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CAFR FY 2020-2021CITY OF SCHERTZ, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2021 Col :4!![— L��7i;*1J ►`LdU4101:4 James M. Browne City Manager James Walters Director of Finance CITY OF SCHERTZ, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2021 TABLE OF CONTENTS INTRODUCTORY SECTION Page Number Letterof Transmittal ...................................................................... ............................... i - iv 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 BalanceSheet ....................................................................... ............................... 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 Statement of Activities ....................................................... ............................... 22 Proprietary Funds Statement of Net Position ....................................................... ............................... 23-24 Statement of Revenues, Expenses, and Changes in Fund Net Position .............................................. ............................... 25 Statement of Cash Flows ........................................................ ............................... 26-27 Notes to the Financial Statements .............................................. ............................... 28- 54 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - General Fund - Budget and Actual ...................................................... 55 56 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Economic Development Corporation - Budget and Actual ....................... 57 NotestoBudgetarySchedu|es ----------------------------. 58 Schedule of Changes in Net Pension Uabi|ityandKe|atedRabos ----------------------------- 59-60 Schedule of Pension Contributions ................................................................................ 61-62 Schodu|eofChangea - TMRSOtherPost-Emp|oymentBenofit Uabi|ityandRe|atadRatios ----------------------------- 63 Schedu|eofChangea - CityRetreeHealthOtherPost-Employment Benefit Liability and Related Ratioa-------------------------. 64 Combining and Individual Fund Statements and Schedules ComparabveBa|enceSheeto - Genera| Fund---------------------' 65 Comparative Schedules ofRevenues, Expenditures, and Changes in Fund Balance - General Fund ................................................................................. 66 Comparative Balance Sheets - Economic Development Corporation ----------- 67 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Balance - Economic Development Corporation ................................................. 68 ComparabveBa|anusSheeto - DabtSeniceFund -------------------. 69 Schedule nf Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Debt Service Fund ......................................... 70 Comparative Balance Sheets -Capital PnjectsFund ------------------ 71 Comparative Schedules of Revenues, Expenditures, and Changes in Fund Ba|ance - CapiLa| ProjectsFund -----------------------. 72 Combining Balance Sheet -Nonmajor Governmental Funds ............................................ 73-74 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances - NonmajorGovernmenta| Funds------------.. 75-76 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Hotel Occupancy Fund ................................... 77 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Park Fund-----------------.. 78 Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Tree Mitigation Fund ...................................... 79 Schedule of Revenues, Expenditures and Changes in Fund Balance -Traaaury Forfeitures Fund-------------------- 80 Schedule of Revenues, Expenditures, and Changes Schedule uf Revenues, Expenditures, and Changes Schedule ofRevenues, Expenditures and Changes in Fund Balance - Budget and Actual - Library Advisory Board Fund ........................... 83 Schedule ofRevenues, Expenditures and Changes in Fund Balance - Budget and Actual - Historical Committee Fund---------- 84 Schedule uf Revenues, Expenditures, and Changes STATISTICAL SECTION NetPositionby[onnponent -------------------------- 1 86-87 ChangainNatPosihon ---------------------------- 2 88-91 Fund Balances uf Governmental Funds .............................................................. 3 92-93 Changes in Fund Balances, Governmental Funds----------------. 4 94-95 TaxRevenuebySource - Governmenta|Funds ----------------' 5 96-97 Total Water and Sewer Consumption and Rates .................................................. 6 98 Rindpa|VVaterandSewer[onsumers --------------------- 7 99 DirectandOvedappngPropertyTaxRates ------------------.. 8 100 Phndpa|PropertyTaxpayers -------------------------. g 101 PropertyTaxLevesandCo|lections ---------------------- 10 102 Taxable Assessed Value ................................ ----------.................... 11 103-1O4 RaUosofOutstandingDettbyType ---------------------- 12 105'106 RaUosofGenera|BondedDebtOutstanding ------------------. 13 107 DinectandOvedappngGovernnnenta|ActivibesDebt -------------- 14 108 DebtMarginInfonnaUon ---------------------------. 15 109 P|edgedRevonuoCoverage --------------------- ----- 16 110 DemographioandEconunohcStatsbcs ---------------------. 17 111 Top Ten Principal Employers ................................ ----------.............. 18 112 FuU-Urno Equivalent City Governmental Ennp|oyersbyFundion ---------. 10 113- 114 Operating Indicators by Function/Program ......................................................... 20 115-118 Capital Asset Statistics by Funcbon/Program------------------ 21 119- 120 THIS PAGE LEFT BLANK INTENTIONALLY INTRODUCTORY SECTION THIS PAGE LEFT BLANK INTENTIONALLY March 08, 2022 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 annual comprehensive financial report of the City of Schertz for the fiscal year ended September 30, 2021. 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, 2021, 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, 2021, 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 42,002 in 2020 according to the US Census Bureau. The City of Schertz is empowered to levy a property tax on both real and personal properties located within its boundaries. It also is empowered by state statue to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing body. 1400 Schertz Parkway Schertz, Texas 78154 210.619.1000 schert xo The City of Schertz has operated under the council - manager form of government since November 30, 1972. Polieymaking and legislative authority are vested in a City Council consisting of the Mayor and seven at -large eouncilmembers. The City Council is responsible for establishing public policy on City matters by the passage of appropriate ordinances and resolutions. The City Manager is responsible for overseeing the day -to -day operations of the government, implementing policy established by City Council, and for appointing the heads of the various departments. The council is elected on a non - partisan basis. Council members serve three -year staggered terms, with two council members elected every three years and then three council members elected the final three years in the cycle. The mayor is elected to serve a three -year term. The City of Schertz provides a full range of services, including police and fire protection, EMS services, library services, the construction and maintenance of streets, recreational facilities, cultural events, and water and sewer services. The annual budget and five -year forecast serve as the foundation for the City of Schertz's financial planning and control. All city departments are required to submit requests for appropriation to the City Manager by June of each year. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents the proposed budget to the council for review in early August. The council then holds public hearings and community meetings on the proposed budget and to adopt a final budget by September 30th The fiscal year for Schertz is from October 1 through September 30. The appropriated budget is prepared by each department (e.g. police). The City Manager may make transfers of appropriations within a department. The City Manager may make transfers between departments and funds with City Council approval. Budget to actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented on pages 55 -56 as part of the required supplementary information. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City of Schertz operates. Local economy. Economic growth in Schertz remained strong in 2021. The surrounding metro area saw growth evidenced by the Federal Reserve Bank of Dallas reporting the San Antonio Business -Cycle Index increase 6.1% year over year for September 2021. This Index potentially indicates a new period of economic growth around the state. As of September 2021, the unemployment rate for Texas was 4.9% and several metro areas including Austin, Dallas - Fort Worth, and San Antonio, are below the state average. Schertz in particular had an unemployment rate of 3.8% during this time. As another indicated of economic growth, the City of Schertz realized a 16.7% increase year -over -year in sales tax collections during the fiscal year. While Schertz continued to see growth during the pandemic, as other economies start to recover Schertz continues strong. Further showcasing Schertz' economic fortitude, it also saw a diverse range of new products developed its real estate and land markets with approximately 2,373,899 square feet of new commercial and industrial space that will become available. CORES is working with the City to provide 1.7 million sq ft of speculative industrial space in the southern area of Schertz. In the North, Titan Development, EastGroup, and Phelan- Bennet are adding 573,899 sq ft of industrial warehouse space that is currently under development. Long -term financial planning. The community approved bond propositions in November 2010 for quality of life projects which included an aquatics facility, improvements to the baseball fields and soccer fields, building a new animal adoption facility, and improvements to Main Street. The only remaining project are the Main Street improvements. 1400 Schertz Parkway Schertz, Texas 78154 210.619.1000 ° s c ert e. oai 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. The fire station was completed in November 2020. Current Year Budget Initiatives. For FY 2021 -22, the City is using the momentum from the previous year and is putting an additional $500,000 into replacing the City's financial software and funding an estimated $350,000 to fix the HVAC system in the Animal Adoption Facility. Due to growing needs the City will also hire a Police Officer, an Evidence Technician and a Plumber as well as expand the existing facilities cleaning contract to include public safety buildings and parks restrooms. The EMS Fund will hire an additional 2 Paramedics and the Water & Sewer Fund will hire a SCADA Technician. Financial Information: Internal Control. Management is responsible for establishing and maintaining internal controls designed to ensure that assets of the City are protected from loss, theft or misuse and to provide adequate accounting information compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles for local governments as prescribed by the Governmental Accounting Standards Board (GASB), the Financial Accounting Standards Board (FASB) and the American Institute of Certified Public Accountants (AICPA). The internal control system is designed to provide reasonable, but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that the cost of an internal control should not exceed the benefits derived from the internal control. The City utilizes financial accounting software which is designed with a system of internal controls. These controls are continually being reevaluated to provide reasonable, but not absolute, assurances. Budget Controls. The City also utilizes budgetary controls. Legally expenditures cannot exceed the appropriated amount. The objective of these budgetary controls is to ensure compliance with the adopted budget approved by the City Council as mandated by the city charter and state law. The levels of budgetary control are established at the line -item basis and at the fund level. Staff believes these controls help monitor and direct approved expenditures to a level within the budget parameters which directly results in a strong financial performance. Financial Results. Assets and fund balances continue to grow as the City grows and financial results remain. strong. While additional debt was issued during the year, Staff closely monitors and plans the amount of issuance to keep steady debt ratios per capita, per revenue, and per operations tax rate to the debt tax rate. Examples of these ratios can be found in the Statistical Section on pages 105 -110. A more detailed summary of the City's Financial Performance is available in the Management Discussion and Analysis section on page 4. 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 annual comprehensive financial report for the fiscal year ended September 30, 2020. This was the 36th 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 annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. Im 1400 Schertz Parkway Schertz, Texas 78154 210.619.1000 schert ,cmri A Certificate of Achievement is valid for a period of one year only. We believe our current annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements and we will be submitting it to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the finance department. We would like to express our appreciation to all members of the department who assisted and contributed to the preparation of this report. In conclusion, we would have none of the success we have enjoyed without the assistance of each and every staff member, as well as the support and strategic direction from the Mayor and the City Council during the strategic planning, pre- budget, and budget approval process. Respectfully submitted, p James M. Browne City Manager 1400 Schertz Parkway James P. Walters Finance Director iv Sehertz, Texas 78154 210.619.1000 Or .ychertzxorr° CITY OF SCHERTZ, TEXAS CITY OFFICIALS MAYOR RALPH GUTIERREZ MAYOR PRO -TEM ROSEMARY SCOTT CITY COUNCIL MARK E. DAVIS JILL WHITTAKER MICHAEL DAHLE DAVID SCAGLIOLA ALLISON HEYWARD TIM BROWN CITY MANAGER JAMES M. BROWNE DIRECTOR OF FINANCE JAMES WALTERS CITY ATTORNEY CHARLES ZECH, DENTON, NAVARRO, ROCHA, BERNAL & ZECH, P.C. v CITY OF SCHERTZ ORGANIZATIONAL FY 2020-21 *Appointed by City Council vi Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Schertz Texas For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2020 rWe',.�W M�M Executive Director /CEO Vii THIS PAGE LEFT BLANK INTENTIONALLY FINANCIAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY INDEPENDENT AUDITOR'S REPORT Honorable Mayor and Members of the City Council City of Schertz, Texas Report on the Financial Statements ATTILL. „ BROWN & HILL, L.L.P.. 401 'Nest State Kgh ;.Yay 6 Waco Texas 76717 254.772.4901 pbhcpaxom 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, 2021, 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 11.2 percent and 12.9 percent, respectively, of the assets and net position of the Water and Sewer Fund, and 10.8 percent and 12.7 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 Waco i Temple i Hillsboro Houston AlCPA NEWMEXICO Albuquerque GAQC Member Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Schertz, Texas, as of September 30, 2021, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the City of Schertz, Texas' fiscal year 2020 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 19, 2021. In our opinion, the summarized comparative information presented herein as of and for the year ended September 30, 2020 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Schertz, Texas' basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 4, 2022, 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. Pa'4 XOorn � 4A ) L - L Waco, Texas March 4, 2022 3 THIS PAGE LEFT BLANK INTENTIONALLY MANAGEMENT'S DISCUSSION AND ANALYSIS THIS PAGE LEFT BLANK INTENTIONALLY 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, 2020. 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 $269,248,695 (net position). Of this amount, $50,150,925 (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 $25,855,719. The primary reason for this increase was an increase in capital contributions of approximately $12 million from the prior year. As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $57,119,032, an increase of $6,125,378 in comparison with the prior year. The primary cause of this increase was a increases in property and sales tax revenues that exceeded expenditure growth. At the end of the fiscal year, the combined total of the General Fund assigned and unassigned fund balances was $13,257,017 which is 36.79% of the general fund expenditures not including capital outlay. The fund balance policy is to reserve at least a 26% balance. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements 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, deferred outflows, liabilities, and deferred inflows, with the difference between the former two and latter 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 Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Schertz, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements. The funds of the City of Schertz can be divided into two categories: governmental and proprietary. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements. However, unlike the government - wide financial statements, governmental fund financial statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information is useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, readers may better understand the long -term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Schertz maintains fifteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, the debt service fund, the economic development corporation, the capital projects fund, and the American Recovery Plan Act fund, all of which are considered to be major funds. Data from the other ten governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report. Proprietary funds. The City of Schertz maintains two types of proprietary funds. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements. The City of Schertz uses enterprise funds to account for its water and sewer department and for its emergency medical services department. The City also maintains an internal service fund to account for internal charges for medical premiums. Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water and sewer department and for the emergency medical services department, both of which are considered to be major funds of the City of Schertz, as well as the internal service fund. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's general fund budgetary schedule. The City of Schertz adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with this budget. The economic development corporation also adopts an annual budget, and a comparison schedule for it also is provided in the required supplementary information. The combining statements referred to earlier in connection with non -major governmental funds are presented immediately following the required supplementary information. Government -wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City of Schertz, assets and deferred outflows exceeded liabilities and deferred inflows by $269,248,695 at the close of the most recent fiscal year. The largest portion of the City's total net position (68 %) reflects its net investment in capital assets (e.g., land, buildings, machinery, and equipment) less any related debt used to acquire those assets that is still outstanding, plus bond proceeds that have not yet been spent. The City of Schertz uses these capital assets to provide services to citizens; consequently, these assets are not available for operational type of future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. �1 An additional portion of the City's total net position (14 %) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position, $50,150,925, 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 2021 2020 2021 2020 2021 2020 Current and other assets $ 67,416,673 $ 62,199,597 $ 56,132,860 $ 54,664,167 $ 123,549,533 $ 116,863,764 Capital assets 149,570,599 144,079,930 98,743,525 92,643,825 248,314,124 236,723,755 Total assets 216,987,272 206,279,527 154,876,385 147,307,992 371,863,657 353,587,519 Deferred outflows of resources 3,488,506 3,267,540 954,384 806,262 4,442,890 4,073,802 Current liabilities 12,946,000 12,527,345 5,316,572 5,245,378 18,262,572 17,772,723 Long -term liabilities 67,867,628 73,002,458 18,214,795 20,706,167 86,082,423 93,708,625 Total liabilities 80,813,628 85,529,803 23,531,367 25,951,545 104,344,995 111,481,348 Deferred inflows of resources 2,130,871 2,235,923 581,986 551,074 2,712,857 2,786,997 Net position: Net investment in capital assets 98,444,714 88,959,102 83,941,882 75,969,319 182,386,596 164,928,421 Restricted 28,342,438 28,664,438 8,368,736 15,071,599 36,711,174 43,736,037 Unrestricted 10,744,127 4,157,801 39,406,798 30,570,717 50,150,925 34,728,518 Total net position $ 137,531,279 $ 121,781,341 $ 131,717,416 $ 121,611,635 $ 269,248,695 $ 243,392,976 The government's net position increased by $25,855,719 during the current fiscal year. The primary cause for the increase was increased revenues; the City recognized approximately $12 million of capital contribution revenue related to dedicated infrastructure assets and also experienced sharp increases in property and sales taxes. These increases stem from the City's continued rapid population growth; continued new housing and business developments resulted in increased assessed value for property taxes and resulted in the creation of infrastructure that was dedicated to the City. The related population increases resulted in increased economic activity that increased sales tax revenues. Additionally, expenses influenced the change in net position from the following notable factors: • General government expenses decreased compared to the prior year; in fiscal year 2020, Schertz EDC made a planned $3.7 million incentive payment for developers meeting performance obligations. • Public Safety expenses increased over $2 million due to increases to police and fire salaries. In 2020, the City completed a comprehensive compensation study that resulted in significant pay raises to maintain competitive against market wages. • Public works expenses decreased over $3.5 million, primarily due to one -time project expenditures in the prior year that did not qualify as capital construction. The following table indicates changes in net position for governmental and business -type activities followed by graphs displaying total revenues and expenses by type: City of Schertz's Changes in Net Position Government -Wide Governmental Business -Type Activities Activities Total 2021 2020 2021 2020 2021 2020 Revenues: Program revenues: Charges for services $ 5,448,546 $ 5,619,998 $ 35,433,956 $ 35,824,170 $ 40,882,502 $ 41,444,168 Operating grants & contributions 1,925,939 2,113,673 - - 1,925,939 2,113,673 Capital contributions 7,959,576 531,096 6,935,191 292,408 14,894,767 823,504 General revenues: Property taxes 21,463,804 19,844,912 - - 21,463,804 19,844,912 Other taxes 19,731,490 17,076,462 - - 19,731,490 17,076,462 Investment earnings 104,613 804,674 68,354 431,555 172,967 1,236,229 Miscellaneous 1,408,270 767,799 754,268 706,296 2,162,538 1,474,095 Total revenues 58,042,238 46,758,614 43,191,769 37,254,429 101,234,007 84,013,043 Expenses: General government 7,298,193 10,310,363 - - 7,298,193 10,310,363 Public safety 19,008,871 16,575,191 19,008,871 16,575,191 Public environment 5,364,408 8,825,099 5,364,408 8,825,099 Parks and recreation 3,395,458 3,012,134 3,395,458 3,012,134 Cultural 1,087,975 1,089,564 1,087,975 1,089,564 Health - 596,288 - 596,288 Administration 4,360,229 3,419,407 4,360,229 3,419,407 Interest and other fees 1,797,520 2,028,065 - - 1,797,520 2,028,065 Water and sewer - - 25,280,964 24,349,219 25,280,964 24,349,219 EMS - - 7,784,670 6,051,296 7,784,670 6,051,296 Total expenses 42,312,654 45,856,111 33,065,634 30,400,515 75,378,288 76,256,626 Increase in net position before transfers 15,729,584 902,503 10,126,135 6,853,914 25,855,719 7,756,417 Transfers 20,354 ( 20,354} Change in net position 15,749,938 902,503 10,105,781 6,853,914 25,855,719 7,756,417 Net position - beginning of year 121,781,341 120,878,838 121,611,635 114,757,721 243,392,976 235,636,559 Net position - end of year $ 137,531,279 $ 121,781,341 $ 131,717,416 $ 121,611,635 $ 269,248,695 $ 243,392,976 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 TOTAL REVENUES - GOVERNMENT -WIDE Charges for Operating Capital Grants Property Other Taxes Unrestricted Miscellaneous Services Grants and and Taxes Investment Contributions Contributions Earnings -2021 c,2020 N $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 Sales T 40% TOTAL EXPENSES - GOVERNMENT -WIDE General Public Safety Public Parks and Cultural Health Administration Interest and Government Environment Recreation Other Fees -2021 -2020 GENERAL REVENUE BY SOURCE - GOVERNMENTAL ACTIVITIES r.�asr_�r_r_�rrecn 8 -operty Tax 50% TOTAL REVENUES AND EXPENSES - BUSINESS -TYPE ACTIVITIES $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 2021 2020 w Revenues �, Expenses BUSINESS -TYPE REVENUES AND EXPENSES Water and Sewer Utilities EMS Revenues mNonoperating Revenues w, Capital Contributions and Transfers Expenses 7 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 $57,119,032. Of this total amount, $11,080,576 constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is non - spendable, restricted, committed, or assigned to indicate that it is not available for new spending because it has already been committed to pay debt service, for capital improvement projects, and other assigned purposes. The general fund is the chief operating fund of the City of Schertz. At the end of the current fiscal year, unassigned fund balance of the general fund was $11,755,619, while total fund balance was $16,478,567, a decrease of $490,411 from the prior year. Overall, the decrease was caused by a large budgeted transfer out for capital projects, but the fund also experienced increases in property and sales tax revenues in spite of the COVID -19 pandemic. 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 36.79% of total general fund expenditures, not including capital outlay. The debt service fund has a total fund balance of $1,087,376, all of which is restricted for the payment of debt service. The net increase in fund balance during the current year in the debt service fund was $301,457. This increase was due to regular principal and interest payments on long -term debt being exceeded by interest and sinking property tax revenue during the year. Over time, however, the debt service fund has sufficient cash and equivalents on hand to remain liquid if tax revenues decrease. The capital projects fund has a total fund balance of $13,170,964, an increase of $3,033,406. This was caused by the supplementation of revenue by amounts transferred from the general and Economic Development Corporation funds. The Economic Development Fund presents the activities of the Schertz Economic Development Corporation (the "EDC "), which promotes economic development activities using a portion of the City's sales tax revenue. At year end, the EDC fund reported an ending fund balance of $21,806,231, which is an increase of $787,605 compared to the prior year. The primary cause of this change was sales tax revenue growing faster than expenditures. The American Rescue Plan Act Fund has a total fund balance of $243, which consists of interest earned on the $5,208,951 received from the first tranche of the Coronavirus Local Fiscal Recovery Fund grant program. The City had spent $303,000 of this amount as of yearend, and the remaining $4,905,708 is presented as unearned revenue until it is spent in accordance with the terms of the grant agreement in future years. Proprietary funds. The City's proprietary funds provide the same type of information found in the government - wide financial statements, but in more detail. Unrestricted net position of the water and sewer fund at the end of the year amounted to $38,332,979 and those for the Schertz EMS fund amounted to $1,073,819, which are 155% and 14% of fund operating costs, respectively. The water and sewer fund reported an increase in net position of $10 million. Approximately half of this increase related to revenue recognized for contributed infrastructure assets; the remaining portion of the increase was from operating income, which was consistent with the prior year. Management's intent is to accumulate operating surplus to fund construction of new water and sewer infrastructure in future years with less reliance on bonded debt. The Schertz EMS fund increased net position by $77,921. Revenues and expenses both increased by approximately $1.6 million compared to the prior year. Revenues increased due to increased number of ambulance runs caused by the the growth in the population of the EMS service area. Expenses increased primarily from increased salaries that resulted from the compensation study discussed previously. w General Fund Budgetary Highlights The general fund expenditures were $1,738,423 less than the $34,254,845 budget. This was the result of cost savings across most of the General Fund due to decreased demand for services. Generally, activities citywide decreased because of the COVID -19 pandemic beginning in March 2020. Revenues were $1,519,574 less than budgeted, primarily due to increased property and sales tax revenues that fell short of the budgeted amount. Overall, ending fund balance in the general fund was $3,241,694 higher than budgeted. CAPITAL ASSET AND DEBT ADMINISTRATION Capita/ assets, The City's investment in capital assets for its governmental and business -type activities as of September 30, 2021, amounts to $248,314,124 (net of accumulated depreciation), including several projects in progress from voter approved bonds. Significant capital asset activity for the year included improvements to streets and infrastructure of $9.2 million and various equipment and technology purchases of $726,000, including $344,000 of vehicles. Additional information on the City's capital assets can be found in note II.F. to the basic financial statements. K01L[elk 142 wr0914 311 At the end of the current fiscal year, the City of Schertz had total long -term debt outstanding of $73,724,518. The related principal and interest payment for the bonds are backed by an annual ad valorem tax levied against all taxable property within the City. The City of Schertz maintains a "AA +" rating from Standard and Poors. Governmental Business -Type Activities Activities Total 2021 2020 2021 2020 2021 2020 Land $ 8,310,986 $ 8,074,199 $ 1,844,488 $ 1,844,488 $ 10,155,474 $ 9,918,687 Water rights - - 70,245 70,245 70,245 70,245 Buildings and improvements 44,588,777 44,447,749 3,609,126 3,635,532 48,197,903 48,083,281 Machinery, equipment, and 2,502,146 2,170,381 772,802 828,781 3,274,948 - vehicles 14,833,547 14,552,416 6,214,967 5,976,040 21,048,514 20,528,456 Infrastructure 129,206,285 119,945,442 105,832,113 100,588,293 235,038,398 220,533,735 Construction in progress 26,695,151 24,826,910 19,942,794 17,266,273 46,637,945 42,093,183 Accumulated depreciation ( 74,064,147) ( 67,766,786) ( 38,770,208) ( 36,737,046) ( 112,834,355) ( 104,503,832) TOTALS $149,570,599 $ ____144 _.. 079 930 $ _ _L____J__ 98,743,525 $ 92,643,825_ $248,314,124 $ _236,723,755 Significant capital asset activity for the year included improvements to streets and infrastructure of $9.2 million and various equipment and technology purchases of $726,000, including $344,000 of vehicles. Additional information on the City's capital assets can be found in note II.F. to the basic financial statements. K01L[elk 142 wr0914 311 At the end of the current fiscal year, the City of Schertz had total long -term debt outstanding of $73,724,518. The related principal and interest payment for the bonds are backed by an annual ad valorem tax levied against all taxable property within the City. The City of Schertz maintains a "AA +" rating from Standard and Poors. Total debt decreased compared to the prior year due to continued payment on existing debt without any additional new issuances. However, the City did issue refunding debt of $7,555,000 in the current year to pay off existing bonds and reduce future debt service. Additional information on the City's long -term debt can be found in note II.H. to the basic financial statements. Economic Factors and Next Year's Budgets and Rates At the end of the last fiscal year, the assigned and unassigned fund balance in the general fund decreased to $13.2 million in a planned decrease of fund balance. The decrease was $490,411 but was budgeted to be $1 million in the original adopted budget. The City of Schertz has appropriated $598,549 of this amount for spending in the 2022 fiscal year budget in accordance to the City's fund balance policy. The approved tax rate remained the same at $0.5121 per $100 of valuation. Ell Governmental Business -Type Activities Activities Total 2021 2020 2021 2020 2021 2020 General obligation bonds $ 40,390,000 $ 44,620,000 $ 2,895,000 $ 3,685,000 $ 43,285,000 $ 48,305,000 Certificates of obligation 14,200,000 15,235,000 10,655,000 11,505,000 24,855,000 26,740,000 Tax notes and leases 291,535 362,134 475,121 282,468 766,656 644,602 Premium on bonds 2,502,146 2,170,381 772,802 828,781 3,274,948 2,999,162 Compensated absences 1,178,062 967,540 364,852 249,269 1,542,914 1,216,809 TOTALS $ 58,561,743 $ 63,355,055 $ 15,162,775 $ 16,550,518 $ 73,724,518 $ 79,905,573 Total debt decreased compared to the prior year due to continued payment on existing debt without any additional new issuances. However, the City did issue refunding debt of $7,555,000 in the current year to pay off existing bonds and reduce future debt service. Additional information on the City's long -term debt can be found in note II.H. to the basic financial statements. Economic Factors and Next Year's Budgets and Rates At the end of the last fiscal year, the assigned and unassigned fund balance in the general fund decreased to $13.2 million in a planned decrease of fund balance. The decrease was $490,411 but was budgeted to be $1 million in the original adopted budget. The City of Schertz has appropriated $598,549 of this amount for spending in the 2022 fiscal year budget in accordance to the City's fund balance policy. The approved tax rate remained the same at $0.5121 per $100 of valuation. Ell The City has not seen lasting effects of the ongoing COVID -19 pandemic. The City's property tax revenues were not negatively affected, with rising property values and continued construction of new homes and business showing growth in the tax base instead. Each year the City updates its five -year budgeting forecast and has implemented a long -term debt model to assist management in making informed financial decisions that will impact the community now and in the future. Requests for Information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Finance Director, City of Schertz, 1400 Schertz Parkway, Schertz, Texas 78154. E Vj THIS PAGE LEFT BLANK INTENTIONALLY BASIC FINANCIAL STATEMENTS CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2021 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on debt refunding 564,011 Primary Government 589,038 Deferred OPEB related outflows Governmental Business -Type 817,436 Deferred pension related outflows Activities Activities Total ASSETS 3,488,506 954,384 4,442,890 Cash and cash equivalents $ 54,740,108 $ 9,456,846 $ 64,196,954 Investments 4,720,194 1,163,351 5,883,545 Receivables, net of allowances: 1,180,560 370,077 1,550,637 Taxes 4,112,464 - 4,112,464 Accounts and other 1,967,768 6,459,527 8,427,295 Accrued interest - 6,324 6,324 Inventories 134,373 184,455 318,828 Prepaids 29,080 2,311 31,391 Internal balances ( 16,139) 16,139 - Restricted assets: Cash and cash equivalents 946,454 20,271,954 21,218,408 Investments - 1,830,287 1,830,287 Service concession arrangement receivable: Due within one year 90,909 - 90,909 Due in more than one year 691,462 - 691,462 Investment in joint venture - 16,741,666 16,741,666 Capital assets: Land 8,310,986 1,844,488 10,155,474 Water rights - 70,245 70,245 Buildings and improvements 44,588,777 3,609,126 48,197,903 Equipment and vehicles 14,833,547 6,214,967 21,048,514 Infrastructure 129,206,285 105,832,113 235,038,398 Construction in progress 26,695,151 19,942,794 46,637,945 Accumulated depreciation ( 74,064,147) ( 38,770,208) ( 112,834,355) Total Assets 216,987,272 154,876,385 371,863,657 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on debt refunding 564,011 25,027 589,038 Deferred OPEB related outflows 622,588 194,848 817,436 Deferred pension related outflows 2,301,907 734,509 3,036,416 Total Deferred Outflows of Resources 3,488,506 954,384 4,442,890 LIABILITIES Accounts payable 1,141,700 2,356,880 3,498,580 Accrued liabilities 1,180,560 370,077 1,550,637 Retainage payable 154,437 28,747 183,184 Due to other governments 60,492 - 60,492 Unearned revenue 4,946,298 456,575 5,402,873 Accrued interest payable 286,255 60,113 346,368 Customer deposits 1,007 627,152 628,159 The accompanying notes are an integral part of these financial statements. 13 CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION LIABILITIES (continued) Noncurrent liabilities: Due within one year: Compensated absences Total OPEB liability Service concession arrangement Long -term debt Due in more than one year: Compensated absences Total OPEB liability Net pension liability Service concession arrangement Long -term debt Total Liabilities DEFERRED INFLOWS OF RESOURCES Deferred service concession arrangement Deferred OPEB related inflows Deferred pension related inflows Total Deferred Inflows of Resources NET POSITION Net investment in capital assets Restricted for: Police and municipal court PEG capital fees Tourism development Economic development Parks and tree mitigation Debt service Scholarships and other purposes Construction Unrestricted Total Net Position SEPTEMBER 30, 2021 Primary Government Governmental Business -Type Activities Activities Total $ 235,612 $ 72,971 52,091 16,621 55,241 - 4,832,307 1,327,436 942,450 2,600,981 11,352,654 420,169 52,551,374 80,813,628 306,961 333,199 1,490,711 2,130,871 98,444,714 421,362 889,139 2,301,716 21,806,474 934,913 934,899 1,053,935 10,744,127 $ 137,531,279 14 291,881 829,941 3,622,486 13,470,487 23,531,367 106,320 475,666 581,986 :: 8,368,736 39,406,798 $ 131,717,416 $ 308,583 68,712 55,241 6,159, 743 1,234,331 3,430,922 14,975,140 420,169 66,021,861 104, 344, 99 5 306,961 439,519 1,966,377 2,712,857 182,386,596 421,362 889,139 2,301,716 21,806,474 934,913 934,899 1,053,935 8,368,736 50,150,925 $ 269,248,695 CITY OF S0HERTZ, TEXAS STATEMENT OFACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2021 Business-type activities: Water and sewer 25,280,964 27,724,429 - 6,935,191 EMS 7,784,670 7,709,027 - - Total Business-Type Activities -__' 6,435^191� Total Primary Government $ 75,378,288 $ 40,882,502 $1925,939 $ 14 General revenues: /axes: 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 Net Position - Ending The accompanying notes are an integral part of these financial statements. is Progra Revenues Operating Capital Charges for Grants and Grants and Functions/Prog rams Expenses Services Contributions Contributions Primary government: Governmental activities: General government $ 7,298,193 $ 651,211 $ 1,367,592 $ - Public safety 19,008,871 3,079,945 538,523 - Public environment 5,364,408 902,712 - 7,959,576 Parks and recreation 3,305,458 528,886 - - Cultural 1,087,975 285,792 19,824 - Administration 4,360,229 - - - Interest 1797520 - - - Total Governmental Activities 42,312,654 1=925/I39} 7,959,576 Business-type activities: Water and sewer 25,280,964 27,724,429 - 6,935,191 EMS 7,784,670 7,709,027 - - Total Business-Type Activities -__' 6,435^191� Total Primary Government $ 75,378,288 $ 40,882,502 $1925,939 $ 14 General revenues: /axes: 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 Net Position - Ending The accompanying notes are an integral part of these financial statements. is Net (Expense) Revenue and Changes in Net Position Primary Government Governmental Business -Type Activities Activities Total $( 5,279,390) ( 15,390,403) 3,497,880 ( 2,866,572) ( 782,359) ( 4,360,229) ( 1,797,520) ( 26,978,593) ( 26,978,593 21,463,804 16,838,731 2,305,108 518,921 68,730 104,613 1,408,270 20,354 42,728,531 15,749,938 121,781,341 $ 137,531,279 9,379,156 ( 75,643) 9,303,513 9,303,513 68,354 754,268 ( 20,354) 802,268 10,105,781 121,611,635 $ 131,717,416 $( 5,279,390) ( 15,390,403) 3,497,880 ( 2,866,572) ( 782,359) ( 4,360,229) ( 1,797,520) ( 26,978,593) 9,379,156 ( 75,643) 9,303,513 ( 17,675,080) 21,463,804 16,838,731 2,305,108 518,921 68,730 172,967 2,162,538 43,530,799 25,855,719 243,392,976 $ 269,248,695 16 CITY OF SCHERTZ, TEXAS BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 General Capital Projects Debt Service Fund Fund Fund ASSETS Cash and cash equivalents $ 11,733,703 $ 13,229,954 $ 1,087,376 Investments 2,514,059 - - Receivables (net of allowances) Taxes 2,924,472 - 133,778 Accounts and other 1,636,735 258,142 - Due from other funds 678,444 - - Inventory 134,373 - - Prepaid items 28,090 - - Restricted assets: Cash and cash equivalents 946,454 - - Total Assets 20,596,330 13,488,096 1,221,154 LIABILITIES Accounts payable 921,978 162,695 - Accrued salaries and benefits 1,180,560 - - Retainage payable - 154,437 - Customer deposits 1,007 - - Due to other governments 60,492 - - Due to other funds 16,139 - - Unearned revenues 40,589 - - Total Liabilities 2,220,765 317,132 - DEFERRED INFLOWS OF RESOURCES Unavailable revenues 1,896,998 - 133,778 Total Deferred Inflows of Resources 1,896,998 - 133,778 FUND BALANCES Nonspendable for: Inventory 134,373 - - Prepaid items 28,090 - - Restricted for: Police and public safety /municipal court 287,199 - - Municipal court 816,152 - - PEG capital fees 889,139 - - Capital improvement - 5,185,166 - Debt service - - 1,087,376 Tourism development - - - Parks and tree mitigation - - - Historical Committee and library - - - Economic development - - - Animal control 42,416 - - Scholarships 116,505 - - Committed for: Capital Projects - 7,985,798 - Civic Center /CIED 907,676 - - Assigned for: Property replacement 902,849 - - Subsequent year's budget 598,549 - - Unassigned 11,755,619 - - Total Fund Balances 16,478,567 13,170,964 1,087,376 Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 20,596,330 $ 13,488,096 $ 1,221,154 The accompanying notes are an integral part of these financial statements. 17 Economic American Nonmajor Total Development Rescue Plan Act Governmental Governmental Corporation Fund Funds Funds $ 18,542,752 $ 4,905,952 $ 5,240,371 $ 54,740,108 2,206,135 - - 4,720,194 1,054,214 - - 4,112,464 7,949 - 64,942 1,967,768 - - - 678,444 - - - 134,373 990 - - 29,080 - - - 946,454 21,812,040 4,905,952 5,305,313 67,328,885 5,809 - 51,218 1,141,700 - - - 1,180,560 - - - 154,437 - - - 1,007 - - - 60,492 - - 678,444 694,583 - 4,905,709 - 4,946,298 5,809 4,905,709 729,662 8,179,077 134,163 1,801,040 2,301,716 934,913 - - 78,862 21,806,231 243 - 21,806,231 $ 21,812,040 243 $ 4,905,952 ( 675,043) 4,575,651 $ 5,305,313 18 2,030,776 2,030,776 134,373 28,090 421,362 816,152 889,139 6,986,206 1,087,376 2,301,716 934,913 78,862 21,806,474 42,416 116,505 7,985,798 907,676 902,849 598,549 11,080,576 57,119,032 $ 67,328,885 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2021 Total Fund Balances - Governmental Funds $ 57,119,032 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. 149,570,599 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. ( 56,059,597) 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. ( 286,255) 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 ( 2,502,146) Deferred loss 564,011 Receivables from grants, 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. 2,030,776 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 ( 11,352,654) Deferred outflows related to pensions 2,301,907 Deferred inflows related to pensions ( 1,490,711) Total OPEB liability ( 2,653,072) Deferred outflows related to OPEB 622,588 Deferred inflows related to OPEB ( 333,199) Net Position of Governmental Activities $ 137,531,279 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, 2021 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 Administration Capital outlay Debt service: Principal Interest and fiscal charges Bond issue costs Total Expenditures Excess (Deficiency) of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Issuance of refunding debt Premium on refunding debt Payment to refunding escrow agent Issuance of capital lease Transfers in Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCES - BEGINNING FUND BALANCES - ENDING General Capital Projects Debt Service Fund Fund Fund $ 27,913,222 1,593,382 1,628,589 637,638 1,623,282 29,147 781,333 34,206,593 724,993 12,333 501.922 1,239,248 $ 7,102,016 1,593 125,000 7,228,609 6,008,482 - - 17,166,400 - - 1,382,185 - - 2,494,684 - - 1,040,276 - - 3,858,317 - - 566,078 4,582,289 - 4,955,000 1,801,467 - - 140,140 32,516,422 4,582,289 6,896,607 1,690,171 ( 3,343,041) 332,002 136,535 ( 2,317,117) ( 2,180,582) ( 490,411) 16,968,978 $ 16,478,567 The accompanying notes are an integral part of these financial statements. 20 6,384,362 ( 7,915) 6.376.447 3,033,406 10,137,558 $ 13,170,964 7,555,000 629,992 ( 8,223,452) 7,915 ( .5 U, 545) 301,457 785,919 $ 1,087,376 Economic American Nonmajor Total Development Rescue Plan Act Governmental Governmental Corporation Fund Funds Funds $ 5,615,928 $ - $ 518,921 $ 41,150,087 - - 219,513 1,812,895 - - 912,406 2,540,995 - - 5,844 643,482 - 303,000 1,931,599 4,582,874 56,144 243 5,153 104,613 - - 15 1,408,270 5,672,072 303,243 3,593,451 52,243,216 306,025 - 266,408 6,580,915 - 303,000 638,018 18,107,418 - - - 1,382,185 - - 39,995 2,534,679 - - 19,708 1,059,984 528,442 - 72,464 4,459,223 - - 66,889 5,215,256 - - - 4,955,000 - - - 1,801,467 - - - 140,140 834,467 303,000 1,103,482 46,236,267 4,837,605 243 2,489,969 6,006,949 - - - 7,555,000 - - - 629,992 - - - ( 8,223,452) - - - 136,535 - - 3,109 6,395,386 ( 4,050,000) - - ( 6,375,032) ( 4,050,000) - 3,109 118,429 787,605 243 2,493,078 6,125,378 21,018,626 - 2,082,573 50,993,654 $ 21,806,231 $ 243 $ 4,575,651 $ 57,119,032 21 THIS PAGE LEFT BLANK INTENTIONALLY 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, 2021 Net Changes in Fund Balances - Governmental Funds $ 6,125,378 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 12,233,480 Depreciation expense ( 6,716,836) The net effect of miscellaneous transactions involving capital assets (i.e., sales, trade -ins, or donations) is to decrease net position. ( 25,975) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Grants ( 1,526,256) Property taxes 45,488 Court fines 45,207 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 long -term debt ( 8,321,527) Payment to escrow agent 8,223,452 Repayment of principal of long -term debt 5,173,199 Amortization of loss on refunding ( 99,045) 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 ( 210,522) Net pension liability 887,699 Total OPEB liability ( 125,871) 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. 42,067 Change in Net Position of Governmental Activities $ 15,749,938 The accompanying notes are an integral part of these financial statements. 22 ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable, net of allowance: Customer accounts Due from other funds Accrued interest Inventory Prepaids 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 CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2021 Business -Type 1,259,823 $ Activities Governmental Enterprise Funds Activities Total 3,185,772 Water and Schertz Enterprise Internal Sewer System EMS Fund Service Fund $ 8,197,023 $ 1,259,823 $ 9,456,846 $ 1,163,351 - 1,163,351 3,273,755 3,185,772 6,459,527 - 16,139 16,139 6,324 - 6,324 82,883 101,572 184,455 - 2,311 2,311 12,723,336 4,565,617 17,288,953 20,271,954 - 20,271,954 1,830,287 - 1,830,287 16,741,666 - 16,741,666 1,844,488 - 1,844,488 70,245 - 70,245 3,609,126 - 3,609,126 3,282,108 2,932,859 6,214,967 105,832,113 - 105,832,113 19,942,794 - 19,942,794 ( 36,963,688) ( 1,806,520) ( 38,770,208) 136,461,093 1,126,339 137,587,432 149,184,429 5,691,956 154,876,385 DEFERRED OUTFLOWS OF RESOURCES Deferred loss on refunding 25,027 - 25,027 Deferred OPEB related outflows 62,568 132,280 194,848 Deferred pension related outflows 227,731 506,778 734,509 Total Deferred Outflows of Resources 315,326 639,058 954,384 The accompanying notes are an integral part of these financial statements. 23 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 Inflows of Resources NET POSITION Net investment in capital assets Restricted for construction Unrestricted Total Net Position CITY OF SCHERTZ, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2021 Business -Type 133,313 $ Activities Governmental Enterprise Funds Activities Total - Water and Schertz Enterprise Internal Sewer System EMS Fund Service Fund $ 2,223,567 $ 133,313 $ 2,356,880 $ - 100,403 269,674 370,077 - 28,747 - 28,747 - 627,152 - 627,152 - 57,968 2,145 60,113 - 455,463 1,112 456,575 - 25,045 47,926 72,971 - 5,153 11,468 16,621 - 1,065,000 262,436 1,327,436 - 4,588,498 728,074 5,316,572 - 100,178 191,703 291,881 - 257,320 572,621 829,941 - 1,123,136 2,499,350 3,622,486 - 13,138,922 331,565 13,470,487 - 14,619,556 3,595,239 18,214,795 - 19,208,054 4,323,313 23,531,367 - 32,964 73,356 106,320 - 147,478 328,188 475,666 - 180,442 401,544 581,986 - 83,409,544 532,338 83,941,882 - 8,368,736 - 8,368,736 - 38,332,979 1,073,819 39,406,798 - $ 130,111,259 $ 1,606,157 $ 131,717,416 $ - 24 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2021 OPERATING REVENUES Fees charged to users Charges for premiums Other charges Miscellaneous Total Operating Revenues OPERATING EXPENSES Personnel services 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 Transfers out Capital contributions - impact fees Capital contributions - dedicated assets CHANGE IN NET POSITION NET POSITION - BEGINNING NET POSITION - END OF YEAR The accompanying notes are an integral part of these financial statements. Business -Type Activities Governmental Enterprise Funds Activities Total Internal Water and Schertz Enterprise Service Sewer System EMS Funds Fund $ 27,245,602 $ 7,709,027 $ 34,954,629 $ 182,414 - 182,414 602,598 151,670 754,268 28,030,614 7,860,697 35,891,311 2,432,081 3,280,186 15,987,246 531,733 2.534.305 24,765,551 3,265,063 5,552,786 737,866 721,572 486,102 286.344 7,784,670 76,027 66,906 1,448 296,913 - ( 515,413) - ( 151,594) 1,448 3,113,469 77,475 ( 20,354) - 1,691,371 - 5,243,820 - 7,984,867 4,018,052 16,708,818 1,017,835 2.820.649 32,550,221 3,341,090 68,354 296,913 515,413 150.146 3,916,301 3,ylb,JU1 3,916,301 3,916,301 3,190,944 - ( 20,354) - 1,691,371 - 5,243,820 - 10,028,306 77,475 10,105,781 120,082,953 1,528,682 121,611,635 $ 130,111,259 $ 1,606,157 $ 131,717,416 $ 25 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2021 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 NON - CAPITAL FINANCING ACTIVITIES Transfers to other funds Net Cash Used in Non - Capital Financing Activities CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets Capital contributions - impact fees Interest paid on long -term debt Principal paid on long -term debt Net Cash Used in Capital and Related Financing Activities ( 3,496,433} ( 500,231) ( 3,996,664} CASH FLOWS FROM INVESTING ACTIVITIES Business -Type Sale (purchase) of investments ( 22,071) Activities Payments from leases Governmental - 296,913 Enterprise Funds 66,906 Activities Water and Schertz Total Internal Sewer System EMS Enterprise Service Fund $ 28,887,299 $ 7,161,623 $ 36,048,922 $ - - - - 3,916,301 ( 2,731,693) ( 5,213,104) ( 7,944,797) ( 3,916,301) ( 23,703,472) ( 1,587,773) ( 25,291,245) - 2,452,134 360,746 2,812,880 - ( 20,354) - ( 20,354) - ( 20,354) - ( 20,354) - ( 2,956,008) ( 319,398) ( 3,275,406) - 1,691,371 - 1,691,371 - ( 701,796) ( 3,880) ( 705,676) - ( 1,530,000) ( 176,953) ( 1,706,953) - ( 3,496,433} ( 500,231) ( 3,996,664} CASH FLOWS FROM INVESTING ACTIVITIES Sale (purchase) of investments ( 22,071) - ( 22,071) Payments from leases 296,913 - 296,913 Interest and investment earnings 66,906 1,448 68,354 Net Cash Provided By (Used in) Investing Activities 341,748 1,448 343,196 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. ( 722,905) ( 138,037) ( 860,942) 11,686,996 1,397,860 13,084,856 17,504,886 - 17,504,886 29,191,882 1,397,860 30,589,742 8,197,023 1,259,823 9,456,846 20,271,954 - 20,271,954 $ 28,468,977 $ 1,259,823 $ 29,728,800 $ 26 CITY OF SCHERTZ, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Net cash provided by operating activities SCHEDULE OF NON -CASH CAPITAL ACTIVITIES Issuance of capital lease Developer contributions of capital assets $ 2,452,134 $ 360,746 $ 2,812,880 $ - $ 409,606 $ 409,606 $ 5,243,820 - 5,243,820 Total non -cash capital activities $___5,243 820 $ 409,606 $ 5,653,426 $ 27 Business -Type Activities Governmental Enterprise Funds Activities Water and Schertz Total Internal Sewer System EMS Enterprise Service Fund RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ 3,265,063 $ 76,027 $ 3,341,090 $ - Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 2,534,305 286,344 2,820,649 - Change in investment in joint venture ( 2,438,628) - ( 2,438,628) - Decrease (increase) in accounts receivable 778,999 ( 700,162) 78,837 - Decrease (increase) in inventory 29,834 22,393 52,227 - Increase (decrease) in deferred pension outflows 7,891 ( 110,010) ( 102,119) - Increase (decrease) in deferred OPEB outflows 14,419 ( 76,138) ( 61,719) - Increase (decrease) in accounts payable ( 1,495,513) 335,374 ( 1,160,139) - Increase (decrease) in accrued liabilities ( 44,993) ( 210,993) ( 255,986) - Increase (decrease) in customer deposits 66,961 - 66,961 - Increase (decrease) in unearned revenue 10,725 1,088 11,813 - Increase (decrease) in compensated absences ( 806) 85,420 84,614 - Increase (decrease) in net pension liability ( 177,144) 336,370 159,226 - Increase (decrease) in deferred OPEB inflows ( 22,979) 17,549 ( 5,430) - Increase (decrease) in deferred pension inflows 14,358 21,984 36,342 - Increase (decrease) in total OPEB liability ( 90,358) 275,500 185,142 - Net cash provided by operating activities SCHEDULE OF NON -CASH CAPITAL ACTIVITIES Issuance of capital lease Developer contributions of capital assets $ 2,452,134 $ 360,746 $ 2,812,880 $ - $ 409,606 $ 409,606 $ 5,243,820 - 5,243,820 Total non -cash capital activities $___5,243 820 $ 409,606 $ 5,653,426 $ 27 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2021 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. Schertz /Seguin Local Government Corporation - is a public, nonprofit corporation organized to aid, assist, and act on behalf of the cities of Schertz and Seguin in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase of services or by subsidizing the operations. Cibolo Valley Local Government Corporation - is a public, nonprofit corporation organized July 28, 2011 to aid, assist, and act on behalf of the cities of Cibolo, Converse and Schertz in acquiring, constructing, maintaining, and operating a water utility system. The participating governments have an ongoing financial responsibility to fund the operation of the corporation through either purchase of services or by subsidizing the operations. 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. r The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges of customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Nonexchange revenues that are measurable but not available are recorded as unavailable revenue (a deferred inflow of resources). These revenues are generally property taxes and warrants outstanding. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Exchange revenues (payments for services) received in advance of the service being provided are recorded as unearned revenue. The City reports the following major governmental funds: The General Fund is the City's primary operating fund which accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Capital Proiects Fund accounts for the acquisition and construction of major capital facilities financed from bond proceeds, grants, and transfers from other funds. The Debt Service Fund accounts for the resources accumulated and payments made for principal and interest on long -term general obligation debt of governmental funds. Economic Development Corporation collects sales taxes to support business development and expansion within the City. The American Rescue Plan Act Fund records revenue and expenditures related to the City's COVID- 19 funding from the American Rescue Plan Act. The City reports the following major enterprise funds: The Water and Sewer System Fund accounts for the water and sewer services provided to the citizens through user charges. The EMS Fund accounts for the emergency medical services provided to the citizens of the City and other participating governments through user charges. Additionally, the City reports the following fund types: Internal Service Fund accounts for the City's group medical insurance program. OITVJ 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 Equivalents The City's cash and cash equivalents are considered to be cash on hand and demand deposits. Cash is reported as restricted when it has restrictions on its use narrower than the purpose of the fund in which it is reported. This can result in differences in presentation between fund statements and government -wide statements. For purposes of the statement of cash flows, the City considers cash and other investments with maturities of three months or less from the date of purchase to be cash and cash equivalents. 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 Pavables 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. 30 Property taxes for the City are levied each October 1 on the taxable value as of the preceding January 1, the date a lien attaches, for all taxable real and personal property located in the City. Taxes are due by January 31 following the October 1 assessment date and become delinquent on February 1, at which time they begin accruing penalty and interest. The enforceable legal claim date for property taxes is the assessment date; therefore, the City did not record a receivable for accrual of future taxes at year end. Accordingly, no current taxes receivable are reported. Delinquent taxes have been reported in the financial statements net of the allowance for uncollectible taxes. Tax revenues are recognized as they become available. Accordingly, an amount equal to taxes not yet available has been reported as unavailable revenue (a deferred inflow of resources) at the government fund level. G. Inventories and Prepaid Items All inventories are valued at cost using the first -in /first -out (FIFO) method. Inventories of governmental funds are recorded as expenditures when consumed rather than when purchased. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both governmental -wide and fund financial statements and in the fund financial statements are offset by a nonspendable fund balance which indicates they do not represent "available spendable resources ". The cost of prepaid items is recorded as expenditures /expenses when consumed rather than when purchased. H. Restricted Assets Certain proceeds from bonds, resources set aside for their repayment, and other restrictive agreements are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants and /or contractual arrangements. I. Capital Assets Capital assets, which include land, buildings and improvements, machinery, equipment, vehicles, and infrastructure assets (i.e., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. When capital assets are purchased, they are capitalized and depreciated in the government -wide financial statements and the proprietary fund statements. Capital assets are recorded as expenditures of the current period in the governmental fund financial statements. Capital assets are valued at cost where historical records are available and at an estimated cost where no records exist. Donated capital assets, donated works of art and similar items received as part of a service concession arrangement are reported at acquisition value, rather than fair value. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements to capital assets that materially extend the life of the asset or add to the value are capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets are depreciated over their useful lives on a straight -line basis as follows: Use Lives Assets (Years) Buildings and improvements 10- 50 Machinery, equipment, and vehicles 2 -20 Infrastructure 15-30 31 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 over the 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. 32 M. Other Post - Employment Benefits (OPEB) Supplemental Death Benefits Fund. For purposes of measuring the total Texas Municipal Retirement System Supplemental Death Benefit Fund (TMRS SDBF) OPEB liability, related deferred outflows and inflows of resources, and expense, City specific information about its total TMRS SDBF liability and additions to /deductions from the City's total TMRS SDBF liability have been determined on the same basis as they are reported by TMRS. The TMRS SDBF expense and deferred (inflows) /outflows of resources related to TMRS SDBF, primarily result from changes in the components of the total TMRS SDBF liability. Most changes in the total TMRS SDBF liability will be included in TMRS SDBF expense in the period of the change. For example, changes in the total TMRS SDBF liability resulting from current - period service cost, interest on the TOL, and changes of benefit terms are required to be included in TMRS SDBF expense immediately. Changes in the total TMRS SDBF liability that have not been included in TMRS SDBF expense are required to be reported as deferred outflows of resources or deferred inflows of resources related to TMRS SDBF. Retiree Health Insurance. For purposes of measuring the total OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB expense, benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Contributions are not required but are measured as payments by the City for benefits due and payable that are not reimbursed by plan assets. Information regarding the City's total OPEB liability is obtained from a report prepared by a consulting actuary, Gabriel Roeder Smith & Company. N. Long -Term Obligations In the government -wide financial statements, and proprietary fund types in the fund financial statements, long -term debt and other long -term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund type statement of net position. Bond premiums, discounts, and losses on defeasance are amortized over the life of the bonds using the straight -line method. Bonds payable are reported net of the applicable bond premium or discount. Losses on defeasance are reported as deferred outflows of resources. Bond issuance costs are expensed as incurred. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. O. Fund Balance Fund balances in governmental funds are classified as follows: Nonspendable - Represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid items) or legally required to remain intact. Restricted - Represents amounts that are constrained by external parties, constitutional provisions or enabling legislation. Committed - Represents amounts that can only be used for a specific purpose because of a formal action by the government's highest level of decision - making authority: an ordinance adopted by City Council prior to the end of the fiscal year. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another ordinance) to remove or revise the limitation. Assigned - Represents amounts which the City intends to use for a specific purpose but do not meet the criteria of restricted or committed. The City Council may make assignments through formal documentation in the minutes. The City Council authorized (by way of policy) the City Manager to also make assignments. The City Manager's assignments do not require formal action; however, the City Manager has not assigned any funds at this time. Unassigned - Represents the residual balance that may be spent on any other purpose of the City. Only the General Fund reports positive unassigned fund balances; if another fund were to have unassigned fund balance, it would be in the event of a deficit. 33 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. Estimates The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. R. Deficit Equity At September 30, 2021, the City has a deficit unassigned fund balance of $681,330 in the Grant Fund. This deficit is due to timing differences between expenditures and reimbursements of grant funds. S. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the American rescue plan act fund, library advisory board fund, grant special revenue fund, police department forfeiture special revenue fund and the capital projects fund, which adopts project - length budgets. T. Reclassifications Certain reclassifications have been made in the presentation of the September 30, 2021 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 Equivalents and Investments As of September 30, 2021, the City had the following cash, cash equivalents and investments: Investment type: LOGIC Lone Star Investment Pool Texas CLASS Certificates of Deposit U.S. Agency Securities Subtotal Plus: depository and petty cash Total cash and investments Reported Weighted Average Value Maturity (days) $ 19,151,617 55 26,991,728 46 29,362,606 53 4,416,598 118 3.269.952 404 83,192,501 9,936,693 $ 93,129,194 LOGIC, Lone Star Investment Pool and Texas CLASS are recorded as cash equivalents in the financial statements. All of the pools have redemption notice periods of one day and may redeem daily. The investment pools' authorities may only impose restrictions on redemptions in the event of a general suspension of trading on major securities markets, general banking moratorium or national state of emergency that affects the pools' liquidity. 34 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. Credit Risk. State law limits investments in certificates of deposit to guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor or the National Credit Union Share Insurance Fund, or its successor and investment pools continuously rated no lower than AAA or an equivalent rating by at least one nationally recognized rating service. The City's investment policy does not further limit its investment choices. As of September 30, 2021, the City's investments in the pooled investment funds were rated AAAm by Standard & Poor's. The City has also invested in debt securities provided by the Federal Home Loan Bank, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal Farm Credit Banks, and U.S Treasury Notes. As of September 30, 2021, the City's investments in debt securities were rated BBB+ by Standard & Poor's. Custodial Credit Risk - Deposits. In the case of deposits, this is the risk that in the event of a bank failure, the government's deposits may not be returned. As of September 30, 2021, the City's cash and cash equivalents (including certificates of deposit, and component unit holdings) were fully collateralized by the City's depository by a combination of pledged collateral and FDIC insurance. All collateral is held in the City's name. Custodial Credit Risk - Investments. For an investment, this is the risk that, in the event of the failure of the counterparty, the government will not be able to recover the value of its investment or collateral securities that are in the possession of an outside party. All of the government securities owned by the City are held by its agent in the City's name. Restricted Cash - Cash is restricted in the Proprietary fund for construction projects, impact fees and customer deposits. B. Property Taxes Taxes are levied on and payable as of October 1. The City has contracted with the Guadalupe County Tax Assessor - Collector to collect taxes on its behalf. Current taxes become delinquent February 1. Current year delinquent taxes not paid by July 1 are turned over to attorneys for collection action. The total taxable value as of October 1, 2020, upon which the fiscal year 2021 levy was based, was $4,070,815,340 (i.e., market value less exemptions). The City is permitted by the Constitution of the State of Texas to levy taxes up to $2.50 per $100 of taxable assessed valuation for all governmental purposes. Pursuant to a decision of the Attorney General of the State of Texas, up to $1.50 per $100 of assessed valuation may be used for the payment of long -term debt. The combined tax rate to finance general governmental services, including the payment of principal and interest on long -term debt for the year ended September 30, 2021, was $0.5121 per $100 of assessed value, which means that the City has a tax margin of $1.9879 for each $100 value and could increase its annual tax levy by approximately $80,923,738 based upon the present assessed valuation before the limit is reached. However, the City may not adopt a tax rate that exceeds the tax rate calculated in accordance with the Texas Property Tax Code without holding a public hearing. The Property Tax Code subjects an increase in the effective tax rate to a referendum election, if petitioned by registered voters, when the effective tax rate increase is more than eight percent (8 %) of the previous year's effective tax rate. Property taxes are recorded as receivables and unearned revenues at the time the taxes are assessed. In governmental funds, revenues are recognized as the related ad valorem taxes are collected. Additional amounts estimated to be collectible in the time to be a resource for payment of obligations incurred during the fiscal year and therefore susceptible to accrual in accordance with generally accepted accounting principles have been recognized as revenue. In the government -wide financial statements, the entire levy is recognized as revenue, net of estimated uncollectible amounts (if any), at the levy date. 35 C. Receivables Receivables as September 30, 2021 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: General Fund Delinquent property taxes receivable Court fines Total General Fund Debt Service Fund Delinquent property taxes receivable Total Debt Service Fund Total Governmental Funds Unavailable $ 273,092 1,623,906 1,896,998 133,778 133,778 $ 2,030,776 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. Deferred outflows: Charge on refunding Related to pensions Related to OPEB - SDBF Related to OPEB - Retiree Health Plan Total deferred outflow Deferred inflows: Service concession arrangement Related to pensions Related to OPEB - SDBF Related to OPEB - Retiree Health plan Total deferred inflow Business -type Activities Governmental Water/ Activities Sewer EMS Totals $ 564,011 $ 25,027 $ - $ 589,038 2,301,907 227,731 506,778 3,036,416 243,287 24,069 53,561 320,917 379,301 38,499 78,719 496,519 $ 3,488,506 $ 315,326 $ 639,058 $ 4,442,890 $ 306,961 $ - $ - 306,961 1,490,711 147,478 328,188 1,966,377 83,693 8,280 18,426 110,399 249,506 24,684 54,930 329,120 $ 2,130,871 $ 180,442 $ 401,544 $ 2,712,857 36 Governmental Activities Business -type Activities General Capital Economic Debt Nonmajor Water and Schertz Fund Projects Development Service Funds Sewer Fund EMS Receivables: Property taxes $ 290,523 $ $ - $ 142,317 $ $ $ Sales tax 2,108,428 1,054,213 - Occupancy taxes - - 64,942 Franchise taxes 521,521 - Customers - 3,306,756 7,081,986 Court fines 3,989,942 - - Grants - 258,142 - Other 41,394 - 7,949 - - - - Gross receivables 6,951,808 258,142 1,062,162 142,317 64,942 3,306,756 7,081,986 Less: allowance for uncollectible accounts ( 2,390,601} - - ( 8,539) - ( 33,001) ( 3,896,214) Net receivables $ 4,561,207 $ 258,142 $ 1,062,162 $ 133,778 $ 64,942 $ 3,273,755 $ 3,185,772 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: General Fund Delinquent property taxes receivable Court fines Total General Fund Debt Service Fund Delinquent property taxes receivable Total Debt Service Fund Total Governmental Funds Unavailable $ 273,092 1,623,906 1,896,998 133,778 133,778 $ 2,030,776 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. Deferred outflows: Charge on refunding Related to pensions Related to OPEB - SDBF Related to OPEB - Retiree Health Plan Total deferred outflow Deferred inflows: Service concession arrangement Related to pensions Related to OPEB - SDBF Related to OPEB - Retiree Health plan Total deferred inflow Business -type Activities Governmental Water/ Activities Sewer EMS Totals $ 564,011 $ 25,027 $ - $ 589,038 2,301,907 227,731 506,778 3,036,416 243,287 24,069 53,561 320,917 379,301 38,499 78,719 496,519 $ 3,488,506 $ 315,326 $ 639,058 $ 4,442,890 $ 306,961 $ - $ - 306,961 1,490,711 147,478 328,188 1,966,377 83,693 8,280 18,426 110,399 249,506 24,684 54,930 329,120 $ 2,130,871 $ 180,442 $ 401,544 $ 2,712,857 36 E. Interfund Balances and Transfers The composition of interfund balances as of September 30, 2021 is as follows: Due From Due To Amount Purpose EMS General $ 16,139 Short -term pool cash loan General Nonmajor Governmental 678,444 Short -term pool cash loan The following schedule briefly summarizes the City's transfer activity for the year ending September 30, 2021: Transfer From Transfer To Amount Purpose General Nonmajor governmental $ 3,109 Suplement funds sources General Capital Projects 2,314,008 Funding for various capital projects Capital Projects Debt Service 7,915 Suplement funds sources EDC Capital Projects 4,050,000 Funding for various capital projects Water and Sewer System Capital Projects 20,354 Funding for various capital projects F. Capital Assets Capital asset activity for the year ended September 30, 2021 was as follows: Governmental activities: Capital assets not being depreciated: Land Construction in progress Total capital assets not being depreciated Capital assets being depreciated: Buildings and improvements Machinery, equipment, and vehicles Street and infrastructure Total assets being depreciated Less accumulated depreciation for: Buildings and improvements Machinery, equipment, and vehicles Street and infrastructure Total accumulated depreciation Total capital assets being depreciated, net Governmental activities capital assets, net Beginning Reclassifications / Ending Balance Additions Retirements Balance $ 8,074,199 $ 236,787 $ - $ 8,310,986 24,826,910 4,024,285 ( 2,156,044) 26,695,151 32,901,109 4,261,072 ( 2,156,044) 35,006,137 44,447,749 141,028 - 44,588,777 14,552,416 726,581 ( 445,450) 14,833,547 119,945,442 7,104,799 2,156,044 129,206,285 178,945,607 7,972,408 1,710,594 188,628,609 ( 16,823,636) ( 1,624,881) - ( 18,448,517) ( 7,430,818) ( 1,180,477) 445,450 ( 8,165,845) ( 43,512,332) ( 3,937,453) - ( 47,449,785) ( 67,766,786) ( 6,742,811) 445,450 ( 74,064,147) 111,178,821 1,229,597 2,156,044 114,564,462 $ 144,079,930 $ 5,490,669 $ - $ 149,570,599 37 Business -type activities: Capital assets, not being depreciated: Land Water rights Construction in progress Total capital assets, not being depreciated Capital assets being depreciated: Buildings and improvements Machinery, equipment, and vehicles Infrastructure Total assets being depreciated Less accumulated depreciation for: Buildings and improvements Machinery, equipment, and vehicles Infrastructure Total accumulated depreciation Total capital assets being depreciated, net Business -type activities capital assets, net Beginning Reclassifications / Ending Balance Additions Retirements Balance $ 1,844,488 $ - $ - $ 1,844,488 70,245 - - 70,245 17,266,273 2,773,773 ( 97,252) 19,942,794 19,181,006 2,773,773 ( 97,252) 21,857,527 3,635,532 - ( 26,406) 3,609,126 5,976,040 1,062,704 ( 823,778) 6,214,966 100,588,293 5,243,820 - 105,832,113 110,199.865 6.306.524 ( 850.184) 115.656.205 968,711) ( 152,395) - ( 1,121,106) 5,758,894) ( 572,191) 787,488 ( 5,543,597) 30,009,441) ( 2,096,063) - ( 32,105,504) 36.737.046) ( 2.820.649) 787.488 ( 38.770.207) 73,462,819 3,485,875 ( 62,696) 76,885,998 $ 92,643,825 $ 6,259,648 $( 159,948) $ 98,743,525 Depreciation expense was charged to functions /programs of the primary government as follows: Governmental activities: $ General government $ 702,442 Public safety 1,108,487 Public environment 3,995,466 Parks and recreation 886,986 Cultural 42,377 Administration 7,053 Total $ 6,742,811 Business -type activities: Water and sewer system $ 2,534,305 EMS 2022 286,344 Total $ 2,820,649 Total Depreciation $ 9,563,460 G. Operating 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 September 30, Total 2022 $ 250,687 2023 263,221 2024 276,382 2025 290,201 2026 304,711 2027 -2028 655,891 $ 2,041,093 38 H. Lonci -Term Debt Changes in long -term debt for the year ending September 30, 2021 are as follows: Governmental activities: General Obligation Bonds Certificates of Obligation General Obligation Bonds - Private Placement Tax Notes - Private Placement Premium from Debt Capital Lease Compensated Absences Total governmental Business -type activities: General Obligation Bonds Certificates of Obligation General Obligation Bonds - Private Placement Tax Notes - Private Placement Unamortized Premium Capital Lease Compensated Absences Total business -type Bonds Payable Beginning Refunded/ Ending Amount Due Balance Issued Retired Balance Within One Year $ 34,615,000 $ 7,555,000 $( 8,400,000) $ 33,770,000 $ 2,655,000 15,235,000 - ( 1,035,000) 14,200,000 1,070,000 10,005,000 - ( 3,385,000) 6,620,000 925,000 345,000 - ( 190,000) 155,000 155,000 2,170,381 629,992 ( 298,227) 2,502,146 - 17,134 136,535 ( 17,134) 136,535 27,307 967,540 597,538 ( 387,016) 1,178,062 235,612 $ 63,355,055 $ 8,919,065 $L 13,712,377) $ 58,561,743 $ 5,067,919 $ 2,645,000 $ - $( 590,000) $ 2,055,000 $ 370,000 11,505,000 - ( 850,000) 10,655,000 605,000 1,040,000 - ( 200,000) 840,000 205,000 150,000 - ( 150,000) - - 828,781 - ( 55,979) 772,802 - 132,468 409,606 ( 66,953) 475,121 147,436 249,269 215,291 ( 99,708) 364,852 72,971 $ 16,550,518 $ 624,897 $( 2,012,640) $ 15,162,775 $____1,400,407 The City issues a variety of long -term debt instruments in order to acquire and /or construct major capital facilities and equipment for governmental activities. These instruments include general obligation bonds, certificates of obligation, and tax notes. These debt obligations are secured by primarily future property tax revenues. In some cases, these bonds are also secured by a pledge of net revenues from the utility system, emergency medical services and economic development sales taxes. However, the amount of the formal pledge is generally limited to $1,000. Proprietary operating revenues for the year exceeded $37.5 million and sales tax revenue was $16.8 million. Additionally, certain obligations that were marketed as private placements have been separately identified; however, the terms of these obligations are not significantly different than other obligations and do not have substantive acceleration clauses. Should the City default on these bonds, any registered owner of the obligations is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make payment. In November 2020, the City issued General Obligation Refunding Bonds, Series 2020 in the amount of $7,555,000. These bonds have interest rates ranging form 1.50% to 4.00% and will mature in February 2036. These bonds refunded the General Obligation Refunding Bonds, Series 2011 to provide net present value savings of $1,777,441, including the City's cash contribution of $174,800. The bonds are secured by the City's ad valorem tax revenue. Prior Year Refunding of Debt The City defeased certain outstanding bonds by placing proceeds of new bonds in irrevocable trusts to provide for all future debt service payments. Accordingly, the respective trust accounts and liability for the defeased bonds are not included in the City's financial statements. As of September 30, 2021, the City does not have bonds considered defeased and outstanding. 39 A summary of the terms of long-term debt outstanding at September 30, 2021, is as follows: Total Business-Type Long-Term Obligations 40 $ 13,550,000 Issue Amount Maturity Rate Balance Governmental Activities General Obligation Bonds 2012 Series $ 7,625,080 2032 2.00v+ *,720,000 aUz1 Series, Refunding 8,450,000 2030 2.0% -4.0% 7,800,000 aOzs Series, Refunding 4,185,000 2031 2.0%-3.25v+ 1,140,000 2016 Series 5,880,000 2036 2.0% -4.0% *,595,000 2017 Series 3,935,000 2037 2.0%-4.0% 3,335,000 2Oz8 Series, Refunding 5,830,000 2033 3.125%-5% 4,635,000 2020 Series, Refunding 7,555,000 2036 1.5% -4% 7,555,000 Private Placement obligations aOO7 Series GO 6,000,000 2027 *.07% 2,265,000 au18 Series GO Refunding 6,035,000 2028 2.12% 4,355,000 au1sx Tax Notes 1'020.000 2023 1s4% zss'onu Certificates ofObligation 2nz6 Series A 2'375.000 2036 M%-4.O% 1.495'000 2oz6 Series e 1'175.000 2036 3.0va-3.75m 1.190'000 2017 Series *'yas.nun 2037 3um-3.75% a.ozs'oon 2018 Series *'845'000 2038 s�om sn% 4.180.000 2019 Series *'ozs'nno zoso zs% s% Total Governmental Long-Term Obligations $ 54,745,000 Issue Amount Maturity Rate Balance Business-type Activities General Obligation Bonds zO18 Series, Refunding 2,740,000 2026 3.125vm'5% $ 2,055,000 Certificates ofObligation 2013 Series 4'965'000 2033 2.0%-4,09a 2.275.000 2017 Series 510'000 znzz 3.O%-3.7s% 115'000 2018 Series s'sys'non 2028 3.0m-5,0n" 5.040.000 2019 Series a'*ao'nnn znas 2.5m-5% 3.225.000 Private Placement obligations 2013 Series GO Refunding z'zsn'ouo 2025 2.58m Total Business-Type Long-Term Obligations 40 $ 13,550,000 Annual future debt service requirements of bonded debt as of September 30, 2021, are as follows: Governmental activities: General Obligation Bonds Certificates of Obligation Year Ended General Obligation Bonds Certificates of Obligation Year Ended September 30, Principal Interest Total September 30, Principal Principal Interest Interest Total Total Principal Interest Total 2022 $ 2,655,000 $ 1,341,539 $ 3,996,539 $ 1,070,000 $ 472,219 $ 1,542,219 2023 $ 2,750,000 $ 1,046,890 $ 3,796,890 2023 1,120,000 390,000 432,319 74,500 1,552,319 2024 2,850,000 970,158 3,820,158 2024 1,010,000 410,000 391,244 54,500 1,401,244 2025 2,250,000 889,602 3,139,602 2025 905,000 435,000 352,719 33,375 1,257,719 2026 2,340,000 808,430 3,148,430 2026 825,000 450,000 319,094 11,250 1,144,094 2027 -2031 14,020,000 2,619,068 16,639,068 2027 -2031 3,630,000 - 1,201,041 - 4,831,041 2032 -2036 6,645,000 597,699 7,242,699 2032 -2036 4,245,000 - 575,234 - 4,820,234 2037 -2040 260,000 4,225 264,225 2037 -2040 1,395,000 - 49,616 - 1,444,616 Total $ 33,770,000 $ 8,277,612 $ 42,047,612 $ 14,200,000 $ 3,793,485 $ 17,993,485 2,322,125 $ 10,655,000 $ 3,181,869 $ 13,836,869 Private Placement Debt Private Placement Debt General Obligation Bonds Tax Notes General Year Ended Tax Notes Year Ended September 30, Principal Interest Total Principal Interest Total Total Principal Interest Total 2022 $ 925,000 $ 171,392 $ 1,096,392 $ 155,000 $ 2,387 $ 157,387 2023 224,028 950,000 - 144,740 1,094,740 - - - - 2024 218,739 980,000 - 117,214 - 1,097,214 - - - - 2025 223,321 1,010,000 - 88,758 1,098,758 - - - - 2026 217,774 1,035,000 - 59,428 1,094,428 - - $ - $ - 2027 -2028 883,860 1,720,000 - 36,270 1,756,270 - - - Total $ 6,620,000 $ 617,801 $ 7,237,801 $ 155,000 $ 2,387 $ 157,387 Business -type activities: CFI General Obligation Bonds Certificates of Obligation Year Ended September 30, Principal Interest Total Principal Interest Total 2022 $ 370,000 $ 93,500 $ 463,500 $ 605,000 $ 378,775 $ 983,775 2023 390,000 74,500 464,500 510,000 356,300 866,300 2024 410,000 54,500 464,500 530,000 333,613 863,613 2025 435,000 33,375 468,375 550,000 310,250 860,250 2026 450,000 11,250 461,250 580,000 285,788 865,788 2027 -2031 - - - 3,280,000 1,035,775 4,315,775 2032 -2036 - - - 3,160,000 440,841 3,600,841 2037 -2040 - - - 1,440,000 40,528 1,480,528 Total $ 2,055,000 $ 267,125 $ 2,322,125 $ 10,655,000 $ 3,181,869 $ 13,836,869 Private Placement Debt General Obligation Bonds Tax Notes Year Ended September 30, Principal Interest Total Principal Interest Total 2022 $ 205,000 $ 19,028 $ 224,028 $ - $ $ - 2023 205,000 13,739 218,739 - - - 2024 215,000 8,321 223,321 - - 2025 215,000 2,774 217,774 - - Total $ 840,000 $ 43,860 $ 883,860 $ - $ $ CFI Capital 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, 2021: Assets: Equipment Less: accumulated depreciation Total Future minimum lease payments are as follows: Governmental Business -type Activities Activities $ 136,535 $ 742,573 ( 22,756) ( 331,696) $ 113,779 $____410,877 Governmental Business -type Year Ending September 30, Activities Activities 2022 $ 27,307 $ 147,796 2023 27,307 81,921 2024 27,307 81,921 2025 27,307 81,921 2026 27,307 81,922 Total payments 136,535 475,481 Less: amount representing interest - ( 360) Present value of minimum lease payments $ 136,535 $ 475,121 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 $ 11,352,654 $ 1,123,136 $ 2,499,350 $ 14,975,140 $ 3,194 $ 316 $ 703 $ 4,213 48,897 4,837 10,765 64,499 52,091 5,153 11,468 68,712 779,982 77,165 171,718 1,028,865 1,820,999 180,155 400,903 2,402,057 2,600,981 257,320 572,621 3,430,922 $ 2,653,072 $ 262,473 $ 584,089 $ 3,499,634 Business -type Activities Governmental Water/ Activities Sewer EMS Totals $ 2,203,776 $ 218,023 $ 485,174 $ 2,906,973 71,476 1,990 40,710 114,176 121,849 ( 1,772) 94,777 214,854 $ 193,325 $ 218 $ 135,487 $ 329,030 C Pi A. Retirement Plan Plan Description. The City of Schertz participates as one of 888 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created by the state of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple - employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the system with a six- member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax - qualified plan under Section 401(a) of the Internal Service Code. TMRS issues a publicly available annual comprehensive financial report (ACFR) that can be obtained at www.tmrs.com. All eligible employees of the City are required to participate in TMRS. Benefits Provided. TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the City- financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. The City grants monetary credits for service rendered of a theoretical amount equal to two times what would have been contributed by the employee, with interest. Monetary credits, also known as the matching ratio, are 200% of the employee's accumulated contributions and are only payable in the form of an annuity. Beginning in 2008, the City granted an annually repeating (automatic) basis monetary credit referred to as an updated service credit (USC) which is a theoretical amount that takes into account salary increases or plan improvements. If at any time during their career an employee earns a USC, this amount remains in their account earning interest at 5% until retirement. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer match plus employer- financed monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, initiated in 2008, the City provided on an annually repeating (automatic) basis cost of living adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index (CPI). At the December 31, 2020 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 126 Inactive employees entitled to but not yet receiving benefits 223 Active employees 354 Total 703 Contributions. The contribution rates for employees in TMRS are either 5 %, 6 %, or 7% of employee gross earnings, and the City matching percentages are either 100 %, 150 %, or 200 %, both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 16.32% and 15.92% in calendar years 2021 and 2020, respectively. The City's contributions to TMRS for the year ended September 30, 2021 were $3,700,948 and were equal to the required contributions. Net Pension Liability. The City's Net Pension Liability (NPL) was measured as of December 31, 2020, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. The net pension liability is typically liquidated through the General Fund and Enterprise Funds. 43 Actuarial Assumptions The Total Pension Liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 2.75% per year Investment rate of return 6.75% net of pension plan investment expense, including inflation Salary increases are based on a service - related table. Mortality rates for active members are based on the PUB(10) mortality tables with the Public Safety table used for males and the General Employee table used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender - distinct 2019 Municipal Retirees of Texas mortality tables. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by Scale UMP to account for future mortality improvements. For disabled annuitants, the same mortality tables for healthy retirees is used with a 4 -year set - forward for males and a 3 -year set - forward for females. In addition, a 3.5% and 3.0% minimum mortality rate will be applied to reflect the impairment for younger members who become disabled for males and females. The rates are projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four -year period from December 31, 2014 to December 31, 2018. They were adopted in 2019 and first used in the December 31, 2019 actuarial valuation. The post- retirement mortality assumption for healthy annuitants and Annuity Purchase Rate (APRs) are based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. In conjunction with these changes first used in the December 31, 2013 valuation, the System adopted the Entry Age Normal actuarial cost method and a one -time change to the amortization policy. 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 real rates of return by the target asset allocation percentage and by adding 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) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). Asset Class Long -Term Expected Real Rate of Return Target Allocation (Arithmetic) Core Fixed Income 10.00% 5.30% Non -Core Fixed Income 20.00% 1.25% Global Public Equity 30.00% 4.14% Real Estate 10.00% 3.85% Real Return 10.00% 4.00% Absolute Return 10.00% 3.48% Private Equity 10.00% 7.75% Total 100.0% 44 Discount Rate The discount rate used to measure the Total Pension Liability was 6.75 %. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long -term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. The below schedule presents the changes in the Net Pension Liability as of December 31, 2020: Balance at 12/31/2019 Changes for the year: Service cost Interest Difference between expected and actual experience Change in assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Netchanges Balance at 12/31/2020 Increase (Decease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) -(b) $ 78,211,777 $ 62,639,563 $ 15,572,214 3,761,994 - 3,761,994 5,326,206 - 5,326,206 154,592) - ( 154,592) 3,327,434 - 1,474,466 - 4,760,749 2,372,023) ( 2,372,023) - ( 30,767) - ( 1,200) 6.561.585 7.158.659 ( 3,327,434) ( 1,474,466) ( 4,760,749) 30,767 1,200 ( 597,074) $ 84,773,362 $ 69,798,222 $ 14,975,140 The following presents the net pension liability of the City, calculated using the discount rate of 6.75 %, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower (5.75 %) or 1- percentage point higher (7.75%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (5.75 %) (6.75 %) (7.75 %) Net pension liability $ 29,246,356 $ 14,975,140 $ 3,486,611 Pension Expense and Deferred Outflows /Inflows of Resources Related to Pensions. For the year ended September 30, 2021, the City recognized pension expense of $2,906,973. Also, as of September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Difference between projected and actual investment earnings Contributions subsequent to the measurement date Total C 1-1 Deferred Outflows Deferred Inflows of Resources of Resources $ 173,183 $ 191,035 162,538 2,700,695 $ 3,036,416 1,775,342 $ 1,966,377 $2,700,695 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, 2022. 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, 2022 $( 530,825) 2023 50,171 2024 ( 1,016,088) 2025 ( 130,884) 2026 ( 3,030) 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. Payments from this fund are similar to group -term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides a lump -sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings for the 12 -month period preceding the month of death). The death benefit for retirees is considered an other employment benefit and is a fixed amount of $7,500. Membership in the plan at December 31, 2020, the valuation and measurement date, consisted of: Inactive employees or beneficiaries currently receiving benefits 98 Inactive employees entitled to but not yet receiving benefits 65 Active employees 354 Total 517 Contributions. The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation, which was 0.13% for 2021 and 0.12% for 2020, of which 0.05% and 0.02 %, respectively, 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 year ended September 30, 2021 were $4,575 representing contributions for both active and retiree coverage, which equaled the required contributions each year. C r Total OPEB Liability. The Total OPEB Liability in the December 31, 2020 actuarial valuation was determined using the following actuarial assumptions and inputs: Measurement year ended December 31, Inflation rate Discount rate Actuarial cost method Projected salary increases Administrative expenses Mortality Rates - Service Retirees Mortality Rates - Disabled Retirees 2020 2.50% per annum 2.00% Entry Age Normal Method 3.50% to 11.5% including inflation All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. 2019 Municipal Retirees of Texas Mortality Tables. The rates are projeted on a fully generational bases with scale UMP. 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set forward for males and a 3 year set - forward for females. In addition, a 3.5% and 3% minimum mortality rate will be applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements subject to the floor. Changes in assumptions reflect the annual change in the municipal bond rate. The actuarial assumptions used in the December 31, 2020 valuation were based on the results of an actuarial experience study for the period December 31, 2014 to December 31, 2018. Discount Rate. The SDBF program is treated as an unfunded OPEB plan because the SDBF trust covers both actives and retirees and the assets are not segregated for these groups. As such, a single discount rate of 2.00% was used to measure the total OPEB liability. Because the plan is essentially a "pay -as- you -go" plan, the single discount rate is equal to the prevailing municipal bond rate. The source of the municipal bond rate was fixed - income municipal bonds with 20 years to maturity that include only federally tax - exempt municipal bonds as reported in Fidelity Index's "20 -year Municipal GO AA Index" as of December 31, 2020. Discount Rate Sensitivity Analysis. The following schedule shows the impact of the total OPEB liability if the discount rate used was 1% less than and 1% greater than the discount rate that was used (2.75 %) in measuring the total OPEB liability. 1% Decrease in Discount Rate (1.00 %) Discount Rate (2.00 %) Total SDB OPEB Liability $ 1,306,428 $ 1,033,078 C f1 1% Increase in Discount Rate (3.00 %) 829,320 Changes in the Total OPEB Liability. Total City's Total OPEB Liability (TOL), based on the above actuarial factors, as of December 31, 2020, the measurement and actuarial valuation date, was calculated as follows: Changes in assumptions and other inputs reflect a change in the discount rate from 3.71% to 2.00 %. OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB. For the year ended September 30, 2021, the City recognized OPEB expense of $114,175. Also, as of September 30, 2021, the City reported deferred outflows and inflows of resources related to the TMRS OPEB from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Contributions subsequent to the measurement date Deferred Outflows Deferred Inflows of Resources of Resources 50,917 $ 78,515 266,690 31,884 3,310 - Total $ 320,917 $ 110,399 $3,310 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, 2022. 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 Total OPEB Ended September 30, Liability Balance at 12/31/2019 $ 810,086 Changes for the year: 40,707 Service cost 50,554 Interest 22,915 Difference between expected and actual experience ( 4,382) Changes of assumptions or other inputs 158,118 Benefit payments, including refunds of employee contributions ( 4,213) Net changes 222,992 Balance at 12/31/2020 $ 1,033,078 Changes in assumptions and other inputs reflect a change in the discount rate from 3.71% to 2.00 %. OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB. For the year ended September 30, 2021, the City recognized OPEB expense of $114,175. Also, as of September 30, 2021, the City reported deferred outflows and inflows of resources related to the TMRS OPEB from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Contributions subsequent to the measurement date Deferred Outflows Deferred Inflows of Resources of Resources 50,917 $ 78,515 266,690 31,884 3,310 - Total $ 320,917 $ 110,399 $3,310 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, 2022. 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, 2022 $ 40,707 2023 40,707 2024 40,707 2025 35,388 2026 29,262 Thereafter 20,437 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, 2020, the valuation date, consisted of: Inactive employees or beneficiaries currently receiving benefits 8 Inactive employees entitled to but not yet receiving benefits - Active employees 332 Total 340 48 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. The City's Retiree Health OPEB Liability (TOL) as of December 31, 2020, was calculated as follows: The actuarial valuation was performed as of December 31, 2019, and update procedures were used to roll forward the TOL to December 31, 2020. Changes of assumptions reflect a change in the discount rate from 2.75% as of December 31, 2019 to 2.00% as of December 31, 2020, revised TMRS demographic assumptions, and updates to both the health care trend and participation assumptions. The following presents the TOL of the City, calculated using the discount rate of 2.00% as well as what the City's TOL would be if it were calculated using a discount rate that is 1- percentage point lower (1.00 %) and 1- percentage point higher (3.00%) than the current rate: 1% Decrease in Total OPEB Discount Rate Liability Balance at 12/31/2019 $ 2,163,923 Changes for the year: $ 2,466,556 $ 2,253,746 Service cost 141,084 Interest 60,561 Difference between expected and actual experience 4,341 Changes of assumptions or other inputs 161,146 Benefit payments, including refunds of employee contributions ( 64,499) Netchanges 302,633 Balance at 12/31/2020 $ 2,466,556 The actuarial valuation was performed as of December 31, 2019, and update procedures were used to roll forward the TOL to December 31, 2020. Changes of assumptions reflect a change in the discount rate from 2.75% as of December 31, 2019 to 2.00% as of December 31, 2020, revised TMRS demographic assumptions, and updates to both the health care trend and participation assumptions. The following presents the TOL of the City, calculated using the discount rate of 2.00% as well as what the City's TOL would be if it were calculated using a discount rate that is 1- percentage point lower (1.00 %) and 1- percentage point higher (3.00%) than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (1.00 %) (2.00 %) (3.00 %) Total OPEB liability - retiree health $ 2,697,077 $ 2,466,556 $ 2,253,746 The following presents what the total OPEB liability of the City would be if it were calculated using healthcare cost trend rates that are 1- percentage point lower or 1- percentage point higher than the current healthcare cost trends: 10% Decrease Total OPEB liability - retiree health $ 2,150,561 Current Healthcare Cost Trend Rate Assumption 1% Increase 2,466,556 $ 2,844,413 For the year ended September 30, 2021, the City recognized OPEB expense of $214,856. Also, as of September 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual economic experience Changes in actuarial assumptions Contributions subsequent to the measurement date Total 49 Deferred Outflows Deferred Inflows of Resources of Resources $ 14,419 420,846 61,254 $ 496,519 $ 272,039 57,081 $ 329,120 $61,254 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, 2022. 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, 2022 $ 13,209 2023 13,209 2024 13,209 2025 13,209 2026 13,209 Thereafter 40,100 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 $3,908,231 for the year ended September 30, 2021. 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 $158,006,349 (as of September 30, 2020, the most recent year for which information is available) to provide funds to build, improve, extend, enlarge and repair the Corporation's utility system, fund a reserve, and pay the costs of bond issuance. The bond resolution pledges intergovernmental contract revenues from the cities of Schertz and Seguin (the participating governments) to bond holders. Under the intergovernmental water supply contract, the participating governments are unconditionally obligated to pay their respective shares of annual contract revenue bond debt service from the operation of their respective utility systems. The organizing documents for the Corporation provide that, in the event of dissolution, the net assets of the Corporation will be equally divided among the Cities of Schertz and 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 $15,780,946. This amount reflects the City's portion of the net position of SSLGC as of September 30, 2020, 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 $100,000 for the year ended September 30, 2021. 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 $960,720 as of September 30, 2021. so D. Commitments and Contingencies Tax Increment Financing (the "Zone ") The City is a principal in the City of Schertz Tax Increment Reinvestment Zone #2, pursuant to Chapter 311 of the Texas Tax Code. Under the terms of the Zone agreement, the City of Schertz, Bexar County, and San Antonio River Authority are funding infrastructure improvements through tax increment financing to the Sedona Development Project. At the time the Zone was created, the property tax base was "frozen" and increment taxes resulting from the increases to property tax base are being used to finance Zone improvements. The total projected cost is a combined figure of $45,000,000. Project costs of the developer will be funded up to 100% of the tax increment generated by the City of Schertz, Bexar County, and San Antonio River Authority (SARA). The City of Schertz (combined with SARA) have committed up to $32,877,000 of the total $45,000,000. The Zone has a statutory termination date of December 31, 2027. The TIRZ has collected $3,514,642 from taxing entities (net of administrative reimbursements) and remitted $2,625,000 to the developer as of September 30, 2021. 380 Agreements The Chapter 380 Incentive program, authorized by Chapter 380 of the Texas Local Government Code, enables the City of Schertz to provide grants or reimbursements from the City's general fund. To become eligible for Chapter 380 Incentives, projects must: create at least of $100 million in new real and personal property; or generate at least $35 million in gross sales that is subject to the collection of local sales and use tax. Businesses that have a 380 Incentive agreement with the City are eligible to receive a reimbursement of taxes paid for the year if they have met the requirements outlined in the agreement by a certain date each year. For the fiscal year ended September 30, 2021, the City reimbursed $621,736 in property taxes paid. Economic Development Incentive Agreements The City of Schertz Economic Development Corporation (the SEDC) negotiates economic development incentive agreement on behalf of the SEDC and the City of Schertz (the City) on an individual basis. As of September 30, 2021, the City had nine active incentive agreements. On May 2, 2017, the City and the Corporation approved the Schertz Incentive Policy which outlines the City's primary tools to attract commercial investment and promote economic development. Projects are selected on a case -by -case basis in accordance current policy and state laws at the discretion of the governing body. All incentive agreements are formalized through a performance agreement with specified terms and recapture criteria. The SEDC Incentive program, authorized by Chapters 501, 502 and 505 of the Texas Local Government Code, enables the Corporation to fund allowable projects from the collection of one -half of one percent of sales tax proceeds collected in the City of Schertz. In accordance with state law, the SEDC Incentive Policy establishes grants and loans for businesses that create Primary Jobs for the following categories: Existing Businesses (3 years of operation within City), Small Businesses (fewer than 50 full -time jobs or annual sales less than $10 million), Large Impact Businesses (Up to $100 million in taxable property), and Extra Large Businesses (over $100 million in taxable property). The City and Corporation's outstanding incentive agreement grants are as follows: City of Schertz - LGC 380.001 SEDC - LGC 501.101 SEDC - LGC 501.103 1-7 1 FY 2020 -21 Amt. Est. Remaining Grant 99,784 $ 99,000 224,384 192,150 - 3,158,000 Service Concession Arrangement 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 $782,371. 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, 2021, 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 $782,371 on the government -wide statements at year -end pursuant to the service concession arrangement, and a liability of $475,410 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 2022 $ 165,000 $ 247,750 $ 412,750 2023 170,000 242,800 412,800 2024 175,000 237,700 412,700 2025 180,000 232,450 412,450 2026 185,000 225,250 410,250 2027 -2031 1,050,000 1,008,450 2,058,450 2032 -2036 1,280,000 778,600 2,058,600 2037 -2041 1,610,000 445,650 2,055,650 2042 -2044 1,140,000 92,400 1,232,400 Total $ 5,955,000 $ 3,511,050 $ 9,466,050 i- J Construction Commitments The City of Schertz has entered into commitments for various projects as follows: Primary Government: Estimated Project Expended to Estimated Future Cost to City Date Commitment Governmental Activities: FM 78 and Main Street $ 1,000,000 $ 457,027 $ 542,973 Fire Station 3 8,601,639 8,601,639 - Pedestrian Routes Project 1,214,002 1,214,002 - YMCA- Bathroom Reovation 549,746 549,746 - Elbel Road Rehabilitation 1,783,000 125,133 1,657,867 Total Governmental Commitments 13,148,387 10,947,547 2,200,840 Business -Type Activities: Woman Hollering Wastewater 5,940,424 1,227,281 4,713,143 Corbett Elevated Water Tank 5,500,000 5,156,942 343,058 FM1103 Utility Relocation 1,351,645 1,351,645 - Crest Oak Sewer Line 1,000,000 16,555 983,445 Corbett Ground Storage 4,965,545 114,254 4,851,291 Aviation Heights WL Replacement 2,185,484 88,123 2,097,362 Transmission Main 16" 2,500,000 417,795 2,082,205 FM1518 Utility Relocation 600,000 410,081 189,919 Total Business -Type Activities 24,043,098 8,782,675 15,260,423 Total Estimated Future Commitments $ 37,191,485 $ 19,730,222 $ 17,461,263 Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City contracts with the Texas Municipal League Intergovernmental Risk Pool, a public entity risk pool currently operating as a common risk management and insurance program providing insurance coverage in the following areas: general liability, automobile liability and physical damage, law enforcement liability, worker's compensation, real and personal property, mobile equipment, and errors and omissions liability. TML is a multi - employer group that provides for a combination of risk sharing among pool participants and stop loss coverage. Contributions are set annually by the provider. Liability by the City is generally limited to the contributed amounts. There were no significant increases or decreases in coverage from the prior year. For the past three fiscal years, no claims or settlements have exceeded deductible amounts. E. Subsequent Events In October 2021, the City issued General Obligation Refunding Bonds, Series 2021 in the amount of $6,015,000. These bonds have interest rates ranging from 2.00% and 3.00% and will mature in February 2028. These bonds will be used to refund the General Obligation Bonds, Series 2012 and the Tax and Limited Pledge Revenue Certificates of Obligation, Series 2013 to provide a present value savings and are secured by the City's ad valorem tax revenue. In January 2022, the City issued Combination Tax and Limited Pledge Revenue Certificates of Obligation, Series 2022 in the amount of $9,390,000. These certificates have interest rates ranging from 2.125% and 3.00% and will mature in February 2032. These certificates will be used to fund multiple public improvement projects and are secured by the City's ad valorem tax revenue and utility system revenue. 53 F. New Accounting Standards Significant new accounting standards issued by the Governmental Accounting Standards Board (GASB) not yet implemented by the City include the following: 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 2022. Statement No. 96, Subscription -Based Information Technology Arrangements - This Statement provides guidance on the accounting and financial reporting for subscription -based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right -to -use subscription asset —an intangible asset —and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended. This Statement will become effective for the City in fiscal year 2023. 54 THIS PAGE LEFT BLANK INTENTIONALLY 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, 2021 w Variance With Final Budget Original Final Actual Positive Budget Budget Amounts (Negative) REVENUES Taxes $ 26,282,550 $ 26,282,550 $ 27,913,222 $ 1,630,672 Permits and fees 1,824,110 1,824,110 1,593,382 ( 230,728) Service fees 1,834,581 1,834,581 1,628,589 ( 205,992) Fines and fees 904,028 904,028 637,638 ( 266,390) Intergovernmental 1,127,550 1,127,550 1,623,282 495,732 Investment earnings 135,000 135,000 29,147 ( 105,853) Miscellaneous 579,200 579,200 781,333 202,133 Total Revenues 32,687,019 32,687,019 34,206,593 1,519,574 EXPENDITURES General government: Council 134,488 134,988 105,990 28,998 City manager 1,276,356 1,279,134 1,249,953 29,181 Municipal court 367,740 368,465 343,557 24,908 311 customer relations 113,869 115,869 115,149 720 Planning & zoning 696,149 664,403 220,518 443,885 Legal 150,000 170,000 158,366 11,634 City secretary 208,840 211,340 204,992 6,348 Nondepartmental 1,974,475 1,627,428 1,831,744 ( 204,316) Public affairs 628,421 639,026 603,791 35,235 Engineering 878,126 921,126 870,161 50,965 Citizens assistance 330,000 330,000 290,617 39,383 Special events 32,100 32,100 20,915 11,185 Total General Government 6,790,564 6,493,879 6,015,753 478,126 Public safety: Police department 10,172,679 10,298,956 9,955,404 343,552 Fire department 6,150,356 6,684,628 6,696,315 ( 11,687) Inspection 1,023,497 1,024,222 974,333 49,889 Total Public Safety 17,346,532 18,007,806 17,626,052 381,754 Public environment: Streets 1,567,620 1,569,740 1,413,808 155,932 Total Public Environment 1,567,620 1,569,740 1,413,808 155,932 Parks and recreation: Parks 1,586,590 1,753,716 1,661,873 91,843 Pools 569,878 569,878 536,674 33,204 Community /Civic Center 393,047 393,047 307,776 85,271 Total Parks and Recreation 2,549,515 2,716,641 2,506,323 210,318 Cultural: Library 1,062,442 1,074,255 1,040,276 33,979 Total Cultural 1,062,442 1,074,255 1,040,276 33,979 w CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 M Variance With Final Budget Original Final Actual Positive Budget Budget Amounts (Negative) EXPENDITURES (CONTINUED) Administration: Information technology 2,637,316 2,638,646 2,517,578 121,068 Human resources 717,584 761,719 666,390 95,329 Finance 651,798 693,967 687,036 6,931 Purchasing & asset management 243,431 244,519 247,912 ( 3,393) Building maintenance 1,631,808 1,863,808 1,663,631 200,177 Fleet service 1,061,752 1,083,597 1,025,477 58,120 Interfund charges ( 2,893,732) ( 2,893,732) ( 2,893,814) 82 Total Administration 4,049,957 4,392,524 3,914,210 478,314 Total Expenditures 33,366,630 34,254,845 32,516,422 1,738,423 Excess of revenues over expenditures ( 679,611) ( 1,567,826) 1,690,171 3,257,997 OTHER FINANCING SOURCES (USES) Proceeds from capital lease - - 136,535 136,535 Transfers in 95,000 95,000 - ( 95,000) Transfers out ( 592,050) ( 2,259,279) ( 2,317,117) ( 57,838) Total Other Financing Sources (Uses) ( 497,050) ( 2,164,279) ( 2,180,582) ( 16,303) NET CHANGE IN FUND BALANCE ( 1,176,661) ( 3,732,105) ( 490,411) 3,241,694 FUND BALANCE - BEGINNING 16,968,978 16,968,978 16,968,978 - FUND BALANCE - ENDING $ 15,792,317 $ 13,236,873 $ 16,478,567 $ 3,241,694 M THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL ECONOMIC DEVELOPMENT CORPORATION REVENUES Taxes Investment income Total Revenues EXPENDITURES Current: General government Administration Total Expenditures FOR THE YEAR ENDED SEPTEMBER 30, 2021 3,521,830 3,521,330 306,025 3,215,305 572,969 573,469 528,442 45,027 4,094,799 4,094,799 834,467 3,260,332 OTHER FINANCING SOURCES (USES) Variance With Transfers out ( 4,050,000) ( 4,050,000) ( Final Budget Original Final Actual Positive Budget Budget Amounts (Negative) $ 4,507,371 $ 4,507,371 $ 5,615,928 $ 1,108,557 141,000 141,000 56,144 ( 84,856) 4,648,371 4,648,371 5,672,072 1,023,701 3,521,830 3,521,330 306,025 3,215,305 572,969 573,469 528,442 45,027 4,094,799 4,094,799 834,467 3,260,332 OTHER FINANCING SOURCES (USES) Transfers out ( 4,050,000) ( 4,050,000) ( 4,050,000) - Total Other Financing Sources (Uses) ( 4,050,000) ( 4,050,000) ( 4,050,000) - NET CHANGE IN FUND BALANCE ( 3,496,428) ( 3,496,428) 787,605 4,284,033 FUND BALANCE - BEGINNING 21,018,626 21,018,626 21,018,626 - FUND BALANCE - ENDING $ 17,522,198 $ 17,522,198 $ 21,806,231 $ 4,284,033 PE THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS NOTES TO BUDGETARY SCHEDULES SEPTEMBER 30, 2021 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 occupancy 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. 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, 2021, actual expenditures did not exceed budgeted expenditures at the fund level for any of the City's funds. Encumbrance accounting, in which appropriations are recorded as budgetary expenditures, is not utilized by the City. 58 CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS TEXAS MUNICIPAL RETIREMENT SYSTEM FOR THE YEAR ENDED SEPTEMBER 30, 2021 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 2020 2019 2018 $ 3,761,994 $ 3,421,878 $ 3,301,265 5,326,206 4,898,478 4,505,483 ( 154,592) ( 108,478) 34,393 - 263,015 - ( 2,372,023) ( 2,244,447) ( 1,914,159) 6,561,585 6,230,446 5,926,982 78,211,777 71,981,331 66,054,349 $ 84,773,362 $ 78,211,777 $ 71,981,331 $ 3,327,434 $ 3,163,340 $ 3,033,936 1,474,466 1,380,585 1,326,518 4,760,749 8,093,416 ( 1,540,890) ( 2,372,023) ( 2,244,447) ( 1,914,159) ( 30,767) ( 45,681) ( 29,768) ( 1,200) ( 1,373) ( 1,554) 7,158,659 10,345,840 874,083 62,639,563 52,293,723 51,419,640 69,798,222 62,639,563 52,293,723 $ 14,975,140 $ 15,572,214 $ 19,687,608 82.34% 80.09% 72.65% $ 21,063,794 $ 19,722,641 $ 18,896,766 71.09% 78.96% 104.19% 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. 59 2017 2016 2015 2014 $ 3,073,538 $ 2,855,745 $ 4,111,517 3,763,562 416,585 139,216 ( 1,843,774) ( 1,581,272) 5,757,866 5,177,251 60,296,483 55,119,232 2,724,337 $ 3,556,428 120,434 59,193 ( 1,570,211) 4,890,181 50,229,051 2,558,743 3,245,266 ( 122,286) ( 1,068,487) 4,613,236 45,615,815 $ 66,054,349 $ 60,296,483 $ 55,119,232 $ 50,229,051 $ 2,793,644 $ 2,627,335 $ 1,232,232 1,152,864 5,999,805 2,602,572 ( 1,843,774) ( 1,581,272) ( 31,080) ( 29,385) ( 1,575) ( 1,583) 8,149,252 4,770,531 43,270,388 38,499,857 2,542,565 $ 2,403,929 1,095,260 1,077,097 53,742 1,841,586 ( 1,570,211) ( 1,068,487) ( 32,727) ( 19,219) ( 1,616) ( 1,580) 2,087,013 4,233,326 36,412,844 32,179,518 51,419,640 43,270,388 38,499,857 36,412,844 $ 14,634,709 $ 17,026,095 $ 16,619,375 $ 13,816,207 77.84% 71.76% 69.85% 72.49% $ 17,603,310 $ 16,478,620 $ 15,648,114 $ 15,389,154 83.14% 103.32% 106.21% 60 89.78% CITY OF SCHERTZ, TEXAS SCHEDULE OF EMPLOYER CONTRIBUTIONS TEXAS MUNICIPAL RETIREMENT SYSTEM FOR THE YEAR ENDED SEPTEMBER 30, 2021 Fiscal Year Ended September 30, Actuarially determined contribution Contributions in relation to the actuarially determined contribution Contribution deficiency (excess) Covered payroll Contributions as a percentage of covered payroll 2021 2020 2019 $ 3,700,948 $ 3,235,479 $ 3,129,413 3,700,948 3,235,479 3,129,413 22,879,083 20,401,412 19,520,269 16.18% 15.86% 16.03% 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 25 years Asset valuation method 10 year smoothed market; 12% soft corridor Inflation 2.5% Salary increases 3.50% to 11.50% 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 2019 valuation pursuant to an experience study of the period 2014 -2018. Mortality Post - retirement: 2019 Municpal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale LIMP. Pre - retirement: PUB(10) mortality tables, with the Public Safety table used for males and the General Employee table used for females. The rates are projected on a fully generational basis with scale LIMP. 61 2018 2017 2016 2015 $ 2,971,592 $ 2,756,511 $ 2,592,593 $ 2,487,856 2,971.592 18,605,654 15.97% 756,511 2,592,593 17, 347, 849 15.89% 16,175,988 16.03% 62 2.487,856 15,486,735 16.06% CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN TMRS OTHER POST - EMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Measurement Date December 31, 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 2020 2019 2018 2017 $ 50,554 $ 33,528 $ 37,794 $ 29,926 22,915 26,904 21,182 20,123 ( 4,382) ( 105,282) 86,276 - 158,118 148,494 ( 54,027) 57,257 ( 4,213) ( 3,945) ( 3,779) ( 3,521) 222,992 99,699 87,446 103,785 810,086 710,387 622,941 519,156 $ 1,033,078 $ 810,086 $ 710,387 $ 622,941 $ 21,063,794 $ 19,722,641 $ 18,896,766 $ 17,603,310 4.90% 4.11% 3.76% 3.54% 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 11.50% including inflation Discount rate 2.00% Administrative expenses All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. Mortality rates - service retirees 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. Mortality rates - disabled retirees 2019 Municipal Retirees of Texas Mortality Tables with a 4 year setforward for males and a 3 year set - forward for females. In addition, a 3.5% and 3% minimum mortality rate will be applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the 3% floor. Other information No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement No. 75 to pay related benefits. Changes in actuarial assumptions reflect changes in the discount rate and, in 2019, changes in assumptions adopted from review of plan provisions. 63 CITY OF SCHERTZ, TEXAS SCHEDULE OF CHANGES IN CITY RETIREE HEALTH OTHER POST - EMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED SEPTEMBER 30, 2021 Measurement Date December 31, 2020 2019 2018 2017 Total OPEB liability Service cost Interest on total OPEB liability Difference in actuarial experience Change of assumptions Benefit payments Net change in total OPEB liability Total OPEB liability, beginning Total OPEB liability, ending (a) Covered payroll Total OPEB liability as a percentage of covered payroll $ 141,084 $ 125,648 $ 121,821 $ 107,517 60,561 78,646 67,947 69,435 4,341 ( 343,086) 14,962 - 161,146 275,398 ( 81,106) 96,092 ( 64,499) ( 59,401) ( 57,530) ( 42,189) 302,633 77,205 66,094 230,855 2,163,923 2,086,718 2,020,624 1,789,769 $ 2,466,556 $ 2,163,923 $ 2,086,718 $ 2,020,624 $ 20,870,983 $ 19,521,924 $ 18,974,951 $ 16,068,891 11.82% 11.08% 11.00% 12.57% 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. Valuation Date: NOTES TO SCHEDULE December 31, 2020 Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Individual entry -age Discount rate 2.00% as of December 31, 2020 Inflation 2.50% Salary increases 3.50% to 11.50% including inflation Demographic assumptions Based on the experience study covering the four -year period ending December 31, 2018 as conducted for the Texas Municipal Retirement System (TMRS). Mortality For healthy retirees, the gender- distinct 2019 Municipal Retirees of Texas mortality tables are used. The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP tables to account for future mortality improvements. Health care trend rates Initial rate of 7.00% declining to an ultimate rate of 4.15% after 15 years. Participation rates For all non - Medicare retirees, 30% if retiring from age 50 to 59, and 35% if retiring from age 60 to 64. Other information The discount rate changed from 2.75% as of December 31, 2019 to 2.00% as of December 31, 2020. 64 THIS PAGE LEFT BLANK INTENTIONALLY SUPPLEMENTARY INFORMATION Comparative Schedules — Governmental Funds General Fund Economic Development Corporation Debt Service Fund Capital Projects Fund American Recovery Program Act 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. Grant Fund - will account for revenue and expenditures related to federal and state grant programs. Library Advisory Board - to account for certain fees generated at the library to be used by the Board for general improvements to the Library. Historical Committee Fund - will account for funds received for the preservation of the history of the City. Capital Recovery Roadways Fund - to account for a fee assessed for capital recovery on new construction. THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS GENERAL FUND SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) ASSETS Cash and cash equivalents Investments Receivables (net of allowances) Taxes Accounts and other Due from other funds Inventory Prepaid items 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 Prepaid items 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 65 2021 2020 816,152 11,733,703 $ 13,417,484 2,514,059 2,507,998 2,924,472 2,393,311 1,636,735 1,854,763 678,444 - 134,373 99,871 28,090 14,916 946,454 867,708 20,596,330 21,156,051 921,978 1,180,560 1,007 60,492 16,139 40,589 2,220,765 972,066 1,074,546 141,987 123,911 16,139 39,159 2,367,808 1,896,998 1,819,265 1,896,998 1,819,265 134,373 99,871 28,090 14,916 287,199 226,092 816,152 823,452 889,139 807,140 42,416 33,408 - 2,109 116,505 104,156 907,676 687,780 902,849 891,319 598,549 1,081,160 11,755,619 12,197,575 16,478, 567 16,968,978 $ 20,596,330 $ 21,156,051 CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED 2020) 66 2021 2020 REVENUES Taxes $ 27,913,222 $ 25,000,163 Permits and fees 1,593,382 1,750,837 Service fees 1,628,589 1,724,150 Fines and fees 637,638 833,148 Intergovernmental 1,623,282 516,475 Investment earnings 29,147 300,369 Miscellaneous 781,333 559,393 Total Revenues 34,206,593 30,684,535 EXPENDITURES Current: General government 6,008,482 5,381,790 Public safety 17,166,400 15,690,248 Public environment 1,382,185 1,270,894 Parks and recreation 2,494,684 2,067,649 Cultural 1,040,276 1,034,435 Administration 3,858,317 2,799,004 Capital outlay 566,078 1,175,241 Debt service: Principal - 44,544 Total Expenditures 32,516,422 29,463,805 Excess (Deficiency) of Revenues Over Expenditures 1,690,171 1,220,730 OTHER FINANCING SOURCES (USES) Proceeds from capital lease 136,535 - Transfers out ( 2,317,117) ( 4,000,169) Total Other Financing Sources (Uses) ( 2,180,582) ( 4,000,169) NET CHANGE IN FUND BALANCE ( 490,411) ( 2,779,439) FUND BALANCES - BEGINNING 16,968,978 19,748,417 FUND BALANCES - ENDING $ 16,478,567 $ 16,968,978 66 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) 67 2021 2020 ASSETS Cash and cash equivalents $ 18,542,752 $ 22,032,946 Investments 2,206,135 2,169,760 Receivables, net of allowances: Taxes 1,054,214 818,817 Accounts and other 7,949 7,949 Prepaid items 990 - Total Assets 21,812,040 25,029,472 LIABILITIES Accounts payable 5,809 4,010,846 Total Liabilities 5,809 4,010,846 FUND BALANCES Restricted for: Economic development 21,806,231 21,018,626 Total Fund Balances 21,806,231 21,018,626 Total Liabilities and Fund Balances $ 21,812,040 $ 25,029,472 67 CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE ECONOMIC DEVELOPMENT CORPORATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR THE YEAR ENDED 2020) REVENUES Taxes Investment earnings Total Revenues EXPENDITURES Current: General government Administration Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures OTHER FINANCING SOURCES (USES) Transfers out Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCE FUND BALANCES - BEGINNING FUND BALANCES - ENDING 68 2021 $ 5,615,928 56,144 5,672,072 306,025 528,442 834,467 4,837,605 ( 4,050,000) ( 4,050,000) 787,605 21,018,626 $ 21,806,231 2020 :: 288,740 5,108,028 4,886,456 480,202 5,366,658 ( 258,630) ( 500,000) ( 500,000) ( 758,630) 21,777,256 $ 21,018,626 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS DEBT SERVICE FUND SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) 69 2021 2020 ASSETS Cash and cash equivalents $ 1,087,376 $ 785,919 Receivables, net of allowances: Taxes 133,778 120,816 Total Assets 1,221,154 906,735 DEFERRED INFLOWS OF RESOURCES Unavailable revenues 133,778 120,816 Total Deferred Inflows of Resources 133,778 120,816 FUND BALANCES Restricted for: Debt service 1,087,376 785,919 Total Fund Balances 1,087,376 785,919 Total Deferred Inflows of Resources and Fund Balances $ 1,221,154 $ 906,735 69 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, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) OTHER FINANCING SOURCES (USES) Issuance of refunding debt - - 7,555,000 7,555,000 - Premium on refunding debt Variance With 629,992 - Payment to refunding escrow agent - - ( 8,223,452) ( 8,223,452) - 2021 Final Budget 2020 Total Other Financing Sources (Uses) Original Final Actual Positive Actual FUND BALANCE - BEGINNING Budget Budget Amounts (Negative) Amounts REVENUES Property taxes $ 6,980,821 $ 6,980,821 $ 7,102,016 $ 121,195 $ 6,714,516 Investment income 15,000 15,000 1,593 ( 13,407) 19,900 Miscellaneous 100,000 100,000 125,000 25,000 75,000 Total Revenue 7,095,821 7,095,821 7,228,609 132,788 6,809,416 EXPENDITURES Debt service: Principal 5,065,000 5,065,000 4,955,000 110,000 4,885,000 Interest and fiscal charges 1,979,861 1,979,861 1,801,467 178,394 2,136,523 Bond issue costs 50,000 50,000 140,140 ( 90,140) 4,200 Total Expenditures 7,094,861 7,094,861 6,896,607 198,254 7,025,723 Excess (Deficiency) of Revenues over Expenditures 960 960 332,002 ( 65,466) ( 216,307) OTHER FINANCING SOURCES (USES) Issuance of refunding debt - - 7,555,000 7,555,000 - Premium on refunding debt - - 629,992 629,992 - Payment to refunding escrow agent - - ( 8,223,452) ( 8,223,452) - Transfers in - - 7,915 7,915 - Total Other Financing Sources (Uses) - - ( 30,545) ( 30,545) - NET CHANGE IN FUND BALANCE 960 960 301,457 300,497 ( 216,307) FUND BALANCE - BEGINNING 785,919 785,919 785,919 - 1,002,226 FUND BALANCE - ENDING $ 786,879 $ 786,879 $ 1,087,376 $ 300,497 $ 785,919 70 CITY OF SCHERTZ, TEXAS COMPARATIVE BALANCE SHEETS CAPITAL PROJECTS FUND SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) ASSETS Cash and cash equivalents Accounts receivable, net of allowance Total Assets LIABILITIES Accounts payable Retainage payable Total Liabilities FUND BALANCES Restricted for: Capital improvement Committed for: Capital projects Total Fund Balances Total Liabilities and Fund Balance 71 2021 $ 13,229,954 258,142 13,488,096 162,695 154,437 317,132 I1 E $ 10,677,080 10,677,080 428,387 111,135 539,522 5,185,166 6,065,616 7,985,798 13,170,964 $ 13,488,096 4,071,942 10,137,558 $ 10,677,080 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS COMPARATIVE SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CAPITAL PROJECTS FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARTIVE TOTALS FOR THE YEAR ENDED 2020) 72 2021 2020 REVENUES Intergovernmental $ 724,993 $ - Investment earnings 12,333 154,977 Miscellaneous 501,922 132,901 Total Revenues 1,239,248 287,878 EXPENDITURES Capital outlay 4,582,289 7,837,991 Total Expenditures 4,582,289 7,837,991 Excess (Deficiency) of Revenues Over Expenditures ( 3,343,041) ( 7,550,113) OTHER FINANCING SOURCES (USES) Transfers in 6,384,362 4,500,000 Transfers out ( 7,915) - Total Other Financing Sources (Uses) 6,376,447 4,500,000 NET CHANGE IN FUND BALANCE 3,033,406 ( 3,050,113) FUND BALANCES - BEGINNING 10,137,558 13,187,671 FUND BALANCES - ENDING $ 13,170,964 $ 10,137,558 72 CITY OF SCHERTZ, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2021 LIABILITIES Accounts payable 3,613 - 13,000 - Due to other funds - - - - Total Liabilities 3,613 - 13,000 - FUND BALANCES Restricted for: Tourism development 2,301,716 - - - Parks and tree mitigation - 287,017 647,896 - Police forfeiture - - - 32,560 Roadways - - - - Historical Committee and library - - - - Unassigned - - - - Total Fund Balances 2,301,716 287,017 647,896 32,560 Total Liabilities and Fund Balances $ 2,305,329 $____287,_017 $____660,896 $_____32,_560 W Special Revenue Funds Hotel Occupancy Park Tree Treasury Fund Fund Mitigation Forfeitures ASSETS Cash and cash equivalents $ 2,240,387 $ 287,017 $ 660,896 $ 32,560 Accounts receivable, net of allowance 64,942 - - - Total Assets 2,305,329 287,017 660,896 32,560 LIABILITIES Accounts payable 3,613 - 13,000 - Due to other funds - - - - Total Liabilities 3,613 - 13,000 - FUND BALANCES Restricted for: Tourism development 2,301,716 - - - Parks and tree mitigation - 287,017 647,896 - Police forfeiture - - - 32,560 Roadways - - - - Historical Committee and library - - - - Unassigned - - - - Total Fund Balances 2,301,716 287,017 647,896 32,560 Total Liabilities and Fund Balances $ 2,305,329 $____287,_017 $____660,896 $_____32,_560 W 96,824 4,779 - - - - - 64,564 - - ( 675,043) - 96,824 4,779 ( 675,043} 64,564 - 2,301,716 - - 934,913 - 134,163 - 1,801,040 1,801,040 14,298 - 78,862 - - ( 675,043) 14,298 1,801,040 4,575,651 $____128,310 $ 4,779 $______6,287 $ 64,697 $ 14,398 $ 1,801,040 $ 5,305,313 74 Capital Special Revenue Funds Projects Fund Library Historical Capital Total Nonmajor Justice State Grant Advisory Committee Recovery Governmental Forfeitures Forfeitures Fund Board Fund Roadways Funds $ 128,310 $ 4,779 $ 6,287 $ 64,697 $ 14,398 $ 1,801,040 $ 5,240,371 - - - - - - 64,942 128,310 4,779 6,287 64,697 14,398 1,801,040 5,305,313 31,486 - 2,886 133 100 - 51,218 - - 678,444 - - - 678,444 31,486 - 681,330 133 100 - 729,662 96,824 4,779 - - - - - 64,564 - - ( 675,043) - 96,824 4,779 ( 675,043} 64,564 - 2,301,716 - - 934,913 - 134,163 - 1,801,040 1,801,040 14,298 - 78,862 - - ( 675,043) 14,298 1,801,040 4,575,651 $____128,310 $ 4,779 $______6,287 $ 64,697 $ 14,398 $ 1,801,040 $ 5,305,313 74 CITY OF SCHERTZ, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2021 REVENUES Occupancy tax Permits and fees Service fees Fines and fees Intergovernmental 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 Total Other Financing Sources (Uses) NET CHANGE IN FUND BALANCES FUND BALANCES - BEGINNING FUND BALANCES - ENDING Special Revenue Funds Hotel Occupancy Park Tree Treasury Fund Fund Mitigation Forfeiture $ 518,921 $ - $ - $ - - - 219,513 - 2,095 293 650 - 521,016 293 220,163 - 263,300 - - - - 4,500 35,495 - 72,464 - - - - 1,012 - - 335,764 5,512 35,495 - 185,252 ( 5,219} 184,668 - 185,252 ( 5,219) 184,668 - 2,116,464 292,236 463,228 32,560 $ 2,301,716 $ 287,017 $ 647,896 $ 32,560 M Capital Special Revenue Funds Projects Fund Library Historical Capital Total Nonmajor Justice State Grant Advisory Committee Recovery Governmental Forfeitures Forfeitures Fund Board Fund Roadways Funds $ - $ - $ - $ - $ - $ - $ 518,921 - - - - - - 219,513 - - - 9,104 590 902,712 912,406 5,844 - - - - - 5,844 - - 1,931,599 - - - 1,931,599 176 - - 111 - 1,828 5,153 - - - 13 2 - 15 6,020 - 1,931,599 9,228 592 904,540 3,593,451 - - - - 3,108 - 266,408 94,899 7,995 535,124 - - - 638,018 - - - - - - 39,995 - - - 19,708 - - 19,708 - - - - - - 72,464 24,750 - - - - 41,127 66,889 119,649 7,995 535,124 19,708 3,108 41,127 1,103,482 ( 113,629) ( 7,995) 1,396,475 ( 10,480) ( 2,516} 863,413 2,489,969 - - - - 3,109 - 3,109 - - - - 3,109 - 3,109 ( 113,629) ( 7,995) 1,396,475 ( 10,480} 593 863,413 2,493,078 210,453 12,774 ( 2,071,518) 75,044 13,705 937,627 2,082,573 $ 96,824 $ 4,779 $( 675,043) $ 64,564 $ 14,298 $ 1,801,040 $ 4,575,651 M CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOTEL OCCUPANCY FUND REVENUES Occupancy tax Investment earnings Total Revenues EXPENDITURES Current: General government Administration Capital outlay Total Expenditures FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) 181,466 226,354 263,300 ( 36,946) 95,954 72,464 72,464 72,464 - 74,428 - - - - 223,189 253,930 298,818 335,764 ( 36,946) 393,571 NET CHANGE IN FUND BALANCE 286,820 241,932 185,252 ( 56,680) ( 98,401) FUND BALANCE - BEGINNING FUND BALANCE - ENDING 2,116,464 2,116,464 2,116,464 - 2,214,865 $ 2,403,284 $ 2,358,396 $___2,301,716 $( 56,680) $ 2,116,464 EN Variance With 2021 Final Budget 2020 Original Final Actual Positive Actual Budget Budget Amounts (Negative) Amounts $ 520,000 $ 520,000 $ 518,921 $( 1,079) $ 268,946 20,750 20,750 2,095 ( 18,655) 26,224 540,750 540,750 521,016 ( 19,734) 295,170 181,466 226,354 263,300 ( 36,946) 95,954 72,464 72,464 72,464 - 74,428 - - - - 223,189 253,930 298,818 335,764 ( 36,946) 393,571 NET CHANGE IN FUND BALANCE 286,820 241,932 185,252 ( 56,680) ( 98,401) FUND BALANCE - BEGINNING FUND BALANCE - ENDING 2,116,464 2,116,464 2,116,464 - 2,214,865 $ 2,403,284 $ 2,358,396 $___2,301,716 $( 56,680) $ 2,116,464 EN CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL PARK FUND REVENUES Licenses and permits Investment earnings Investment earnings Total Revenues EXPENDITURES Current: Parks and recreation Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) 25,000 25,000 4,500 20,500 5,760 100,000 100,000 1,012 98,988 - 125,000 125,000 5,512 119,488 5,760 ( 51,500) ( 51,500) ( 5,219) ( 192,695) 1,566 292,236 292,236 292,236 - 290,670 $ 240,736 $_____240,736 $ 287,017 $ 46,281 $ 292,236 78 Variance With 2021 Final Budget 2020 Original Final Actual Positive Actual Budget Budget Amounts (Negative) Amounts $ 70,000 $ 70,000 $ - $( 70,000) $ 4,000 3,500 3,500 293 ( 3,207) 3,325 - - - - 1 73,500 73,500 293 ( 73,207) 7,326 25,000 25,000 4,500 20,500 5,760 100,000 100,000 1,012 98,988 - 125,000 125,000 5,512 119,488 5,760 ( 51,500) ( 51,500) ( 5,219) ( 192,695) 1,566 292,236 292,236 292,236 - 290,670 $ 240,736 $_____240,736 $ 287,017 $ 46,281 $ 292,236 78 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL TREE MITITGATION FUND REVENUES Licenses and permits Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: Parks and recreation Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) 70,000 70,000 35,495 34,505 28,674 70,000 70,000 35,495 34,505 28,674 4,500 4,500 184,668 180,168 29,822 463,228 463,228 463,228 - 433,406 $___467 728 $ 467,728 $ 647,896 $ 180,168 $ 463,228 79 Variance With 2021 Final Budget 2020 Original Final Actual Positive Actual Budget Budget Amounts (Negative) Amounts $ 70,000 $ 70,000 $ 219,513 $ 149,513 $ 52,427 4,500 4,500 650 ( 3,850) 5,569 - - - - 500 74,500 74,500 220,163 145,663 58,496 70,000 70,000 35,495 34,505 28,674 70,000 70,000 35,495 34,505 28,674 4,500 4,500 184,668 180,168 29,822 463,228 463,228 463,228 - 433,406 $___467 728 $ 467,728 $ 647,896 $ 180,168 $ 463,228 79 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE TREASURY FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) REVENUES Fines and fees Total Revenues EXPENDITURES Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 80 2021 2020 $ - $ 4,400 4,400 206 206 - 4,194 32,560 28,160 $ 32,560 $ 32,354 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE JUSTICE FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) REVENUES Fines and fees Investment earnings Total Revenues EXPENDITURES Current: Public safety Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 81 2021 2020 $ 5,844 $ 35,444 176 2,747 6,020 38,191 94,899 42,063 24,750 40,465 119,649 82,528 ( 113,629) ( 44,337) 210,453 254,790 $ 96,824 $ 210,453 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE STATE FORFEITURES FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) 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 82 2021 2020 $ - $ 7,665 7,665 7,995 - 7,995 - ( 7,995) 7,665 12,774 5,109 $ 4,779 $ 12,774 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPEDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY ADVISORY BOARD REVENUES Service fees Investment earnings Miscellaneous Total Revenues EXPENDITURES Current: Cultural Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) 21,200 21,200 19,708 1,492 10,456 21,200 21,200 19,708 1,492 10,456 ( 10,480) ( 10,480) ( 398) 75,044 75,044 75,044 - 75,442 $ 75,044 $ 75,044 $ 64,564 $( 10,480) $ 75,044 83 Variance With 2021 Final Budget 2020 Original Final Actual Positive Actual Budget Budget Amounts (Negative) Amounts $ 20,000 $ 20,000 $ 9,104 $( 10,896) $ 9,204 1,000 1,000 111 ( 889) 850 200 200 13 ( 187) 4 21,200 21,200 9,228 ( 11,972) 10,058 21,200 21,200 19,708 1,492 10,456 21,200 21,200 19,708 1,492 10,456 ( 10,480) ( 10,480) ( 398) 75,044 75,044 75,044 - 75,442 $ 75,044 $ 75,044 $ 64,564 $( 10,480) $ 75,044 83 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, 2021 (WITH COMPARATIVE ACTUAL TOTALS FOR 2020) REVENUES Sale of merchandise Miscellaneous Total Revenues EXPENDITURES Current: General government Total Expenditures Excess of Revenues Over Expenditures OTHER FINANCING SOURCES (USES) Variance With 2021 Final Budget Original Final Actual Positive Budget Budget Amounts (Negative) $ 1,000 $ 1,000 $ 590 $( 410) $ 2 2 1,000 1,000 592 ( 408) 2020 Actual Amounts 43 43 11,750 11,750 3,108 8,642 169 11,750 11,750 3,108 8,642 169 ( 7,641) 169 ( 10,750) ( 10,750) ( 2,516) 8,234 ( 126) Transfers in 10,750 10,750 3,109 ( 7,641) 169 Total Other Financing Sources (Uses) 10,750 10,750 3,109 ( 7,641) 169 NET CHANGE IN FUND BALANCE - - 593 593 43 FUND BALANCE - BEGINNING 13,705 13,705 13,705 - 13,662 FUND BALANCE - ENDING $ 13,705 $ 13,705 $ 14,298 $ 593 $ 13,705 84 CITY OF SCHERTZ, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE CAPITAL RECOVERY ROADWAYS FOR THE YEAR ENDED SEPTEMBER 30, 2021 (WITH COMPARATIVE TOTALS FOR 2020) REVENUES Service fees Investment earnings Total Revenues EXPENDITURES Capital outlay Total Expenditures NET CHANGE IN FUND BALANCE FUND BALANCE - BEGINNING FUND BALANCE - ENDING 85 2021 2020 $ 902,712 $ 850,201 1,828 1,973 904,540 852,174 41,127 - 41,127 - 863,413 852,174 937,627 85,453 $ 1,801,040 $ 937,627 STATISTICAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY STATISTICAL SECTION (Unaudited) This part of the City of Schertz, Texas Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well -being have changed over time. 86-95 Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue sources. 96- 104 Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 105- 110 Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. 111 - 114 Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 115- 120 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 $ 53,071,836 $ 2012 2013 2014 2015 Governmental activities - - Net investment in capital assets $ 56,616,809 $ 57,543,618 $ 62,792,671 $ 68,125,738 Restricted 1,917,098 7,788,354 10,401,728 13,343,280 Unrestricted 8,907,326 6,645,418 8,613,239 1,640,519 Total Governmental Activities Net Position $ 67,441,233 $ 71,977,390 $ 81,807,638 $ 83,109,537 Business -type activities Net investment in capital assets $ 50,161,157 $ 53,071,836 $ 53,674,437 $ 59,625,205 Restricted - - - - Unrestricted 11,577,645 11,902,282 16,450,988 14,243,922 Total Business -Type Activities Net Position $ 61,738,802 $ 64,974,118 $ 70,125,425 $ 73,869,127 Primary government Net investment in capital assets $ 106,777,966 $ 110,615,454 $ 116,467,108 $ 127,750,943 Restricted 1,917,098 7,788,354 10,401,728 13,343,280 Unrestricted 20,484,971 18,547,700 25,064,227 15,884,441 Total Primary Government Net Position $ 129,180,035 $ 136,951,508 $ 151,933,063 $ 156,978,664 86 TABLE 1 Fiscal Year 2016 2017 2018 2019 2020 2021 $ 74,237,004 $ 84,537,238 $ 89,266,885 $ 89,869,766 $ 88,959,102 $ 98,444,714 17,095,325 20,437,116 23,391,047 28,088,355 28,664,438 28,342,438 2,231,341 1,673,567 2,351,236 2,920,717 4,157,801 10,744,127 $ 93,563,670 $ 106,647,921 $ 115,009,168 $ 120,878,838 $ 121,781,341 $ 137,531,279 $ 64,210,231 $ 70,361,035 $ 64,871,629 $ 68,271,075 $ 75,969,319 $ 83,941,882 - 10,565,463 12,626,526 13,232,638 15,071,599 8,368,736 15,737,470 20,781,291 20,870,671 33,254,008 30,570,717 39,406,798 $ 79,947,701 $ 101,707,789 $ 98,368,826 $ 114,757,721 $ 121,611,635 $ 131,717,416 $ 138,447,235 $ 154,898,273 $ 154,138,514 $ 158,140,841 $ 164,928,421 $ 182,386,596 17,095,325 20,437,116 23,391,047 41,320,993 43,736,037 36,711,174 17,968,811 22,454,858 35,848,433 36,174,725 34,728,518 50,150,925 $ 173,511,371 $ 197,790,247 $ 213,377,994 $ 235,636,559 $ 243,392,976 $ 269,248,695 87 CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Fiscal Year 2012 2013 2014 2015 Expenses 2,230,800 1,974,637 1,840,547 2,216,385 Governmental activities: 16,349,967 16,954,871 17,762,116 18,440,959 General government $ 7,802,092 $ 7,066,087 $ 6,958,530 $ 6,443,227 Public safety 9,103,676 9,567,595 10,025,703 10,836,712 Public environment 3,586,087 3,622,834 3,740,538 3,876,644 Parks and recreation 1,584,605 1,807,559 1,807,136 2,164,604 Cultural 916,967 907,676 870,159 892,194 Health 357,658 344,647 407,114 470,468 Administration 1,117,044 1,180,656 1,942,312 1,845,877 Interest and other fees 2,302,912 3,340,951 2,352,856 2,226,635 Total Governmental Activities Expenses 26,771,041 27,838,005 28,104,348 28,756,361 Business -type activities: 2,230,800 1,974,637 1,840,547 2,216,385 Water and sewer 16,349,967 16,954,871 17,762,116 18,440,959 EMS 3,758,425 3,959,445 4,268,125 4,719,526 Total Business -Type Activities Expenses 20,108,392 20,914,316 22,030,241 23,160,485 764,997 234,084 220,264 336,252 Total Primary Government Expenses 46,879,433 48,752,321 50,134,589 51,916,846 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 2,286,488 2,230,800 1,974,637 1,840,547 2,216,385 2,516,547 2,536,476 2,603,476 541,512 721,222 917,639 794,003 279,267 305,932 309,897 325,178 36,746 38,149 32,429 26,744 764,997 234,084 220,264 336,252 1,178,573 1,531,740 5,756,456 5,509,530 7,303,968 7,578,474 11,747,798 11,435,730 17,411,568 17,696,327 19,147,872 20,700,369 3,561,114 4,459,600 4,533,753 4,415,126 828,853 1,301,235 2,809,110 4,158,552 21,801,535 23,457,162 26,490,735 29,274,047 29,105,503 31,035,636 38,238,533 40,709,777 Net(expense)revenue: Governmental activities ( 19,467,073) ( 20,259,531) ( 16,356,550) ( 17,320,631) Business -type activities 1,693,143 2,542,846 4,460,494 6,113,562 Total Primary Government Net Expense ( 17,773,930) ( 17,716,685) ( 11,896,056) ( 11,207,069) 88 TABLE 2 Fiscal Year 2016 2017 2018 2019 2020 2021 $ 6,557,778 $ 6,253,926 $ 7,421,918 $ 6,534,013 $ 10,310,363 $ 7,298,193 12,141,968 13,061,120 13,899,278 15,448,886 16,575,191 19,008,871 4,147,653 4,460,540 4,930,723 5,495,192 8,825,099 5,364,408 2,034,964 2,859,974 2,707,292 3,022,278 3,012,134 3,395,458 954,871 1,004,747 1,042,085 1,119,650 1,089,564 1,087,975 570,204 776,494 724,780 516,890 596,288 - 1,954,276 3,052,102 3,067,983 3,853,255 3,419,407 4,360,229 2,240,783 2,355,714 2,125,687 2,196,180 2,028,065 1,797,520 30,602,497 33,824,617 35,919,746 38,186,344 45,856,111 42,312,654 20,269,111 21,346,078 23,579,854 25,608,390 24,349,219 25,280,964 5,004,110 6,006,178 6,110,407 6,529,631 6,051,296 7,784,670 25,273,221 27,352,256 29,690,261 32,138,021 30,400,515 33,065,634 55.875.718 61.176.873 65.610.007 70.324.365 76.256.626 75.378.288 1,507,252 874,737 1,013,698 947,538 836,246 651,211 2,415,537 4,131,548 4,104,911 3,177,329 3,276,129 3,079,945 - - - 138,920 850,201 902,712 788,727 544,460 640,231 484,495 331,174 528,886 326,079 330,412 313,668 311,575 299,944 285,792 30,308 29,742 27,930 21,101 26,304 - 342,485 552,878 776,942 692,042 2,113,673 1,925,939 6,227,664 10,043,483 4,744,489 1,319,793 531,096 7,959,576 11,638,052 16,507,260 11,621,869 7,092,793 8,264,767 15,334,061 22,003,794 25,390,713 27,099,237 27,333,475 29,709,279 27,724,929 5,921,223 6,366,894 6,092,559 6,596,618 6,114,891 7,709,027 2,831,126 6,111,474 3,132,348 1,975,524 292,408 6,935,191 30,756,143 37,869,081 36,324,144 35,905,617 36,116,578 42,369,147 42,394,195 54,376,341 47,946,013 42,998,410 44,381,345 57,703,208 ( 18,964,445) ( 17,317,357) ( 24,297,877) ( 31,093,551) ( 37,591,344) ( 26,978,593) 5,482,922 10,516,825 6,633,883 3,767,596 5,716,063 9,303,513 ( 13,481,523) ( 6,800,532) ( 17,663,994) ( 27,325,955) ( 31,875,281) ( 17,675,080) 89 CITY OF SCHERTZ, TEXAS CHANGE IN NET POSITION LAST TEN FISCAL YEARS (ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Source: City financial statements 90 Fiscal Year 2012 2013 2014 2015 General Revenues and Other Changes in Net Position Governmental activities: Taxes Ad valorem $ 11,298,204 $ 12,359,146 $ 12,794,172 $ 14,139,037 Sales 7,968,212 9,637,097 10,553,382 10,315,125 Franchise fees 1,647,712 1,681,079 2,073,162 2,263,783 Hotel /motel 470,290 503,267 552,570 563,734 Mixed drink 28,586 30,421 39,917 43,656 Investment income 60,265 54,270 43,279 56,820 Miscellaneous 621,560 505,268 180,316 197,881 Transfers ( 62,294) 25,140 ( 50,000) ( 42,235) Total Governmental Activities 22,032,535 24,795,688 26,186,798 27,537,801 Business -type activities: Interest and investment earnings 36,409 53,089 31,810 47,728 Miscellaneous 666,645 664,521 609,003 344,731 Transfers 62,294 ( 25,140) 50,000 42,235 Total Business -Type Activities 765,348 692,470 690,813 434,694 Total Primary Government 22,797,883 25,488,158 26,877,611 27,972,495 Change in Net Position Governmental activities 2,565,462 4,536,157 9,830,248 10,217,170 Business -type activities 2,458,491 3,235,316 5,151,307 6,548,256 Total Primary Government $ 5,023,953 $ 7,771,473 $ 14,981,555 $ 16,765,426 Source: City financial statements 90 TABLE 2 Fiscal Year 2016 2017 2018 2019 2020 2021 $ 15,131,997 10,921,489 2,250,815 544,871 43,073 187,847 309,275 29,211 29,418,578 $ 16,166,006 10, 844, 503 2,208,373 499,466 42,699 448,408 182,754 9,399 30,401,608 $ 17,018,950 12,668,555 2,393,182 520,424 43,395 909,985 283,496 19,186 33,857,173 102,642 211,466 532,367 522,221 475,733 453,374 ( 29,211) ( 9,399) ( 19,186 595.652 677,800 966,555 30,014,230 31,079,408 34,823,728 10,454,133 13, 084, 251 9,559,296 6,078,574 11,194,625 7,600,438 $ 16,532,707 $ 24,278,876 $ 17,159,734 91 $ 19,151,005 $ 12,506,879 2,357,150 514,679 60,518 1,470,258 984,257 ( 81,525) 36,963,221 855,216 267,788 81,525 1,204,529 19,844,912 $ 14,432,152 2,305,225 268,946 70,139 804,674 767,779 21,463,804 16,838,731 2,305,108 518,921 68,730 104,613 1,408,270 38,493,827 42,708,177 431,555 68,354 706,296 754,268 1,137,851 822,622 38,167,750 39,631,678 43,530,799 5,869,670 902,503 15,729,584 4,972,125 6,853,914 10,126,135 $ 10,841,795 $ 7,756,417 $ 25,855,719 CITY OF SCHERTZ, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) All other governmental funds Restricted $ 22,462,562 $ 22,742,237 $ 19,261,995 $ 21,191,968 Committed - 165,000 31,718 - Assigned 347,191 244,937 31,177 6,657 Unassigned - - - - Total all other governmental funds $ 22,809,753 $ 23,152,174 $ 19,324,890 $ 21,198,625 Source: Balance Sheets - Governmental Funds in City's ACFRs. 92 2012 2013 2014 2015 General fund Non - spendable $ 186,003 $ 925,291 $ 110,253 $ 117,084 Restricted 1,275,501 1,599,487 1,701,408 1,748,374 Committed - - - - Assigned 322,656 456,034 694,916 785,005 Unassigned 2,560,667 4,206,734 5,587,262 7,280,240 Total general fund $ 4,344,827 $ 7,187,546 $ 8,093,839 $ 9,930,703 All other governmental funds Restricted $ 22,462,562 $ 22,742,237 $ 19,261,995 $ 21,191,968 Committed - 165,000 31,718 - Assigned 347,191 244,937 31,177 6,657 Unassigned - - - - Total all other governmental funds $ 22,809,753 $ 23,152,174 $ 19,324,890 $ 21,198,625 Source: Balance Sheets - Governmental Funds in City's ACFRs. 92 TABLE 3 2016 2017 2018 2019 2020 2021 $ 220,503 $ 98,263 $ 94,876 $ 131,925 $ 114,787 $ 162,463 1,929,636 1,994,905 2,027,125 2,196,037 1,996,357 2,151,411 - - - - 687,780 907,676 752,503 854,198 3,080,557 5,580,626 1,972,479 1,501,398 8,509,467 9,976,169 12,548,013 9,228,612 12,197,575 11,755,619 $ 11,412,109 $ 12,923,535 $ 17,750,571 $ 17,137,200 $ 16,968,978 $ 16,478,567 $ 27,252,908 $ 35,721,031 $ 37,772,240 $ 39,009,399 $ 32,024,252 $ 33,329,710 342,519 454,376 454,376 687,779 4,071,942 7,985,798 6,743 - - - - - - - - - ( 2,071,518) ( 675,043) $ 27,602,170 $ 36,175,407 $ 38,226,616 $ 39,697,178 $ 34,024,676 $ 40,640,465 93 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 2012 2013 2014 2015 $ 21,401,991 $ 24,181,863 $ 26,021,730 $ 27,348,297 1,363,461 1,609,954 1,805,047 1,731,302 1,547,007 1,739,387 1,763,964 1,797,151 2,027,613 1,927,744 1,750,311 1,534,588 1,000,413 492,332 221,769 393,607 969,921 767,110 671,731 689,805 28,310,406 30,718,390 32,234,552 33,494,750 7,094,834 6,311,276 5,981,439 5,582,441 8,690,849 9,113,840 9,409,894 10,158,401 976,327 951,528 1,012,607 952,663 1,398,692 1,412,329 1,338,232 1,658,197 845,124 840,595 815,691 821,146 346,318 341,961 394,918 404,008 1,249,557 1,289,078 2,270,041 2,056,646 1,299,843 3,277,397 8,000,467 2,314,668 2,704,898 3,217,325 3,695,597 3,918,008 2,313,510 2,381,171 2,108,610 2,112,746 254,971 31,750 165,650 7,992 27,174,923 29,168,250 35,193,146 29,986,916 1,135,483 14,370,000 175,473 ( 6,698,421) 139,635 ( 201,929) 7,784,758 $ 8,920,241 19.5% 1,550,140 ( 2,958,594) 1,635,000 788,084 ( 788,084) 1,635,000 $ 3,185,140 21.6% 8,583,715 686,137 ( 9,182,250) 1,243,833 ( 1,293,832) 37,603 $( 2,920,991) 21.3% 3,507,834 245,000 989,120 ( 1,031,355) 202,765 $ 3,710,599 Source: Statement of Revenues, Expenditures, and Changes in Fund Balance for Governmental Funds. 94 21.3% TABLE 4 2016 2017 2018 2019 2020 2021 $ 28,865,727 $ 29,720,578 $ 32,632,702 $ 34,590,008 $ 36,802,913 $ 41,150,087 1,493,336 2,540,045 2,557,056 1,635,461 1,807,264 1,812,895 1,789,321 2,132,299 2,159,193 2,070,293 2,583,598 2,540,995 1,441,474 1,217,621 1,049,989 953,614 880,657 643,482 401,494 397,073 609,131 1,057,681 951,604 4,582,874 1,741,436 1,897,153 1,761,285 2,454,515 1,572,473 1,512,883 35,732,788 37,904,769 40,769,356 42,761,572 44,598,509 52,243,216 5,657,998 5,394,918 6,327,133 5,881,647 10,364,369 6,580,915 11,048,767 11,870,636 12,728,222 13,985,443 15,366,593 18,107,418 1,007,326 1,128,979 1,136,052 1,112,041 1,270,894 1,382,185 1,528,356 1,885,915 1,697,872 2,393,487 2,102,083 2,534,679 869,162 921,870 955,153 1,018,109 1,044,891 1,059,984 480,175 672,934 628,054 498,871 589,616 - 2,015,573 2,912,855 3,015,239 3,795,233 3,353,634 4,459,223 10,192,398 5,492,196 7,708,625 9,083,572 9,276,886 5,215,256 4,040,975 4,473,174 4,744,116 4,565,000 4,929,544 4,955,000 1,896,911 2,113,679 2,099,190 2,069,215 2,136,523 1,801,467 449,358 214,280 129,417 189,082 4,200 140,140 - - - 5,489,912 - - 39,186,999 37,081,436 41,169,073 50,081,612 50,439,233 46,236,267 ( 3,454,211) 823,333 ( 399,717) ( 7,320,040) ( 5,840,724) 6,006,949 10,750,000 8,870,000 4,887,829 4,620,000 - 136,535 4,185,000 - 6,035,000 5,225,000 - 7,555,000 590,432 381,931 269,212 6401115 - 629,992 ( 4,215,482) - ( 6,159,623) - - ( 8,223,452) 863,583 438,803 777,487 120,503 4,500,169 6,395,386 ( 834,371) ( 429,404) ( 758,302) ( 202,028) ( 4,500,169) ( 6,375,032) 11,339,162 9,261,330 5,051,603 10,403,590 - 118,429 $ 7,884,951 $ 10,084,663 $ 4,651,886 $ 3,083,550 $( 5,840,724) $ 6,125,378 20.5% 20.4% 22.2% 17.3% 16.2% 19.9% m CITY OF SCHERTZ, TEXAS GOVERNMENTAL FUNDS TAX REVENUES BY SOURCE LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING) (UNAUDITED) Fiscal Property Sales & Use Franchise Year Tax Tax Tax Mixed Beverage 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 2020 19,726,451 14,432,152 2,305,225 70,139 2021 21,418,597 16,838,731 2,305, 108 68,730 M Hotel TABLE 5 Bingo Occupancy Total $ - $ 470,290 $ 21,401,991 - 503,267 24,181,863 31 552,570 26,021,730 103 563,734 27,348,297 1 544,870 28,865,727 31 499,466 29,720,578 11 520,424 32,632,704 24 514,679 34,590,032 24 268,946 36,802,937 24 518,921 41,150,111 97 Fiscal Year Ended September 30, 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 CITY OF SCHERTZ, TEXAS TOTAL WATER AND SEWER CONSUMPTION AND RATES LAST TEN FISCAL YEARS Total Water & Sewer Consumption (In Gallons) 1,629,336,300 1,982,664,200 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 98 Water & Sewer Base Rate 38.15 38.15 37.15 35.61 34.35 30.11 26.54 24.38 22.69 22.69 TABLE 6 Water & Sewer Initial Rate Per 1.000 Gallons 6.97 6.97 6.84 6.53 6.21 5.73 5.43 5.17 4.84 4.84 CITY OF SCHERTZ, TEXAS TABLE 7 PRINCIPAL WATER AND SEWER CONSUMERS LAST TEN FISCAL YEARS TOTAL 76,208,600 4.68% 92,272,800 5.75% Total City Water Consumption 1,629,336,300 1,604,952,300 99 2021 2012 Percentage Percentage Total of Total of Water Total City Water Total City Consumption Water Consumption Water TAXPAYERS (In Gallons) Rank Consumption (In Gallons) Rank Consumption Caterpillar 20,975,100 1 1.29% City of Cibolo 17,972,200 2 1.10% Republic Beverage Company 5,824,300 3 0.36% Sysco 8,056,600 4 0.49% 18,163,300 2 1.13% Colgate Inc. 4,209,200 5 0.26% 6,766,200 4 0.42% Silver Tree Nursing Rehab. 4,203,100 6 0.26% 6,304,900 6 0.39% IPT San Antonio Logistics 4,173,400 7 0.26% 4,444,100 9 0.28% YMCA 4,067,200 8 0.25% Atrium Inn 3,396,200 9 0.21% Manco Structures 3,331,300 10 0.20% Lions Fut Ball Club 25,141,000 1 1.57% Beck Readymix Concrete 8,567,600 3 0.53% IPT San Antonio Logistics 6,447,400 5 0.40% Manco Structures 6,275,400 7 0.39% Big Time Management 5,966,500 8 0.37% City of Schertz (Soccor Field) 4,196,400 10 0.26% TOTAL 76,208,600 4.68% 92,272,800 5.75% Total City Water Consumption 1,629,336,300 1,604,952,300 99 CITY OF SCHERTZ, TEXAS TABLE 8 DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 100 City Direct Rates Overlapping School Districts Schertz- Cibolo- Fiscal Basic Debt Universal Comal Year Rate Service Total City ISD ISD 2021 0.3470 0.1651 0.5121 1.4106 1.2757 2020 0.3496 0.1650 0.5146 1.4200 1.3200 2019 0.3497 0.1649 0.5146 1.4900 1.3200 2018 03248 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 03164 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 Overlapping Counties Bexar Community Fiscal Bexar Hospital River College Corral Guadalupe Year County District Authority District County County 2021 0.2624 0.2762 0.0186 0.1492 0.3224 0.3854 2020 0.2774 0.2762 0.0186 0.1492 0.3224 0.3319 2019 0.2774 0.2762 0.0186 0.1492 0.2952 0.3319 2018 0.2928 0.2762 0.0173 0.1492 0.3078 0.3799 2017 0.2928 0.2762 0.0173 0.1492 0.2928 0.3851 2016 0.2929 0.2762 0.0173 0.1492 0.2929 0.3851 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 100 CITY OF SCHERTZ, TEXAS TABLE 9 PRINCIPAL PROPERTY OF TAX PAYERS CURRENT YEAR AND NINE YEARS AGO 2021 2012 Taxpayer Taxable Assessed Value Rank Percentage of Total City Taxable Assessed Value Taxable Assessed Value Rank Percentage of Total City Taxable Assessed Value SYSCO San Antonio, Inc. $ 141,147,340 1 3.28% $ 44,955,071 2 2.28% Caterpillar Inc. 107,425,724 2 2.49% 39,710,625 3 2.02% Amazon Com Services Inc 83,888,434 3 1.95% Texas Circle 161 LLC 58,777,703 4 1.36% Rebublic Beverage Company 57,556,210 5 1.34% 47,821,320 1 2.43% Colfin 2018 -3 Industrial Owner LLC 51,009,011 6 1.18% 1290 Entertainment LLC 19,923,909 7 0.46% H.E.Butt Grocery Co. 18,099,778 8 0.42% EM Limited Partnership 17,800,000 9 0.41% Piret(Doer Lane) Holdings LLC 17,536,180 10 0.41% Capital Group Companies Inc. 23,928,015 4 1.22% San Antonio MTA Lp 23,026,185 5 1.17% Capital Group Companies Inc. 17,587,923 6 0.89% SC Schertz LLC 16,900,000 7 0.86% Eye Care Centers of America Inc. 14,471,578 8 0.74% Salof Properties II LLC 14,300,000 9 0.73% Wal -Mart Real Estate Business Trust 13,137,327 10 0.67% Totals $ 573,164,289 13.31% $ 255,838,044 12.99% Total Taxable Assessed Value $ 4,306,840,068 $ 1,968,808,829 101 THIS PAGE LEFT BLANK INTENTIONALLY CITY OF SCHERTZ, TEXAS TABLE 10 PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) 102 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 2021 $ 22,011,090 $ 21,787,625 98.98% $ - $ 21,787,625 98.98% 2020 20,854,329 20,758,493 99.54% 68,692 20,827,185 99.87% 2019 19,922,568 19,825,244 99.51% 85,062 19,910,306 99.94% 2018 18,010,824 17,899,825 99.38% 71,342 17,971,167 99.78% 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% 102 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 2021 2020 $ 3,060,963,760 $ 1,505,592,717 2020 2019 3,004,686,341 1,613,615,732 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 *Taxable Assessed Value is before any applicable freeze adjustments. Source: Bexar, Comal and Guadalupe County Appraisal Districts. 103 TABLE 11 104 Total Taxable Total Tax - Exempt Other Assessed Direct Property Property Value* Tax Rate $ (716,028,336) $ 276,109,231 $ 4,070,815,340 0.5121 (716,028,336) 250,185,870 4,152,459,607 0.5146 (621,773,006) 260,571,835 3,900,769,022 0.5146 (757,265,921) 146,860,809 3,647,504,903 0.4911 (649,173,041) 132,002,406 3,375,850,131 0.4911 (544,328,535) 130,353,515 3,037,267,611 0.4974 (460,271,461) 135,084,054 2,752,562,574 0.4974 (340,747,650) 107,013,520 2,600,365,551 0.4999 (285,245,142) 105,837,429 2,411,270,623 0.4843 (262,591,896) 102,952,090 2,363,893,708 0.4493 104 General Fiscal Obligation Year Bonds 2021 40,390,000 2020 44,620,000 2019 48,320,000 2018 52,752,896 2017 56,613,614 2016 56,352,272 2015 53,410,128 2014 56,487,433 2013 58,693,750 2012 60,878,759 CITY OF SCHERTZ, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental Activities Certificates of Obliaation 14,200,000 15,415,000 16,235,000 13,636,966 9,011,415 4,057,189 277,801 543,934 801,767 1,581,300 Tax Capital Notes Lease 155,000 345,000 530,000 715,000 1,230,000 1,740,000 1,210,000 1,585,000 2,155,000 190,000 105 136,535 25,695 25,699 34,264 25,147 58,321 91,495 123,370 22,398 60,190 Business -TVDe Activities Certificates Revenue of Bonds Obligation - $ 10,655,000 - 11,200,000 - 12,330,000 - 13,211,178 - 8,174,779 - 8,331,966 - 8,946,153 - 9,561,204 2,215,000 5,048,233 2,342,656 5,383,700 Business -Type Activities TABLE 12 General Obligation Bonds Capital Lease Tax Notes Total Primary Government Percent of Gross Income Per Capita $ 2,895,000 $ 475,121 $ - $ 68,906,656 4.25% 1,619 3,685,000 134,662 150,000 75,575,357 4.50% 1,769 4,445,000 199,421 460,000 82,545,120 5.60% 1,932 2,127,657 289,553 765,000 83,532,514 5.98% 2,028 2,533,626 92,721 1,065,000 75,076,605 6.22% 1,996 3,014,595 162,262 1,360,000 75,076,605 6.39% 1,979 3,490,564 231,803 1,640,000 69,297,944 5.99% 1,830 3,966,533 347,705 65,000 72,680,179 6.35% 1,992 2,127,502 - 130,000 71,193,650 6.50% 1,982 2,413,471 - 190,000 73,040,076 8.15% 2,117 106 CITY OF SCHERTZ, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS TABLE 13 General Bonded Debt Outstanding $ 43,285,000 Less: Percentage of General Certificates Amounts Actual Taxable Fiscal Obligation of Available for Value of Per Year Bonds Obligation Debt Service Total Property Capita 2021 $ 43,285,000 $ 24,855,000 $ (934,899) $ 67,205,101 1.65% 1,558 2020 46,223,908 15,801,473 ( 1,051,874) 60,973,507 1.47% 1,481 2019 54,687,960 16,834,029 ( 1,084,908) 70,437,081 1.81% 1,785 2018 54,880,553 13,636,966 ( 809,427) 67,708,092 1.86% 1,785 2017 59,147,240 9,011,415 ( 924,989) 67,233,666 1.99% 1,776 2016 59,366,867 4,057,189 ( 813,306) 62,610,750 2.06% 1,716 2015 56,900,692 277,801 ( 847,178) 56,331,315 2.05% 1,568 2014 60,453,966 543,934 ( 517,199) 60,480,701 2.33% 1,753 2013 60,821,252 801,767 ( 227,674) 61,395,345 2.55% 1,830 2012 63,292,230 1,581,300 ( 117,250) 64,756,280 2.74% 2,418 107 CITY OF SCHERTZ, TEXAS TABLE 14 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT [aIl] 10:1►1i�11ye\ 7 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable* Debt Debt repaid with property taxes: Alamo CCD $ 437,790,000 0.32% $ 1,400,928 Bexar County 1,541,429,243 0.32% 4,932,574 Bexar County Hospital District 916,855,010 0.32% 2,933,936 Comal County 130,723,964 4.18% 5,464,262 Comal ISD 725,695,179 4.42% 32,075,727 Guadalupe County 17,905,000 20.10% 3,598,905 Schertz- Cibolo- Universal ISD 384,573,190 48.29% 185,710,393 Subtotal, Overlapping Debt City Governmental Activities Direct Debt TOTAL NET OVERLAPPING DEBT 236,116,724 54,881,535 $ 290,998,259 NOTES: The overlapping debt was received from the Municipal Advisory Council of Texas. Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. Overlapping debt is the proportionate share of the debts of local jurisdictions located wholly or in part within the limits of the City of Shertz. This schedule is intended to demonstrate the total debt that the City of Shertz property tax payers will be expected to repay. The amount of debt applicable to the City of Schertz is computed by (a) determining what portion of total assessed value of the overlapping jurisdiction lies within the limits of the City and (b) applying this percentage to the total governmental activities debt of the overlapping jurisdiction. 108 Assessed Value, 2020 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 TABLE 15 $ 4,070,815,340 $ 407,081,534 $ 54,881,535 ( 934,899) 53,946,636 $ 353,134,898 15.28% 109 Fiscal Year 2016 2017 2018 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 61,181,169 65,792,916 66,329,699 Total Debt Margin $ 276,403,844 $ 298,957,574 $ 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 $ 218,452,758 $ 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 $ 199,536,987 109 CITY OF SCHERTZ, TEXAS TABLE 16 PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS NOTE: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. Operating expenses do not include the depreciation, interest, or amortization expenses. 110 Water Revenue Bonds Utility Less: Net Debt Service Fiscal Service Operating Available Year Charges Expenses Revenue Principal Interest Coverage 2021 $ 28,030,614 $ 22,231,246 $ 5,799,368 $ 1,856,953 $ 515,413 2.44 2020 29,735,911 24,032,772 5,703,139 1,961,953 612,643 2.22 2019 27,246,250 22,622,986 4,623,264 1,845,132 561,880 1.92 2018 27,099,237 20,802,263 6,296,974 1,671,134 391,609 3.05 2017 25,390,713 18,697,162 6,693,551 1,554,541 368,390 3.48 2016 22,003,794 17,603,487 4,400,307 1,441,741 417,346 2.37 2015 20,700,369 15,916,597 41783,772 1,448,407 428,912 2.55 2014 19,147,872 15,246,653 3,901,219 1,010,500 426,100 2.72 2013 17,696,327 14,553,274 3,143,053 728,800 359,680 2.89 2012 17,411,568 14,185,126 3,226,442 697,100 396,968 2.95 NOTE: Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. Operating expenses do not include the depreciation, interest, or amortization expenses. 110 CITY OF SCHERTZ, TEXAS TABLE 17 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Fiscal Year Population Personal Income Per Capita Personal Income Median Age Education Level in Years of Schooling School Enrollment Unemployment Rate 2021 43,125 $ 1,641,725,625 $ 38,069 37.6 16.2 15,887 3.9% 2020 42,734 1,680,129,944 39,316 37.4 16.2 15,675 5.1% 2019 41,948 1,473,255,708 35,121 38.0 16.2 15,925 2.7% 2018 41,182 1,396,481,620 33,910 37.3 15.9 15,817 3.2% 2017 39,453 1,266,046,770 32,090 37.2 15.9 15,497 3.8% 2016 37,938 1,175,319,240 30,980 36.9 15.8 15,460 3.4% 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% 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. 111 CITY OF SCHERTZ, TEXAS TOP TEN PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO TABLE 18 Source: City Economic Development Corporation 2021 2012 Percentage Percentage of Total City of Total City Employer Employees Employment Employees Employment Schertz- Cibolo- Universal City ISD 2,000 10.40% 944 5.86% Amazon 1,302 6.80% Sysco Central Texas, Inc 827 4.30% 582 3.62% Republic National Distributing Company 639 3.30% 250 1.55% Fed Ex Ground - Doerr Lane, Schertz 580 3.00% Brandt Companies 527 2.70% 300 1.86% City of Schertz 400 2.10% 344 2.14% FedEx Freight 340 1.80% 141 0.88% Visionworks 300 1.60% 542 3.37% Hollingsworth Logistics Group 286 1.50% Wal -mart Stores 385 2.39% H.E.B Grocery Co. 346 2.15% Valero Diamond Distribution 170 1.06% TOTAL 7,201 37.50% 4,004 24.88% Source: City Economic Development Corporation CITY OF SCHERTZ, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENTAL EMPLOYEES BYFUNCTION LAST TEN FISCAL YEARS Full-Time Equivalent | of September ]O Function 2012 2013 2014 2015 General Government City Manager Court Support Municipal Court Customer Relations Planning and Zoning General Services City Secretary Public Affairs Records Management Schertz Magazine Engineer GTS Information Technology Human Resources Finance Purchasing Fleet Service Building Maintenance Facility Services Public Safety Police Fine Inspections Marshal Services Health Animal Control Environmental Health Parks and Culture Parks Pools Event Facilities Library Public Environment Streets Public Works Public Works Business Office Water and Sewer Drainage EMS EcononnicDeve|oonnent TOTAL 7 7 6 6 - 6 - 6 - 6 - 6 5 5 5 5 3 3 3 3 15 13 13 13 2 I 2 2 4 4 4 4 1 1 1 1 2 2 2 2 4 3 3 3 2 2 2 2 4 6 6 6 4 4 4 4 6 6 6 8 5 4 3 3 4 4 4 6 - - 2 - 2 - 3 - 70 75 75 75 32 32 33 33 7 7 8 9 8 8 8 8 6 - 6 - 7 - 7 - y y y y - 1 - 1 - 1 - 1 14 14 14 14 14 14 14 14 4 6 6 6 10 10 10 10 17 16 16 16 7 8 8 8 35 35 36 37 4 4 4 4 311 318 320 327 113 TABLE 19 114 Full -Time Equivalent Employees as of September 30, 2016 2017 2018 2019 2020 2021 5 5 5 5 5 5 6 6 6 4 4 4 5 5 5 3 3 3 4 4 4 3 3 4 2 2 2 2 2 2 4 4 5 5 5 4 1 1 - - - - 2 2 - - - - 7 7 7 7 8 8 2 2 2 2 2 2 6 7 8 8 8 8 5 5 5 5 5 5 8 8 8 7 7 7 3 3 3 3 3 3 6 6 6 7 8 8 16 16 17 10 10 11 78 81 86 86 87 90 36 39 45 45 46 46 8 8 11 12 12 12 8 5 - - - - 8 8 7 7 8 9 3 3 4 4 4 5 9 10 12 11 11 11 1 1 1 5 5 6 14 14 15 14 14 14 14 14 14 14 17 17 4 4 4 4 4 4 10 10 10 9 9 9 16 16 19 19 19 21 6 6 8 8 8 8 39 41 45 45 45 55 4 4 4 4 4 4 339 346 366 357 365 384 114 CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS 115 Fiscal Year Function 2012 2013 2014 2015 General Government Building Permits Issued 2,643 3,054 2,869 3,087 Schertz Tales Number of Magazines Printed 168,000 168,000 180,000 180,000 Police CFS 19,434 19,894 19,067 36,138 Arrests 666 800 776 595 Traffic Violations 20,881 19,335 15,077 12,306 Accidents 1,665 1,960 1,823 2,040 Fire Number of Rescue /Other Responses 1,799 2,046 1,759 2,167 Number of Fire Responses 74 108 110 99 Number of Inspections 429 332 252 698 Number of Training Classes Conducted 168 132 125 150 Number of Pre -Plan Inspections 714 729 735 980 EMS Requests for Transport 7,545 8,391 8,840 9,286 Actual Transports 4,766 5,451 5,713 6,118 EMT Students 79 116 87 84 Marshal Service Warrants Issued 2,888 3,344 2,354 3,798 Warrants Cleared 4,118 4,687 3,781 3,691 Food Establishment Permits 123 127 82 135 Food Establishment Inspection 180 281 218 136 Foster /Adoption Inspections 14 24 16 22 Parks Facility Reservations 234 258 301 275 Community and Civic Centers Civic Center 325 444 458 478 Community Center Rentals 816 735 437 455 North Community Center Rentals 307 288 244 209 115 TABLE 20 116 Fiscal Year 2016 2017 2018 2019 2020 2021 5,919 4,800 5,251 4,748 2,993 4,474 180,000 1801000 180,000 180,000 187,500 189,700 39,064 34,428 45,190 41,327 57,149 29,007 603 423 624 603 527 416 8,960 81001 11,359 12,541 8,326 6,980 2,119 2,057 2,244 2,304 1,752 2,076 2,327 21758 3,055 3,804 3,953 4,837 67 86 161 100 108 205 440 519 562 528 500 548 460 340 600 804 763 770 867 922 788 865 814 848 9,723 9,956 10,059 10,759 10,713 12,251 6,123 6,201 6,165 6,738 6,549 7,444 89 90 90 90 84 123 2,587 2,816 1,598 2,036 1,738 2,095 3,492 2,822 2,022 1,834 664 1,451 145 201 181 55 189 142 153 13 211 96 209 172 21 21 18 8 10 12 240 251 248 241 75 237 483 590 516 441 293 253 370 455 381 326 193 291 185 230 235 188 92 153 116 CITY OF SCHERTZ, TEXAS OPERATING INDICATORS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS 117 Fiscal Year Function 2012 2013 2014 2015 Animal Services Number of Animals Handled 1,463 1,326 1,218 1,304 Number of Adoptions 291 362 309 357 Number of Return to Owners 149 231 222 213 Number of Transfers 312 301 316 296 Library Annual Circulation 410,312 404,691 395,998 394,766 Library Visits 256,349 254,633 253,237 259,413 Library Program Attendance 16,035 12,581 15,048 13,825 Registered Users 30,475 31,658 30,759 31,138 Water New Connections 271 168 235 369 Water Main Breaks 52 38 45 45 Total Consumption 16,131,415 15,500,413 15,497,071 14,757,134 (Thousands of Gallons) Daily Average Consumption (Thousands of Gallons) 44,196 42,466 42,458 40,431 Peak Daily Consumption (Thousands of Gallons) 9,290 9,483 10,089 8,385 Total Customers 12,557 12,757 13,324 13,570 Average Use Per Connection 5,517 5,905 5,467 5,135 Sewer Total Customers 10,988 11,456 11,578 11,413 Facilities Maintenance Number of Buildings Maintained 19 19 19 21 Square Footage 166,591 166,591 166,591 234,202 117 Fiscal Year TABLE 20 2016 2017 2018 2019 2020 2021 1,313 11283 926 1,157 1,015 1,070 410 348 319 366 450 329 205 228 218 233 335 284 316 326 297 227 188 152 399,622 3851206 414,790 447,379 254,643 281,659 255,109 235,428 258,695 237,821 102,297 91,291 15,282 161814 16,945 18,412 6,524 2,541 30,702 311432 30,806 33,104 31,296 30,291 213 303 235 300 357 342 45 45 50 52 65 38 16,097,931 15,222,373 15,833,124 17,602,330 1,976,687 1,617,120 43,942 411705 43,378 48,225 54,155 59,377 10,985 111000 9,083 11,094 14,011 9,160 13,877 14,124 14,678 16,434 13,683 151861 5,352 5,244 5,294 4,587 5,600 101,955 12,282 121398 12,866 12,853 13,112 14,128 21 21 25 26 27 26 234,202 2341202 245,218 257,218 301,656 257,218 118 CITY OF SCHERTZ, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION /PROGRAM LAST TEN FISCAL YEARS Sewer Sanitary Sewers (Miles) 85 Fiscal Year 90 96 Function 2012 2013 2014 2015 Police Stations 1 1 1 1 Patrol Units 42 42 42 48 Fire 3 3 3 4 Stations 2 2 2 2 Fire Vehicles 13 13 15 16 EMS Ambulances 6 7 7 9 Marshal Service Vehicles 8 7 7 7 Streets Streets, Paved (Miles) 134 137 141 149 Streets, Unpaved (Miles) 5 5 5 5 Parks and Recreation Parks - Developed 17 13 13 14 Parks - Undeveloped 4 8 8 9 Playground 15 16 16 18 Swimming Pools 2 2 2 2 Baby Pools 2 2 2 2 Baseball /Softball Diamonds 9 12 12 15 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 81,468 86,221 100,478 113,085 Water Number of Pump Stations 5 5 5 5 Water Mains (Miles) 192 197 199 210 Sewer Sanitary Sewers (Miles) 85 87 90 96 Storm Sewers (Miles) 10 11 11 12 Facilities Maintenance Vehicles 4 5 5 6 Fleet Generators 3 3 3 4 Vehicles & Equipment 119 TABLE 21 Fiscal Year 2016 2017 2018 2019 2020 2021 1 1 1 1 1 1 50 64 69 68 72 66 2 2 3 3 3 3 16 16 18 19 20 20 9 8 8 9 9 10 7 7 7 7 7 7 153 159 153 165.4 165 167.5 5 5 5 5 5 5 15 20 21 21 21 21 10 4 4 4 4 5 19 19 19 20 21 21 2 4 4 4 4 4 2 2 2 2 2 2 15 15 15 15 15 15 12 12 12 12 12 12 4 4 4 4 4 4 4 3 4 4 6 6 1 1 1 1 1 1 97,412 107,382 110,266 150,972 139,447 149,965 5 5 5 5 6 7 211 221 225 228 228.5 231.4 98 110 113 116 116.2 119.5 12 12 13.6 13.8 13.8 14.7 6 6 11 11 10 8 4 4 7 10 7 8 384 352 341 376 120 THIS PAGE LEFT BLANK INTENTIONALLY