial
performance and well -being have changed over time.
Revenue Capacity (Tables S through 12)
Tax Revenues by Source, Governmental Funds
Total Water and Sewer Consumption and Rates
Principal Water and Sewer Consumers
Assessed Value and Estimated Actual Value of Taxable Property
Direct and Overlapping Property Tax Rates
Principal Property Taxpayers
Property Tax Levies and Collections
Taxable Assessed Value
These schedules contain information to help readers assess the factors affecting the City's ability to
generate its property and sales tax.
Debt Capacity (Tables 13 through 17)
Ratios of Outstanding Debt by Type
Ratios of General Bonded Debt Outstanding
Direct and Overlapping Governmental Activities Debt
Debt Margin Information
Pledged Revenue Coverage
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.
Demographic and Economic Information (Tables 18 through 19)
Demographic and Economic Statistics
Principal Employers
These schedules offer demographic and economic indicators to help the reader understand how the
City's financial activities take place and to help make comparisons over time and with other
governments.
Operating Information (Tables 20 throug22)
Full -time Equivalent City Government Employees by Function
Operating Indicators by Function /Program
Capital Asset Statistics by Function/Program
These schedules contain information about the City's operations and resources to help the reader
understand how the City's financial information relates to the services the City provides and the
activities it performs.
m
CITY OF SCHERTZ, TEXAS
NET POSITION, BY COMPONENT
LAST TEN FISCAL YEARS
Governmental Activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total Governmental Activities
Net Position
Business -Type Activities
Net Investment in Capital Assets
Restricted
Unrestricted
Total Business -Type Activities
Net Position
Primary Government
Net Investment in Capital Assets
Restricted
Unrestricted
Total Primary Government Net Position
Fiscal Year
2008 2009 2010 2011
$
47,327,175
$
57,324,482
$
54,010,139
$
55,415,699
1,058,514
1,170,786
897,324
2,089,971
11,029,326
3,650,287
7,548,859
7,370,101
$
59,415,015
$
62,145,555
$
62,456,322
$
64,875,771
$
41,350,184
$
50,047,301
$
50,778,490
$
51,838,589
10,286,447
3,633,244
4,217,098
7,441,722
$
51,636,631
$
53,680,545
$
54,995,588
$
59,280,311
$
88,677,359
$
107,371,783
$
104,788,629
$
107,254,288
1,058,51.4
1,170,786
897,324
2,089,971.
21,315,773
7,283,531
11,765,957
14,811,823
$
111,051,646
$
115,826,100
$
117,451,910
$
124,156,082
Note — GASB Statement No. 68 has been prospectively implemented in year -end 2015.
90
TABLE 1
Fiscal Year
2012 2013 2014 2015 2016 2017
$
56,616,809
$
57,543,618
$
62,792,671
$
68,125,738
$
74,237,004
$
84,537,238
1,917,098
7,788,354
10,401,728
13,343,280
17,095,325
20,437,116
8,907,326
6,645,418
8,613,239
1,640,519
2,231,341
1,673,567
$
67,441,233
$
71,977,390
$
81,807,638
$
83,109,537
$
93,563,670
$
106,647,921
$
50,161,157
$
53,071,836
$
53,674,437
$
59,625,205
$
64,210,231
$
70,361,035
11,577,645
11,902,282
16,450,988
14,243,922
15,737,470
20,781,291
$
61,738,802
$
64,974,118
$
70,125,425
$
73,869,127
$
79,947,701
$
91,142,326
$
1.06,777,966
$
110,615,454
$
116,467,108
$
127,750,943
$
138,447,235
$
154,898,273
1,917,098
7,788,354
10,401,728
1.3,343,280
17,095,325
20,437,116
20,484,971
18,547,700
25,064,227
1.5,884,441
17,968,81.1
22,454,858
$
129,180,035
$
136,951,508
$
151,933,063
$
156,978,664
$
173,511,371
$
197,790,247
91
CITY OF SCHERTZ, TEXAS
CHANGE IN NET POSITION
LAST TEN FISCAL YEARS
Fiscal Year
2008 2009 2010 2011 .
Expenses
Governmental Activities
General Government
$ 7,093,762
Public Safety
7,227,406
Public Environment
2,300,425
Parks and Recreation
1,184,866
Cultural
492,991
Health
330,736
Administration
1,364,194
Interest and Other Fees
1,984,151.
Total Governmental Activities Expenses
21,978,531.
Business -Type Activities
$ 7,987,977
7,755,056
2,740,755
1,193,525
769,928
377,1.25
734,584
1,818,984
23,377,934
$ 7,892,516
7,897,298
2,966,642
1,593,075
809,323
345,455
1,084,430
2,230,452
24,819,191
$ 8,112,954
8,390,740
3,152,119
1,673,098
876,339
374,516
1,321,055
2,251,472
26,152,293
Water and Sewer
12,379,584
13,568,065
14,434,709
15,280,871
EMS
2,976,112
3,365,544
3,690,007
3,659,031
Total Business -Type Activities
15,355,696
16,933,609
18,124,716
18,939,902
Total Primary Government Expenses
$ 37,334,227
$ 40,311,543
$ 42,943,907
$ 45,092,195
Program Revenues
Governmental Activities
Charges for Service:
General Government
Public Safety
Parks and Recreation
Cultural
Health
Operating Grants and Contributions
Capital Grants and Contributions
Total Governmental Aactivities
Program Revenues
Business -Type Activities
Charges for Service:
Water and Sewer
EMS
Capital Grants and Contributions
Total Business -Type Activities
Program Revenues
Total Primary Government
Program Revenues
$ 1,497,472
1,643,635
155,168
219,749
41,390
595,401
12,595,635
$ 1,720,279
1,481,004
273,917
219,029
33,930
1,044,884
3,023,377
$ 1,905,600
1,986,536
536,609
265,714
36,728
587,643
1,276,465
$ 1,495,563
2,815,029
524,443
228,242
39,743
717,105
2,998,115
16,748,450
7,796,420
6,595,295
8,818,240
13,620,440
14,668,137
15,147,332
17,073,075
3,150,428
2,889,518
3,061,414
3,564,852
5,190,039
2,241,726
973,437
2,175,889
21,960,907
$ 38,709,357
19,799,381
$ 27,595,801
19,182,183
$ 25,777,478
Note — GAS13 Statement No. 68 has been prospectively implemented in year -end 2015.
M
22,813,816
$ 31,632,056
TABLE 2
Fiscal Year
2012 . 2013 2014 2015 . 2016 . 2017 .
$ 7,802,092
$ 7,066,087
$ 6,958,530
$ 6,443,227
$ 6,557,778
$ 6,253,926
9,103,676
9,567,595
10,025,703
10,836,712
12,141,968
13,061,120
3,586,087
3,622,834
3,740,538
3,876,644
4,147,653
4,460,540
1,584,605
1,807,559
1,807,136
2,164,604
2,034,964
2,859,974
916,967
907,676
870,159
892,194
954,871
1,004,747
357,658
344,647
407,114
470,468
570,204
776,494
1,117,044
1,180,656
1,942,312
1,845,877
1,954,276
3,052,102
2,302,912
3,340,951
2,352,856
2,226,635
2,240,783
2,355,714
26,771,041
27,838,005
28,104,348
28,756,361
30,602,497
33,824,617
16,349,967
16,954,871
17,762,116
18,440,959
20,269,111
21,346,078
3,758,425
3,959,445
4,268,125
4,719,526
5,004,110
6,006,178
20,108,392
20,914,316
22,030,241
23,160,485
25,273,221
27,352,256
$ 46,879,433
$ 48,752,321
$ 50,134,589
$ 51,916,846
$ 55,875,718
$ 61,176,873
$ 2,286,488
$ 2,230,800
$ 1,974,637
$ 1,840,547
$ 1,507,252
$ 874,737
2,216,385
2,516,547
2,536,476
2,603,476
2,415,537
4,131,548
541,512
721,222
917,639
794,003
788,727
544,460
279,267
305,932
309,897
325,178
326,079
330,412
36,746
38,149
32,429
26,744
30,308
29,742
764,997
234,084
220,264
336,252
342,485
552,878
1,178,573
1,531,740
5,756,456
5,509,530
6,227,664
10,043,483
7,303,968
7,578,474
11,747,798
11,435,730
11,638,052
16,507,260
17,411,568
17,696,327
19,147,872
20,700,369
22,003,794
25,390,713
3,561,114
4,459,600
4,533,753
4,415,126
5,921,223
6,366,894
828,853
1,301,235
2,809,110
4,158,552
2,831,126
6,111,474
21,801,535
23,457,162
26,490,735
29,274,047
30,756,143
37,869,081
$ 29,105,503
$ 31,035,636
$ 38,238,533
$ 40,709,777
$ 42,394,195
$ 54,376,341
93
CITY OF SCHERTZ, TEXAS
CHANGE IN NET POSITION (CONTINUED)
LAST TEN FISCAL YEARS
Fiscal Year
2008 2009 2010 2011 .
Net (Expenses) Revenue
Governmental Activities $ (5,230,081) $ (15,581,514) $ (18,223,896) $ (17,334,053)
Business -Type Activities 6,605,211 2,865,772 1,057,467 3,873,914
Total Primary Government Net Expenses $ 1,375,130 $ (12,715,742) $ (17,166,429) $ (13,460,139)
Governmental Revenues and Other
Changes in Net Position
Governmental Activities
Taxes:
Ad Valorem
Sales
Franchise Fees
Hotel /Motel
Mixed Drink
Bingo
Unrestricted Investment Earnings
Miscellaneous
Transfers
Total Governmental Activities
Business -Type Activities
Interest and Investment Earnings
Miscellaneous
Transfers
Total Business -Type Activities
Total Primary Government
Changes In Net Position
Government Activities
Business -Type Activities
Total Primary Government
$
7,841,928
$
8,980,102
$
9,715,645
$
10,280,768
6,175,759
6,017,782
6,240,749
7,054,394
1,240,642
1,462,199
1,448,620
1,542,046
273,558
305,073
348,1.47
391,181.
32,364
31,790
32,144
33,630
4,751
5,105
4,651
2,173
1,310,310
364,648
117,776
48,235
293,763
84,748
611,510
316,840
-
1,060,607
15,421
84,235
17,173,075
18,312,054
18,534,663
19,753,502
522,595
128,233
36,824
37,950
1.79,121
110,516
236,173
457,094
-
(1,060,607)
(15,421)
(84,235)
701,716
(821,858)
257,576
410,809
$
17,874,791
$
17,490,196
$
18,792,239
$
20,164,311
$
11,942,994
$
2,730,540
$
310,767
$
2,419,449
7,306,927
2,043,914
1,315,043
4,284,723
$
19,249,921
$
4,774,454
$
1,625,810
$
6,704,172
94
TABLE 2 (Continued)
Fiscal Year
2012 . 2013 2014 2015 . 2016 . 2017 .
$ (19,467,073) $ (20,259,531) $ (16,356,550) $ (17,320,631) $ (18,964,445) $ (17,317,357)
1,693,143 2,542,846 4,460,494 6,113,562 5,482,922 10,516,825
$ (17,773,930) $ (17,716,685) $ (11,896,056) $ (11,207,069) $ (13,481,523) $ (6,800,532)
$
11,298,204
$
12,359,146
$
12,794,172
$
14,139,037
$
15,131,997
$
16,166,006
7,968,212
9,637,097
10,553,382
10,315,125
10,921,489
10,844,503
1,647,712
1,681,079
2,073,162
2,263,783
2,250,815
2,208,373
470,290
503,267
552,570
563,734
544,871
499,466
28,586
30,421
39,917
43,656
43,073
42,699
60,265
54,270
43,279
56,820
187,847
448,408
621,560
505,268
180,316
197,881
309,275
182,754
(62,294)
25,140
(50,000)
(42,235)
29,211
9,399
22,032,535
24,795,688
26,186,798
27,537,801
29,418,578
30,401,608
36,409
53,089
31,81.0
47,728
102,642
211,466
666,645
664,521
609,003
344,731
522,221
475,733
62,294
(25,1.40)
50,000
42,235
(29,211)
(9,399)
765,348
692,470
690,813
434,694
595,652
677,800
$
22,797,883
$
25,488,158
$
26,877,611
$
27,972,495
$
30,014,230
$
31,079,408
$
2,565,462
$
4,536,157
$
9,830,248
$
10,217,170
$
10,454,133
$
13,084,251
2,458,491
3,235,316
5,151,307
6,548,256
6,078,574
11,194,625
$
5,023,953
$
7,771,473
$
14,981,555
$
16,765,426
$
16,532,707
$
24,278,876
95
CITY OF SCHERTZ, TEXAS
FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
96
Fiscal Year
2008
2009
2010
2011 .
Nonspendable Fund Balance:
Inventory
$ 46,014
$ 44,217 $
46,473
$ 43,504
Prepaid Items
-
-
-
-
Note Receivable
-
-
150,000
120,080
Total Nonspendable Fund Balance
46,014
44,217
196,473
163,584
Restricted Fund Balance:
Police and Public Safety
394,122
355,451
421,265
403,799
Municipal Court
269,961
332,1.17
402,744
459,244
PEG Capital Fees
-
-
-
317,453
Capital Improvement
16,416,440
1.4,342,553
3,914,323
1.0,219,300
Debt Service
429,289
444,369
286,215
117,250
Tourism Development
502,883
180,710
250,379
301,517
Tree Mitigation
271,071
191,834
164,424
173,999
Parks
169,529
120,501
79,317
84,329
Historical Committee & Library
68,207
163,661
200,359
231,686
Economic Development Corporation
2,331,951
2,543,010
3,548,067
3,394,850
Animal Control
-
-
-
-
Veterans
-
-
-
-
Scholarships
-
-
-
-
Total Restricted Fund Balance
20,853,453
1.8,674,206
9,267,093
1.5,703,427
Committed Fund Balance:
Capital Improvement
-
-
-
-
Total Assigned Fund Balance
-
-
-
-
Assigned Fund Balance:
Property Replacement
400,247
201,850
202,341
202,723
Special Events
88,778
62,263
142,465
93,447
Capital Improvement
-
-
-
162,113
Recycling
14,748
-
-
-
Historical Committee
-
10,149
9,940
9,940
Youth Activities
-
-
-
-
Total Assigned Fund Balance
503,773
274,262
354,746
468,223
Unassigned Fund Balance
5,269,890
1,209,451
1,372,779
1,899,105
Total Governmental Funds
$ 26,673,130
$ 20,202,136 $
11,191,091
$ 18,234,339
96
TABLE 3
Fiscal Year
�nin �ni� �nin nnic nnit nnin
$ 63,556
$ 50,768
$ 88,518
$ 101,084
$ 107,529
$ 98,263
2,367
754,443
21,735
16,000
112,974
-
120,080
120,080
-
-
-
-
186,003
925,291
110,253
117,084
220,503
98,263
338,118
496,890
529,264
494,337
555,722
514,931
527,513
646,422
628,459
683,558
714,609
728,350
409,870
456,175
489,509
509,535
577,590
638,506
17,104,595
15,360,800
9,600,028
8,924,587
1.1,665,693
1.6,915,997
227,674
517,199
625,435
847,178
1,311,577
1,450,082
390,561
470,250
501,996
848,969
1,186,062
1,503,873
217,600
157,659
359,205
331,149
340,386
331,913
90,718
136,647
304,655
341,551
441,606
367,812
65,409
77,554
78,098
76,787
75,420
77,137
4,366,005
6,022,128
7,792,578
9,821,747
12,227,179
15,069,421
-
-
-
-
18,667
35,660
-
-
-
-
4,985
4,796
-
-
54,176
60,944
63,048
77,458
23,738,063
24,341,724
20,963,403
22,940,342
29,182,544
37,715,936
-
165,000
31,718
-
342,519
454,376
-
1.65,000
31,718
-
342,519
454,376
322,656
456,034
694,916
785,005
752,503
854,198
92,555
99,770
31,177
6,657
6,743
-
243,546
145,167
-
-
-
-
11,090
-
-
-
-
-
669,847
700,971
726,093
791,662
759,246
854,198
2,560,667
4,206,734
5,587,262
7,280,240
8,509,467
9,976,169
$ 27,154,580
$ 30,339,720
$ 27,418,729
$ 31,129,328
$ 39,014,279
$ 49,098,942
97
CITY OF SCHERTZ, TEXAS
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
EXPENDITURES
Current:
General Government
6,184,705
Fiscal Year
6,989,561
7,164,667
Public Safety
2008
2009
2010
2011 .
REVENUES
745,307
884,158
816,939
846,150
Taxes
$ 15,583,058
$ 16,786,590 $
17,811,547
$ 19,309,675
Permits and Fees
992,953
822,105
1,160,197
1,776,292
Service Fees
1,018,197
973,781
1,492,130
1,645,489
Fines and Fees
1,387,677
1,517,821
1,655,183
1,452,610
Intergovernmental
4,376,072
1,444,966
570,386
1,216,211
Other Revenue
1,864,877
1,066,097
1,161,182
603,498
TOTAL REVENUES
25,222,834
22,611,360
23,850,625
26,003,775
EXPENDITURES
Current:
General Government
6,184,705
6,765,315
6,989,561
7,164,667
Public Safety
6,638,352
7,235,501
7,409,720
7,885,119
Public Environment
745,307
884,158
816,939
846,150
Parks and Recreation
800,079
869,166
1,178,455
1,195,171
Cultural
667,995
821,048
872,668
937,611
Health
295,156
348,448
331,860
360,746
Administration
1,517,785
941,675
1,251,368
1,506,831
Capital Outlay
19,189,505
14,963,950
11,347,876
2,956,511
Debt Service:
Principal
2,025,043
4,816,928
1,893,086
2,371,070
Interest and Fiscal Charges
1,617,876
1,987,384
2,183,852
2,066,221
Bond Issue Costs
122,290
191,066
20,000
244,237
TOTAL EXPENDITURES
39,804,093
39,824,639
34,295,385
27,534,334
Excess (Deficiency) of Revenues
Over (Under) Expenditures
(14,581,259)
(17,213,279)
(10,444,760)
(1,530,559)
OTHER FINANCING
SOURCES (USES)
Bonds & Debt Issuances
9,900,000
9,681,678
1,418,294
8,206,572
Refunding Bond Issuance
-
-
-
-
Premium (Discount) on Bond Issue
-
-
-
283,000
Payment to Refund Agent
-
-
-
-
Transfers In
593,294
2,778,593
242,539
348,846
Transfers (Out)
(593,294)
(1,717,986)
(227,118)
(264,611)
TOTAL OTHER FINANCING
SOURCES (USES)
9,900,000
10,742,285
1,433,715
8,573,807
NET CHANGE IN FUND BALANCE
$ (4,681,259)
$ (6,470,994)
$ (9,011,045)
$ 7,043,248
Debt Service as a percentage of
Noneapital Expenditures
14.6%
26.1%
17.7%
17.4%
•:
l
Fiscal Year
2012 2013 2014 2015 . 2016 . 2017 .
$ 21,401,991
$ 24,181,863
$ 26,021,730
$ 27,348,297
$ 28,865,727
$ 29,720,578
1,363,461
1,609,954
1,805,047
1,731,302
1,493,336
2,540,045
1,547,007
1,739,387
1,763,964
1,797,151
1,789,321
2, 132,299
2,027,613
1,927,744
1,750,311
1,534,588
1,441,474
1,217,621
1,000,413
492,332
221,769
393,607
401,494
397,073
969,921
767,110
671,731
689,805
1,741,436
1,897,153
28,310,406
30,718,390
32,234,552
33,494,750
35,732,788
37,904,769
7,094,834
6,311,276
5,981,439
5,582,441
5,657,998
5,394,918
8,690,849
9,113,840
9,409,894
10,158,401
11,048,767
11,870,636
976,327
951,528
1,012,607
952,663
1,007,326
1,128,979
1,398,692
1,412,329
1,338,232
1,658,197
1,528,356
1,885,915
845,124
840,595
815,691
821,146
869,162
921,870
346,318
341,961
394,918
404,008
480,175
672,934
1,249,557
1,289,078
2,270,041
2,056,646
2,015,573
2,912,855
1,299,843
3,277,397
8,000,467
2,314,668
10,1.92,398
5,492,196
2,704,898
3,217,325
3,695,597
3,918,008
4,040,975
4,473,174
2,313,51.0
2,381,1.71
2,108,610
2,112,746
1,896,911
2,113,679
254,971
31,750
165,650
7,992
449,358
214,280
27,174,923
29,168,250
35,193,146
29,986,916
39,186,999
37,081,436
1,135,483
1,550,140
(2,958,594)
3,507,834
(3,454,211)
823,333
14,370,000
1,635,000
8,583,715
245,000
10,750,000
8,870,000
-
-
-
-
4,185,000
-
175,473
-
686,137
-
590,432
381,931.
(6,698,421)
-
(9,182,250)
-
(4,215,482)
-
139,635
788,084
1,243,833
989,1.20
863,583
438,803
(201,929)
(788,084)
(1,293,832)
(1,031,355)
(834,371)
(429,404)
7,784,758
1,635,000
37,603
202,765
11,339,162
9,261,330
$ 8,920,241
$ 3,185,140
$ (2,920,991)
$ 3,710,599
$ 7,884,951
$ 10,084,663
19.5%
21.6%
21.3%
213%
20.5%
20.4%
99
CITY OF SCHERTZ, TEXAS
TAX REVENUE BY SOURCE — GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
Fiscal
Mixed
Hotel
Year
Property
Sales & Use
Franchise
Beverage
Bin oo
Occupancy
2017
$ 16,125,537
$ 10,844,503
$ 2,208,373
$ 42,668
$ 31
$ 499,466
2016
15,105,480
10,921,489
2,250,815
43,072
1
544,870
2015
14,161,999
10,315,125
2,263,783
43,553
103
563,734
2014
12,802,668
10,553,382
2,073,162
39,917
31
552,570
2013
12,329,999
9,637,097
1,681,079
30,421
-
503,267
2012
11,287,191
7,968,212
1,647,712
28,586
-
470,290
2011
10,286,251
7,054,394
1,542,046
33,630
2,173
391,1.81
2010
9,737,236
6,240,749
1,448,620
32,144
4,651
348,1.47
2009
8,964,642
6,017,781
1,462,199
31,790
5,105
305,073
2008
7,855,984
6,175,759
1,240,642
32,364
4,751
273,558
11
Total
Revenue
$ 29,720,578
28,865,727
27,348,297
26,021,730
24,181, 863
21,401,991
9,309,675
1.7,811,547
6,786,590
1.5,583,058
CITY OF SCHERTZ, TEXAS
TOTAL WATER AND SEWER CONSUMPTION AND RATES
LAST TEN FISCAL YEARS
Fiscal
Year
Ended
September 30,
2017 .
2016
2015
2014
2013
2012
2011
2010
2009
2008
Total Water &
Sewer Consumption
(In Gallons)
1,583,462,300
1,509,250,000
1,472,948,300
1,543,351,600
1,550,039,700
1,604,952,300
1,676,323,900
1,231,376,600
1,511,567,900
855,779,200
1M]
Water &
Sewer
Base Rate
23.19
20.89
19.71
19.32
18.94
18.94
18.94
18.94
18.94
15.94
Water & Sewer
Initial Rate Per
1,000 Gallons
$ 2.86
2.58
2.43
2.39
2.34
2.34
2.34
2.25
2.16
1.92
Consumers
Caterpillar Inc.
Scenic Hill Lawn Care
Schertz 1518
Beck Readymix Concrete
Pecan Grove TX LLC
Sycamore Creek Apartments
Big Time Management Properties
Sebastian Apartments
Waterford Ridge Apartments
Wal -mart Supercenter
Beck Readymix
Prologis Trust
Pecan Grove Investments
Landscape of Texas
AOH- Vantage at Schertz, LLC
Lack's
Legacy Oaks Apartments
Samuel Clemens High Schools
TOTAL
Total City Water Consumption
CITY OF SCHERTZ, TEXAS
PRINCIPAL WATER AND SEWER CONSUMERS
CURRENT YEAR AND NINE YEARS AGO
2017 2008
Total
Percentage of
Total
Percentage of
Water
Total City
Water
Total City
Consumption
Water
Consumption
Water
(in Gallons)
Rank
Consumption
(in Gallons)
Rank
Consumption
18,837,200
1
1.17%
12,896,100
2
0.80%
12,586,700
3
10,546,200
4
8,132,300
5
0.51%
7,871,300
6
0.49%
4,714,000
9
0.33%
7,372,600
7
0.46%
0.00%
6,740,000
8
6,131,700
9
5,928,400
10
0.37%
5,831,400
6
0.40%
11,685,700
1
0.81%
9,139,400
2
0.63%
7,751,000
3
0.54%
6,946,900
4
0.48%
6,162,100
5
0.43%
5,644,100
7
0.39%
5,236,200
8
0.36%
4,110,800
10
0.28%
97,042,500
3.79%
67,221,600
4.65%
1,609,793,100
1,446,023,900
1®
CITY OF SCHERTZ, TEXAS
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal
Year
Ended
September 30,
Total Taxable
Assessed Value
Total Direct
Tax Rate
2017
$ 3,647,504,903
0.4911
2016
3,375,850,131
0.4911
2015
3,037,267,611
0.4974
2014
2,752,562,574
0.4974
2013
2,600,365,551
0.4999
2012
2,411,270,623
0.4843
2011
2,363,893,708
0.4493
2010
2,342,355,490
0.4342
2009
2,230,825,045
0.4090
2008
2,221,073,744
0.4090
Source: Bexar, Comal and Guadalupe County Appraisal Districts
NOTES: Property in the City of Schertz is reassessed every year at estimated actual value. For this reason, assessed
value is equal to estimated actual value. Tax rates are per $100 of assessed value. Total taxable assessed
value is before any applicable fi°eeze adjustments.
103
Source
NOTE:
Fiscal
Year
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
Fiscal
Year
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
CITY OF SCHERTZ, TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(UNAUDITED)
City Direct Rates
Overlapping
School Districts
Schertz-
Cibolo-
Basic
Debt
Universal
Coma]
Rate
Service
Total
City ISD
ISD
0.3168
0.1743
0.4911
1.4700
1.3900
0.3159
0.1752
0.4911
1.4900
1.3900
0.3164
0.1810
0.4974
1.4900
1.3900
0.3010
0.1964
0.4974
1.4900
1.4300
0.2993
0.2006
0.4999
1.4600
1.4300
0.2993
0.1850
0.4843
1.4350
1.4300
0.2993
0.1500
0.4493
1.4350
1.3700
0.2842
0.1500
0.4342
1.4200
1.3100
0.2590
0.1500
0.4090
1.3850
1.3100
0.2590
0.1500
0.4090
1.3150
1.3100
County
0.2933
0.2975
0.3269
0.3269
0.3269
0.3269
0.3269
0.3269
0.3269
0.3269
Hospital
District
0.2762
0.2762
0.2762
0.2762
0.2762
0.2762
0.2662
0.2610
0.2374
0.2439
Overlapping Counties
Bexar Comal Guadalupe
River
Authority
0.0173
0.01.73
0.01.78
0.01.74
0.0174
0.0167
0.0160
0.0160
0.0160
0.01.60
Bexar, Comal and Guadalupe County Tax Offices
Community
College
District
0.1492
0.1492
0.1492
0.1492
0.1416
0.1416
0.1359
0.1359
0.1346
0.1371
County
0.2928
0.3429
0.3504
0.3504
0.3504
0.3340
0.3130
0.3080
0.3180
0.3152
County
0.3449
0.3311
0.3999
0.4036
0.4036
0.3999
0.3895
0.3895
0.3895
0.4031.
Overlapping rates are those of local and county governments that apply within the City of Schertz. Not all
overlapping rates apply to all City of Schertz property owners.
1M
CITY OF SCHERTZ, TEXAS
PRINCIPAL PROPERTY TAX PAYERS
CURRENT YEAR AND NINE YEARS AGO
Taxnaver
Caterpillar Inc.
SYSCO San Antonio, Inc.
Amazon.com KYDC, LLC
US Real Estate, LP
Republic Beverage Co. Distribution
Visionary Properties
GE Oil & Gas
Shell US Gas & Power LLC
San Antonio MTA LP
SC Schertz LLC
Sprint Spectrum, LP
Wal -Mart Real Estate Business Trust
H.E.B. Grocery Co.
EM Limited Partnership
Eye Care Centers of America, Inc.
Lowe's Home Center Inc.
Prologis North American Properties Fund
GD Bar Family Ltd. Partnership
Atlantic Financial Group, Ltd.
TOTALS
TOTAL TAXABLE
ASSESSED VALUE
$ 3,647,504,903
$ 2,221,073,744
Source: Bexar, Comal and Guadalupe County Appraisal Districts
1*,
TABLE 10
2017
2008
Percentage
Percentage
of
of
Total City
Total City
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Value
Rank
Value
Value
Rank
Value
$ 141,584,070
1
3.88%
105,604,943
3
2.90%
80,897,236
2
2.22%
57,155,244
4
1.57%
49,373,850
6
1.35%
40,740,300
7
1.12%
31,044,393
5
0.85%
27,182,290
8
0.75%
24,351,699
9
0.67%
23,048,580
1
1.04%
23,430,800
10
0.64%
16,699,920
2
1.23%
14,804,831
3
0.67%
11 ,958,400
4
11,136,474
6
0.50%
11,298,734
5
0.51%
10,010,608
7
0.45%
9,104,240
8
0.41%
8,589,227
9
0.39%
8,566,675
10
0.39%
$ 581,364,825
15.94%
$ 125,217,689
5.58%
$ 3,647,504,903
$ 2,221,073,744
Source: Bexar, Comal and Guadalupe County Appraisal Districts
1*,
CITY OF SCHERTZ, TEXAS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
(UNAUDITED)
Source: Guadalupe County Tax Office
106
Collected Within
Total Collections
Fiscal Year
Taxes Levied
Fiscal Year of Levy
Collections In
To Date
Ended
for the
% of
Subsequent
% of
September 30,
Fiscal Year
Amount
Levy
Years
Amount
Levy
2017
$ 17,356,822
$ 17,241,556
99.34%
$ -
$ 17,241,556
99.34%
2016
16,238,180
16,160,248
99.52%
43,500
16,203,748
99.79%
2015
14,793,867
14,738,760
99.63%
40,391
14,779,151
99.90%
2014 .
13,383,759
13,297,258
99.35%
64,948
13,362,206
99.84%
2013 .
12,536,540
12,455,336
99.35%
70,027
12,525,363
99.91%
2012 .
11,239,572
11,159,974
99.29%
70,626
11,230,600
99.92%
2011
9,978,430
9,895,240
99.17%
75,817
9,971,057
99.93%
2010
9,639,945
9,559,899
99.17%
73,205
9,633,104
99.93%
2009
8,800,927
8,703,978
98.90%
91,252
8,795,230
99.94%
2008
7,793,405
7,711,714
98.95%
77,047
7,788,761
99.94%
Source: Guadalupe County Tax Office
106
CITY OF SCHERTZ, TEXAS
TAXABLE ASSESSED VALUE
LAST TEN FISCAL YEARS
(UNAUDITED)
* Taxable Assessed Value is before any applicable freeze adjustments.
Source: Bexar, Comal, and Guadalupe County Appraisal Districts.
107
TABLE 12
Fiscal
Year
Taxable
Total Taxable
Total
Ended
Value
Residential
Commercial
Tax - Exempt
Other
Assessed
Direct
September 30,
January 1,
Property
Property
Property
Property
Value*
Tax Rate
2017
2016
$ 1,895,085,016
$ 2,269,590,522
$ (649,173,041)
$ 132,002,406 $
3,647,504,903
0.4911
2016
2015
1,702,601,947
2,087,223,204
(544,328,535)
130,353,515
3,375,850,131
0.4911
2015
2014
1,568,651,309
1,793,803,709
(460,271,461)
135,084,054
3,037,267,611
0.4974
2014
2013
1,445,731,509
1,540,565,195
(340,747,650)
107,013,520
2,752,562,574
0.4974
2013
2012
1,383,423,359
1,396,349,905
(285,245,142)
105,837,429
2,600,365,551
0.4999
2012
2011
1,337,223,390
1,233,687,039
(262,591,896)
102,952,090
2,411,270,623
0.4843
2011
2010
1,272,970,256
1,253,600,729
(280,015,063)
117,337,786
2,363,893,708
0.4493
2010
2009
1,234,950,439
1,237,284,878
(251,217,268)
121,337,441
2,342,355,490
0.4342
2009
2008
1,169,845,869
1,191,387,341
(248,544,582)
118,136,417
2,230,825,045
0.4090
2008
2007
1,096,587,777
1,276,925,393
(345,068,394)
192,628,968
2,221,073,744
0.4090
* Taxable Assessed Value is before any applicable freeze adjustments.
Source: Bexar, Comal, and Guadalupe County Appraisal Districts.
107
CITY OF SCHERTZ, TEXAS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities
NOTES: a Details regarding the City's outstanding debt can be found in the notes to the basic financial
statements.
b. See Table 18 for personal income and population data for the City. These ratios are calculated using
personal income and population for the prior calendar year.
1:
General
Certificates
Certificates
Fiscal
Obligation
of
Tax
Capital
Revenue
of
Year
Bonds
Obligation
Notes
Lease
Bonds
Obligation
2017
$ 56,613,614
$ 9,011,41.5
$ 1,230,000
$ 25,147
$ -
$ 8,174,779
2016
56,352,272
4,057,189
1,740,000
58,321
-
8,331,966
2015
53,410,128
277,801
1,210,000
91,495
-
8,946,153
2014
56,487,433
543,934
1,585,000
123,370
-
9,561,204
2013
58,693,750
801,767
2,155,000
22,398
2,215,000
5,048,233
2012
60,878,759
1,581,300
190,000
60,190
2,342,656
5,383,700
2011
48,035,253
8,615,077
250,000
97,188
2,476,681
5,704,200
2010
37,804,450
12,404,034
310,000
1.33,408
5,436,773
6,149,350
2009
38,773,456
13,326,340
-
-
5,779,949
6,571,150
2008
32,903,213
1.4,230,297
-
107,078
6,203,126
6,976,300
NOTES: a Details regarding the City's outstanding debt can be found in the notes to the basic financial
statements.
b. See Table 18 for personal income and population data for the City. These ratios are calculated using
personal income and population for the prior calendar year.
1:
TABLE 13
1•
Business -Type
Activities
Public
General
Total
Percent
Facility
Obligation
Capital
Tax
Primary
of Gross
Per
Loan
Bonds
Lease
Notes
Government
Income
Capita
$ -
$ 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
-
3,490,564
231,803
1,640,000
69,297,944
5.99%
1,830
-
3,966,533
347,705
65,000
72,680,179
6.35%
1,992
-
2,127,502
-
130,000
71,193,650
6.50%
1,982
-
2,413,471
-
190,000
73,040,076
8.15%
2,117
-
2,684,440
-
250,000
68,112,839
8.01%
2,031
-
-
-
310,000
62,548,01.5
7.07%
1,923
7,000
-
-
-
64,457,895
7.05%
2,049
14,000
-
-
-
60,434,01.4
7.20%
1,885
1•
CITY OF SCHERTZ, TEXAS
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
Percentage of
Actual Taxable
Value of
Property
Per
Capita
General Bonded Debt Outstanding
1,700
1.86%
1,658
1.88%
1,504
General
Certificates
Available in
1,707
Fiscal
Obligation
of
Debt Service
2.12%
Year
Bonds
Obligation
Funds
Total
2017
$ 59,147,240
$ 9,011,415
$ (1,087,260)
$ 67,071,395
2016
59,366,867
4,057,189
(517,199)
62,906,857
2015
56,900,692
277,801
(227,674)
56,950,819
2014
60,453,966
543,934
(117,250)
60,880,650
2013
60,821,252
801,767
(286,215)
61,336,804
2012
63,292,230
1,581,300
(444,369)
64,429,161.
2011 .
50,719,693
8,615,077
(429,289)
58,905,481
2010 .
37,804,450
1.2,404,034
(556,884)
49,651,600
2009
38,773,456
1.3,326,340
(347,739)
51,752,057
2008
32,903,213
1.4,230,297
(263,740)
46,869,770
Percentage of
Actual Taxable
Value of
Property
Per
Capita
1.84%
1,700
1.86%
1,658
1.88%
1,504
2.21%
1,669
2.36%
1,707
2.67%
1,868
2.49%
1,756
2.12%
1,527
2.32%
1,645
2.11%
1,462
NOTE: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. See
Table 8 for the City's property tax value data. City population data can be found in Table 18.
®1
CITY OF SCHERTZ, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
CURRENT YEAR
Governmental Unit
Debt repaid with property taxes:
Debt
Outstanding
Estimated
Percentage
Applicable*
TABLE 15
Estimated
Share of
Overlapping
Debt
Alamo CCD
$ 394,680,000
0.19%
$ 749,892
Bexar County
1,743,140,000
0.20%
3,486,280
Bexar County Hospital District
643,960,000
0.19%
1,223,524
Coma] County
126,550,000
4.45%
5,631,475
ComalISD
568,250,107
2.60%
1.4,774,503
Guadalupe County
7,095,000
18.91%
1,341,665
Schertz- Cibolo- Universal ISD
381,086,092
50.56%
1.92,677,128
Subtotal, Overlapping Debt
City Governmental Activities Direct Debt
TOTAL NET OVERLAPPING DEBT
219,884,466
66,855,029
$ 286,739,495
NOTES: The overlapping debt was received fi°om the Municipal Advisory Council of Texas. Details regarding the City's
outstanding debt can be found in the notes to the basic 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 taxpayers
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.
CITY OF SCHERTZ, TEXAS
DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
Assessed Value, 2016 Tax Roll
Debt Limit - Texas statues do not provide a legal
debt limit for cities; however, through accepted
practice a practical "economic" debt limit is
considered to be 10% of the assessed value.
Amount of Applicable Debt:
General Bonded Debt
Less Debt Service Net Position
DEBT MARGIN
Total Net Debt as a Percentage
of Debt Margin
Assessed Value
Debt Limit
Total Net Debt Applicable to Limit
Total Debt Margin
Assessed Value
Debt Limit
Total Net Debt Applicable to Limit
Total Debt Margin
Assessed Value
Debt Limit
Total Net Debt Applicable to Limit
Total Debt Margin
$ 3,647,504,903
$ 364,750,490
$ 66,880,176
(1,087,260) 65,792,916
$ 298,957,574
22.01%
Fiscal Year
2014 2015 2016
$ 2,752,562,574 $ 3,037,267,611 $ 3,375,850,131
$ 275,256,257 $ 303,726,761 $ 337,585,013
56,803,499 53,424,303 61,181,169
$ 218,452,758 $ 250,302,458 $ 276,403,844
2010 2011 2013
$ 2,363,893,708 $ 2,411,270,623 $ 2,600,365,551
$ 236,389,371 $ 241,127,062 $ 260,036,555
55,298,550 60,973,626 60,499,568
$ 181,090,821 $ 180,153,436 $ 199,536,987
2007 2008 2009
$ 2,221,073,744 $ 2,230,825,045 $ 2,342,355,490
$ 222,107,374 $ 223,082,505 $ 234,235,549
45,466,903 50,41.4,481 48,81.9,435
$ 176,640,471 $ 172,668,024 $ 185,416,114
112
CITY OF SCHERTZ, TEXAS
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
TABLE 17
Water Revenue Bonds
NOTE: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
Operating expenses do not include depreciation, interest, amortization or joint venture expenses.
113
Utility
Less:
Net
Debt Service
Fiscal
Service
Operating
Available
Year
Charges
Expenses
Revenue
Principal
Interest
Coverage
2017
$ 25,390,71.3
$ 18,697,1.62
$ 6,693,551
$ 1,554,541
$ 368,390
3.48
2016
22,003,794
17,603,487
4,400,307
1,441,741
41.7,346
2.37
2015
20,700,369
15,916,597
4,783,772
1,448,407
428,912
2.55
2014
19,147,872
15,246,653
3,901,219
1,010,500
426,100
2.72
2013
17,696,327
14,553,274
3,143,053
728,800
359,680
2.89
2012
17,411,568
14,185,126
3,226,442
697,100
396,968
2.95
2011
16,843,780
13,229,037
3,614,743
577,824
409,801
3.66
2010
14,993,648
12,399,880
2,593,768
615,400
502,629
3.74
2009
14,533,390
9,973,940
4,559,450
685,400
534,634
3.74
2008
13,620,440
9,040,264
4,580,176
665,400
558,569
4.86
NOTE: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
Operating expenses do not include depreciation, interest, amortization or joint venture expenses.
113
CITY OF SCHERTZ, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Sources: Population, 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.
114
Education
Per Capita
Level in
Personal
Personal
Median
Years of
School
Unemployment
Fiscal Year
Population
Income
Income
Age
Schooling
Enrollment
Rate
2016-2017
39,453
$1,266,046,770
$ 32,090
37.2
15.9
15,497
3.8%
2015-2016
37,938
1,175,319,240
30,980
36.9
15.8
15,460
3.4%
2014-2015
37,865
1,157,835,970
30,578
36.1
15.6
15,009
3.2%
2013-2014
36,477
1,144,465,875
31,375
36.9
15.4
14,515
5.1%
2012-2013
35,929
1,095,331,494
30,486
37.1
15.4
14,058
5.5%
2011-2012
34,499
895,739,206
25,964
36.8
15.4
13,016
5.6%
2010-2011
33,544
850,069,800
25,342
37.8
15.4
12,533
5.7%
2009-2010
32,523
885,015,876
27,212
34.4
15.4
12,330
5.1%
2008-2009
31,465
913,919,790
27,923
36.5
13.9
11,700
5.0%
2007-2008
32,057
839,701,058
26,194
35.1
14.0
10,991
4.0%
Sources: Population, 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.
114
CITY OF SCHERTZ, TEXAS
TOP TEN PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Source: City Economic Development Corporation
2017
2008
Percentage
Percentage
of Total City
of Total City
Employer
Employees
Employment
Employees
Employment
Schertz /Cibolo/UC ISD
1,837
12.92%
1,495
1.0.09%
Amazon.com
1,256
8.83%
Sysco Central. Texas
815
5.73%
Baker Hughes, a GE Company
600
4.22%
The Brandt Companies, LLC
437
3.07%
FedEx Ground
475
3.34%
165
1.11%
Visionworks
400
2.81%
Republic Beverage Company
382
2.69%
100
0.67%
HEB Grocery CO
350
2.46%
300
2.02%
City of Schertz
341
2.40%
303
2.04%
Wal -Mart Stores
420
2.83%
EyeCare Centers of America
320
2.16%
Valero Diamond Distribution
160
1.08%
Metro Ambulance LP
110
0.74%
Manco
100
0.67%
TOTAL
6,893
48.47%
3,473
23.41%
Source: City Economic Development Corporation
I rz/,� �N
CITY
OA
1,
CITY OF SCHERTZ, TEXAS
FULL -TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
TOTAL 272.1 285.1 289.6 299.3 310.9 317.9 319.9 327.4 338.7 345.7
Source: City Adopted Budgets
Note: Full -time equivalent is based on the schedule hours of positions to a 40 hour work week.
116
Full -Time Equivalent Employees as of September 30,
Function
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
General Government
City Manager
6
7
6
6
7
7
6
6
5
5
Court Support
0
0
0
0
0
0
0
0
0
0
Municipal Court
4
5
5
5
6
6
6
6
6
6
Customer Relations
4
4
4
4.5
4.5
4.5
4.5
4.5
4.5
4.5
Planning and Zoning
5
4
4
4
3
3
3
3
4
4
General Services
9
9.5
1.3.5
1.4.7
14.7
12.7
12.7
1.3
0
0
City Secretary
2
2
2
2
2
2
2
2
2
2
Public Affairs
3
3
3
3
4
4
4
4
4
4
Records Management
3
3
1
1
1
1
1
1
1
1
Schertz Magazine
0
0
0
2
2
2
2
2
2
2
Engineer
3
1
2
2
4
3
3
3
7
7
GIS
0
2
2
2
2
2
2
2
2
2
Information Technology
3
3
3
4
4
6
6
6
6
7
Human Resources
3
3
4
4
4
4
4
4
5
5
Finance
6
6
6
6
6
6
6
8
8
8
Purchasing
2
5
5
5
5
4
3
3
3
3
Fleet Service
3
3
3
4
4
4
4
6
6
6
Building Maintenance
0
0
0
0
0
2
2
3
0
0
Facility Services
0
0
0
0
0
0
0
0
15.6
15.6
Public Safety
Police
68.6
64.6
64.6
64.6
69.7
74.7
74.7
75.2
77.6
80.6
Fire
32
32
32
32
32
32
33
33
36
39
Inspections
8
7
6
7
7
7
8
9
8
8
Marshal Services
0
5
5
8
8
8
8
8
8
5
Health
Animal Control
6
6
6
6
6
6
7
7
8
8
Environmental Health
0
0
0
0
0
0
0
0
3
3
Parks and Culture
Parks
8
8
8
9
9
9
9
9
9
10
Pools
0
0
0
0
0
0
0
0
0
0
Event Facilities
1
1
2
1
1
1
1
1
1
1
Library
10.5
11
13.5
13.5
14
14
14
14
14
14
Public Environment
Streets
13
13
13
14
14
14
14
14
14
14
Public Works
Public Works
6
6
5
4
4
6
6
6
4
4
Business Office
10
10
10
10
1.0
1.0
1.0
1.0
1.0
1.0
Water and Sewer
14
16
16
17
1.7
1.6
1.6
1.6
1.6
1.6
Drainage
6
7
7
7
7
8
8
8
6
6
EMS
30
34
34
34
35
35
36
37
39
41
Economic Development
3
4
4
3
4
4
4
4
4
4
TOTAL 272.1 285.1 289.6 299.3 310.9 317.9 319.9 327.4 338.7 345.7
Source: City Adopted Budgets
Note: Full -time equivalent is based on the schedule hours of positions to a 40 hour work week.
116
CITY OF SCHERTZ, TEXAS
OPERATING INDICATORS BY FUNCTIONTROGRAM
LAST TEN FISCAL YEARS
Fiscal Year
Function
2009
2010
2011
2012
2013
General Government
Building Permits Issued
5,181
4,806
4,950
2,643
3,054
Schertz Tales
Number of Magazines printed
120,000
144,000
168,000
168,000
168,000
Police
CFS
36,319
37,269
26,205
19,434
19,894
Arrests
873
790
762
666
800
Traffic Violations
20,452
19,259
13,231
20,881
19,335
Accidents
1,491
1,606
1,575
1,665
1,960
Fire
Number of Rescue /Other Responses
1,536
1,671
1,657
1,799
2,046
Number of Fire Responses
135
76
110
74
108
Number of Inspections
447
425
616
429
332
Number of Training Classes Conducted
264
107
142
168
132
Number of Pre -Plan Inspections
452
642
536
714
729
EMS
Requests for Transport
7,061
7,281
7,443
7,545
8,391
Actual Transports
4,341
4,575
4,801
4,766
5,451
EMT Students
80
80
85
79
116
Marshal Service
Warrants Issued
5,974
5,444
4,141
2,888
3,344
Warrants Cleared
3,836
4,023
3,985
4,118
4,687
Food Establishment Permits
134
129
118
123
127
Food Establishment Inspection
209
202
244
180
281
Foster /Adoption Inspections
34
27
18
14
24
Parks
Facility Reservations
671
719
237
234
258
Community and Civic Centers
Civic Center
484
594
354
325
444
Community Center Rentals
-
635
666
816
735
North Community Center Rentals
-
-
241
307
288
Animal Services
Number of Animals Handled
1,804
2,021
1,802
1,463
1,326
Number of Adoptions
255
249
257
291
362
Number of Return to Owners
252
279
313
149
231
Number of Transfers
415
451
300
312
301
Library
Annual Circulation
263,131
392,528
414,074
410,312
404,691
Library Visits
188,118
257,235
254,934
256,349
254,633
Library Program Attendance
10,499
10,610
13,767
16,035
12,581
Registered Users
20,360
24,628
28,589
30,475
31,658
Water
New Connections
446
509
439
271
168
Water Main Breaks
72
25
76
52
38
Total Consumption (thousands of gallons)
15,115,679
12,313,766
16,763,239
16,131,415
15,500,413
Daily Average Consumption
(thousands of gallons)
38,550
33,736
45,927
44,196
42,466
Peak Daily Consumption
(thousands of gallons)
7,520
7,040
11,000
9,290
9,483
Total Customers
10,198
10,134
12,234
12,557
12,757
Average Use Per Connection
6,913
5,054
5,725
5,517
5,905
Sewer
Total Customers
9,974
9,499
10,907
10,988
11,456
Facilities Maintenance
Number of Buildings Maintained
19
19
19
19
19
Square Footage
166,591
166,591
166,591
166,591
166,591
Source: Various City Departments. Prior year
information for some functions is not available.
117
Fiscal Year
2014
2015
2016
2016
2017
2,869
3,087
5,919
5,919
4,800
180,000
180,000
180,000
180,000
180,000
19,067
36,138
39,064
39,064
34,428
776
595
603
603
423
15,077
12,306
8,960
8,960
8,001
1,823
2,040
2,119
2,119
2,057
1,759
2,167
2,327
2,327
2,758
110
99
67
67
86
252
698
440
440
519
125
150
460
460
340
735
980
867
867
922
8,840
9,286
9,723
9,723
9,956
5,713
6,118
6,123
6,123
6,201
87
84
89
89
90
2,354
3,798
2,587
2,587
2,816
3,781
3,691
3,492
3,492
2,822
82
135
145
145
201
218
136
153
153
13
16
22
21
21
21
301
275
240
240
251
458
478
483
483
590
437
455
370
370
455
244
209
185
185
230
1,218
1,304
1,313
1,313
1,283
309
357
410
410
348
222
213
205
205
228
316
296
316
316
326
395,998
394,766
399,622
399,622
385,206
253,237
259,413
255,109
255,109
235,428
15,048
13,825
15,282
15,282
16,814
30,759
31,138
30,702
30,702
31,432
235
369
213
213
303
45
45
45
45
45
15,497,071
14,757,134
16,097,931
16,097,931
15,222,373
42,458
40,431
43,942
43,942
41,705
10,089
8,385
10,985
10,985
11,000
13,324
13,570
13,877
13,877
14,124
5,467
5,135
5,352
5,352
5,244
11,578
11,413
12,282
12,282
12,398
19
21
21
21
21
166,591
234,202
234,202
234,202
234,202
CITY OF SCHERTZ, TEXAS
CAPITAL ASSET STATISTICS BY FUNCTIONTROGRAM
LAST TEN FISCAL YEARS
Function
Police
Stations
Patrol Units
Fire
Stations
Training Facility
Fire Vehicles
EMS
Ambulances
Marshal Service
Vehicles
Streets
Streets, paved (miles)
Streets, unpaved (miles)
Parks and Recreation
Parks - Developed
Parks - Undeveloped
Playground
Swimming Pools
Baby Pools
Baseball /Softball Diamonds
Soccer Fields
Community Centers
Animal Control
Control Vehicle
Library
Facility
Volumes in Collection
Water
Number of Reservoirs
Number of Pump Stations
Water Mains (Miles)
Sewer
Sanitary Sewers (Miles)
Storm Sewers (Miles)
Facilities Maintenance
Vehicles
Generators
Source: Various City Departments
Fiscal Year
2008
2009
2010
2011
2012
1
1
1
1
1
33
38
40
42
42
2
2
2
2
2
1
-
-
-
-
1.4
13
13
13
13
6
6
6
6
6
-
5
7
8
8
1.22
124
125
1.32
1.34
7
7
7
5
5
7
11
12
17
17
4
4
4
4
4
20
20
19
15
15
2
2
2
2
2
2
2
2
2
2
12
12
12
9
9
-
12
12
12
12
2
2
4
4
4
3
3
3
3
3
1
60,650
1
64,400
1
71,929
1
73,904
1
81,468
-
5
5
5
5
1.82
188
190
1.92
1.92
71
78
78
84
85
8
9
9
10
10
4
5
5
5
4
3
3
3
3
3
119
TABLE 22
Fiscal Year
2013 2014 2015 2016 2017
1
1
1
1
1
42
42
48
50
64
2
2
2
2
2
13
15
16
16
16
7
7
9
9
8
7
7
7
7
7
1.37
141
149
153
159
5
5
5
5
5
13
13
14
15
20
8
8
9
10
4
16
16
18
19
19
2
2
2
2
4
2
2
2
2
2
12
12
15
15
15
12
12
12
12
12
4
4
4
4
4
3
3
3
4
3
1
1
1
1
1
86,221
100,478
113,085
97,412
107,382
5
5
5
5
5
197
199
210
211
221
87
90
96
98
110
11
11
12
12
12
5
5
6
6
6
3
3
4
4
4
120
I rz/,� �N
CITY
OA
1,
COMPLIANCE SECTION
121
INDEPENDENT AUDITOR'S REPORT
Row 011 11 ']up WIL Altf
L419101YERAIN WAN Weil A%
IV
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT A UDITING STANDARDS
To the City Council and management
City of Schertz
We have audited, 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, the financial statements of the governmental activities, the
business -type activities, each major fund, and the aggregate remaining fund information of City of Schertz as
of and for the year ended September 30, 2017, and the related notes to the financial statements, which
collectively comprise City of Schertz's basic financial statements, and have issued our report thereon dated
March 6, 2018.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered City of Schertz's 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 City of Schertz's internal control. Accordingly, we do not
express an opinion on the effectiveness of City of Schertz's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in internal control over financial reporting that we
consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
941 West Byrd Blvd., Suite 101 - Universal City, Texas 78148
Phone; 210-658-6229 - pax. 210 -659 -7611 - Email; info @avacpa.com * www.avacpa.com
122
Compliance and Other Matters
As part of obtaining reasonable assurance about whether City of Schertz's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. 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.
We noted certain matters that we have reported to management of City of Schertz in a separate letter dated
March 6, 2018.
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.
Armstrong, Vaughan & Associates, P.C.
March 6, 2018
123
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