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20-R-31 - Approval of the CAFR Report for FY 2018-19RESOLUTION NO. 20 -R -31 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE APPROVAL OF THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR 2018 -19, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City staff of the City of Schertz (the "City ") has recommended that the City Council approve the Comprehensive Annual Financial Report for Fiscal Year 2018 -19 ; and WHEREAS, the Audit Committee has recommended that it is in the best interest of the City to approve the Comprehensive Annual Financial Report for Fiscal Year 2018 -19; and WHEREAS, the City Council has determined that it is in the best interest of the City to approve the Comprehensive Annual Financial Report for Fiscal Year 2018 -19. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the approval of the Comprehensive Annual Financial Report for Fiscal Year 2018 -19. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. PASSED AND ADOPTED, this 24'h day of March 2020. CITY OF SCHERTZ, TEXAS Rafael ti ez, N&or Ll ATTEST: + 1{ r City Secretary, Brenda Dennis 50506221.1 - 2 - 1-11�11ni� Honorable Mayor and Members of the City Council City of Schertz, Texas PATTILLO, BROWN & HILL, L.L.P. 401 West State Highway 6 Waco, Texas 76710 254.772.4901 pbhcpa.com We have audited the financial statements of the City of Schertz, Texas (the "City ") as of and for the year ended September 30, 2019, and have issued our report thereon dated March 18, 2020. Professional standards require that we advise you of the following matters relating to our audit. Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated August 6, 2019, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities. Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you. Planned Scope and Timing of the Audit We conducted our audit consistent with the planned scope and timing we previously communicated to you. Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, and, as appropriate, our firm have complied with all relevant ethical requirements regarding independence. As a part of the engagement we assisted in preparing the financial statements and related notes to the financial statements of the City in conformity with U.S. generally accepted accounting principles. These nonaudit services do not constitute an audit under Government Auditing Standards and such services were not conducted in accordance with Government Auditing Standards. OFFICE LOCATIONS M TEXAS I Waco I Temple Hillsboro 1 Houston 4j�_ AICPA NEW MEXICO ' Albuquerque GAQC Member In order to ensure we maintain our independence for performing these nonaudit services certain safeguards were applied to this engagement. Management assumed responsibility for the financial statements and related notes to the financial statements and any other nonaudit services we provided. Management acknowledged in the management representation letter our assistance with the preparation of the financial statements and related notes to the financial statements and that these items were reviewed and approved prior to their issuance and accepted responsibility for them. Further, the nonaudit services were overseen by an individual within management that has the suitable skill, knowledge, or experience; evaluated the adequacy and results of the services; and accepted responsibility for them. Qualitative Aspects of the Entity's Significant Accounting Practices Significant Accounting Policies Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note I to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during fiscal year 2019. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. Significant Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management's current judgments. The most sensitive accounting estimates affecting the financial statements are: Management's estimate of the useful lives of capital assets is based on the expected lifespan of the asset in accordance with standard guidelines. We evaluated the key factors and assumptions used to develop the estimate of useful lives in determining that it is reasonable in relation to the financial statements taken as a whole and in relation to the applicable opinion units. Management's estimate of the allowance for uncollectible court fines and delinquent property taxes receivable are based on historical collections. We evaluated the key factors and assumptions used to develop the allowance for uncollectible court fines in determining that it is reasonable in relation to the financial statements taken as a whole and in relation to the applicable opinion units. Management's estimate of the allowance for uncollectible EMS receivable is based on historical collections. We evaluated the key factors and assumptions used to develop the allowance for EMS revenues in determining that it is reasonable in relation to the financial statements taken as a whole and in relation to the applicable opinion units. Management's estimate of the net pension and total OPEB liabilities and related expenses are based on actuarial assumptions which are determined by the demographics of the plan and future projections that the actuarial makes based on historical information of the plan and the investment market. We evaluated the key factors and assumptions used to develop the net pension and total OPEB liabilities and pension and OPEB expenses and determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units. Financial Statement Disclosures Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City's financial statements relate to the net pension and OPEB liabilities. The disclosures in the financial statements are neutral, consistent, and clear. 2 Significant Difficulties Encountered during the Audit We encountered no significant difficulties in dealing with management relating to the performance of the audit. Uncorrected and Corrected Misstatements For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. Management has corrected all identified misstatements. In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City's financial statements or the auditor's report. No such disagreements arose during the course of the audit. Representations Requested from Management We have requested certain written representations from management, which are included in the management representation letter dated March 18, 2020. Management's Consultations with Other Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters. Other Significant Matters, Findings, or Issues In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City's auditors. This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties. e?o�,4jiol qjk, L.L.-F Waco, Texas March 18, 2020 3 CITY OF SCHERTZ, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019 04 i%r �4-1-bORAT N, OFFICIALS ISSUING REPORT James M. Browne City Manager James Walters Director of Finance CITY OF SCHERTZ, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ' - ' CityOfficials .................................................................................. ............................... v OrganizationalChart ...................................................................... ............................... vi Certificate of Achievement .............................................................. ............................... vii FINANCIAL SECTION Independent Auditor's Report .......................................................... ............................... 1 —3 ....... ............................... Management Discussion and Analysis ...... ............................... ... 4— 12 Basic Financial Statements Government -Wide Financial Statements: Statement of Net Position .......................................................... ............................... 13- 14 Statement of Activities .............................................................. ............................... 15-16 Fund Financial Statements: Governmental Funds ................. Balance Sheet ................................................. ............................... ..... 17-18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................ ............................... 19 Statement of Revenues, Expenditures, and Changes in Fund Balances .................................................. ............................... 20-21 Reconciliation of Revenues, Expenditures and Changes In Fund Balances — Governmental Funds to the Statementof Activities....... ................................................ ............................... 22 Proprietary Funds Statement of Net Position .......................................... ............................... ....... 23-26 Statement of Revenues, Expenses, and Changes in Fund Net Position .............................................. ............................... 27-28 Statement of Cash Flows ........................................................ ............................... 29-32 Notes to the Financial Statements .............................................. ............................... 33-59 Schedule of Revenues, Expenditures, and Changes in Fund Balance - State Forfeitures Fund .................................. ............................... 95 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual — Library Advisory Board Fund ........................... 96-97 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Budget and Actual - Historical Committee Fund .............................. 98-99 Schedule of Revenues, Expenditures, and Changes in Fund Balance — Capital Recovery Roadways .......................... ............................... 100 STATISTICAL SECTION Net Position by Component ............................................... ............................... 1 101 — 102 Changein Net Position ..................................................... ............................... 2 103— 106 Fund Balances of Governmental Funds ............................... ............................... 3 107— 108 Changes in Fund Balances, Governmental Funds .................. ............................... 4 109-110 Tax Revenue by Source — Governmental Funds ................... ............................... 5 111- 112 Total Water and Sewer Consumption and Rates ................... ............................... 6 113 Principal Water and Sewer Consumers ................................ ............................... 7 114-115 Direct and Overlapping Property Tax Rates ......................... ............................... 8 116 Principal Property Taxpayers ............................................. ............................... 9 117- 118 Property Tax Levies and Collections ................................... ............................... 10 119 Taxable Assessed Value .................................................... ............................... 11 120- 121 Ratios of Outstanding Debt by Type ................................... ............................... 12 122- 123 Ratios of General Bonded Debt Outstanding ........................ ............................... 13 124 Direct and Overlapping Governmental Activities Debt ........... ............................... 14 125 Debt Margin Information ................................................... ............................... 15 126 Pledged Revenue Coverage ............... ............................... Demographic and Economic Statistics ................................. ............................... 17 128 Top Ten Principal Employers .............................................. ............................... 18 129 Full -Time Equivalent City Governmental Employers by Function ............................ 19 130- 131 Operating Indicators by Function /Program .......................... ............................... 20 132- 135 Capital Asset Statistics by Function / Program ....................... ............................... 21 136- 137 INTRODUCTORY SECTION SCHIERTZ OCOMMUNITY PPORTUNITY February 1, 2020 To the Honorable Mayor, City Council, and the Citizens 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, 2019. 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 Pattillo, Brown & Hill, LLP 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, 2019, 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, 2019, 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 41,057 in 2018 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. 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 term. SCHHERTZ SERVICE .. OCOMMUNITY PPORTUN In November 2015, the City placed 2 bond propositions before the voters totaling $15 million. $7 million was for FM roadways 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. $2 million for the FM roadways have been issued and sent to the Texas Department of Transportation for improvements on FM 1103 as of July 2018. In June 2018, 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 2018 -19, the City's main initiatives that had a major budget impact were the implementation of the fourth and final year recommendation of the Classification and Compensation Study to bring the wages up to a more competitive level, a new Classification and Compensation Study to determine our new market position, a Staff Study to evaluate department efficiencies and personnel placement, and add 9 new positions. In addition, the General Fund will transfer $4 million from reserves into the capital project fund for road, sidewalk, and drainage improvements. The new personnel will be decided by a staffing study results in January 2020. 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. A more detailed summary of the City's Financial Performance is available in the Management Discussion and Analysis. Independent Audit. Every year an independent audit is performed of the general ledger, accounts, financial records, and transactions of all city departments. The audit is completed by an independent certified public accounting firm selected by the City Council. The City is in compliance with this requirement and the independent auditor's report by Pattillo, Brown & Hill, LLP. Certified Public Accountants, has been included in this report. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Schertz for its comprehensive annual financial report for the fiscal year ended September 30, 2018. This was the 34th 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. Im CITY OF SCHERTZ, TEXAS CITY OFFICIALS MAYOR MICHAEL CARPENTER MAYOR PRO -TEM TIM BROWN CITY COUNCIL RALPH GUTIERREZ MARK E. DAVIS SCOTT LARSON CEDRIC EDWARDS, SR. DAVID SCAGLIOLA ALLISON HEYWARD CITY MANAGER JAMES M. BROWNE DIRECTOR OF FINANCE JAMES WALTERS CITY ATTORNEY CHARLES ZECH, DENTON, NAVARRO, ROCHA, BERNAL & ZECH, P.C. v Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Schertz Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2018 ojw&fj..,. P. /1%0 Executive Director /CEO vii FINANCIAL SECTION t ; INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Schertz, Texas Report on the Financial Statements PATTILLO, BROWN & HILL, L.L.P. 401 West State Highway 6 Waco, Texas 76710 254.772.4901 phhepa.cem 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, Texas, as of and 'for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City of Schertz, Texas' basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements The 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 did not audit the financial statements of the Schertz- Seguin Local Government Corporation or the Cibolo Valley Local Government Corporation, which collectively represent 8.3 percent 10.0 percent, respectively, of the assets and net position of the Water and Sewer Fund, and 8.0 percent and 9.9 percent, respectively, of the assets and net position of the business -type activities. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Schertz - Seguin Local Government Corporation and Cibolo Valley Local Government Corporation, is based solely on the report of the other auditors. 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. 1 OFFICE LOCATIONS �� TEXAS I Waco Temple Hillsboro ` Houston 0 % AICPA NEW MEXICO I Albuquerque GAQC Member Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 18, 2020, on our consideration of the City of Schertz, Texas' 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 the City of Schertz, Texas' internal control over financial reporting and compliance. L. L.-? Waco, Texas March 18, 2020 3 MANAGEMENT'S DISCUSSION AND ANALYSIS MANAGEMENT'S 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, 2019. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found in the introductory section of this report. Financial Highlights The assets and deferred outflows of the City of Schertz exceeded its liabilities and deferred inflows at the close of the most recent fiscal year by $235,636,559 (net position). Of this amount, $36,174,725 (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 $22,258,565. The primary reason for this increase was due to a prior period adjustment in the business -type activities recognizing the City's equity interest in joint ventures. Of the remaining increase, a significant portion, 30.4 %, 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 $56;834,378, an increase of $857,191 in comparison with the prior year. The primary cause of this increase was an increase of $1.7 million in property tax revenues compared to the prior year. This increase in revenue was caused by an increase in assessed values due to the City's continued population growth. At the end of the fiscal year, the combined total of the General Fund assigned and unassigned fund balances was $10,119,933 which is 35.94% of the general fund expenditures not including capital outlay. The fund balance policy is to reserve at least a 26% balance. During the fiscal year, the City issued $16,065,000 in general obligation bonds and certificates of obligation, of which $6.2 million is allocated to the proprietary funds. The debt was issued primarily to fund certain capital projects and to refund existing obligations with a present value savings. 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 activities of the City of Schertz include a water and sewer department and an emergency medical services department. 4 An additional portion of the City's total net position (17.5 %) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $36,174,725, 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. City of Schertz's Net Position Government -Wide Governmental Business -Type Activities Activities Total 2019 2018 2019 2018 2019 2018 Current and other assets $ 62,483,126 $ 58,907,201 $ 55,115,512 $ 43,350,389 $ 117,598,638 $ 102,257,590 Capital assets 143,800,2.97 139 558,325 86,809,556 78,668,459 230,609,853 218,226,784 Total assets 206,283,423 198,465,526 141,925,068 122,018,848 348,208,491 320,484,374 Deferred outflows of resources 5,026,512 2,896,350 1,307,526 732,459 6,334,038 3,628,809 Current liabilities 8,595,801 7,846,103 4,792,951 5,190,642 13,388,752 13,036,745 Long -term liabilities 81,400,396 77,074,678 23,649,513 18,905,255 105,049,909 95,979 933 Total liabilities 89,996,197 84,920,781 28,442,464 24,095,897 118,438,661 109,016,678 Deferred Inflows of resources 434,900 1,431,927 32,409 286,584 467,309 1,718,511 Net position: Net investment in capital assets 89,869,766 89,266,885 68,271,075 64,871,629 158,140,841 154,138,514 Restricted 28,088,355 23,391,047 13,232,638 12,626,526 41,320,993 36,017,573 Unrestricted 2,920,717 2,351,236 33,254,008 20,870,671 36,174,725 23,221 907 Total net position $ 120,878,838 $ 115,009,168 $ 114,757,721, $ 98,368,826 $ 235,636,559 $, 213,377,994 6 TOTAL REVENUES - GOVERNMENT -WIDE $20,000,000 $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 Charges for Operating Capital Grants Property Other Taxes Unrestricted Miscellaneous Services Grants and and Taxes Investment Contributions Contributions Earnings 2019 2018 TOTAL EXPENSES - GOVERNMENT -WIDE $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 General Public Safety Public Parks and Government Environment Recreation 2019 2018 8 0 � 10 Cultural Health Administration Interest and Other Fees $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 BUSINESS -TYPE REVENUES AND EXPENSES Water and Sewer Utilities EMS if Revenues Nonoperating Revenues Capital Contributions and Transfers Expenses 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 $56,834,378. Of this total amount, $9,228,612 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 $9,228,612, while total fund balance was $17,539,029, an increase of $1,908,576 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 fund balance to total fund expenditures. Unassigned fund balance represents 35.9% of total general fund expenditures, not including capital. The debt service fund has a total fund balance of $1,002,226, all of which is restricted for the payment of debt service. The net decrease in fund balance during the current year in the debt service fund was $97,632. This decrease was due to a current loss on refunding bonds. Overtime, however, the refunding is expected to result in a present value savings. The capital projects fund has a total fund balance of $13,114,310, a decrease of $2,942,455. This decrease was caused by the expenditure of accumulated funds for planned capital projects. Additionally, the capital projects fund accumulated bond proceeds of $4.6 million to fund future capital projects. 10 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. 12 BASIC FINANCIAL STATEMENTS CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2019 The accompanying notes are an integral part of these financial statements. 13 Primary Government Governmental Business -Type Activities Activities Total ASSETS Current assets: Cash and cash equivalents $ 1,872,546 $ 2,061,479 $ 3,934,025 Investments 54,032,372 17,986,512 72,018,884 Receivables, net of allowances: Taxes 2,956,606 - 2,956,606 Accounts and other 1,899,967 6,844,023 8,743,990 Service concession arrangement receivable 90,909 - 90,909 Accrued interest - 6,324 6,324 Inventories 117,009 146,921 263,930 Prepaids 14,916 - 14,916 Internal balances ( 16,139] 16,139 - Total Current Assets 60, 968,186 27, 061, 398 88, 029, 584 Noncurrent assets: Restricted assets: Cash and cash equivalents 785,708 3,457,678 4,243,386 Investments - 13,179,666 13,179,666 Service concession arrangement receivable 729,232 - 729,232 Investment in joint venture - 11,416,770 11,416,770 Capital assets: Land 8,073,199 1,696,942 9,770,141 Water rights - 70,245 70,245 Buildings and improvements 46,367,441 5,489,184 51,856,625 Equipment and vehicles 12,958,097 6,007,550 18,965,647 Infrastructure 117,414,346 100,295,885 217,710,231 Construction in progress 21,045,668 9,248,439 30,294,107 Accumulated depreciation 62,058,454) ( 35,998,689] ( 98,057,143 Total Noncurrent Assets 145,315,237 114,863,670 260,178,907 Total Assets 206,283,423 141,925,068 348,208,491 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on debt refunding 672,495 60,079 732,574 Deferred OPEB related outflows 196,842 56,396 253,238 Deferred pension related outflows 4,157,175 _ 1,191, 051 5,348,226 Total Deferred Outflows of Resources 5,026,512 1,307,526 6,334,038 LIABILITIES Current liabilities: Accounts payable 1,548,131 3,178,814 4,726,945 Accrued liabilities 970,679 273,077 1,243,756 Retainage payable 293,788 172,373 466,161 Due to other governments 123,116 - 123,116 Unearned revenue 33,314 431,104 464,418 Accrued interest payable 353,793 104,803 458,596 Customer deposits 22,251 632,780 655,031 Total Current Liabilities 3,345,072 4,792,951 8,138,023 The accompanying notes are an integral part of these financial statements. 13 CITY OF SCHERTZ, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 General revenues: Taxes: Ad valorem Sales Franchise fees Hotel /motel Mixed drink Investment earnings Miscellaneous Transfers Total General Revenues and Transfers Change in Net Position Net Position - Beginning Prior Period Adjustment Net Position - Ending The accompanying notes are an integral part of these financial statements. 15 Proaram Revenues Operating Capital Charges for Grants and Grants and Functions/ Programs Expenses Services Contributions Contributions Primary government: Governmental activities: General government $ 6,534,013 $ 947,538 $ 201,117 $ - Public safety 15,448,886 3,177,329 477,907 - Public environment 5,495,192 138,920 - 1,319,793 Parks and recreation 3,022,278 484,495 - - Cultural 1,119,650 311,575 13,018 - Health 516,890 21,101 - - Administration 3,853,255 - - - Interest 2,196,180 - - - Total Governmental Activities 38,186,344 5,080,958 692,042 1,319,793 Business -type activities: Water and sewer 25,608,390 27,333,475 - 1,975,524 EMS 6,529,631 6,596,618 - - Total Business -Type Activities 32,138,021 33,930,093 - 1,975,524 Total Primary Government $_ 70,324,365 $ 39,011,051 $ 692,042 $_ 3,295,317 General revenues: Taxes: Ad valorem Sales Franchise fees Hotel /motel Mixed drink Investment earnings Miscellaneous Transfers Total General Revenues and Transfers Change in Net Position Net Position - Beginning Prior Period Adjustment Net Position - Ending The accompanying notes are an integral part of these financial statements. 15 CITY OF SCHERTZ, TEXAS BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2019 The accompanying notes are an integral part of these financial statements. 17 General Capital Projects Debt Service Fund Fund Fund ASSETS Cash and cash equivalents $ 1,211,660 $ 34,120 $ 91,510 Investments 15,105,396 14,147,499 910,716 Receivables (net of allowances) Taxes 2,134,563 - 82,682 Accounts and other 1,775,482 52,248 - Inventory 117,009 - - Prepaids 14,916 - - Restricted assets: Cash and cash equivalents 785,708 - _ - Total Assets 21,144,734 14,233,867 1,084,908 LIABILITIES Accounts payable 685,560 825,769 - Accrued salaries and benefits 970,679 - - Retainage payable - 293,788 - Customer deposits 22,251 - - Due to other governments 123,116 - - Due to other funds 16,139 - - Unearned revenues 33,314 - - Total Liabilities 1,851,059 1,119,557 - DEFERRED INFLOWS OF RESOURCES Unavailable revenues 1,754,646 - 82,682 Total Deferred Inflows of Resources 1,754,646 - 82,682 FUND BALANCES Nonspendable for: Inventory 117,009 - - Prepaid items 14,916 - - Restricted for: Police and public safety /municipal court 226,093 - - Municipal court 823,451 - - PEG capital fees 723,353 - - Capital improvement - 13,114,310 - Debt service - - 1,002,226 Tourism development - - - Parks and tree mitigation - - - Historical Committee and library - - - Economic development - - - Animal control 33,408 - - Veterans 2,109 - - Scholarships 101,673 - - Committed for: Civic Center /CIED 687,779 - - Assigned for: Property replacement 891,321 - - Subsequent year's budget 4,689,305 - - Unassigned 9,228,612 - - Total Fund Balances 17,539,029 13,114,310 1,002,226 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 21,144,734 $ 14,233,867 $ 1,084908 The accompanying notes are an integral part of these financial statements. 17 CITY OF SCHERTZ, TEXAS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2019 Total Fund Balances - Governmental Funds $ 56,834,378 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and, therefore, are not reported in the governmental funds balance sheet. 143,800,297 Bonds payable and accrued compensated absences will not be liquidated with current financial resources and, therefore, have not been included in the fund financial statements. ( 66,337,098) Interest payable on long -term debt is accrued in the government -wide financial statements, whereas in the fund financial statements, interest expenditures are reported when due. ( 353,793) Premiums on bond issuances and deferred losses on bond refunding are recorded as other financing sources and uses when paid in the fund financial statements but are capitalized and amortized in the government -wide financial statements over the life of the bonds. Premiums ( 2,338,297) Deferred loss 672,495 Receivables from property taxes and fines and fees are not available soon enough to pay for the current period's expenditures and are, therefore, deferred in the fund financial statements. 1,837,328 Included in the items related to debt is the recognition of the City's net pension liability, total OPEB liability, and related deferred outflows and inflows of resources. Net pension liability ( 15,303,179) Deferred outflows related to pensions 4,157,175 Deferred inflows related to pensions ( 20,043) Total OPEB liability ( 2,174,190) Deferred outflows related to OPEB 196,842 Deferred inflows related to OPEB ( 93,077) Net Position of Governmental Activities $ 120,878,838 The accompanying notes are an integral part of these financial statements. 19 CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 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 Payment to refunded bond escrow agent Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Issuance of debt Issuance of refunding debt Premiums from issuance of debt Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCES - BEGINNING FUND BALANCES - ENDING General Fund Capital Projects Debt Service Fund Fund $ 23,488,223 $ - $ 6,414,868 1,605,299 - - 1,909,300 - - 926,657 - - 965,768 91,913 - 489,051 382,850 70,318 684,882 - 100,277 30, 069,180 474,763 _ 6,585,463 5,389,701 - - 13,926,364 - - 1,112,041 - - 2,350,370 - - 998,445 - - 498,871 - - 3,231,294 - - 649,055 8,308,326 - - - 4,565,000 - - 2,069,215 - 68,213 120,869 - - 5,489,912 28,156,141 8,376,539 12,244,99 1,913,039 _( 7,901,776) ( 5,659,533) - 4,620,000 - 303,214 - 117,632 ( 4,463) ( 81,525) ( 4,463) 4,959,321 1,908,576 ( 2,942,455) 15.630, 453 16.056, 765 $ 17,539,029 $ 13,114,310 The accompanying notes are an integral part of these financial statements. 20 5,225,000 336,901 ( 97,632) 1,099,858 $ 1,002,226 CITY OF SCHERTZ, TEXAS RECONCILIATION OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 Net Changes in Fund Balances - Governmental Funds $ 3,083,550 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the governmental activities statement of activities, that cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay 10,734,925 Depreciation expense ( 6,443,851) The net effect of miscellaneous transactions involving capital assets (i.e., sales, trade -ins, or donations) is to decrease net position. ( 49,102) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Property taxes 55,951 Court fines 223 The issuance of long -term debt (e.g. bonds) provides current financial resources to governmental funds, while the repayment of the principal of long -term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas the amounts are deferred and amortized in the Statement of Activities. Issuance of debt ( 9,828,076) Repayment of principal of long -term debt 10,175,244 Amortization of: Premium on bond issuance ( 640,115) Loss on refunding ( 88,146) Current year changes in certain long -term liabilities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated Absences 925 Net pension liability ( 975,732) Total OPEB liability ( 177,698) Interest payable on long -term debt is accrued in the government -wide financial statements, whereas in the fund financial statements, interest expenditures are reported when due. 21,572 Change in Net Position of Governmental Activities $ 5,869,670 The accompanying notes are an integral part of these financial statements. 22 CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2019 ASSETS Current assets: 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 Investment in joint ventures Capital assets: Land Water rights Buildings and improvements Machinery, equipment, and vehicles Infrastructure Construction in progress Less: accumulated depreciation Total Noncurrent Assets Total Assets DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refunding Deferred OPEB related outflows Deferred pension related outflows Total Deferred Outflows of Resources The accompanying notes are an integral part of these financial statements. 23 Business -Type Activities Enterprise Funds Water and Schertz Sewer System EMS $ 1,955,132 $ 106,347 17,369,593 616,919 3,995,689 2,848,334 - 16,139 6,324 - 85 015 61,906 23,411,753 3,649,645 3,457,678 - 13,179,666 - 11,416,770 - 1,696,942 - 70,245 - 5,489,184 - 3,195,258 2,812,292 100,295,885 - 9,248,439 - 34,132,122) 1,866.,5672 113,917,945 945,725 137, 329, 698 4,595,370 60,079 - 19,018 37,378 401,652 789,399 480,749 826,777 CITY OF SC HERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2019 LIABILITIES Current liabilities: Accounts payable Accrued liabilities Retainage payable Customer deposits Accrued interest Unearned revenue Current portion of long -term liabilities: Compensated absences Total OPEB liability Long -term debt Total Current Liabilities Noncurrent liabilities: Compensated absences Total OPEB liability Net pension liability Long -term debt Total Noncurrent Liabilities Total Liabilities DEFERRED INFLOWS OF RESOURCES Deferred OPEB related inflows Deferred pension related inflows Total Deferred Outflows of Resources NET POSITION Net investment in capital assets Restricted for construction Unrestricted Total Net Position The accompanying notes are an integral part of these financial statements. 25 Business -Type Activities Enterprise Funds Water and Schertz Sewer System EMS $ 3,137,174 $ 41,640 69,966 203,111 172,373 - 632,780 - 101,523 3,280 431,088 16 23,940 43,288 5,473 10,756 11620,000 341,953 6,194, 317 644,044 95,760 204,589 1,478,539 15,971,088 17, 749, 976 23,944, 293 173,151 402,097 2,905,891 372.98 3,854,127 4,498,171 8,993 17,674 1,936 3,806 10,929 21,480 68,040,291 230,784 13,232,638 - 32, 582, 296 671,712 $ 113,855,225 $ 902,496 CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 OPERATING REVENUES Fees charged to users Charges for premiums Other charges Miscellaneous Total Operating Revenues OPERATING EXPENSES Personnel services Contribution to joint ventures Water purchase Garbage contractor Sewage treatment General and administrative Contractual services Supplies and maintenance Depreciation Total Operating Costs Operating Income (Loss) NON - OPERATING REVENUES (EXPENSES) Investment revenue Lease revenue Interest expense Total Non - Operating Revenues (Expenses) Income Before Contributions and Transfers Capital contributions Transfers in CHANGE IN NET POSITION NET POSITION - BEGINNING PRIOR PERIOD ADJUSTMENT NET POSITION - BEGINNING, RESTATED NET POSITION - END OF YEAR The accompanying notes are an integral part of these financial statements. 27 Business -Type Activities Enterprise Funds Water and Schertz Sewer System EMS $ 27,018,506 $ 6,596,618 90,041 - 137,703 130,085 27, 246, 250 ____6,726,,703 575,811 1,908,362 4,442,559 4,287,219 - 3,086,446 - 4,848,197 - 4,379,952 - 3,237,942 575,811 264,586 667,701 607,940 496,208 2,354,506 506 336, 004 24, 975,150 6,518,283 2,271,100 208,420 840,279 14,937 224,928 - ( 633, 240) ( 11,348) 431,967 3,589 2,703,067 212,009 1,975, 524 - 81,525 - 4,760, 116 212,009 97,678,339 690,487 11,416,770 - 109, 095,109 690,487 $ 113,855,225 $ 902,496 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 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 suppliers for goods and services Net Cash Provided By operating Activities CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers in Collection of cash advances from other funds Net Cash Provided By Noncapital Financing Activities CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Proceeds from the issuance of debt Premium from issuance of debt Interest paid on long -term debt Principal paid on long -term debt Net Cash Used in Capital and Related Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES Sale (purchase) of investments Payments from leases Interest and investment earnings Net Cash Provided By (Used in) Investing Activities Net (Decrease) Increase 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 The accompanying notes are an integral part of these financial statements. 29 Business -Type Activities Enterprise Funds Water and Schertz Sewer System EMS $ 26,149,246 ( 2,054,226) ( 19,175, 069) 4,919,951 81,525 116,040 197,565 $ 6,766,373 ( 4,360,732) ( 1, 575,204J 830,437 ( 8,864,566) - 6,220,000 - 498,979 - ( 648,464) ( 11,348) ( 4,420,000 ( 360,133) { 7,214,051} ( 371,481) 1,033,036 ( 559,779) 224,928 - 840 279 14,937 2,.098,.243 ( 544,842) 1,708 ( 85,886) 1,448,185 3,962,917 5,411,102 1,955,132 3,457,678 $ 5,412,810 192,233 192,233 106,347 $ 106,347 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation Decrease (increase) in accounts receivable Decrease (increase) in inventory Increase (decrease) in deferred pension outflows Increase (decrease) in deferred OPEB outflows Increase (decrease) in accounts payable Increase (decrease) in accrued liabilities Increase (decrease) in customer deposits Increase (decrease) in unearned revenue Increase (decrease) in compensated absences Increase (decrease) in net pension liability Increase (decrease) in deferred OPEB inflows Increase (decrease) in deferred pension inflows Increase (decrease) in total OPEB liability Net cash provided by operating activities SCHEDULE OF NON -CASH CAPITAL ACTIVITIES Developer contributions of capital assets The accompanying notes are an integral part of these financial statements. 31 Business -Type Activities Enterurise Funds Water and Schertz Sewer System EMS 2,271,100 $ 208,420 2,354,506 1,088,390) 4,856 165,109) 5,588) 1,532,357 20,091 8,614) 6,206 55,414 8,993 ( 67,739) 1,868 $ 4,919,951 1 975, 524 336,004 36,384 25,322 ( 404,526) ( 10,826) 139,194 ( 141,177) 3,280 6 25,019 807,526 17,674 ( 213,103) 1,240 $ 830,437 CITY OF SCHERTZ, TEXAS 19IM1 �•1: 7t R9[6101►/-10150GIN&]ltrt;lul4►rV SEPTEMBER 30, 2019 I. 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 government'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 component unit: 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 and appoints all board members. For financial reporting purposes, the SEDC is reported as a blended component unit due to the City having operational responsibility for the component unit, and that any debt issued by SEDC would be expected to be paid using City resources. Thus, SEDC is presented as a special revenue fund within the City's financial statements. Complete financial statements for the Schertz Economic Development Corporation may be obtained from City Hall. Joint Ventures - A joint venture is a legally separate entity that results from a contractual arrangement and that is owned, operated, or governed by two or more participating governments. The following entities meet the criteria as joint ventures. Separate financial statements for these entities may be obtained at City Hall. SchertzL "uin 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. 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. 33 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 fund's principal ongoing operations. The principal operating revenues of the water and sewer enterprise fund and the EMS enterprise fund are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. D. Cash and Cash Eguivalents 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. Investments for the City are reported at fair value, except for the position in investment pools, which are reported at net asset value per share (which approximates fair value) even though it is calculated using the amortized cost method. The City categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quotes prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. F. Receivables and Payables Activities between the funds that are representative of inter -fund loans outstanding at the end of the fiscal year are referred to as due to /from other funds. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances ". Accounts 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. � *j J. Deferred Inflows /Outflows of Resources In addition to assets, the statement of financial position and /or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense /expenditure) until then. The City has the following items that qualify for reporting in this category. • Deferred charges on refunding — A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. • Pension and OPEB contributions after measurement date — These contributions are deferred and recognized in the following fiscal year. • Difference in expected and actual pension and OPEB experience - This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. • Changes in actuarial assumptions and other inputs —This difference is deferred and recognized overthe estimated average remaining lives of all members determined as of the measurement date. In addition to liabilities, the statement of financial position and /or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following types of items that qualify for reporting in this category. • Unavailable revenue is reported only in the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. • Difference in projected and actual earnings on pension assets — This difference is deferred and amortized over a closed five -year period. • Difference in expected and actual pension and OPEB experience - This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. • Changes in actuarial assumptions and other inputs — This difference is deferred and recognized overthe estimated average remaining lives of all members determined as of the measurement date. 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. The general fund, water and sewer fund and the EMS fund are used to liquidate compensated absences. 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. 37 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. P. Net Position Net position represents the difference between assets plus deferred outflows of resources less liabilities and deferred inflows of resources. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed by creditors, grantors, or laws or regulations of other governments. Q. EEtimatp, s 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. R. 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. S. Reclassifications Certain reclassifications have been made in the presentation of the September 30, 2019 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. II. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES A. Cash, Cash Enuivalents and Investments As of September 30, 2019, the City had the following pooled investment funds: The City's U.S. Agency Securities recurring fair value measurements as of year -end are quoted market prices (level 1 inputs) for $3,148,081 and a matrix pricing model (level 2 inputs) for $74,936. 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 outperform current holdings. 39 Reported Weighted Average Value Maturity (days) Investment type: LOGIC $ 18,377,749 49 Lone Star Investment Pool 29,184,721 42 Texas CLASS 30,165,581 41 Certificates of Deposit 4,247,482 44 U.S. Agency Securities 3,223,017 424 Total $ 85,198,550 The City's U.S. Agency Securities recurring fair value measurements as of year -end are quoted market prices (level 1 inputs) for $3,148,081 and a matrix pricing model (level 2 inputs) for $74,936. 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 outperform current holdings. 39 C. Receivables Receivables as September 30, 2019 for the government's individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows: D. Deferred Inflows and Outflows of Resources Governmental funds report unavailable revenue in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue and unavailable revenue reported in the governmental funds were as follows: Unavailable General Fund Delinquent property taxes receivable $ 160,520 Court fines 1,594,126 Total General Fund 1,754,646 Debt Service Fund Delinquent property taxes receivable 82,682 Total Debt Service Fund 82,682 Total Governmental Funds $ 1,837,328 Additionally, the proprietary funds and governmental activities statements of net position report various deferred outflows and inflows of resources, primarily due to pensions and OPEB, that are summarized by column. The following table presents the disaggregated amounts. Governmental Activities Business -ty we Activities General Economic Capital Debt Nonmajor Water and Schertz Fund Development Projects Service Funds Sewer Fund EMS Receivables: Charge on refunding $ Property taxes $ 170,766 $ - $ $ 87,960 $ $ $ Sales tax 1,478,722 739,361 5,348,226 - - 92,432 Occupancy taxes - - Related to OPEB - Retiree 63,789 Franchise taxes 473,890 Health Plan 104,410 - - 19,826 Customers 2,796 $ 5,026,512 $ 480,749 4,101,256 8,830,074 Court fines 3,916,772 - - Grants - $ 52,248 $ - 321,780 Related to pensions - Other _ 230.816 8,448 - - Related to OPEB - SDBF 66,478 31,240 Gross receivables 6,273,762 747,809 52,248 87,960 63,789 4,167,734 8,861,314 Less: allowance for Health plan 56,819 5,490 uncollectible accounts ( 2,378,687) Total deferred inflow $ ( 5,278) $ 172,045) ( 6,012,980) Net receivables $ 3.895,075 $ 747,809 $ 52,248 $ 82,682 $ 63,789 $ 3,995,689 $ 24 848,334 D. Deferred Inflows and Outflows of Resources Governmental funds report unavailable revenue in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue and unavailable revenue reported in the governmental funds were as follows: Unavailable General Fund Delinquent property taxes receivable $ 160,520 Court fines 1,594,126 Total General Fund 1,754,646 Debt Service Fund Delinquent property taxes receivable 82,682 Total Debt Service Fund 82,682 Total Governmental Funds $ 1,837,328 Additionally, the proprietary funds and governmental activities statements of net position report various deferred outflows and inflows of resources, primarily due to pensions and OPEB, that are summarized by column. The following table presents the disaggregated amounts. 41 Business -type Activities Governmental Water/ Activities Sewer _ EMS Totals Deferred outflows: Charge on refunding $ 672,495 $ 60,079 $ - $ 732,574 Related to pensions 4,157,175 401,652 789,399 5,348,226 Related to OPEB - SDBF 92,432 8,930 17,552 118,914 Related to OPEB - Retiree Health Plan 104,410 10,088 19,826 134,324 Total deferred outflow $ 5,026,512 $ 480,749 $ 826,777 $ 6,334,038 Deferred inflows: Service concession arrangement $ 321,780 $ - $ - 321,780 Related to pensions 20,043 1,936 3,806 25,785 Related to OPEB - SDBF 36,258 3,503 6,885 46,646 Related to OPEB - Retiree Health plan 56,819 5,490 10,789 73,098 Total deferred inflow $ 434,900 $ 10,929 $ 21,480 $ 467,309 41 Beginning Transfers/ Ending Balance Additions Retirements Balance Business -type activities: Capital assets, not being depreciated: Land $ 1,357,539 $ 339,488 $( 85) $ 1,696,942 Water rights 70,245 - - 70,245 Construction in progress 3,391,127 _7 752,183 1,894871) 9,248,439 Total capital assets, not being depreciated 4,818,911 8.091,671 Capital assets being depreciated: 1,062,066 Buildings and improvements 4,695,503 835,683 Machinery, equipment, and vehicle- 5,441,459 764,497 Infrastructure 97, 225A671 3,034,71 Total assets being 7,053 depreciated 107,362,633 4,634 892 Less accumulated depreciation for: Buildings and improvements ( 2,630,010) ( 72,865) Machinery, equipment, and vehicle: ( 4,928,317) ( 622,400) Infrastructure [ 25,954,758) ( 1,995,245) Total accumulated depreciation ( 33,513,085) f 2,690,510) Total capital assets being depreciated, net 73 849,548 1,944,382 Business -type activities capital 1,894,956) 11,015,626 ( 42,002) 5,489,184 ( 198,406) 6,007,550 35,502 100, 295.885 204; 906) 111, 792: 619 6,500 ( 2,696,375) 198,406 ( 5,352,311) i 27,950,003) 204,906 35,998 689) 75, 793, 930 assets, net $ 78,668,459 $ _10 „036,053 $, 1,894,956) $ 86,809,556 Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: General government $ 568,105 Public safety 1,062,066 Public environment 3,853,021 Parks and recreation 894,989 Cultural 58,617 Administration 7,053 Total $ 6,443,851 Business -type activities: Water and sewer system $ 2,354,506 EMS _ 336,004 Tota 1 $ 2, 690, 510 G. Operatinca Leases 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. Year Ending 30 -Sep 2020 2021 2022 2023 2024 2025 -2029 43 Total $ 276,693 290,528 305,054 320,307 336,322 1,522,069 $ 3,050,972 A summary of the terms of long -term debt outstanding at September 30, 2019, is as follows: Total Governmental Long -Term Obligations Business -type Activities General Obligation Bonds 2011 Series, Refunding 2018 Series, Refunding Certificates of Obligation 2013 Series 2017 Series 2018 Series 2019 Series Private Placement obligations 2013 Series GO Refunding 2015 Tax Notes Issue Amount Maturisv $ 2,675,000 Issue 2,740,000 2026 4,965,000 2033 Amount Maturity Rate Balance Governmental Activities 2039 2,130,000 2025 1,880,000 General Obligation Bonds 2011 Series $ 8,250,000 2036 3.0% -6.0% $ 6,580,000 2012 Series 7,625,000 2032 2.00% 5,440,000 2014 Series, Refunding 8,450,000 2030 2.0% -4.0% 8,000,000 2015 Series, Refunding 4,185,000 2031 2.0% - 3.25% 2,505,000 2016 Series 5,880,000 2036 2.0% -4.0% 5,055,000 2017 Series 3,935,000 2037 2.0% -4.0% 3,650,000 2018 Series, Refunding 5,830,000 2033 3.125% - 5% 5,735,000 Private Placement obligations 2007 Series GO 6,000,000 2027 4.07% 1,865,000 2011A Series GO Refunding 6,745,000 2024 2.33% 1,310,000 2018 Series GO Refunding 6,035,000 2028 2.12% 4,410,000 2015 Tax Notes 245,000 2021 1.75% 4,635,000 2015A Tax Notes 1,020,000 2023 1.54% 4,015,000 Certificates of Obligation 2016 Series A 2,375,000 2036 2.0% -4.0% 2,905,000 2016 Series B 1,475,000 2036 3.0%-3.75% 2,965,000 2017 Series 4,935,000 2037 3.0% - 3.75% 5,485,000 2018 Series 4,845,000 2038 3.0% -5.0% 75,000 2019 Series 4,015,000 2039 2.5% - 5% 455,000 Total Governmental Long -Term Obligations Business -type Activities General Obligation Bonds 2011 Series, Refunding 2018 Series, Refunding Certificates of Obligation 2013 Series 2017 Series 2018 Series 2019 Series Private Placement obligations 2013 Series GO Refunding 2015 Tax Notes Issue Amount Maturisv $ 2,675,000 2021 2,740,000 2026 4,965,000 2033 540,000 2022 5,595,000 2028 3,480,000 2039 2,130,000 2025 1,880,000 2021 Total Business -Type Long -Term Obligations 45 $_65,085 000 Rate 2.0% - 3.0% $ 3.125% - 5% 2.0% -4.0% 3.0%- 3.75% 3.0% - 5.0% 2.5% -5% 2.58% 1.75% Balance 475,000 2,740,000 3,095,000 335,000 5,420,000 3,480,000 1,230,000 460,000 $ 17,235,000 Capita! Leases The City enters into various lease agreements to finance machinery and equipment; they are classified as capital leases due to bargain - purchase options. 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 lease obligations are secured by the purchased equipment. The assets acquired through capital lease are reported in capital assets with the following accumulated depreciation at September 30, 2019: Governmental Business -type Assets: Activities Activities Equipment $ 42,825 $ 680,671 Less: accumulated depreciation C 8,565) { 414.,297) Total $ 34,260 $ 266,374 Future minimum lease payments are as follows: Governmental Business -type Year Ending September 30, Activities Activities 2020 $ 8,565 $ 67,313 2021 8,565 67,313 2022 8,569 65e875 Total payments 25,699 200,501 Less: amount representing interest - ( 1,080) Present value of minimum lease payments $ 25,699 $ 199,421 I. Net Pension and Total OPEB Liabilities and Expenses Amounts are aggregated into a single net pension liability and total OPEB liability, and expenses for certain columns. Below is the detail of net pension liability and total OPEB liability and expenses for governmental and business -type activities. Net pension liability Total OPEB liability: Due within one year: TMRS SDBF Retiree health plan Total due within one year Due in within more than one year: TMRS SDBF Retiree health plan Total due in more than one year Total OPEB liability Pension expense OPEB expense: TMRS SDBF Retiree Health Plan Total OPEB expense Business -type Activities Governmental Water/ Activities Sewer EMS Totals $ 15,303,179 $ 1,478,539 $ 2.905,891 $ 19,687,609 $ 3,026 $ 293 $ 575 $ 3,894 53,617 5,180 10,181 68,978 56.643 5,473 10,756 72,872 549,158 53,057 1,568,389 151,532 2,117,547 204,589 $_2,.174 190 $ 210,062 104,278 706,493 297,819 2,017,740 402,097 2,724,33 $ 412,853 $ 2,797,105 Business-type Activities Governmental Water/ Activities Sewer EMS Totals $ 3,442,174 $ 13, 250 $ 664, 506 $ 4,119,930 $ 57,836 $ 4,679 $ 8,688 $ 71,203 176,504 6,066 10,155 192,725 $ _ 234,340 $ 10,745 $ 18,843 $ 263,928 47 Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 3.00% per year Investment rate of return 6.75% 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, 2018 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). The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: 49 Long -Term Expected Real Rate of Return Asset Class Target Allocation (Arithmetic) U.S. Equities 17.50% 4.55% International Equity 17.50% 6.35% Core Fixed Income 10.00% 1.00% Non -Core Fixed Income 20.00% 3.90% Real Estate 10.00% 3.80% Real Return 10.00% 4.50% Absolute Return 10.00% 3.75% Private Equity 5.00% 7.50% Total 100.0% 49 $2,254,940 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: For the Year Ended September 30, 2020 $ 995,488 2021 509,273 2022 489,003 2023 1,069,999 2024 3,738 B. Other Post - Employment Benefits The City participates in two defined - benefit other post - employment benefit (OPEB) plans: the Texas Municipal Retirement System Supplemental Death Benefits Fund (TMRS SDBF, and its own single - employer retiree health plan. Both are described in detail below. The total OPEB liabilities of both plans are typically liquidated through the General Fund and Enterprise Funds. TMRS Supplemental Death Benefits Fund Plan Description. The City voluntarily participates in a single - employer other postemployment benefit (OPEB) plan administered by TMRS. The Plan is a group -term life insurance plan known as the Supplemental Death Benefits Fund (SDBF). The Plan is established and administered in accordance with the TMRS Act identically to the City's pension plan. SDBF includes coverage for both active and retired members, and assets are commingled for the payment of such benefits. Therefore, the Plan does not qualify as an OPEB Trust in accordance with paragraph 4 of GASB Statement No. 75. Benefits Provided. The SDBF provides group -term life insurance to City employees who are active members in TMRS, including or not including retirees. The City Council opted into this program via an ordinance, and may terminate coverage under, and discontinue participation in, the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. Membership in the plan at December 31, 2018, the valuation and measurement date, consisted of: Inactive employees or beneficiaries currently receiving benefits 88 Inactive employees entitled to but not yet receiving benefits 59 Active employees 328 Tota 1 475 Contributions. The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation, which was 0.12% for 2019 and 0.13% for 2018, of which 0.02% represented the retiree -only portion for each year, as a percentage of annual covered payroll. The rate is equal to the cost of providing one -year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term life insurance during employees' entire careers. The City's contributions to the SDBF for the years ended September 30, 2019 were $3,893 representing contributions for both active and retiree coverage, which equaled the required contributions each year. Total OPEB Liability. The Total OPEB Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions and inputs: Inflation rate Actuarial cost method Discount rate Projected salary increases 51 2.5% per annum Entry age normal 3.71% 3.5% to 10.5% including inflation OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB. For the year ended September 30, 2019, the City recognized OPEB expense of $71,203. Also, as of September 30, 2019, the City reported deferred outflows and inflows of resources related to the TMRS OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience $ 74,490 $ - Changes in actuarial assumptions 41,613 46,646 Contributions subsequent to the measurement date 2,811 - Tota 1 $ 118,914 $ 46,646 $2,811 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the Total OPEB liability for the year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to the TMRS OPEB will be recognized in OPEB expense in future periods as follows: For the Year Ended September 30, 2020 $ 12,228 2021 12,228 2022 12,228 2023 12,228 2024 12,228 Thereafter 8,318 City of Schertz Retiree Health Other Post - Employment Benefit Plan In addition to the TMRS OPEB, The City administers a single employer defined benefit healthcare plan for retirees, established under legal authority of the City Charter. The City is the only employer participating in the Plan. The Plan does not issue a publicly available financial report. The City provides post - employment benefits for eligible participants enrolled in City- sponsored plans. The benefits are provided in the form of an implicit rate subsidy where the City contributes towards the retiree health premiums before achieving Medicare eligibility. While the Plan offers retiree only rates, a very small implicit liability still exists. Membership in the plan as of December 31, 2017, the valuation date, consisted of: Inactive employees or beneficiaries currently receiving benefits 6 Inactive employees entitled to but not yet receiving benefits - Active employees 313 Total 319 Current active employees must be eligible for service retirement under the Texas Municipal Retirement System. To attain this eligibility active employees must be at least age 60 with 5 years of service or have at least 20 years of employment with the City. When a regular, full -time employee retires, they are eligible to maintain their coverage in the City's group health coverage. The City does not provide an explicit subsidy for retiree medical insurance. The liability for the City is due to the implicit rate. The City made no direct contributions for monthly premiums. The retirees pay 102% of the monthly premiums which range based on the type of plan from $508 for retiree only to $1,796 for a retiree and their family. k*1 $43,723 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the Total OPEB liability for the year ending September 30, 2020. Other amounts reported as deferred outflows and inflows of resources related to the City's Retiree Health OPEB will be recognized in OPEB expense as follows: For the Year Ended September 30, 2020 $ 2,957 2021 2,957 2022 2,957 2023 2,957 2024 2,957 Thereafter 2,717 C. Joint Ventures Schertz /Seguin Local Government Corporation The Schertz /Seguin Local Government Corporation is a public, nonprofit corporation organized to aid, assist, and act on behalf of the cities of Schertz and Seguin in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase of services or by subsidizing the operations. Payments to the corporation are generally for the purchase of water treatment and for covering the Corporation's debt service requirements; they are reflected as "operating expenses" in the water and sewer fund and totaled $7,613,665 for the year ended September 30, 2019. Separate financial statements for the Schertz /Seguin Local Government Corporation may be obtained from the City of Seguin, 210 East Gonzales Street, Seguin, Texas 78156. The City of Schertz is jointly liable, together with the City of Seguin, for operating deficits and long -term debt of the Schertz /Seguin Local Government Corporation. The Corporation had net revenue bonds outstanding in the amount of $103,281,449 (as of September 30, 2019) to provide funds to build, improve, extend, enlarge and repair the Corporation's utility system, fund a reserve, and pay the costs of bond issuance. The bond resolution pledges intergovernmental contract revenues from the cities of Schertz and Seguin (the participating governments) to bond holders. Under the intergovernmental water supply contract, the participating governments are unconditionally obligated to pay their respective shares of annual contract revenue bond debt service from the operation of their respective utility systems. The organizing documents for the Corporation provide that, in the event of dissolution, the net assets of the Corporation will be equally divided among the Cities of Schertz and Seguin. As such, the City's net investment in the joint venture has been recorded in the Water and Sewer Fund in the amount of $10,481,944. This amount reflects the City's portion of the net position of SSLGC as of September 30, 2018, the most recent fiscal year for which information is available. 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. Payments to the corporation are generally for the purchase of wastewater treatment and for covering the Corporation's debt service requirements; they are reflected as "operating expenses" in the water and sewer fund and totaled $480,000 for the year ended September 30, 2019. 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. In the event of dissolution, the net assets of the Corporation will be equally divided among the Cities of Schertz and Cibolo. As such, the City's net investment in the joint venture has been recorded in the Water and Sewer Fund in the amount of $934,826 as of September 30, 2019. 55 Service Concession Arrangements The City entered into an agreement with Young Men's Christian Association of Greater San Antonio ("YMCA "), under which YMCA will operate and collect user fees from the Natatorium and Outdoor Pools for the next 20 years. YMCA will pay the city $100,000 annually over the course of the arrangement to cover costs of debt service related to the facility; the present value of these installment payments is estimated to be $820,141. 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, 2019, the Natatorium is still under construction and is reported by the City as Construction in Progress. The City reports the Outdoor Pools and related equipment as capital assets recorded at historical cost. The City reports a receivable in the amount of $820,141 on the government -wide statements at year -end pursuant to the service concession arrangement, and a liability of $498,361 for the present value of maintenance costs estimated over the life of the Service Concession arrangement. The balance of these two amounts is recorded as a deferred inflow of resources. Litigation The City is the subject of various claims and litigation that have arisen in the course of its operations. Management is of the opinion that the City's liability in these cases, if decided adversely to the City, will not have a material effect on the City's financial position. Cibolo Creek Municipal Authority The Cibolo Creek Municipal Authority (CCMA) provides sewage treatment for the area in and around the City. In Fiscal year 2014, the City entered into an agreement with CCMA to construct a sewage treatment facility in the southern portion of the City to primarily serve citizens of the City but also neighboring Cities and future development. Because the City would be the primary customer at this time, the agreement stipulates that the City will pay all future debt service on the bonds issued by CCMA to finance the project. 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. Future debt service on the CCMA bonds are as follows: Year Ended September 30, Principal Interest Total 2020 $ 160,000 $ 254,150 $ 414,150 2021 160,000 250,950 410,950 2022 165,000 247,750 412,750 2023 170,000 242,800 412,800 2024 175,000 237,700 412,700 2025 -2029 970,000 1,087,650 2,057,650 2030 -2034 1,180,000 877,450 2,057,450 2035 -2039 1,465,000 592,500 2,057,500 2040 -2044 1,830,000 225,200 2,055,200 Total $_6,275 000 $ 4,016,150 $ 10,291,150 57 Statement No. 87, Leases — This Statement will improve the accounting and financial reporting for leases by governments by requiring recognition of certain lease assets and liabilities previously classifies as operating leases. It establishes a single model for lease accounting based on the principle that leases are financing the right to use an underlying asset. Under the Statement a lessee is required to recognize a lease liability and an intangible right -to -use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resource, enhancing the relevance and consistency of information about leasing activities. This Statement will become effective for the City in fiscal year 2021. F. Prior Period Adiustment During the fiscal year ended September 30, 2019, management determined that the City's residual interest in its two joint ventures was sufficiently measurable to recognize in the financial statements. As such, the amount of the City's 50% residual interests in the Schertz- Seguin Local Government Corporation and the Cibolo Valley Local Government Corporation, as of October 1, 2018, were recognized in the Water and Sewer System Fund, with a corresponding increase to beginning net position of $11,416,770. 59 REQUIRED SUPPLEMENTARY INFORMATION CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 REVENUES Taxes Permits and fees Service fees Fines and fees Intergovernmental Investment earnings Miscellaneous Total Revenues EXPENDITURES General government: Council City manager Municipal court 311 customer relations Planning & zoning Legal City secretary Nondepartmental Public affairs Engineering Geographic information systems Citizens assistance Special events Total General Government Public safety: Police department Fire department Inspection Total Public Safety Public environment: Streets Total Public Environment Parks and recreation: Parks Pools Community /Civic Center Total Parks and Recreation Cultural: Library Total Cultural 60 Original Final Budget Bud et $ 22,708,488 $ 22,708,488 1,661,080 1,661,080 1,717,212 1,717,212 594,269 594,269 425,500 425,500 235,250 270,250 617,560 632,560 27,9591359 28,009,359 100,959 103,959 1,161,522 1,144,522 391,940 403,940 121,957 121,957 240,266 240,266 160,000 160,000 207,049 212,049 1,718,488 1,533,724 644,841 652,091 739,220 739,220 175,311 182,311 327,666 332,666 156,510 177,708 6,145,729 6,004,413 8,355,809 8,277,809 5,261,613 5,283,184 895,579 1,015, 579 14, 513, 001 14, 576, 572 1,474,297 1,641,982 1,474,297 1,641,982 1,603,030 1,610,307 639,878 639,879 425,605 421,605 2,668,513 2,671,791 967,904 1,017,904 967,904 1,017,904 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FORTH E YEAR ENDED SEPTEMBER 30, 2019 EXPENDITURES (CONTINUED) Health: Animal control Total Health Administration: Information technology Human resources Finance Purchasing & asset management Building maintenance Fleet service Interfund charges Total Administration Total Expenditures Excess of revenues over expenditures OTHER FINANCING SOURCES (USES) Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 62 Original Final Budget Budget $ 500,269 $ 500,269 500,269 500,269 2,312,442 611,935 672,482 226,299 1,542,419 87 5, 043 2,731,683 3,508,937 29, 778, 650 2,790,759 687,385 625,482 229,399 1,547,419 880,543 ( 2,731683 4,029,304 30,442,235 ( 1,819,291) ( 2,432,876) 79,000 79,000 ( 10,750} { 10,750) 68,250 68,250 ( 1,751,041) ( 2,364,626) 15, 630, 453 15,630,453 $ 13,879,412 $ 13,265,827 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ECONOMIC DEVELOPMENT CORPORATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 REVENUES Taxes Investment income Miscellaneous Total Revenues EXPENDITURES Current: General government Administration Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 64 Original Final Budget Budget $ 4,242,580 $ 4,242,580 258,000 258,000 4,500,580 4,500,58 5,219,670 5,219,670 530,074 530,074 5,749,744 5, 749,744 249,164) 1,249,164) 17,811, 968 17, 811, 968 $ 16, 562, 804 $ 16, 562, 804 CITY OF SCHERTZ, TEXAS NOTES TO BUDGETARY SCHEDULES SEPTEMBER 30, 2019 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 are exercised at the department level. Actual expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at year -end. For the fiscal year ended September 30, 2019, actual expenditures exceeded budgeted expenditures in the Debt Service Fund by $5,591,271. This overage was caused by the payment to refunded bond escrow agent during the year that was not reflected in the adopted budget; however, the refunding was approved by City Council. Additionally, proceeds from the issuance of refunding bonds were used to used to fund this overage and was reported as other financing sources. The Justice Forfeitures Fund had actual expenditures exceeded budgeted amounts for $79,450, existing fund balance was used to fund this overage. Encumbrance accounting, in which appropriations are recorded as budgetary expenditures, is not utilized by the City. 66 CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS TEXAS MUNICIPAL RETIREMENT SYSTEM FOR THE YEAR ENDED SEPTEMBER 30, 2019 Measurement Date December 31, Total pension liability Service cost Interest on total pension liability Difference between expected and actual experience Change of assumptions Benefit payments /refunds of contributions Net Change in Total Pension Liability Total Pension Liability, Beginning Total Pension Liability, Ending (a) Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefit payments /refunds of contributions Administrative expenses Other Net Change in Fiduciary Position Fiduciary Net Position, Beginning Fiduciary Net Position, Ending (b) Net pension liability = (a) -(b) Fiduciary Net Position as a Percentage of Total Pension Liability Covered Payroll Net Pension Liability as a Percentage of Covered Payroll 2018 2017 2016 $ 3,301,265 $ 3,073,538 $ 2,855,745 4,505,483 4,111,517 3,763,562 34,393 416,585 139,216 ( 1,914,159 ( 1,843,774) ( 1,581,272) 5,926,982 5,757,866 5,177,251 66, 054, 349 60, 296,483 55,119, 232 $ 71, 981, 331 $ 66, 054, 349 $ 60, 296,483 $ 3,033,936 $ 2,793,644 $ 2,627,335 1,326,518 1,232,232 1,152,864 ( 1,540,890) 5,999,805 2,602,572 ( 1,914,159) ( 1,843,774) ( 1,581,272) ( 29,768) ( 31,080) ( 29,385) 1,555) { 1,575) { 1,583) 874,082 8,149, 252 4,770 , 531 51,419,640 431 270,_388 38,499,857 $ 52,293,722 $ 51,419,640 $ 43,270,388 19,687,609 _14,634,709 17,026,095 72.65% 77.84% 71.76% $ 18,896,766 $ 17,603,310 $ 16,478,620 104.19% 83.14% 103.32% Note: GASB Statement No. 68 requires 10 years of data to be provided in this schedule. As of year -end, all years are not available. Additional years will be added in the future as the information becomes available. 67 CITY OF SCHERTZ, TEXAS SCHEDULE OF EMPLOYER CONTRIBUTIONS TEXAS MUNICIPAL RETIREMENT SYSTEM FOR THE YEAR ENDED SEPTEMBER 30, 2019 Fiscal Year Ended September 30, 2019 2018 Actuarially determined contribution $ 3,129,413 $ 2,971,592 Contributions in relation to the actuarially determined contribution 3,129,413 2,971,592 Contribution deficiency (excess) Covered payroll 19,520,269 18,605,654 Contributions as a percentage of covered payroll 16.03% 15.97% Note: GASB Statement No. 68 requires 10 years of data to be provided in this schedule. As of year -end, all years are not available. Additional years will be added in the future as the information becomes available. NOTES TO SCHEDULE OF CONTRIBUTIONS Valuation Date: Actuarially determined contribution rates are calculated as of December 31st and become effective on January 1st, 13 months and a day 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 27 years Asset valuation method 10 year smoothed market; 15% soft corridor Inflation 2.50% Salary increases 3.50% to 10.50% 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 female rates multiplied by 103% and projected on a fully generational basis with scale BB. 69 CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN TMRS OTHER POST - EMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Measurement Date December 31, 2018 2017 Total OPEB liability Service cost Interest on total OPEB liability Differences in actuarial experience Change of assumptions Benefit payments Net change in total OPEB liability Total OPEB liability, beginning Total OPEB liability, ending (a) Covered - employee payroll Total OPEB liability as a percentage of covered - employee payroll $ 37,794 $ 29,926 21,182 20,123 86,276 - ( 54,027) 57,257 t. 3,779) ( 3_,521) 87,446 103,785 622,941 519,156 $ 710.387 $ 622,941 $ 18,896,766 $ 17,603,310 3.76% 3.54% Note: 10 years of data is required to be provided in this schedule. As of year -end, all years are not available. Additional years will be added in the future as the information becomes available. NOTES TO SCHEDULE Valuation Date: Actuarially determined contribution rates are calculated as of December 31st and become effective on January 1st, 13 months and a day later. Methods and Assumptions Used to Determine Contribution Rates: Inflation 2.50% Salary increases 3.50% to 10.50% including inflation Discount rate 3.71% (based on Fidelity's 20 -Year Municipal GO AA Index) Administrative expenses All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. Mortality rates - service retirees Mortality rates - disabled retirees Other information RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully generational basis with scale BB. RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% with a 3 year set - forward for both males and females. The rates are projected on a fully generational basis with scale BB to account for future mortality improvements subject to the 3% floor. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement No. 75 to pay related benefits. 71 SUPPLEMENTARY INFORMATION Comparative Schedules — Governmental Funds General Fund Economic Development Corporation Debt Service Fund Capital Projects Fund Combining Statements and Individual Fund Schedules - Nonmaior Governmental Funds Hotel Occupancy Fund - will account for proceeds of hotel occupancy taxes to be used strictly for those kinds of programs that promote the tourism industry. Park Fund - will account for revenues from developers' fees (in lieu of park land dedication), grants, and donations and is designed to monitor and manage improvement of the City's park system. Tree Mitigation Fund - will account for revenues from permits, grants and donations to preserve and replace trees in the City. Treasury 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. Historical Committee Fund - will account for funds received for the preservation of the history of the City. Capital Recovery Roadways Fund - to account for a fee assessed for capital recovery on new construction. CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS GENERAL FUND SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) ASSETS Cash and cash equivalents Investments Receivables (net of allowances) Taxes Accounts and other Inventory Prepaids Restricted assets: Cash and cash equivalents Total Assets LIABILITIES Accounts payable Accrued salaries and benefits Customer deposits Due to other governments Due to other funds Unearned revenues Total Liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES Nonspendable for: Inventory Restricted for: Police and public safety /municipal court Municipal court PEG capital fees Animal control Veterans Scholarships Committed for: Civic Center /CIED Assigned for: Property replacement Subsequent year's budget Unassigned Total Fund Balances Total Liabilities, Deferred inflows of Resources, and Fund Balances 73 2019 2018 $ 1,211,660 $ 1,391,876 15,105,396 13,202,101 2,134, 563 2,136,274 1,775,482 1,682,001 117,009 94,876 14,916 - 785,708 701,922 21,144,734 19,209,050 685,560 892,564 970,679 742,046 22,251 52,456 123,116 143,448 16,139 16,139 33,314 351 720 1,851,059 1,882,373 1,754,646 1,696,224 1,754,646 1,696,224 131,925 94,876 226,093 101,842 823,451 728,350 723,353 723,353 33,408 35,660 2,109 4,796 101,673 84,989 687,779 454,376 891,321 854,198 4,689,305 2,226,359 9,228,612 10, 321, 654 17, 539, 029 15, 630,453 $ 21,144, 734 $ 19, 209, 050 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30,2019 (WITH COMPARATIVE TOTALS FOR 2018) ASSETS Cash and cash equivalents Investments Receivables, net of allowances: Taxes Accounts and other Total Assets LIABILITIES Accounts payable Total Liabilities FUND BALANCES Restricted for: Economic development Total Fund Balances Total Liabilities and Fund Balances 75 2019 2018 224,144 $ 397,726 20,824, 561 16,664,835 739,361 746,350 8,448 8,448 $ 21, 796, 514 $ 17, 817, 359 $ 19,258 $ 5,391 19,258 5,391 21,777,256 17, 811, 968 21, 777, 256 17,811,968 $ 21796,514 $�_ 17,817,359 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS DEBT SERVICE FUND SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) ASSETS Cash and cash equivalents Investments Receivables, net of allowances: Taxes Total Assets DEFERRED INFLOWS OF RESOURCES Unavailable revenues Total Deferred Inflows of Resources FUND BALANCES Restricted for: Debt service Total Fund Balances Total Deferred Inflows of Resources and Fund Balances 77 2019 $ 91,510 910,716 2018 $ 27,896 1,071,962 82,682 _ 8_4,934 1,084.908 1,184, 792 82,682 84,934 82,682 84,934 1,002,226 1,099,858 1002, 226 1,099,858 $ 1,084,908 $ 1,184,792 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE DEBT SERVICE FUND BUDGET AND ACTUAL FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Property taxes Investment income Miscellaneous Total Revenue EXPENDITURES Debt service: Principal Interest and fiscal charges Bond issue costs Payment to refunded bond escrow agent Total Expenditures Excess (Deficiency) of Revenues over Expenditures OTHER FINANCING SOURCES (USES) Transfers in Issuance of refunding debt Premiums from issuance of debt Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING - - 5,225,000 336,901 - _ _ - 5,561,901 ( 113,725) ( 113,725) ( 97,632) 1,099,858 1,099,8S8 1,099, 858 $ 986,133 $ 986,133 $ 1,002,226 78 2019 Original Final Actual Budget Budget Amounts $ 6,384,000 $ 6,384,000 $ 6,414,868 56,000 56,000 70,318 100,000 _ 100'000 100,277 6,540,000 _ 6, 540, 000 6,585,463 4,260,000 4,260,000 4,565,000 2,388,725 2,388,725 2,069,215 5,000 5,000 120,869 -_ - 5,489,912 6,653,725 6,653,725 12,244,996 ( 113,725) ( 113,725) ( 5,659,533) - - 5,225,000 336,901 - _ _ - 5,561,901 ( 113,725) ( 113,725) ( 97,632) 1,099,858 1,099,8S8 1,099, 858 $ 986,133 $ 986,133 $ 1,002,226 78 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS CAPITAL PROJECTS FUND SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) ASSETS Cash and cash equivalents Investments Accounts receivable Total Assets LIABILITIES Accounts payable Retainage payable Due to other funds Total Liabilities FUND BALANCES Restricted for: Capital improvement Total Fund Balances Total Liabilities and Fund Balance 80 2019 2018 $ 34,120 14,147,499 52,248 $ 14,233,867 $ 825,769 293,788 $ 361,260 16,469,940 $ 658,395 116,040 774,435 13,114, 310 16, 056, 765 13,114, 310 16, 056,765 $ 14,233,867 $ 16,831,200 CITY OF SCHERTZ, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS ASSETS Cash and cash equivalents Investments Accounts receivable, net of allowance Total Assets LIABILITIES Accounts payable Total Liabilities FUND BALANCES Restricted for: Tourism development Tree mitigation Parks Police forfeiture Roadways Library Historical committee Total Fund Balances SEPTEMBER 30, 2019 Special Revenue Funds Hotel Occupancy Park Tree Treasury Fund Fund Mitigation Forfeitures — $ 37,118 $ 47,745 $ 59,926 $ 28,160 2,117,237 242,925 387,600 - 63,789 - - - $ 2,218,144, $ 290,670 $ 447, 526 $ 28,,160 $ 3,279 $ - $ 14,120 $ - 3,279 - 14,120 - 2,214,865 - - - - - 433,406 - - 290,670 - - - - - 28,160 2,214,865 290,670 433,406 28,160 Total Liabilities and Fund Balances $ 2,218,144 $ 290,670 $ 447,526 $ 28,160 82 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 REVENUES Occupancy tax Permits and fees Service fees Fines and fees Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: General government Public safety Parks and recreation Cultural Administration Capital outlay Total Expenditures Excess (Deficiency) of Revenue Over Expenditures OTHER FINANCING SOURCES (USES) Transfer in Transfer out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING S©ecial Revenue Funds Hotel Occupancy Fund Park Fund Tree Miti ation Treasury Forfeiture $ 514,679 $ - $ - $ - - 11,000 19,162 - - - - 900 48,015 7,600 10,306 1,846,947 3,071 - - - 565,765 18,600 29,468 900 130,265 - - - - 15,250 27,867 - 67,582 - - 86,841 - 206 197,847 102,091 27,867 206 367,918 83,491) 1,601 694 83,491 1,601 694 367, 918 1,846,947 374,161 431,805 27,466 $ 2,214,865 $ 290,670 $ 433,406 $ 28,160 84 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOTEL OCCUPANCY FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Occupancy tax Investment earnings Miscellaneous Total Revenues EXPENDITURES Current; General government Administration Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING 189,150 67,582 271,268 1,846,947 189,150 67,582 256,732 271,268 1,846,947 130,265 67,582 367,918 1,846,947 FUND BALANCE - ENDING $ 2,118,215 $ 2,118,215 $ 2,214,865 86 2019 Original Final Actual Budget Budget Amounts $ 500,000 $ 500,000 $ 514,679 28,000 28,000 48,015 - - 3,071 528,000 528,000 565,765 189,150 67,582 271,268 1,846,947 189,150 67,582 256,732 271,268 1,846,947 130,265 67,582 367,918 1,846,947 FUND BALANCE - ENDING $ 2,118,215 $ 2,118,215 $ 2,214,865 86 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARK FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Licenses and permits Investment earnings Total Revenues EXPENDITURES Current: Parks and recreation Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 2019 Original Final Actual Budget Budget Amounts $ 70,000 $ 70,000 $ 11,000 7,750 7,750 7,600 77,750 77,750 18,600 15,000 25,204 15,250 85,000 151,308 86,841 100,000 176,512 102,091 L 22,2501 ( 98,762) { 83,491) 374,161 374,161 374,161 $ 351,911 $ 275,399 $ 290,670 88 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL TREE MITITGATION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Licenses and permits Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: Parks and recreation Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING 2019 Original Final Actual Budget Budget Amounts $ 72,500 $ 72,500 $ 19,162 7,750 7,750 10,306 ou,G.Ju ou'G.Ju G7"TUu 75,000 75,000 27,867 75,000 75,000 27,86 5,250 5,250 1,601 431,805 4311805 431,805 FUND BALANCE - ENDING $ 437,055 $ 437,055 $ 433,406 MI61 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TREASURY FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) REVENUES Fines and fees Investment earnings Total Revenues EXPENDITURES Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 92 2019 2018 $ 900 $ 13,767 33 900 13,800 206 7,349 206 7,349 694 6,451 27,466 21,015 $ 28,160 $ 27,466 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL JUSTICE FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Fines and fees Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: Public safety Capital outlay Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 93 123,200 2019 Original Final Actual Budget Budget Amounts 314,131 $ 130,000 $ 130,000 $ 23,509 2,200 2,200 6,600 1,000 1,000 - 133,200 133,200 30,109 - - 50,306 10,000 10,000 39,144 101000 10,000 89,450 123,200 123,200 ( 59,341) 123,200 123,200 59,341) 314,131 314,131 314,131 $ 437,331 $ 437,331 $ 254,790 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE STATE FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) 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 95 2019 2018 $ 2,548 $ - - 64 2,548 64 8,773 - 8,773 - { 6,225] 64 11,334 11,270 $ 5,109 $ 11,334 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPEDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY ADVISORY BOARD FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Service fees Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: Cultural Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 96 2019 Original Final Actual Budget Budget Amounts $ 22,000 $ 22,000 $ 21,365 400 400 1,853 32,400 32,400 19,664 32,400 32,400 _ 19,664 ( 9,500 9,500 3,561 71,881 71,881 71,881 $ 62,381 $ 62,381 $ 75,442 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HISTORICAL COMMITTEE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE ACTUAL TOTALS FOR 2018) REVENUES Sale of merchandise Miscellaneous Total Revenues EXPENDITURES Current: General government Total Expenditures Excess of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Transfers in Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 98 2019 Original Final Actual Budget Budget Amounts $ 1,000 $ 1,000 $ 708 _ - - 17 1,000 1,000 ` _ 725 11,750 11,750 2,871 11,750 11,750 2,871 10,750) ( 10,750_) ( 2,146) 10,750 10,750 2,871 10,750 10,750 2,871 - _ - /L7 12,937 12,937 12,937 $ 12,937 $ 12,937 $ 13,662 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CAPITAL RECOVERY ROADWAYS FOR THE YEAR ENDED SEPTEMBER 30, 2019 (WITH COMPARATIVE TOTALS FOR 2018) REVENUES Service fees Investment earnings Total Revenues OTHER FINANCING SOURCES (USES) Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 100 2019 $ 138,920 1,451 140,371 f 116,040) ( 116,040) 2018 $ 60,793 329 61,122 24,331 61,122 61,122 - $ 85,453 $ 61,122 STATISTICAL SECTION CITY OF SCHERTZ, TEXAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Business -type activities Net investment in capital assets $ Fiscal Year $ 51,838,589 $ 2010 2011 2012 2013 Governmental activities - - Net investment in capital assets $ 54,010,139 $ 55,415,699 $ 56,616,809 $ 57,543,618 Restricted 897,324 2,089,971 1,917,098 7,788,354 Unrestricted 7,548,,859 J 7,370,101 8,907,326 6,645,418 Total Governmental Activities Net Position $ 62,456,322 $ 64,875,771 $ 67441,233 $ 71,9779390 Business -type activities Net investment in capital assets $ 50,778,490 $ 51,838,589 $ 50,161,157 $ 53,071,836 Restricted - - - - Unrestricted 4,217,098 7,441,722 11,577,645 11,902,282 Total Business -Type Activities Net Position $ 54, 995, 588 $ 59, 280, 311 $ 61, 738,802 $ 64, 974,118 Primary government Net investment in capital assets $ 104,788,629 $ 107,254,288 $ 106,777,966 $ 110,615,454 Restricted 897,324 2,089,971 1,917,098 7,788,354 Unrestricted 11, 765, 957 14, 811,823 20 484 97 18, 547, 700 Total Primary Government Net Position $ 117,451,910 $ 124,156,082 $ 129,180,035 $ 136,951,508 101 CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Program Revenues Governmental activities: Charges for services: General government Public safety Public environment Parks and recreation Cultural Health Operating grants and contributions Capital grants and contributions Total Governmental Activities Program Revenues Business -type activities: Charges for services: Water and sewer EMS Capital grants and contributions Total Business -Type Activities Program Revenues Total Primary Government Program Revenues 1,905,600 1,495,563 Fiscal Year 2,230,800 1,986,536 2010 2011 2012 2013 Expenses 541,512 721,222 265,714 228,242 Governmental activities: 305,932 36,728 39,743 36,746 General government $ 7,892,516 $ 8,112,954 $ 7,802,092 $ 7,066,087 Public safety 7,897,298 8,390,740 9,103,676 9,567,595 Public environment 2,966,642 3,152,119 3,586,087 3,622,834 Parks and recreation 1,593,075 1,673,098 1,584,605 1,807,559 Cultural 809,323 876,339 916,967 907,676 Health 345,455 374,516 357,658 344,647 Administration 1,084,430 1,321,055 1,117,044 1,180,656 Interest and other fees _ 2,230,452 2,251,472 2,302,912 _ 3,340,951 Total Governmental Activities Expenses 24,819,191 26,152,293 26,771,041 27,838,005 _ Business -type activities: Water and sewer 14,434,709 15,280,871 16,349,967 16,954,871 EMS 3,690,007 3,659,031 3,758,425 3,959,445 Total Business -Type Activities Expenses 18,124,716 18,939,902 20,108,392 20,914,316 Total Primary Government Expenses 42,943,907 45,092,195 46,879,433 48,752,321 Program Revenues Governmental activities: Charges for services: General government Public safety Public environment Parks and recreation Cultural Health Operating grants and contributions Capital grants and contributions Total Governmental Activities Program Revenues Business -type activities: Charges for services: Water and sewer EMS Capital grants and contributions Total Business -Type Activities Program Revenues Total Primary Government Program Revenues 1,905,600 1,495,563 2,286,488 2,230,800 1,986,536 2,815,029 2,216,385 2,516,547 536,609 524,443 541,512 721,222 265,714 228,242 279,267 305,932 36,728 39,743 36,746 38,149 587,643 717,105 764,997 234,084 1,276,465 2, 998,115 1,178, 573 _ 1, 531, 740 6,595,295 8; 818, 240 7,303,968 7,578,474 15,147,332 17,073,075 17,411,568 17,696,327 3,061,414 3,564,852 3,561,114 4,459,600 973,437 2,175,889 828,853 1,301,235 19,182,183 22, 813, 816 21, 801, 535 23,457,162 25,777,478 31,632,056 29,105,503 31,035,636 Net(expense)revenue: Governmental activities ( 18,223,896) ( 17,334,053) ( 19,467,073) ( 20,259,531) Business -type activities 1,057,467 3,873,914 1,693,143 2,542,846 Total Primary Government Net Expense ( 17,166,429} ( 13,460,139) ( 17,773,930} ( 17,716,680 103 CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Source: City financial statements 105 Fiscal Year 2010 2011 2012 2013 General Revenues and Other Changes in Net Position Governmental activities: Taxes Ad valorem $ 9,715,645 $ 10,280,768 $ 11,298,204 $ 12,359,146 Sales 6,240,749 7,054,394 7,968,212 9,637,097 Franchise fees 1,448,620 1,542,046 1,647,712 1,681,079 Hotel /motel 348,147 391,181 470,290 503,267 Mixed drink 32,144 33,630 28,586 30,421 Bingo 4,651 2,173 - - Investment income 117,776 48,235 60,265 54,270 Miscellaneous 611,510 316,840 621,560 505,268 Transfers 15,421 84,235 ( 62,294} 25,140 Total Governmental Activities 18,534,663 19,753,502 22,032,535 24,795,688 Business -type activities: Interest and investment earnings 36,824 37,950 36,409 53,089 Miscellaneous 236,173 457,094 666,645 664,521 Transfers ( 15,421} { 84,235.) 62,294 ( 25,140} Total Business -Type Activities 257,576 410,809 765,348 692,470 Total Primary Government 18,792,239 20,164,311 22,797,883 25,488,158 Change in Net Position Governmental activities 310,767 2,419,449 2,565,462 4,536,157 Business -type activities 1,315,043 4,284,723 2,458,491 3,235,316 Total Primary Government $ 1,625,810 $ 6,704,172 $ 5,023,953 $ 7,771,473 Source: City financial statements 105 CITY OF SCHERTZ, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Nonspendable Fund Balance: Inventory Prepaid items Note receivable Total Nonspendable Fund Balance Restricted Fund Balance: Police and public safety Municipal court PEG capital fees Capital improvement Debt service Tourism development Tree mitigation Parks Historical Committee & library Economic Development Corporation Animal control Veterans Scholarship Total Restricted Fund Balance Committed Fund Balance: Capital improvement Total Nonspendable Fund Balance Assigned Fund Balance: Property replacement Special events Capital improvement Historical Committee Subsequent year's budget Youth activities Total Assigned Fund Balance Unassigned Fund Balance 2010 2011 _ $ 46,473 $ 43,504 $ 150r000 120,080 196.473 163,584 2012 2013 63,556 $ 50,768 2,367 754,443 120,080 120,080 1861003 925,291 421,265 4 403,799 3 338,118 4 496,890 402,744 4 459,244 5 527,513 6 646,422 - 3 317,453 4 409,870 4 456,175 3,914,323 1 10,219,300 1 17,104,595 1 15,360,800 286,215 1 117,250 2 227,674 5 517,199 250,379 3 301,517 3 390,561 4 470,250 164,424 1 173,999 2 217,600 1 157,659 79,317 8 84,329 9 90,718 1 136,647 200,359 2 231,686 6 65,409 7 77,554 3,548,067 3 3,394,850 4 4,366,005 6 6,022,128 9,267,093. 1 24, 341, 724 15,703,427 2 23,7 8, 063 2 165,000 - - - 165,000 202,341 202,723 322,656 456,034 142,465 93,447 92,555 99,770 - 162,113 243,546 145,167 9,940 9,940 - - - - 11,090 - 354,746 468,223 669,847 700,971 1,372,779 1,899,105 21.560,667 4,206,734 Total Governmental Funds $ 11,191,091 $ 18,234,339 $ 27,154,580 $ 30,339,720 Source: Balance Sheets - Governmental Funds in City's CAFRs. 107 Total Governmental Funds $ 11,191,091 $ 18,234,339 $ 27,154,580 $ 30,339,720 Source: Balance Sheets - Governmental Funds in City's CAFRs. 107 CITY OF SCHERTZ, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Revenues Taxes Permits and fees Service fees Fines and fees Intergovernmental Other revenue 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 Payment to refund agent Total Expenditures Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Bond & debt issuances Refunding bond issuance Premium (discount) on bond issue Payment to refund agent Transfer in Transfer out Net Other Financing Sources (Uses) Net Change in Fund Balances Debt Service as a Percentage of Noncapital Expenditures 2010 2011 2012 2013 $ 17,811,547 $ 19,309,675 $ 21,401,991 $ 24,181,863 1,160,197 1,776,292 1,363,461 1,609,954 1,492,130 1,645,489 1,547,007 1,739,387 1,655,183 1,452,610 2,027,613 1,927,744 570,386 1,216,211 1,000,413 492,332 1,161,182 603,498 96_9,921 767,110 23,850,625 26,003,775 28,310,406 30,718,390 6,989,561 7,164,667 7,094,834 6,311,276 7,409,720 7,885,119 8,690,849 9,113,840 816,939 846,150 976,327 951,528 1,178,455 1,195,171 1,398,692 1,412, 329 872,668 937,611 845,124 840,595 331,860 360,746 346,318 341,961 1,251,368 1,506,831 1,249,557 1,289,078 11,347,876 2,956,511 1,299,843 3,277,397 1,893,086 2,371,070 2,704,898 3,217,325 2,183,852 2,066,221 2,313,510 2,381,171 20,000 244,237 254,971 31,750 34, 295, 385 27,534,334 27,174, 923 29,168,250 ( 10,444,760) ( 1,530,559) 1,135,483 1,550,140 1,418,294 8,206,572 14,370,000 1,635,000 - 283,000 175,473 - - - ( 6,698,421) - 242,539 348,846 139,635 788,084 ( 227,118) { 264, 611) { 201,929) ( 788,08D 1,433,715 8,573,807 7,784,758 1,635,000 $( 9,011,045) $ 7,043,248r $ 8,920,241 $ 3,1851140 17.7% 17.4% 19.5% 21.6% Source: Statement of Revenues, Expenditures, and Changes in Fund Balance for Governmental Funds. 109 Fiscal Year CITY OF SCHERTZ, TEXAS GOVERNMENTAL FUNDS TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Property Sales & Use Franchise Tax Tax Tax Mixed Beverage 2010 $ 9,737,236 $ 6,240,749 $ 1,448,620 $ 32,144 2011 10,286,251 7,054,394 1,542,046 33,630 2012 11, 287,191 7,968, 212 1,647,712 28,586 2013 12,329,999 9,637,097 1,681,079 30,421 2014 12,802,668 10,553,382 2,073,162 39,917 2015 14,161,999 10,315,125 2,263,783 43,553 2016 15,105,480 10,921,489 2,250,815 43,072 2017 16,125,537 10,844,503 2,208,373 42,668 2018 17,007,148 12,668,555 2,393,182 43,384 2019 19,150,782 12,506,879 2,357,150 60,518 111 Fiscal Year Ended September 30, 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 CITY OF SCHERTZ, TEXAS TOTAL WATER AND SEWER CONSUMPTION AND RATES LAST TEN FISCAL YEARS Total Water & Sewer Consumption 'In Gallons) 1,622,930,500 1,583,312,400 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 1,231,376,600 113 $ Water & Sewer Base Rate 37.15 35.61 34.35 30.11 26.54 24.38 22.69 22.69 22.69 22.69 TABLE 6 Water & Sewer Initial Rate Per 1,000 Gallons $ 6.84 6.53 6.21 5.73 5.43 5.17 4.84 4.84 4.75 4.75 CITY OF SCHERTZ, TEXAS PRINCIPAL WATER AND SEWER CONSUMERS CURRENT YEAR AND NINE YEARS AGO TAXPAYERS Caterpillar Inc. Beck Readymix Concrete Sycamore Creek Apartments SA WFR Partners, LLC IPT San Antonio Logistics CTR Sebastian Apartments Val Verde 6561 Sysco / Cooling Tower Legacy Oaks Apartments Pecan Grove TXLLC Wal -Mart Supermarket #3391 spk Sedona Master Community, INC Lowe's Home Improvement Warehouse CCMA TOTAL 2019 Total Percentage of Water Total City Consumption Water (In Gallons) Rank Consumption 21,614,000 1 1.33% 13,419,600 2 0.83% 6,462,900 3 0.40% 6,623,900 4 0.41% 5,633,200 5 0.35% 4,893,200 6 0.30% 4,426,700 7 0.27% 4,763,400 8 0.29% 4,106,200 9 0.25% 4,880,500 10 0.30% 76,823,600 Total City Water Consumption 1,622,930,500 114 4.73% CITY OF SCHERTZ, TEXAS TABLE 8 DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 116 City Direct Rates Overlappin2 School Districts Schertz- Cibolo- Fiscal Basic Debt Universal Comal Year Rate Service Total City ty ISDs ISD 2019 0.3497 0.1649 0.5146 1.4900 1.3200 2018 0.3248 0.1662 0.4910 1.4900 1.3900 2017 0.3168 0.1743 0.4911 1.4700 1.3900 2016 0.3159 0.1752 0.4911 1.4900 1.3900 2015 0.3164 0.1810 0.4974 1.4900 1.3900 2014 0.3010 0.1964 0.4974 1.4900 1.4300 2013 0.2993 0.2006 0.4999 1.4600 1.4300 2012 0.2993 0.1850 0.4843 1.4350 1.4300 2011 0.2993 0.1500 0.4493 1.4350 1.3700 2010 0.2842 0.1500 0.4342 1.4200 1.3100 Overlaying Counties Bexar Comal Guadalupe Community Fiscal Hospital River College Year County District Authoritv District County County 2019 0.2774 0.2762 0.0186 0.1492 0.2952 0.3319 2018 0.2928 0.2762 0.0173 0.1492 0.3078 0.3799 2017 0.2928 0.2762 0.0173 0.1492 0.2928 0.3851 2016 0.2929 0.2762 0.0173 0.1492 0.2929 0.3851 2015 0.2929 0.2762 0.0178 0.1492 0.2929 0.3941 2014 0.2782 0.2762 0.0174 0.1492 0.2782 0.3999 2013 0.3052 0.2762 0.0174 0.1416 0.3504 0.4036 2012 0.3269 0.2762 0.0167 0.1416 0.3340 0.4036 2011 0.3269 0.2662 0.0160 0.1359 0.3130 0.3999 2010 0.3269 0.2610 0.0160 0.1359 0.3080 0.3895 116 CITY OF SCHERTZ, TEXAS PRINCIPAL PROPERTY OF TAX PAYERS CURRENT YEAR AND NINE YEARS AGO r Caterpillar Inc. SYSCO San Antonio, Inc. US Real Estate, LP Republic Beverage Co. Distribution Colfin 2018 -3 Industrial Owner Shell US Gas & Power LLC Amazon.com KYDC LLC GE Oil & Gas LLC Amazon Com Services Inc SA WFR Partners LLC Lack Properties Inc. San Antonio MTA LP Eye Care Centers of America Inc. Aoh- Vantage at Schertz LLC Wal -Mart Real Estate Business Trust Sprint Spectrum LP H.E.B Grocery Co. EM Limited Partnership Mid Cities 35 Partners LTD TOTALS 2019 Percentage of Total City Taxable Taxable Assessed Assessed Value Rank Value $ 127,829,440 1 3.28% 108,437,649 2 2.78% 60,564,813 3 1.55% 56,088,100 4 1.44% 44,527,470 5 1.14% 37,942,000 6 0.97% 36,498,147 7 0.94% 28,301,316 8 0.73% 27,545,385 9 0.71% 26,108,900 10 0.67% 553,843,220 TOTAL TAXABLE ASSESSED VALUE $ 3,900,769,022 117 14.20% CITY OF SCHERTZ, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) TABLE 10 119 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 2019 $ 19,922,568 $ 19,825,244 99.51% $ - 19,825,244 99.51% 2018 18,010,824 17,899,825 99.38% 85,062 17,984,887 99.86% 2017 17,356,822 17,241,556 99.34% 72,675 17,314,231 99.75% 2016 16,238,180 16,160,248 99.52% 57,835 16,218,083 99.88% 2015 14,793,867 14,738,760 99.63% 44,730 14,783,490 99.93% 2014 13,383,759 13,297,258 99.35% 68,412 13,365,670 99.86% 2013 12,536,540 12,455,336 99.35% 71,432 12,526,768 99.92% 2012 11,239,572 11,159,974 99.29% 71,740 11,231,714 99.93% 2011 9,978,430 9,895,240 99.17% 74,770 9,970,010 99.92% 2010 9,639,945 9,559,899 99.17% 74,503 9,634,402 99.94% 119 CITY OF SCHERTZ, TEXAS TAXABLE ASSESSED VALUE LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year Taxable Ended Value Residential Commercial September 30, January 1, Property Property 2019 2018 $ 2,860,333,982 $ 1,401,636,211 2018 2017 2, 049, 067, 806 2, 344, 365,139 2017 2016 1,895,085,016 2,269,590,522 2016 2015 1,702,601,947 2,087,223,204 2015 2014 1,568,651,309 1,793,803,709 2014 2013 1,445,731,509 1,540, 565,195 2013 2012 1,383,423,359 1,396,349,905 2012 2011 1,337,223,390 1,233,687,039 2011 2010 1,272,970,256 1,253,600,729 2010 2009 1,234,950,439 1,237,284,878 *Taxable Assessed Value is before any applicable freeze adjustments. Source: Bexar, Comal and Guadalupe County Appraisal Districts. 120 CITY OF SCHERTZ, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 122 Governmental Activities General Certificates Certificates Fiscal Obligation of Tax Capital Revenue of Year Bonds Obligation Notes Lease Bonds Obligation 2019 $ 48,320,000 $ 16,235,000 $ 530,000 $ 25,699 $ - $ 12,330,000 2018 52,752,896 13,636,966 715,000 34,264 - 13,211,178 2017 56,613,614 9,011,415 1,230,000 25,147 - 8,174,779 2016 56,352,272 4,057,189 1,740,000 58,321 - 8,331,966 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 12,404,034 310,000 133,408 5,436,773 6,149,350 122 CITY OF SCHERTZ, TEXAS TABLE 13 1 :7_�� fi�Y� l��l�>,1�:7= ��i1►1�]��1�7�: �il1��rJ11�I�] General Bonded Debt Outstanding Percentage of General Certificates Amounts Actual Taxable Fiscal Obligation of Available for Value of Per Year Bonds Obligation Debt Service Total Property Capita 2019 $ 52,765,000 $ 16,235,000 $( 1,084,908) $ 67,915,092 1.74% 1,649 2018 54,880,553 13,636,966 ( 809,427) 67,708,092 1.86% 1,716 2017 59,147,240 9,011,415 ( 517,199) 67,641,456 2.00% 1,783 2016 59,366,867 4,057,189 ( 227,674) 63,196,382 2.08% 1,669 2015 56,900,692 277,801 ( 117,250) 57,061,243 2.07% 1,564 2014 60,453,966 543,934 ( 286,215) 60,711,685 2.33% 1,690 2013 60,821,252 801,767 ( 444,369) 61,178,650 2.54% 1,773 2012 63,292,230 1,581,300 ( 429,289) 64,444,241 2.73% 1,921 2011 50,719,693 8,615,077 ( 556,884) 58,777,886 2.51% 1,807 2010 37,804,450 12,404,034 ( 347,739) 49,860,745 2.58% 1,585 124 Assessed Value, 2018 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 CITY OF SCHERTZ, TEXAS DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2016 TABLE 15 $ 3, 900, 769, 022 $ 390,076,902 $ 67,104,862 ( 1,084,908) 66,019,954 $ 324,056,948 Fiscal Year 2017 2018 20.37% Assessed Value $ 3,375,850,131 $ 3,647,504,903 $ 3,783,027,833 Debt Limit 337,585,013 364,750,490 378,302,783 Total Net Debt Applicable to Limit 61,1811169 65,792,916 66,329,699 Total Debt Margin $ 276,403,844 $ 2984957,574 $ 311,973,084 2013 2014 2015 Assessed Value $ 2,600,365,551 $ 2,752,562,574 $ 3,037,267,611 Debt Limit 260,036,555 275,256,257 303,726,761 Total Net Debt Applicable to Limit 60,499,568 56,803,499 53,424,.303 Total Debt Margin $ 199,536,987 $ 2181452,758 $ 250,302,458 2010 2011 2012 Assessed Value $ 2,363,893,708 $ 2,411,270,623 $ 2,600,365,551 Debt Limit 236,389,371 241,127,062 260,036,555 Total Net Debt Applicable to Limit 55,298,550 60,973,626 60,499,568 Total Debt Margin $ 181,090,821 $_ 180,,153,436 $ 199,536,987 126 CITY OF SCHERTZ, TEXAS TABLE 17 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Sources: Population, personal income, median age and education level informaiton provided by City Economic Development Corporation. School enrollment provided by Schertz- Cibolo- Universal City Independent School District. Unemployment data provided by Texas Workforce Commission. 128 Per Education Capita Level in Fiscal Personal Personal Median Years of School Unemployment Year Population Income Income Artie Schooling Enrollment Rate 2019 41,948 1,473,255,708 35,121 38.0 16.2 15,925 2.7% 2018 41,182 1,396,481,620 33,910 37.3 15.9 15,817 3.2% 2017 39,453 1,266,046,770 32,090 37.2 15.9 15,497 3.8% 2016 37,938 1,175,319,240 30,980 36.9 15.8 15,460 3.4% 2015 37,865 1,157,835,970 30,578 36.1 15.6 15,009 3.2% 2014 36,477 1,144,465,875 31,375 36.9 15.4 14,515 5.1% 2013 35,929 1,095,331,494 30,486 37.1 15.4 14,058 5.5% 2012 34,499 895,739,206 25,964 36.8 15.4 13,016 5.6% 2011 33,544 850,069,800 25,342 37.8 15.4 12,533 5.7% 2010 32,523 885,015,876 27,212 34.4 15.4 12,330 5.1% 2009 31,465 913,919,790 27,923 36.5 13.9 11,700 5.0% Sources: Population, personal income, median age and education level informaiton provided by City Economic Development Corporation. School enrollment provided by Schertz- Cibolo- Universal City Independent School District. Unemployment data provided by Texas Workforce Commission. 128 CITY OF SCHERTZ, TEXAS FULL -TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 130 Full -Time Equivalent Employees as of September 30, Function 2010 2011 2_012 2013 General Government City Manager 6 6 7 7 Court Support - - - - Municipal Court 5 5 6 6 Customer Relations 4 5 5 5 Planning and Zoning 4 4 3 3 General Services 14 15 15 13 City Secretary 2 2 2 2 Public Affairs 3 3 4 4 Records Management 1 1 1 1 Schertz Magazine - 2 2 2 Engineer 2 2 4 3 GIS 2 2 2 2 Information Technology 3 4 4 6 Human Resources 4 4 4 4 Finance 6 6 6 6 Purchasing 5 5 5 4 Fleet Service 3 4 4 4 Building Maintenance - - - 2 Facility Services - - - - Public Safety Police 65 65 70 75 Fire 32 32 32 32 Inspections 6 7 7 7 Marshal Services 5 8 8 8 Health Animal Control 6 6 6 6 Environmental Health - - - - Parks and Culture Parks 8 9 9 9 Pools - - - - Event Facilities 2 1 1 1 Library 14 14 14 14 Public Environment Streets 13 14 14 14 Public Works Public Works 5 4 4 6 Business Office 10 10 10 10 Water and Sewer 16 17 17 16 Drainage 7 7 7 8 EMS 34 34 35 35 Economic Development 4 3 4 4 TOTAL 290 299 311 318 130 CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS 132 Fiscal Year Function 2010 2011 2012 2013 General Government Building Permits Issued 4,806 4,950 2,643 3,054 Schertz Tales Number of Magazines Printed 144,000 168,000 168,000 168,000 Police CFS 37,269 26,205 19,434 19,894 Arrests 790 762 666 800 Traffic Violations 19,259 13,231 20,881 19,335 Accidents 1,606 1,575 1,665 1,960 Fire Number of Rescue /Other Responses 1,671 1,657 1,799 2,046 Number of Fire Responses 76 110 74 108 Number of Inspections 425 616 429 332 Number of Training Classes Conducted 107 142 168 132 Number of Pre -Plan Inspections 642 536 714 729 EMS Requests for Transport 7,281 7,443 7,545 8,391 Actual Transports 4,575 4,801 4,766 5,451 EMT Students 80 85 79 116 Marshal Service Warrants Issued 5,444 4,141 2,888 3,344 Warrants Cleared 4,023 3,985 4,118 4,687 Food Establishment Permits 129 118 123 127 Food Establishment Inspection 202 244 180 281 Foster /Adoption Inspections 27 18 14 24 Parks Facility Reservations 719 237 234 258 Community and Civic Centers Civic Center 594 354 325 444 Community Center Rentals 635 666 816 735 North Community Center Rentals - 241 307 288 132 CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS 134 Fiscal Year Function 2010 2011 2012 2013 Animal Services Number of Animals Handled 2,021 1,802 1,463 1,326 Number of Adoptions 249 257 291 362 Number of Return to Owners 279 313 149 231 Number of Transfers 451 300 312 301 Library Annual Circulation 392,528 414,074 410,312 404,691 Library Visits 257,235 254,934 256,349 254,633 Library Program Attendance 10,610 13,767 16,035 12,581 Registered Users 24,628 28,589 30,475 31,658 Water New Connections 509 439 271 168 Water Main Breaks 25 76 52 38 Total Consumption 12,313,766 16,763,239 16,131,415 15,500,413 (Thousands of Gallons) Daily Average Consumption (Thousands of Gallons) 33,736 45,927 44,196 42,466 Peak Daily Consumption (Thousands of Gallons) 7,040 11,000 9,290 9,483 Total Customers 10,134 12,234 12,557 12,757 Average Use Per Connection 5,054 5,725 5,517 5,905 Sewer Total Customers 9,499 10,907 10,988 11,456 Facilities Maintenance Number of Buildings Maintained 19 19 19 19 Square Footage 166,591 166,591 166,591 166,591 134 CITY OF SCHERTZ, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function_ _ 2010 _ 2011 2012 2013 Police Stations 1 1 1 1 Patrol Units 40 42 42 42 Fire Stations 2 2 2 2 Training Facility - - - - Fire Vehicles 13 13 13 13 EMS Ambulances 6 6 6 7 Marshal Service Vehicles 7 8 8 7 Streets Streets, Paved (Miles) 125 132 134 137 Streets, Unpaved (Miles) 7 5 5 5 Parks and Recreation Parks - Developed 12 17 17 13 Parks - Undeveloped 4 4 4 8 Playground 19 15 15 16 Swimming Pools 2 2 2 2 Baby Pools 2 2 2 2 Baseball /Softball Diamonds 12 9 9 12 Soccer Fields 12 12 12 12 Community Centers 4 4 4 4 Animal Control Control Vehicle 3 3 3 3 Library Facility 1 1 1 1 Volumes in Collection 71,929 73,904 81,468 86,221 Water Number of Reservoirs - - - - Number of Pump Stations 5 5 5 5 Water Mains (Miles) 190 192 192 197 Sewer Sanitary Sewers (Miles) 78 84 85 87 Storm Sewers (Miles) 9 10 10 11 Facilities Maintenance Vehicles 5 5 4 5 Generators 3 3 3 3 136 COMPLIANCE SECTION PATTILLO. BROWN & HILL, L.L.P. 401 West State Highway 6 Mf M_ Waco, Texas 76710 254.772.4901 pbhepa.can INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Honorable Mayor and Members of City Council City of Schertz, Texas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Schertz, Texas, as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City of Schertz, Texas' basic financial statements, and have issued our report thereon dated March 18, 2020. Internal Control Over Financial Renortina In planning and performing our audit of the financial statements, we considered the City of Schertz, Texas' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Schertz, Texas' internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Schertz, Texas' internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control 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. 138 OFFICE LOCATIONS TEXAS I Waco ' Temple ; Hillsboro Houston .yt AICPA NEW MEXICO I Albuquerque GAQC Member Brenda Dennis From: Jimmy & Wendy <jnw1917 @satx.rr.com> Sent: Sunday, March 22, 2020 10:32 AM To: Brenda Dennis Subject: Commission Application (Odom) Attachments: Commission Application (Odom).pdf Dear Ms. Dennis I'm would like to apply for a seat on the P &Z Commission and /or the Transportation Safety Advisory Commission. Please see the attached cover letter, application, and resume. Thank you for your time and service to our community. Best regards Jimmy Odom 2964 Mineral Spgs Schertz, TX 78108 Cell #: 325 - 201 -7608