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FY 2022 Annual Comprehensive Financial Report
City of Euless W&O Annual Comprehensive Financial Report Fiscal Year Ending September 30, 2022 201 N. Eotor Drive{ Euless, TX 76039 WWW.eUIBSStX.gDV H E C I T Y O EULESS City of Euless, Texas Annual Comprehensive Financial Report Fiscal Year Ending September 30, 2022 Prepared by City of Euless Finance Department 201 North Ector Drive Euless, TX 76039 H E C I T Y O EULESS CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2022 CONTENTS INTRODUCTORY SECTION Page(s) Letter of Transmittal i-vii City Officials viii Organizational Chart ix GFOA Certificate of Achievement x FINANCIAL SECTION Independent Auditor's Report 1-3 Management's Discussion and Analysis (unaudited) 5-17 Basic Financial Statements Government -Wide Financial Statements Statement of Net Position 18 Statement of Activities 19 Fund Financial Statements Governmental Funds Balance Sheet 20-21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 23 Statement of Revenues, Expenditures and Changes in Fund Balances 24-25 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 27 Proprietary Funds Statement of Net Position 28-29 Statement of Revenues, Expenses, and Changes in Net Position 30-31 Statement of Cash Flows 32-33 Fiduciary Funds Statement of Net Position 34 Statement of Changes in Fiduciary Net Position 35 Notes to Basic Financial Statements 36-80 Required Supplementary Information Schedule of Changes in Net Pension Liability and Related Ratios (Texas Municipal Retirement System) 83 Schedule of Contributions (Texas Municipal Retirement System) 84 Schedule of Changes in Net OPEB Liability and Related Ratios 85 Schedule of Contributions — OPEB Trust 86 Budgetary Comparison Schedules General Fund 87-88 Car Rental Special Revenue Fund 89 Notes to Required Supplementary Information 90 Combining and Individual Fund Statements and Schedules Non -Major Governmental Funds Combining Balance Sheet 94-97 CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2022 C ON TENT S - CONTINUED Page(s) Combining and Individual Fund Statements and Schedules - Continued Non-Maj or Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 98-101 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Hotel/Motel Special Revenue Fund 102 Half -Penny Sales Tax Special Revenue Fund 103 Police Drug Enforcement Special Revenue Fund 104 Crime Control and Prevention District Special Revenue Fund 105 Grants Special Revenue Fund 106 Police Seized Assets Special Revenue Fund 107 Juvenile Case Special Revenue Fund 108 TIRZ #3 Glade Parks Special Revenue Fund 109 Midtown Public Improvement District Special Revenue Fund 110 TIRZ #4 Midtown Special Revenue Fund III Cable PEG Fees Special Revenue Fund 112 Internal Service Funds Combining Statement of Net Position 114 Combining Statement of Revenues, Expenses, and Changes in Net Position 115 Combining Statement of Cash Flows 116 STATISTICAL SECTION (Unaudited) Table Net Position by Component 1 119 Changes in Net Position 2 120-121 Fund Balances, Governmental Funds 3 122 Changes in Fund Balances, Governmental Funds 4 123 Estimated Actual Value of Taxable Property 5 124 Direct and Overlapping Property Tax Rates 6 125 Principal Property Taxpayers 7 126 Property Tax Levies and Collections 8 127 Ratio of Outstanding Debt by Type 9 128 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 10 129 Direct and Overlapping Governmental Activities Debt 11 130 Schedule of Revenue Bond Coverage Water and Wastewater Bonds 12 131 Demographic Statistics 13 132 Principal Employers 14 133 Full-time City Government Employees by Function/Program 15 134 Operating Indicators by Function/Program 16 135 Capital Asset Statistics by Function/Program 17 136 INTRODUCTORY SECTION H E C I T Y O EULESS T H E C I i Y O F EULESS February 28, 2023 To the Honorable Mayor, Members of the City Council, and Citizens of the City of Euless, Texas The Finance Department and City Manager's Office are pleased to submit the Annual Comprehensive Financial Report for the City of Euless, Texas ("City") for the fiscal year ended September 30, 2022. This report complies with State law which requires that all local governments publish, within six months of the close of each fiscal year, a complete set of financial statements presented in conformity with accounting principles generally accepted in the United States of America ("GAAP") and audited in accordance with auditing standards generally accepted in the United States of America by a firm of licensed certified public accountants. This report is published to provide the City Council, City staff, citizens, bondholders, and other interested parties with detailed information concerning the financial condition and activities of the City. The report consists of City management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the accuracy, completeness, and reliability of all of the information presented in the report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh the benefits derived from them, the City's 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's financial statements have been audited by Weaver and Tidwell, L.L.P., a firm of licensed, certified public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended September 30, 2022, 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 ("clean") opinion that the City's financial statements for the fiscal year ended September 30, 2022, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the Financial Section of this report. i 201 N. Ector Drive, Euless TX 76039-3595 817/685-1400 Metro 817/267-4403 Fax 817/685-1416 www.eulesstx.gov This report is presented in three sections: Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, a listing of City Officials, and an organizational chart of the City. The Financial Section includes the independent auditor's report on the basic financial statements, Management's Discussion and Analysis ("MD&A"), basic financial statements, the Notes to the Basic Financial Statements, and combining and individual fund statements and schedules. The MD&A is a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement, and should be read in conjunction with, the MD&A. The City of Euless' MD&A can be found immediately following the independent auditor's report. The Statistical Section includes financial and demographic information relevant to readers of the City's financial statements. The statistical data is generally presented on a multi -year basis. Profile of the City of Euless, Texas The City of Euless is located in North Central Texas in Northeast Tarrant County approximately 16 miles west of Dallas and 16 miles east of Fort Worth. Euless is readily accessible by State Highway 183 which is a multi -lane expressway linking Dallas to Fort Worth. Other major highways through the City include State Highway 121, State Highway 360, State Highway 10 and Farm -to -Market Road 157. Euless' centralized location provides quick access to both Dallas and Fort Worth metropolitan areas and is adjacent to Dallas -Fort Worth International Airport ("DFW Airport"), one of the world's busiest airports. The City is approximately 16.2 square miles and serves a population of approximately 61,480. The City of Euless was incorporated February 24, 1953 and is a home rule city operating under a Council/Manager form of government. The City Council is comprised of the mayor and six council members who are elected at large. The Council has the authority to enact local legislation, levy taxes, adopt budgets, determine policies, incur debt, and appoint the City Secretary, City Attorney, Municipal Court Judge, and the City Manager. The City Manager reports directly to the City Council, and is responsible for the daily management of the various City departments. Council members serve three-year staggered terms, with two council members elected each year. The Mayor is elected to serve a three-year term. In addition, several boards and commissions were created to assist the City Council in deciding matters of policy and procedure and meet on various issues throughout the year. The City of Euless provides a full range of services to its citizens including: police and fire protection; emergency ambulance services; municipal court operations; development and code services; construction and maintenance of streets and highways, parks, and recreational facilities; water service and wastewater collection and treatment; and library operations. The City also operates a top -ranked, 18-hole golf course and conference center, youth athletic complex, and an aquatics center. Internal services of the City account for risk management, equipment replacement, and employee insurance coverage activities on a cost reimbursement basis. Private contractors, through franchise agreements, provide solid waste and recycling collections and disposal services for the City. ii Four component units of the City, the Euless Development Corporation, the Euless Crime Control and Prevention District, Tax Increment Reinvestment Zone (TIRZ) #3 — Glade Parks, and Tax Increment Reinvestment Zone (TIRZ) #4 — Midtown, are presented in the financial statements of the City as blended component units. Data for these organizations is recorded in and presented as special revenue funds in the City's financial statements. Additional information on these component units can also be found in Note 1 in the Notes to the Basic Financial Statements. The annual budget serves as the foundation for the City of Euless' financial planning and control. Per the City Charter, the City Manager provides to the City Council the proposed budget by August 1 st each year. The budget is filed with the City Secretary and is open for public inspection. Upon receipt of the budget, the City Council sets a date for a public hearing at which time interested citizens may express their opinions regarding the proposed budget. The Charter requires the Council to adopt the budget by a favorable majority vote at least ten days prior to the beginning of the next fiscal year. The City Manager is authorized to transfer budgeted amounts between line items and departments within any fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. Budgetary control has been established at the individual fund level. Financial reports are produced showing budget to actual expenditures by line item and are distributed monthly to City departments for review. Economic 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 Euless operates. The City of Euless is located in Tarrant County in the heart of the Dallas/Fort Worth (DFW) Metroplex and adjacent to the DFW International Airport. Thus, the economic vitality of the region significantly impacts the economic health of Euless. DFW Airport reports itself as the third largest airport in terms of operations and second largest in terms of passengers in the world, handling 62.5 million passengers in 2021. According to the North Texas Commission, DFW is the 4th largest region in the US and has experienced tremendous growth during the past decade. With its highly -diversified economy, DFW has a population of over 7.7 million, a Gross Domestic Product of $534.8 billion, a labor force of over 4 million with the fifth largest concentration of tech workers in the United States, an 8.1% job growth rate, is home to 24 Fortune 500 Firms, and boasts college enrollment of over 472,600 in colleges and universities making their home in the region. Such an economic environment has helped the region weather economic downturns in key sectors better than many other regions in the nation. The AllianceTexas development in North Fort Worth is a 27,000-acre development that has generated an estimated $100.6 billion in economic impact with over 550 companies, generating 62,000 direct jobs. It is anchored by the inland port known as the Alliance Global Logistics Hub. This area offers a variety of commercial real estate options, m industrial space, office space, and retail facilities. Perot Field Fort Worth Alliance Airport was also just named a Top 20 U.S. Cargo Airport by the Federal Aviation Administration (www.alliancetexas.com). Assessed value for all residential and commercial property in the City of Euless is estimated at approximately $6 billion for tax year 2022, which is a 13.1 % increase from the prior year, due to increases in both residential and commercial real estate property values. Sales tax collections increased almost 18% from FY2020-21 to FY2021-22. Euless continues to look for additional revenue opportunities in order to minimize the tax burden to citizens and strives to cut costs without impacting service. The City receives a significant amount of revenue from a consolidated rental car facility located at DFW Airport. COVID-19 had a significant impact on the travel industry and this revenue source significantly reduced in FY2019-20 but rebounded in FY2020-21 and FY2021-22. The City Council has chosen to continue to use this funding source to support general government operations and to cash flow capital projects in lieu of debt issuance when possible. The City has been very cautious to not become overly dependent on this volatile resource while providing for needed improvements for citizens. The City of Euless has approximately 429.4 acres of undeveloped land. The Dallas Cowboys AT&T Stadium, Texas Rangers Globe Life Park and Choctaw Stadium in Arlington are located within minutes of Euless and, continue to attract additional tourism to the City by hosting concerts and sporting events. Euless population has increased from 51,750 to 61,480 in ten years (North Central Texas Council of Governments). The City's median household income is $69,912, which compares favorably to $64,021 for the United States (U.S. Census Bureau American Community Survey 2022). The City's educational level is 90.4% high school graduate or higher, which again is favorable to 88.9% for the United States (U.S. Census Bureau American Community Survey 2022). Long -Term Financial Planning The City of Euless has developed a comprehensive capital improvements document. Such strategic planning has allowed the City Council to fund several major infrastructure upgrades, park enhancements, and capital purchases in a systematic manner while considering the full impact to the operating budget and tax requirements. Many of these projects have been completed on a pay-as-you-go basis by utilizing operating revenues, excess reserves, and rental car taxes. The City Council and citizens of Euless have determined that debt issuance is a viable method of financing major capital projects and equipment purchases. Analysis of potential debt issuance includes the operating impact the repayment thereof will have on citizens, property tax rates, and enterprise fund service fee revenues. Per the City's fiscal policies, long-term debt will not be used for operating purposes and the life of the debt instruments will not exceed the useful life of the projects or equipment financed. Policy also specifies that debt with an average life of 20 years or less will be issued to reduce net iv interest cost and maintain future flexibility by paying off debt earlier. The majority of the City's existing long-term debt was used to finance infrastructure needs and traditional government facilities such as streets, utility infrastructure, and development of parks and open spaces. The City's fiscal policies state current expenditures will be paid with current revenues. Deferrals, short-term loans, or one-time sources will be avoided as budget balancing techniques. Reserves will be used for emergencies or nonrecurring expenditures, except when balances can be reduced because levels exceed guidelines or legally -required minimums. Fiscal policies provide for a General Fund reserve equal to between 30 and 60 days of working capital. At no time shall the reserve fall below 8.3% of the General Fund expenditure budget (i.e. 30-day level). The current operating reserve is at 186 days of operations which equates to approximately 43% of next year's budgeted expenditures. At the end of the current year, the City was in compliance with this fiscal policy reserve level. The City's fiscal policies for the Water and Wastewater Fund require the maintenance of a minimum reserve of 45 to 75 days of working capital. The City currently maintains a 123-day reserve. Water and Wastewater revenue bond covenants require the City to maintain reserve amounts sufficient to cover the average annual debt service requirements. This revenue bond reserve is in addition to the working capital required by the City's fiscal policies and is maintained in a separate fund on the general ledger. As of September 30, 2022, the revenue bond reserve totaled $750,550 which meets the required average annual debt service per bond covenants. Standard & Poor's Ratings Services, a subsidiary of the McGraw-Hill Companies, Inc. rates the City's general obligation debt and sales tax revenue debt at AA and the water and wastewater revenue debt at AA+. Moody's Investor Service, Inc. rates the general obligation debt and water and wastewater revenue debt at Aa2. Additional information about the rating agencies or the significance of the ratings provided may be obtained from each agency's web site. Major Initiatives The City has partnered with Tarrant County, surrounding cities, local churches, and businesses to renovate qualifying homes in the community through the Tarrant County Home Program and the Community Powered Revitalization Program ("CPR"). Through these partnerships, the cities of Hurst, Euless, and Bedford have joined forces to assist qualifying residents in all three communities. The City's Capital Improvements Program and Americans With Disability Act (ADA) Transition Plan address facility needs of the City. The Parks Master Plan, which focuses on improving the quality of life for the community, includes additional hikeibike trails, park amenities and upgrades. The City has completed several projects in the past year and has many others underway that were included in these plans. The City believes it is critical that the street, water, wastewater, and drainage systems are properly maintained v and systematically upgraded. While these are not glamorous, these represent the most basic governmental functions. Deferral of these projects creates a financial burden for future generations. The FY2019 Street Reconstruction Project continues. This project includes Harwood Road between N. Main and State Highway 157, S. Pipeline Road from Royal Parkway to Highland Drive, Highland Drive, W. Pipeline from Raider Drive, to the western city limits and an extension of Mills Drive from State Highway 10 to Carr Park. The construction work is being performed in two phases. The first phase which includes Harwood Road, S. Pipeline Road and Highland Drive is complete. The second phase is scheduled for bid in 2023. The FY2022 Sanitary Sewer Rehabilitation is underway and the Bear Creek Elementary School Drainage Channel Improvements project is complete. The water well replacement projects at the Far North Well and Fuller Well are near completion with only flushing, testing, and final authorization needed. Various water line replacement projects at Alexander Lane and Dickey Drive are also under construction. Construction of the new Fire Station #1 is almost complete and design for Fire Station #2 and the Police / Court Facility are underway. Over the last several years, the City has worked with developers on some major, mixed - use centers. Glade Parks, located along the southwest corner of Glade Road and Highway 121, provides approximately 1.2 million square feet of retail/office and includes a unique residential component. In an effort to promote development in this area, the City created a Tax Increment Reinvestment Zone ("TIRZ") for the Glade Parks development and approved the related project and financing plan. This plan authorized the City to undertake certain public improvements associated with the Glade Parks development. Additionally, the City created the Glade Parks Public Improvement District ("PID") which is funded from assessments within the district. Over the last several fiscal years, numerous businesses opened in this development creating increased property values and retail sales. The single-family residential component continues to add value to the property tax base as well. The RiverWalk! development, includes approximately 200 acres located at the northwest corner of Airport Freeway and State Highway 360 extending north to Harwood Road. Lennar Homes has developed five (5) subdivisions within this mixed -use project. Approximately 63 acres has been sold and will be known as Watercolor. This development will include single family residential including villas, townhomes and rowhomes, urban lofts, and retail/commercial centered around a water feature. The City also approved a 56-acre mixed -use development called Founders Parc, previously known as Midtown, located on the south side of State Highway 183, east of Farm -to -Market Road 157 and north of State Highway 10. Building is continuing on this development of 259 new single-family homes, 285 urban lofts, and over 57,000 square feet of retail and commercial space. Both a TIRZ and a PID have been created by the City to support debt for public improvements needed for the area including roadways, water distribution system, sanitary sewer and storm sewer collections systems, hardscaping, and amenities. There are currently five active residential subdivisions in the City. vi Awards and Acknowledgements The Government Finance Officers Association ("GFOA") awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Euless for its Annual Comprehensive Financial Report for the fiscal year ended September 30, 2021. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose contents conform to program standards. Such report must satisfy both Generally Accepted Accounting Principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. The City has been awarded a Certificate of Achievement for the last 35 consecutive years. We believe that the current Annual Comprehensive Financial Report meets the Certificate of Achievement program requirements and are submitting it to GFOA for review. In addition, the City of Euless received the GFOA's Distinguished Budget Presentation Award for its annual budget document. The City of Euless has received the Distinguished Budget Award for the last 31 years. In order to qualify for the award, the City's budget document was judged to be proficient in several categories, including as a policy document, a financial plan, an operations guide, and a communications device. The preparation of this report on a timely basis could not have been accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Appreciation is expressed to City employees throughout the organization, especially those who were instrumental in the successful completion of this report. We would like to thank the Mayor and members of the City Council for their support in planning and conducting the financial operations of the City in a responsible, professional, and progressive manner. As always, the City of Euless staff welcomes and appreciates your comments. Respectfully Submitted, (�9% X�k� Loretta Getchell City Manager Janina Jewell Director of Finance vn City of Euless FISCAL YEAR 2021-2022 Council Members LINDA MARTIN, MAYOR Tim Stinneford, Place One Jeremy Tompkins, Place Two Eddie Price, Mayor Pro Tom, Place Three Perry Bynum, Place Four Harry Zimmer, Place Five Tika Paudel, Place Six Loretta Getchell, City Manager Chris Harker. Deputy City Manager Was Rhodes Assistant City Manager Vlll cc \ U k k ! 2 o R - / G § z $ � k { 2 LU j o in D \ u \ a co_LU g � ■ � d � U 2 0 § $ LL � 9 \ 2[� ,! / $ )} CL §§ q � § k �§ §§� 4 � cc � � � � � lu ) § 0 cc kcic k 2 2 §} \ Kef &9 » !! (§ E] uj 2 §) 0¥ '{ ��� § !© ��± § \ § §2 §/ ( m 43 2� °w § I R e � § w Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Euless Texas For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2021 Executive Director/CEO X FINANCIAL SECTION Xl H E C I T Y O EULESS Xii 141 weaver Independent Auditor's Report To the Honorable Mayor, City Council and City Manager City of Euless, Texas Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business - type activities, each major fund, and the aggregate remaining fund information of the City of Euless, Texas (the City) as of and for the year ended September 30, 2022, and the related notes to the financial statements which collectively comprise the City's basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2022, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter As discussed in Note 1 to the basic financial statements, during the year ended September 30, 2022, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 87, Leases. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements The City'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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Weaver and Tidwell, L.L.P. 2821 West 7th Street, Suite 700 1 Fort Worth, Texas 76107 Main: 817.332.7905 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor, City Council and City Manager Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, the raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, and the 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. 2 The Honorable Mayor, City Council and City Manager Other Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the 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. Other Information Included in the Annual Comprehensive Financial Report (ACFR) Management is responsible for the other information included in the ACFR. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 27, 2023, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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's internal control over financial reporting and compliance. as �,.f-�' P WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 27, 2023 3 H E C I T Y O EULESS CITY OF EULESS, TEXAS Management's Discussion and Analysis For the Year Ended September 30, 2022 (Unaudited) Management of the City of Euless offers the readers of the City's financial statements this narrative overview and analysis of the financial activities and financial position of the City for the fiscal year ended September 30, 2022. In the broadest context, the financial well-being of a government lies in the underlying wealth and willingness of its citizens and property owners to pay adequate taxes combined with the vision of the government's elected and appointed leadership to spend those taxes strategically so that the City's tax base, service levels, City assets, and the City's desirability will be maintained not just for the current year but well into the future. Financial reporting is limited in its ability to provide the "big picture" but rather focuses on financial position and changes in financial position. In other words, are revenues and/or expenditures higher or lower than the previous year? Has net position (containing both short-term and long-term assets and liabilities) or fund balance (the current "spendable" assets less current liabilities") of the government been maintained? Readers are encouraged to consider the information presented here in conjunction with the additional information furnished in the letter of transmittal (pages i-vii of this report) and the statistical section (pages 118-136 of this report) as well as information in the annual budget and the capital improvement plan along with other community information found on the City's website at www.eulesstx.gov. It should be noted that the Independent Auditor's Report describes the auditors' association with the various sections of this report and that all of the additional information from the website and other City sources is unaudited. Financial Highlights • The assets and deferred outflows of resources of the City of Euless exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $296,262,606 (net position). This number must be viewed in the context that the vast majority of the City's net position of $197,169,040 (67%) is net investment in capital assets and that most capital assets in government do not directly generate revenue nor can they be sold to generate liquid capital. The net position restricted for specific purposes totaled $12,162,933 (4%). The remaining $86,930,633 (29%) is unrestricted net position and may be used to meet the government's ongoing obligations to citizens and creditors in accordance with the City's fund designation and fiscal policies. • Governmental activities realized an increase in total net position of $16,458,322 and business -type activities realized an increase in total net position of $11,719,856 bringing the total increase in net position for the City to $28,178,178. • At the close of the current fiscal year, the City of Euless' governmental funds reported combined ending fund balances of $80,866,444 which represents an increase of $11,037,295. Within this total, $4,405,396 is restricted for debt service; $15,184,734 is restricted by bond covenants for capital projects; $108,919 and $189,156 are restricted for court technology and juvenile case management, respectively; and another $2,230,259 is restricted for capital projects by developer agreements. Amounts restricted for cable PEG fees and historical preservation total $644,986 and $843, respectively. Nonspendable fund balance of $128,745 represents fund balance amounts for 5 inventories and prepaid items. Fund balances of $33,077,159 represent assigned fund balance in the general, special revenue, and capital projects funds. The unassigned fund balance in the General Fund of $24,896,247 can be used for any lawful purpose. The General Fund unassigned balance represents 57% of fiscal year 2022 total fund expenditures. • The City's total capital assets (net of accumulated depreciation and amortization) increased by $8,251,892 which is attributed to completion of capital improvement projects and other asset additions including construction in progress exceeding current year depreciation expense and asset retirements. • The City's debt payable increased by $1.4 million or 1.6% due primarily to the issuance of tax notes and leases less scheduled principal payments and annual amortization of premiums and discounts on debt issuances. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis are intended to serve as an introduction to the City of Euless' basic financial statements which are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required 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 of Euless' finances, in a manner similar to a private - sector business. The statement of net position presents information on all of the City of Euless' assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between them 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 Euless is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash receipts and cash outlays in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). The government -wide financial statements distinguish between functions of the City 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 functions of the City include general and administrative, public safety, highways and streets, development services, and culture and recreation. The business -type activities of the City include water and wastewater system, drainage system, golf course, and other recreational enterprises. The government -wide financial statements include not only the City of Euless (the primary government), but also the Euless Development Corporation, the Crime Control and Prevention District, the Tax Increment Reinvestment Zone #3 — Glade Parks, and Tax Increment Reinvestment Zone #4 — Midtown which are legally separate entities that are financially accountable to the City. A blended presentation has been used to report the financial information of these component units. 6 The government -wide financial statements can be found on pages 18-19 of this report. Fund Financial Statements. A fund is a self -balancing set of accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Euless, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements with the exclusion of internal service fund activity. 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 may be 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, the reader 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 maintains twenty-three individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General, Debt Service, Car Rental Tax, and General CIP funds, all of which are considered to be major funds. Data from the other nineteen governmental funds are combined into a single, aggregate presentation. Individual fund data for each of these non - major governmental funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget for its General, and Car Rental Tax major governmental funds. A budgetary comparison schedule has been provided for each fund to demonstrate compliance with the adopted budgets. The basic governmental fund financial statements can be found on pages 20-27 of this report. Proprietary funds. The City maintains two different 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 uses enterprise funds to account for its water and wastewater, drainage utility, golf operations, and other recreation enterprises. Internal service funds are an accounting device used to accumulate resources and allocate costs internally among the City's various functions. The City uses internal service funds to account for its equipment replacement, risk management, and health insurance services. Because these services predominately benefit governmental rather than business -type functions, a portion of the activities in these funds is included within governmental activities in the government -wide financial statements. 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 Water and Wastewater, Drainage Utility, Golf, and Other Recreation enterprises all of which are considered to 7 be major funds of the City. The internal service funds are combined into a single, aggregate presentation in the proprietary fund financial statements. Individual data for the internal service funds is provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements can be found on pages 28-33 of this report. Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. The basic fiduciary fund financial statements can be found on pages 34 and 35 of this report. 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. The notes to the financial statements can be found on pages 36-80 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City's progress in funding its obligations to provide pension and post -employment healthcare benefits to its employees. Additionally, schedules comparing budgetary figures and actual results of the General and Car Rental Tax funds are also located in this section of the report. Required supplementary information can be found on pages 83-90 of this report. The combining statements referred to earlier in connection with non -major governmental funds and internal service funds are presented immediately following the required supplementary information on pensions, OPEB, and budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 92-116 of this report. Government -Wide Financial Statement Analysis As noted earlier, net position and especially net position by category may serve over time as a useful indicator of a government's financial position. In the case of the City of Euless, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $296,262,606 as of September 30, 2022. The largest portion of the City's net position (67%) reflects its investment in capital assets (i.e., land, buildings, equipment, improvements, construction in progress, and infrastructure) net of accumulated depreciation, less any debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending and with the exception of business -type assets, do not generate direct revenue for the City. They do, however, represent an obligation on the part of the City to maintain these assets into the future. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position (4%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of 8 $86,930,633 (29%) may be used to meet the City's ongoing obligations to citizens, creditors, and employees. Net Position Governmental Business -type Amounts shown in 000's activities activities Totals 2022 2021 2022 2021 2022 2021 Current and other assets $ 128,480 $ 107,655 $ 47,793 $ 38,350 $ 176,273 $ 146,005 Capital assets 180,481 179,771 92,810 85,268 273,291 265,039 Total assets 308,961 287,426 140,603 123,618 449,564 411,044 Deferred outflows 5,613 4,287 1,343 1,121 6,956 5,408 Long-term liabilities 83,580 91,089 22,002 25,223 105,582 116,312 Other liabilities 20,804 19,275 12,129 5,237 32,933 24,512 Total liabilities 104,384 110,364 34,131 30,460 138,515 140,824 Deferred inflows 18,714 6,331 3,029 1,213 21,743 7,544 Net position: Net investment in capital assets 123,862 130,460 73,307 64,951 197,169 195,411 Restricted 7,579 7,441 4,583 4,674 12,162 12,115 Unrestricted 60,035 37,117 26,896 23,441 86,931 60,558 Total net position $ 191,476 $ 175,018 $ 104,786 $ 93,066 $ 296,262 $ 268,084 As of September 30, 2022, the City reports positive balances in all three categories of net position, for the government as a whole, as well as for its separate governmental and business -type activities. The same was true for the prior year. The City's unrestricted net position increased by $26,372,004 in fiscal year 2022 as compared to the unrestricted net position for the prior year. Restricted net position realized an increase of $47,843 and the amount invested in capital assets, net of related debt increased by $1,758,331. The increase in total net position of more than $28 million results primarily from current year operating results flowing to the net investment in capital assets and unrestricted categories of net position. The details of the results of current year operations are found in the table shown on the following page. 9 Changes in Net Position Governmental Business -type Amounts shown in 000's Activities Activities Totals 2022 2021 2022 2021 2022 2021 REVENUES Program revenues: Charges for services $ 6,174 $ 5,868 $ 37,643 $ 35,198 $ 43,817 $ 41,066 Operating grants and contributions 1,055 811 - - 1,055 811 Capital grants and contributions 551 396 1,255 1,002 1,806 1,398 General revenues: Property taxes 24,974 24,196 - - 24,974 24,196 Sales taxes 28,693 24,373 - - 28,693 24,373 Car rental taxes 18,373 13,063 - - 18,373 13,063 Mixed beverage taxes 201 171 - - 201 171 Occupancy taxes 1,736 1,183 - - 1,736 1,183 Gross receipts taxes 4,478 4,220 - - 4,478 4,220 Investment income 804 124 174 42 978 166 Rents and royalties 1,567 1,574 - - 1,567 1,574 Miscellaneous 1,305 1,082 949 - 2,254 1,082 Total revenues 89,911 77,061 40,021 36,242 129,932 113,303 EXPENSES Culture and recreation 7,714 6,890 - - 7,714 6,890 Development services 934 904 - - 934 904 General government 24,294 20,604 - - 24,294 20,604 Highways and streets 4,016 3,906 - - 4,016 3,906 Public safety 27,380 27,489 - - 27,380 27,489 Interest and fiscal charges 2,417 2,507 - - 2,417 2,507 Water and wastewater - - 26,754 24,824 26,754 24,824 Drainage utility - - 1,517 1,572 1,517 1,572 Golf course - - 4,704 4,201 4,704 4,201 Recreation enterprises - - 2,024 1,568 2,024 1,568 Total expenses 66,755 62,300 34,999 32,165 101,754 94,465 Increase (decrease) in net position before transfers 23,156 14,761 5,022 4,077 28,178 18,838 Transfers (6,698) 987 6,698 (987) - - hicrease (decrease)in net position 16,458 15,748 11,720 3,090 28,178 18,838 Net position, beginning 175,018 159,270 93,066 89,976 268,084 249,246 Net position ending $ 191,476 $ 175,018 $ 104,786 $ 93,066 $ 296,262 $ 268,084 • Governmental activities. Governmental activities increased the City's net position by $16,458,322 thereby accounting for most of the growth (58%) in total net position. With the exception of rents and royalties, all revenue categories exceeded those of the prior fiscal year. Most revenue categories also exceeded budget expectations except for grant revenues. At fiscal year-end, most of the American Rescue Plan Act (ARPA) funding remained unspent resulting in unearned revenue per reporting requirements. As a result, grant revenues fell far short of expectations. Sound fiscal management and close monitoring of revenues and expenses allowed the City to realize an increase in governmental activities net position before transfers of $23,156,814. 10 Total revenue for the governmental activities (excluding transfers) increased from the previous year by $12.8 million primarily due to a net increase in general revenues of $12.1 million combined with increased program revenues of approximately $705,000. General revenues are primarily comprised of property taxes, sales taxes, and car rental taxes. Property tax revenue increased due to an overall increase in taxable values of 2.31 % over the prior year values (See Statistical Table 5). Sales taxes continued to recover as patrons adjusted to the "new normal" of everyday life resulting in increased collections of more than $4.3 million over last year. The "new normal" also provided workers with flexible schedules and work -from -home (i.e. anywhere) options leading to a host of travel opportunities. Additionally, the travel industry rebounded with a resurgence in business and personal travel. As a result, by the end of the fiscal year, car rental tax collections, which are highly dependent upon the travel industry, reached an all-time high of $18.4 million. Total governmental program revenues, which consist of charges for services, grants, and contributions, realized an increase of nearly $705,000 combined. Culture and recreation revenues realized income from capital grants of almost $349,000 from a Community Development Block Grant-Coronavirus (CDBG-CV) for the construction of a canopy at the senior center. Development services revenues dropped by approximately $429,000 due primarily to a reduction in building permit revenues resulting from declining construction levels. This trend is expected to continue as the City approaches build -out. Public safety charges for services increased by $875,000 for the year. The police department entered into a 5-year contract with the City of Bedford for jail services at a fixed rate of $650,000 annually. The department is no longer housing federal detainees for Immigration and Customs Enforcement resulting in a decline in jail revenue of $88,000. Revenues from ambulance service and municipal court fines increased approximately $162,000 and $203,000, respectively. The Midtown PID assessment accounts for the decrease in highways and streets charges for services of $265,000. Contributed capital for streets and highways declined by approximately $160,000 due to the reduction in development and associated infrastructure. Total expenses of governmental activities increased by $4.5 million from FY2021 to FY2022. A 2% raise package plus a one-time lump sum raise of up to 3% were included for employees across all funds. The 2% raise package increased governmental salary expenses by about $465,000 and the lump -sum raises accounted for an increase in governmental activities expenses of approximately $695,000 across all functions. Benefits based upon salaries also increased accordingly. The addition of three firefighter/paramedics increased public safety salary -related expenses by an estimated $315,000. Pension -related entries decreased salary -related expenses $5 million for the current year primarily due to the recording of changes in and amortization of deferred outflows and deferred inflows (net $5.9 million increase) combined with a decrease of more than $10.9 million in the net pension liability. The latter of which resulted in a net pension asset for the year. In the prior year, these entries decreased salary -related expenses of governmental activities by $2.97 million. OPEB- related expenses which includes the change in the net OPEB liability, related deferred inflows and deferred outflows, as well as the amortization of the deferrals decreased salary -related expenses by approximately $179,000 compared to a decrease in expenses of $224,000 in the prior year. Rebates increased by $3.7 million as a result of increased sales, occupancy, and car rental taxes. Maintenance costs increased by more than $443,000 due to cost increases in software, heating and cooling, and equipment maintenance. These increases were a result of supply chain issues as well as overall inflationary pressures. Interest and fiscal charges declined by $91,000 due to a reduction in scheduled payments. The net position of general governmental operations accounts for 65% of total net position. • Business -type activities. Business -type activities increased the City's net position by $11,719,856. The change in net position before transfers is $5,021,364. Charges for services program revenues for the business -type activities increased from the previous year by $2.4 million due primarily to 11 increased Water and Wastewater ("W&WW") revenues and golf revenues of $841,000 and $781,000, respectively. There were no rate increases to utility customers from FY2021 to FY2022. However, the volume of water consumed increased by 218 million gallons and wastewater treatment volume increased by close to 74 million gallons. Rather than receiving a refund, the annual true -up of costs with the Trinity River Authority ("TRA") subjected the City to additional costs of $41,000. In the current year, golf course rounds were slightly below those of the prior year. Due to increased operational costs resulting from supply chain issues and inflationary pressures, fees were increased in all facets of the golf course operations resulting in additional revenues. Capital grants and contributions increased by close to $252,000 due primarily to increased developer contributions of infrastructure. Miscellaneous revenues increased by $949,000 due to the receipt and subsequent expense of ARPA funds at the golf course. Overall, total business -type expenses realized a net increase for the year of $2.8 million combined. Net pension and net OPEB related entries decreased salary and benefit costs by more than $1 million in the business -type activities this year compared to a decline of only $597,000 in the prior year. Water purchases and wastewater treatment costs climbed from the prior year as a result of increases in consumption and treatment volumes. Increased costs of $502,000 at the golf course resulted from the increased cost of goods sold, inflationary pressures, and supply chain issues. Drainage utility realized an expense decrease of almost $55,000, while other recreation enterprises realized expense increases of $456,000. Net position for business -type activities represents 35% of total net position. Financial Analysis of the City's Funds. As noted earlier, the City 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 City's net resources available for spending at the end of the fiscal year. At the end of the current fiscal year, the City of Euless' governmental funds reported combined ending fund balances of $80,866,444, which represents an increase of $11,037,295 in comparison with prior year. Approximately 31 % or $24.9 million constitutes unassigned fund balance in the general fund that is available for spending at the City's discretion. Another $128,745 in non -spendable fund balance represents amounts invested in inventories and prepayments. Another portion is restricted to indicate that it is not available for new spending because it has already been committed 1) to pay debt service ($4,405,396); 2) to pay for specific capital improvements per developer agreements ($2,230,259); 3) restricted by bond covenants for specific capital projects ($15,184,734); and 4) for a variety of other restricted purposes ($943,904). Assigned fund balance includes funds that management intends to use for a specific purpose as well as any residual balances of governmental funds other than the general fund. Assigned fund balance totals $33,077,159 and includes assigned fund balance in the general fund of $187,649 and $32,889,510 represents residual balances in other governmental funds. See discussion under Fund Balance Classifications in Note 1 of the Notes to Basic Financial Statements for additional details. In the General Fund, the City budgeted for a decrease in fund balance (i.e. a planned reduction) of $4,489,288 (revised). Due to a positive budget variance in overall revenues and expenditures, the General Fund ended the year with an increase to fund balance of $4,559,151. This figure represents a positive budget variance of $9,048,439 resulting primarily from sales tax collections, municipal court fines, ambulance fees, and building permit revenues realizing significant increases over expectations. 12 Budgetary expenditure savings of $2.4 million before transfers results primarily from savings in general and administrative costs of almost $1.2 million and public safety charges of nearly $868,000. Several General Fund revenue categories realized increases over the prior year including property tax collections, general sales tax receipts, jail income, intergovernmental revenue, and rental income. General sales tax collections increased by almost $2.7 million as patrons adjusted to the "new normal" of everyday life. Flexible work schedules and inflationary pressure also contributed to this increase. Taxable property values increased over the prior year values by 2.31%, while the tax rate increased from 46.250 to 47.50 per $100 of taxable property valuation. The resulting increase in property tax collections of close to $1.2 million offset reductions from FY2021 to FY2022 in licenses and permits. Municipal court fines rose by nearly $205,000 and jail income climbed by over $586,000. The police department contracted with the City of Bedford to house their detainees for $650,000 annually. Additionally, the department is no longer housing federal detainees which resulted in a revenue loss from the prior year. Market rates as well as investment portfolio yields increased throughout the fiscal year. A resulting uptick in investment income of more than $111,000 was realized. Total revenues surpassed prior year levels by nearly $5.6 million and outpaced budgetary expectations by more than $6 million. Expenditures increased $2 million or 4.6% over the prior year, and ended the fiscal year under budget parameters by more than $2.4 million. The employee raise packages previously mentioned combined with funding of a reinstated position and several new public safety positions increased total salary and benefit expenditures in the general fund by almost $1.1 million over the prior year. Many of the City's benefits are salary -based and increase automatically when any type of raise becomes effective. Other public safety expenditures increased by $957,000 due primarily to the additional equipment replacement user fees charged to patrol, police service and EMS/Suppression divisions. Non -departmental expenditures, which are classified in the general and administrative expenditure category, decreased by $1.8 million primarily due to a decrease in transfers to equipment replacement of just over $1 million, a decline in one-time requests of $488,000 and a reduction in the general portion of the DFW rebate of almost $114,000. Culture and recreation realized an overall increase in expenditures due to costs for equipment replacement in parks, recreation, and the senior center of approximately $285,000 combined. An increase in transfers to equipment replacement from streets and highways topped $336,000 which accounts for more than the total departmental increase. Supply chain issues and inflationary pressures are resulting in higher than anticipated vehicle, machinery, and equipment replacement costs. Whenever feasible to do so, the City will extend the useful life of these assets to accumulate additional funding for replacement and/or to wait for easing of inflationary pressures currently being experienced. The Debt Service fund balance decreased $911,384 which is $144,649 better than the anticipated drawdown of $1,056,033. The positive variance results primarily from property tax collections surpassing projections by approximately $116,000 and interest income exceeding expectations by $24,000. The Car Rental Tax fund balance was originally anticipated to increase $682,651, but ended the year with an increase of $3,809,641 resulting primarily from a significant turnaround in car rental revenues. The travel industry rebounded with a resurgence in business and personal travel. The "new normal" provided workers with flexible schedules and work -from -home (or elsewhere) options which also added to the industry rebound. All of these factors contributed to increased car rental revenues of $5.3 million more than the prior year and $7.5 million over budget parameters. Investment income was approximately $131,000 more than prior year levels due to rising market rates combined with an increase in investable balances in this fund. Per contractual agreement, the car rental revenues are 13 shared with the cities of Dallas and Fort Worth. Increased collections lead to a $3.5 million increase in expenditures, while capital outlay declined by $54,000. Transfers to other funds increased over the prior year by more than $834,000 due to an almost 50% jump in the general fund transfer, a $250,000 increase in the transfer for redevelopment, and picking up $240,000 for asset purchases in equipment replacement combined with the elimination of the transfer to the golf course CIP fund of $50,000. The general CIP fund balance increased by $4.7 million due to the issuance of debt in the amount of $7.6 million for the fire station #2 project. Design services dropped by $129,000 which is normal for this point in the fire station #1 project; while building, equipment, and furniture expenditures all increased for this project. Total capital outlay for the general CIP fund totaled nearly $3.7 million for the year which represents an increase of $813,000 over the prior year. Fire station #1 was close to completion at the end of the fiscal year. The non -major governmental funds realized a combined decrease in fund balance of $1,165,499; special revenue funds contributed an increase of $4,338,153, while the capital projects funds reduced the balance by $5,503,652. The car rental and streets CIP funds realized fund balance decreases as expenditures ramped up on projects funded (at least partially) in the prior fiscal year. Current year project funding for all CIP funds from transfers totaled $6.3 million while project expenditures totaled $10.9 million. The redevelopment, half -penny sales tax and developers' contribution CIP funds all added to the combined CIP fund balance. Hotel/motel collections exceeded expectations and prior year collections by $1.2 million and $553,000, respectively. Hotel/motel fund expenditures and transfers out were both up from the prior year. This fund added $950,000 to fund balance for the year. The Half - Penny Sales Tax (EDC) fund added almost $1.8 million to fund balance primarily resulting from increased sales taxes as discussed previously. Expenditures increased by $1.1 million due to an increase in parks user fees for equipment replacement and new equipment purchases; while transfers out to CIP increased by $440,000 over the prior year. The Crime and Prevention District (CCPD) fund added $547,000 to fund balance in the current year as a result of increased sales tax collections and a $478,000 increase in expenditures. Salary and benefit costs increased in the CCPD fund by approximately $425,000 primarily as a result of moving the cost of three police officers back from the General fund (i.e. moved in the prior year). The TIRZ #3 Glade Parks and the TIRZ #4 Midtown funds increased fund primarily due to the collection of property and sales taxes from participating entities outpacing debt service expenditures. Enterprise funds. The City's enterprise fund statements provide the same type of information found in the government -wide financial statements for business -type activities, but in more detail. Most of the City's enterprise funds are heavily dependent upon local weather conditions. During the year, rainfall fell short of that of a "normal" year by close to six and a quarter inches and was also short of prior year levels nearly three and a half inches. The W&WW fund realized a decline in operating income of $1.7 million resulting primarily from increased operating revenues combined with an increase in expenses of $2.5 million. The W&WW fund revenues increased $834,000 primarily as a result of volumetric increases in water consumption and wastewater treatment. Water purchases and wastewater treatment costs rose by just over $1 million combined. Salary and benefit expenses (excluding non -departmental) increased by more than $123,000 due to the raises previously mentioned. Non -departmental expenses increased by $726,000 overall. Salary and benefit expenses in this department grew by almost $307,000 due to changes in the net pension liability/(asset) and the net OPEB liability, related current year deferred inflows and outflows, as well as the amortization of the deferrals. Franchise and administrative fees increased by almost $100,000 each from the prior year; while electric service dropped by $92,000. Including nonoperating 14 and other revenues and expenses, an increase of almost $7.4 million was realized in the W&WW fund for FY2022. The main force driving this increase is developer contributions ($6.9 million) which includes the transfer of Midtown water and wastewater infrastructure and land assets. The golf course was fully operational during the year leading to increased revenues of $782,000 and net expense increases of $611,000 leading to additional operating income of $171,000 over prior year levels. Paid golf rounds were slightly below those of the prior year. Entries relating to net pension and net OPEB liabilities and related deferrals dropped salary expenses by almost $58,000. Increases in user fee transfers to equipment replacement totaled $57,000; while cost of goods sold increased by $199,000 for food, beverage, and merchandise for resale due to higher sales volumes, inflation, and supply chain issues. The increase in net position of the Drainage Utility fund results primarily from the transfer of Midtown infrastructure assets during the current year. Other recreation enterprises operating revenues increased by $474,000, while operating expenses increased more than $636,000. Costs increases include instructor fees, equipment replacement costs, umpire fees, recreational supplies, and cost of goods sold. Arbor Daze, which was canceled in the prior year, saw costs increase by $73,000. The net result of the other recreational activity was a loss of $283,000. Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business -type activities as of September 30, 2022, totaled $273,291,047 (net of accumulated depreciation and amortization). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, and construction in progress. The net increase in the City's investment in capital assets for the current fiscal year was $8,161,892 or about 3%. Major capital asset activity that occurred during the current fiscal year included the following: • Capital asset contributions were comprised of $7,724,000 in Midtown water, wastewater, and drainage infrastructure and land; Community Development Block Grant funding of wastewater lines and a canopy at the senior center; and developer asset dedications totaling just over $765,000 in street infrastructure, water and wastewater facilities, and drainage structures. • Capital asset additions for governmental activities include, but are not limited to, IBM AS/400 server replacement, traffic signal preemption equipment, self -loan station for the library, a digital posting board, and a several HVAC replacements. Completed projects for the year include the senior center canopy, Midtown redevelopment infrastructure, and several property purchases. • Construction -in -progress related to general government activity of $19,933,713 primarily consists of the following projects: fire station #1 ($6.6M), FY2019 street reconstruction ($12M), and FY2022 street improvements ($962K). Blessing Branch and Wilshire park improvements are also currently underway and have incurred expenditures of $258,000. • Capital asset additions for the business -type activities include, but are not limited to, purchase of an express oven, outfield fencing at Royal Field, and a yard control gate for public works. • Water lines along Fuller Wiser Road, Alexander Lane, and Dickey Drive were completed during the fiscal year. Wastewater infrastructure completed projects include: Del Paso Phases I and II; mains along South Pipeline Road/Highway 10; and the 47th year CDBG project. Bear Creek channel improvements were also completed during the year. 15 • Construction -in -progress related to business -type operations of $10,704,946 primarily consists of the Well Replacement project. Capital Assets (Net of Accumulated Depreciation) Amounts shown in 000's Land Buildings Other improvements M&E Infrastructure Right -to -use equipment Construction in Progress Totals Governmental Business -type activities activities Totals 2022 2021 2022 2021 2022 2021 $ 42,947 $ 37,237 $ 5,719 $ 3,619 $ 48,666 $ 40,856 36,358 38,646 1,179 1,303 37,537 39,949 15,750 12,838 8,189 8,738 23,939 21,576 11,835 11,915 1,185 1,440 13,020 13,355 53,459 52,569 65,630 59,740 119,089 112,309 198 - 203 - 401 - 19,934 26,566 10,705 10,428 30,639 36,994 $ 180,481 $ 179,771 $ 92,810 $ 85,268 $ 273,291 $ 265,039 Additional information on the City's capital assets can be found in Note 3 on pages 55-56 of this report. Long-term debt. At fiscal year-end, the City's outstanding debt totaled $89,400,294 net of unamortized losses on prior refundings. Of this amount, $65,577,410 comprises debt backed by the full faith and credit of the government, where $4,469,338 is the amount of self -supported debt for Texas Star Golf Course and Stars Center. The remainder of the City's debt, $21,822,885, represents bonds secured solely by specific revenue sources (i.e. revenue bonds). Outstanding Debt Governmental Business -Type Amounts shown in 000's activities activities Totals 2022 2021 2022 2021 2022 2021 GO bonds $ 3,010 $ 4,115 $ 2,775 $ 3,295 $ 5,785 $ 7,410 COs 52,560 54,930 - - 52,560 54,930 GO/CO deferred loss (92) (133) (232) (278) (324) (411) Taxnotes 9,155 2,370 - - 9,155 2,370 Leases 198 - 203 - 401 - Revenue bonds 5,025 5,245 16,835 17,780 21,860 23,025 Revenue deferred loss - - (37) (56) (37) (56) Totals $ 69,856 $ 66,527 $ 19,544 $ 20,741 $ 89,400 $ 87,268 In fiscal year 2022, the City issued $7,660,000 in new tax notes and $486,827 in lease liabilities were recorded. No new bonded debt was issued for the City's enterprise operations during the year. The City's total debt increased $2,132,379 (exclusive of deferred losses) or 2.44% during fiscal year 2022 and is attributed to the addition of the new debt less scheduled annual principal payments and annual amortization of premiums and discounts on debt issues. Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. rates the City's general obligation debt and revenue debt at AA and the water and wastewater revenue debt at AA+. Moody's Investor Service, Inc. rates the general obligation debt and the water and wastewater revenue debt at Aa2 and the sales tax revenue debt at Aa2. Additional information on the City's long-term debt can be found in Note 4 on pages 57-63. 16 Economic Factors and Next Year's Budgets and Rates In the FY2022-23 budget, General Fund revenues and transfers in are budgeted to increase by 9.7% from the FY2021-22 original budget. Property taxes account for 40% of budgeted revenues and sales taxes comprise approximately 34% of budgeted revenues. Certified assessed valuations as of July 25, 2022 increased 13% from the preceding year. The property tax rate decreased from 47.50 per $100 of taxable assessed valuation to 460 per $100 of taxable assessed valuation for FY2022-23. In the FY2022-23 budget, total sales tax receipts are projected to increase approximately $4.1 million over the FY2021-22 original projections. The car rental tax receipts are budgeted below prior year actual collections due mainly to the timing of budget preparation. By the end of FY2021-22, monthly car rental tax receipts were exceeding pre -pandemic levels and this trend is anticipated to continue into future. However, the budget preparation work was completed prior to receipt of final collection results for FY2021-22. Baseline budgeted expenditures in the General Fund are projected to increase approximately 9.5% from the FY2021-22 original budget excluding capital programs. The proposed employee pay plan includes a baseline salary increase of 7% as well as funding for additional amounts of up to 3% for those employees that are not eligible for step increases. A one-time lump sum increase of 3% is included for employees that are not eligible for merit or step increases. The City elected to use excess reserves to fund capital needs. For the Water and Wastewater Fund, the FY2022-23 budget includes the continuation of the tiered rate structure for residential and irrigation water volume billing. Under the tiered structure, customers pay a graduated volume rate based on varying levels of monthly water consumption. Residential volume rates range from $4.77 to $7.40 per thousand gallons. A wastewater volume charge of $4.53 per thousand gallons applies to all customer classes. Residential wastewater volume charges are capped at a maximum of 12,000 gallons per month. Residential base rates on water and wastewater service both increased $1 per month. The City maintained annual funding of $1,075,000 for pay-as-you-go capital expenses. Additionally, funding from the American Rescue Plan Act of 2021 will allow the City to expand the number of projects undertaken in the upcoming fiscal year. Planned projects primarily include infrastructure improvements such as wastewater lines in Cedar Hill Estates South Phases I and II and Trailwood Addition as well as water line replacements in Midway Park 1st Addition, Oakwood Terrace, and along South Main Street. The Texas Star Golf Course and Conference Centre is a vibrant part of the Euless community. This secluded facility, located in the midst of the Dallas/Fort Worth Metroplex, is well-known for world class golf and a challenging course that has been recognized as a premier municipal facility by leading golf publications, including Golf Digest and GolAveek. Additionally, Raven's Grille and the Conference Centre continue to receive rave reviews. The Conference Centre has 7,000 square feet of divisible space and hosts business conferences, weddings, concerts, and other events. Proposed revenues of $4,926,715 and proposed operating expenses of $4,879,599 plus capital expenses of $120,000. Request for Information The financial report is designed to provide citizens, customers, investors, and creditors with a general overview of the City's finances. If you have questions about this report or need additional information, contact the Finance Department, Attn: Janina Jewell, Director of Finance, at 201 North Ector Drive, Euless, Texas 76039, call (817) 685-1626, or e-mail jjewell(d),eulesstx. og_v. 17 CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF NET POSITION SEPTEMBER 30, 2022 ASSETS Deposits and investments Receivables, net of allowances Lease receivables Internal balances Inventories, at cost Prepaid items Restricted assets Deposits and investments Net pension asset Capital assets Land and construction in progress Other capital assets, net of accumulated depreciation/amortization Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension Deferred outflows related to OPEB Deferred charges on refunding Total deferred outflows of resources LIABILITIES Accounts payable Contracts payable Accrued liabilities Accrued interest payable Unearned revenue Money held in escrow Noncurrent liabilities Due within one year Due in more than one year Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to OPEB Deferred inflows related to pension Deferred inflows related to leases Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for Debt service Impact fees Developer agreements Court technology Juvenile cases Cable PEG fees Historical preservation Unrestricted Total net position Primary Government Governmental Business -type Activities Activities Total $ 95,123,863 $ 25,409,863 $ 120,533,726 10,947,100 5,002,439 15,949,539 5,418,653 393,424 5,812,077 (5,026,074) 5,026,074 - 7,358 273,677 281,035 1,080,131 27,774 1,107,905 20,901,497 11,481,461 32,3 82,958 27,400 177,629 205,029 62,881,042 16,423,491 79,304,533 117,599,697 76,386,817 193,986,514 308,960,667 140,602,649 449,563,316 4,560,959 875,100 5,436,059 960,103 198,968 1,159,071 91,942 269,024 360,966 5,613,004 1,343,092 6,956,096 13,526,855 2,617,329 16,144,184 2,457,426 276,721 2,734,147 1,602,097 246,932 1,849,029 265,878 84,815 350,693 2,951,078 6,588,819 9,539,897 - 2,314,235 2,314,235 6,331,732 1,602,010 7,933,742 77,247,994 20,400,132 97,648,126 104,383,060 34,130,993 138,514,053 671,513 136,377 807,890 12,623,779 2,499,007 15,122,786 5,418,653 393,424 5,812,077 18,713,945 3,028,808 21,742,753 123,862,163 73,306,877 197,169,040 4,405,396 1,348,929 5,754,325 - 3,234,445 3,234,445 2,230,259 - 2,230,259 108,919 - 108,919 189,156 - 189,156 644,986 - 644,986 843 - 843 60.034.944 26.895.689 86.930.633 $ 191,476,666 $ 104,785,940 $ 296,2 22,606 The Notes to the Basic Financial Statements are an integral part of these statements. 18 Program Activities Primary government Governmental activities Culture and recreation Development services General and administrative Highways and streets Public safety Interest and fiscal agent charges Total governmental activities Business -type activities Water and wastewater Drainage utility Golf course Other recreation enterprises Total business -type activities Total primary government NET POSITION, beginning of year NET POSITION, end of year CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2022 Program Net (Expense) Revenue and Revenues Changes in Net Position Primary Government Operating Capital Business - Charges Grants and Grants and Governmental Type Expenses for Services Contributions Contributions Activities Activities Total $ 7,714,207 $ 319,544 $ 487 $ 348,819 $ (7,045,357) $ - $ (7,045,357) 934,100 1,149,319 - - 215,219 - 215,219 24,293,764 787,552 17,813 - (23,488,399) - (23,488,399) 4,015,628 717,124 - 201,980 (3,096,524) - (3,096,524) 27,379,929 3,200,585 1,036,403 - (23,142,941) - (23,142,941) 2,417,173 - - - (2,417,173) - (2,417,173) 66,754,801 6,174,124 1,054,703 550,799 (58,975,175) - (58,975,175) 26,754,590 29,412,986 - 1,214,738 - 3,873,134 3,873,134 1,517,199 1,193,159 - 39,794 - (284,246) (284,246) 4,703,615 5,131,494 - - - 427,879 427,879 2,024,308 11905,434 - - - (118,874) (118,874) 34,999,712 37,643,073 - 1,254,532 - 3,897,893 3,897,893 $ 101,754,513 $ 43,817,197 $ 1,054,703 $ 1,805,331 (58,975,175) 3,897,893 (55,077,282) General Revenues Taxes Property taxes, levied for general purposes 24,974,349 - 24,974,349 Sales taxes 28,693,421 - 28,693,421 Car rental taxes 18,372,898 - 18,372,898 Mixed beverage taxes 201,348 - 201,348 Hotel/motel occupancy taxes 1,736,088 - 1,736,088 Gross receipts taxes 4,478,146 - 4,478,146 Investment income 804,074 174,403 978,477 Rents and royalties 1,567,269 - 1,567,269 Miscellaneous 1,304,396 949,068 2,253,464 Transfers (6,698,492) 6,698,492 - Total general revenues and transfers 75,433,497 7,821,963 83,255,460 Change in net position 16,458,322 11,719,856 28,178,178 175,018,344 93,066,084 268,084,428 $ 191,476,666 $ 104,785,940 $ 296,262,606 The Notes to the Basic Financial Statements are an integral part of these statements. 19 CITY OF EULESS, TEXAS BALANCE SHEET — GOVERNMENTAL FUNDS SEPTEMBER 30, 2022 ASSETS Deposits and investments Receivables Property taxes Accounts receivable Accrued interest receivable Due from other governments Lease receivable Prepaids and deposits Inventories, at cost Restricted deposits and investments Total assets LIABILITIES Accounts payable Contracts payable Accrued liabilities Unearned revenue Total liabilities Debt Car General Service Rental Tax Fund Fund Fund $ 24,160,358 $ 2,280,217 $ 16,580,565 335,250 90,304 - 1,150,008 1,374 - 37,979 - 28,943 3,168,352 - 3,074,025 1,193,137 2,456,419 - 105,732 - - 7,358 - - - - 1,962,219 $ 30,158,174 $ 4,828,314 $ 21,645,752 $ 1,366,146 $ 500 $ 10,985,282 1,046,232 - - - - 1,962,219 2,412,378 500 12,947,501 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes 335,250 87,330 - Unavailable revenue - other 911,504 41,250 - Deferred inflow related to leases 1,193,137 2,456,419 - Total deferred inflows of resources 2,439,891 2,584,999 - FUND BALANCES Nonspendable Prepaids, deposits, and inventories Restricted for Debt service Capital projects Developer agreements Court technology Juvenile case management Cable PEG fees Historical preservation Assigned Unassigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances 113,090 - - 2,242,815 108,919 - - 187,649 - 8,698,251 24, 896,247 - - 25,305,905 2,242,815 8,698,251 $ 30,158,174 $ 4,828,314 $ 21,645,752 The Notes to the Basic Financial Statements are an integral part of these statements. 20 General Non -major Total CIP Governmental Governmental Fund Funds Funds $ 2,705,182 $ 25,082,580 $ 70,808,902 - 38,434 463,988 33,284 541,359 1,726,025 9,737 19,324 95,983 - 1,904,806 8,147,183 - 1,769,097 5,418,653 - 15,655 121,387 - - 7,358 9,391,394 9,250,491 20,604,104 $ 12,139,597 $ 38,621,746 $ 107,393,583 $ - $ 752,465 $ 13,104,393 644,556 1,812,870 2,457,426 - 130,109 1,176,341 - 988,859 2,951,078 644,556 3,684,303 19,689,238 - - 422,580 43,914 996,668 - 1,769,097 5,418,653 1,813,011 6,837,901 - 15,655 128,745 - 2,162,581 4,405,396 8,746,838 6,437,896 15,184,734 - 2,230,259 2,230,259 - - 108,919 - 189,156 189,156 - 644,986 644,986 - 843 843 2,748,203 21,443,056 33,077,159 - - 24,896,247 11,495,041 33,124,432 80,866,444 $ 12,139,597 $ 38,621,746 $ 107,393,583 21 T H E C I T Y O EULESS 22 CITY OF EULESS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2022 Total fund balances - governmental funds Amounts reported for governmental activities in the statement of net position are different because: Capital assets of governmental funds are not current financial resources and therefore are not reported in the governmental funds balance sheet. Interest payable on long-term debt does not require current financial resources, therefore, interest payable is not reported as a liability in the governmental funds balance sheet. Internal service funds are used by management to charge the cost of certain activities, such as insurance and fleet management, to individual funds. The assets and liabilities of the internal service funds are net of the amount allocated to business -type activities. Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. Funds comprising the net OPEB liability ($9,168,287), deferred inflows ($671,513) and deferred outflows $960,103 of resources related to the OPEB are not current financial resources and therefore are not reported in the governmental funds balance sheet. Funds comprising the net pension asset $27,400, deferred inflows ($12,623,779) and deferred outflows $4,560,959 of resources related to the pension are not current financial resources and therefore, are not reported in the governmental funds balance sheet. 174,376,965 (265,878) 26,311,059 1,419,248 (8,879,697) (8,035,420) Long-term liabilities, including bonds payable, deferred charges on refixndings, and compensated absences (excluding those of internal service funds) are not due and payable in the current period and therefore, are not reported in the fund financial statements. (74,316,055) Net position of governmental activities $ 191,476,666 The Notes to the Basic Financial Statements are an integral part of these statements. 23 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2022 Revenues General property tax Gross receipts tax Mixed beverage tax General sales tax Car rental tax Fines and fees Licenses and permits Investment income DEA revenues Intergovernmental Rents and royalties Other revenues Total revenues Expenditures Current Culture and recreation Development services General and administrative Highways and streets Public safety Debt service Principal Interest and fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Issuance of lease Issuance of debt Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Debt Car General Service Rental Tax Fund Fund Fund $ 19,378,218 $3,686,153 $ - 4,398,363 - - 201,349 - - 17,498,088 - - - - 18,372,898 3,652,725 - - 1,127,642 - - 173,661 141,728 137,438 908,347 - - - 419,187 - 1,437,131 - - 48,775,524 4,247,068 18,510,336 3,555,786 - - 785,980 - - 9,649,628 - 12,248,360 1,518,171 - - 27,449,656 - - 61,897 4,350,000 - 1,189 2,248,929 - 971,369 - - 43,993,676 6,598,929 12,248,360 4,781,848 (2,351,861) 6,261,976 259,697 - - - 60,000 - 30,650 - - 2,744,924 2,380,202 - (3,257,968) (999,725) (2,452,335) (222,697) 1,440,477 (2,452,335) 4,559,151 (911,384) 3,809,641 20,746,754 3,154,199 4,888,610 $ 25,305,905 $ 2,242,815 $ 8,698,251 The Notes to the Basic Financial Statements are an integral part of these statements. 24 General Non -major Total CIP Governmental Governmental Fund Funds Funds $ - $ 2,171,871 $ 25,236,242 - 1,815,871 6,214,234 - - 201,349 - 11,195,333 28,693,421 - - 18,372,898 - - 3,652,725 - - 1,127,642 51,333 207,792 711,952 - 42,175 42,175 - 131,605 1,039,952 122,190 79,198 620,575 348,819 788,518 2,574,468 522,342 16,432,363 88,487,633 - 3,779,487 7,335,273 - 207,847 993,827 - 857,701 22,755,689 - 9,872 1,528,043 - 3,212,427 30,662,083 - 220,000 4,631,897 - 182,125 2,432,243 3,662,247 11,080, 820 15,714,436 3,662,247 19,550,279 86,053,491 (3,139,905) (3,117,916) 2,434,142 - - 259,697 7,600,000 - 7,660,000 - 168,750 199,400 391,291 6,340,709 11,857,126 (106,000) (4,557,042) (11,373,070) 7,885,291 1,952,417 8,603,153 4,745,386 (1,165,499) 11,037,295 6,749,655 34,289,931 69,829,149 $ 11,495,041 $ 33,124,432 $ 80,866,444 25 H E C I T Y O EULESS 26 CITY OF EULESS, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2022 Net change in fund balances - total governmental funds $ 11,037,295 Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over the estimated useful lives and reported as depreciation expense. This is the amount of capital expenditures recorded in the current period. 15,714,436 Governmental funds do not report contributions of assets to enterprise funds, but the governmental activities do. This is the value of assets transferred to enterprise funds. (7,724,247) Governmental funds report cash proceeds from the disposal of capital assets as revenues, while only the net gain/loss on the transaction is reported in the statement of activities and capital contributions are not reported in governmental funds. This is the amount of capital contributions and disposals recorded in the current period. (805,909) Depreciation and amortization expense on capital assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation and amortization expenses are not reported as expenditures in the governmental funds. (6,731,155) The issuance of long-term debt provides current financial resources to governmental funds, but has no effect on net position. (7,919,697) The repayment of the principal of long-term debt consumes current financial resources of governmental funds, but has no effect on net position. 4,631,897 Governmental funds report the effect of premiums, discounts, and deferred charges on refunding when debt is first issued, whereas the amounts are deferred and amortized in the statement of activities. 146,565 Current year changes in the long-term liabilities for compensated absences do not require the use of current financial resources; therefore, they are not reported as expenditures in governmental funds. (152,662) Current year changes in accrued interest payables do not require the use of current financial resources; therefore, they are not reported as expenditures in governmental funds. 15,070 Changes in the net OPEB liability and related deferred inflows and outflows not recognized on the fund financial statements under the modified accrual basis are recognized on the accrual basis in the government -wide financial statements. 179,243 Changes in the net pension liability and related deferred inflows and outflows not recognized on the fund financial statements under the modified accrual basis are recognized on the accrual basis in the government -wide financial statements. 5,009,515 Internal service funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net revenue of the internal service funds is reported with governmental activities net of the amount allocated to business -type activities. 3,201,455 Certain revenues in the government -wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. (143,484) Change in net position of governmental activities $ 16,458,322 The Notes to the Basic Financial Statements are an integral part of these statements. 27 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION - PROPRIETARY FUNDS SEPTEMBER 30, 2022 ASSETS Current assets Deposits and investments Accounts receivable and unbilled revenue less allowance for uncollectibles of $16,307 for water and wastewater and $307 for drainage utility Accrued interest receivable Lease receivable Prepaids and deposits Inventory Total unrestricted current assets Restricted deposits and investments W&WW impact fees Capital projects Revenue bond reserve for debt service Total restricted assets Total current assets Non -current assets Net pension asset Lease receivable Property, plant, and equipment in service, at cost Land Building Equipment huprovements Construction in progress Utility system Right -to -use equipment Total property, plant, and equipment in service Less accumulated depreciation/amortization Net property, plant, and equipment in service Total non -current assets Total assets Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds $ 20,096,501 $ 1,074,603 $ 2,854,282 $ 1,384,477 $ 25,409,863 $ 24,314,961 4,382,201 263,245 301,610 26,258 4,973,314 462,833 29,125 - - - 29,125 51,087 - - 36,856 36,856 - 18,228 9,546 - 27,774 958,744 135,813 - 100,706 37,158 273,677 - 24,661,868 1,337,848 3,266,144 1,484,749 30,750,609 25,787,625 3,234,445 - - - 3,234,445 - 6,898,087 6,898,087 297,393 1,348,929 1,348,929 - 11,481,461 - - - 11,481,461 297,393 36,143,329 1,337,848 3,266,144 1,484,749 42,232,070 26,085,018 51,182 77,565 42,729 6,153 177,629 - - - - 356,568 356,568 3,676,667 559,826 897,520 584,532 5,718,545 97,094 - 3,621,666 488,275 4,207,035 - 1,604,450 10,380 515,531 1,644,238 3,774,599 16,868,092 1,097,774 1,171,994 8,963,462 10,095,527 21,328,757 - 10,704,946 - - - 10,704,946 102,152,366 31,457,005 - - 133,609,371 24,238 - 157,878 45,014 227,130 119,357,535 33,199,205 14,156,057 12,857,586 179,570,383 16,868,092 52,551,989 18,125,757 9,064,724 71017,605 86,760,075 10,764,318 66,805,546 15,073,448 5,091,333 5,839,981 92,810,308 6,103,774 66,856,728 15,151,013 5,134,062 61202,702 93,344,505 6,103,774 103,000,057 16,488,861 8,400,206 7,687,451 135,576,575 32,188,792 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 656,733 72,679 123,950 21,738 875,100 Deferred outflows related to OPEB 147,127 19,387 27,818 4,636 198,968 Deferred charges on refunding 37,115 - 231,909 - 269,024 Total deferred outflows of resources 840,975 92,066 383,677 26,374 1,343,092 The Notes to the Basic Financial Statements are an integral part of these statements. 28 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION - PROPRIETARY FUNDS - CONTINUED SEPTEMBER 30, 2022 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service LIABILITIES Wastewater Utility Course Enterprises Funds Funds Current liabilities Payable from current assets Accounts payable $ 2,432,252 $ 37,102 $ 73,525 $ 74,450 $ 2,617,329 $ 422,462 Contracts payable 276,721 - - - 276,721 - Accrued salaries and wages 144,425 20,357 68,980 13,170 246,932 5,805 Current portion of bonds payable 960,000 - 530,000 - 1,490,000 - Current portion of compensated absences 28,342 3,109 6,887 1,218 39,556 344 Current portion of lease liability 5,797 - 38,275 10,765 54,837 - Accrued insurance claims - - - - 419,951 Unearned revenue 6,500,000 88,819 6,588,819 - Accrued interest 76,555 - 8,260 84,815 - Total current liabilities 10,424,092 60,568 814,746 99,603 11,399,009 848,562 Non -current liabilities Customer and escrow deposits 2,168,872 - 145,363 - 2,314,235 - Net OPEBliability 1,268,178 139,902 261,145 43,524 1,712,749 Bonds payable 15,860,852 - 2,339,512 - 18,200,364 - Compensated absences 255,081 27,986 61,985 10,963 356,015 3,097 Lease liability 12,664 - 112,436 23,521 148,621 - Total non -current liabilities 19,565,647 167,888 2,920,441 78,008 22,731,984 3,097 Total liabilities 29,989,739 228,456 3,735,187 177,611 34,130,993 851,659 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 1,833,654 241,915 362,947 60,491 2,499,007 - Deferred inflows related to OPEB 100,074 13,682 19,389 3,232 136,377 Deferred inflows related to leases - - - 393,424 393,424 Total deferred inflows of resources 1,933,728 255,597 382,336 457,147 3,028,808 - NET POSITION Net investment in capital assets 50,124,714 15,073,448 2,303,020 5,805,695 73,306,877 6,103,774 Restricted for Impact fees 3,234,445 - - - 3,234,445 - Debt service 1,348,929 - - 1,348,929 - Unrestricted 17,209,477 1,023,426 2,363,340 1,273,372 21,869,615 25,233,359 Total net position $ 71,917,565 $ 16,096,874 $ 4,666,360 $ 7,079,067 99,759,866 $ 31,337,133 Reconciliation to government -wide statement of net position Adjustment to reflect the consolidation of internal service funds' activities related to enterprise fiords 5.026.074 Net position of business -type activities $ 104,785,940 The Notes to the Basic Financial Statements are an integral part of these statements. 29 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2022 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Operating revenues Water service $ 16,446,768 $ $ $ $ 16,446,768 $ Reclaimed water service 946,434 946,434 Wastewater service 10,709,042 10,709,042 Drainage fees - 1,193,159 1,193,159 Recreation fees - 595,175 595,175 - Insurance premiums - - - 6,663,545 Service fees and miscellaneous 1,307,192 5,129,344 1,311,974 7,748,510 5,884,884 Total operating revenues 29,409,436 1,193,159 5,129,344 1,907,149 37,639,088 12,548,429 Operating expenses General and administrative 520,990 - - - 520,990 2,136,329 Water production 9,875,008 9,875,008 - Water distribution 1,708,377 1,708,377 Utility engineering 512,412 512,412 Wastewater collection and treatment 5,595,451 5,595,451 Nondepartmental 4,506,581 4,506,581 Geographic information systems 706,070 706,070 Service center 1,200,725 - 1,200,725 Drainage - 710,003 - 710,003 Recreation classes - - 430,715 430,715 Golf course 1,456,187 - 1,456,187 Pro shop 485,295 485,295 Food and beverage 1,375,316 1,375,316 Conference center 695,977 695,977 Cart operations 282,927 - 282,927 Parks at Texas Star - 1,250,772 1,250,772 Arbor Daze 73,370 73,370 - Insurance costs - - - - - 6,177,297 Depreciation 2,279,949 781,545 404,047 455,031 3,920,572 1,478,176 Amortization 25,620 - 34,646 10,728 70,994 - Total operating expenses 26,931,183 1,491,548 4,734,395 2,220,616 35,377,742 9,791,802 Operating income (loss) 2,478,253 (298,389) 394,949 (313,467) 2,261,346 2,756,627 The Notes to the Basic Financial Statements are an integral part of these statements. 30 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2022 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Nonoperating revenues (expenses) Gain (loss) on sale of capital assets $ 3,550 $ $ 2,150 $ (1,715) $ 3,985 $ 492,026 Intergovernmental revenue - 949,068 - 949,068 - Investment income 141,754 7,654 11,008 13,987 174,403 125,078 Interest expense (265,575) (70,165) (206) (335,946) - Total nonoperating revenues (expenses), net (120,271) 7,654 892,061 12,066 791,510 617,104 Income (loss) before contributions and transfers 2,357,982 (290,735) 1,287,010 (301,401) 3,052,856 3,373,731 Developer contributions 6,869,167 2,109,613 - - 8,978,780 - Transfers in - - 487,523 18,760 506,283 843,949 Transfers out (1,788,138) (46,150) - - (1,834,288) - Net income (loss) 7,439,011 1,772,728 1,774,533 (282,641) 10,703,631 4,217,680 Net position, beginning 64,478,554 14,324,146 2,891,827 7,361,708 27,119,453 Net position, end of year $ 71,917,565 $ 16,096,874 $ 4,666,360 $ 7,079,067 $ 31,337,133 Reconciliation to government -wide statement of net position Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds 1,016,225 Change in net position of business -type activities $ 11,719,856 The Notes to the Basic Financial Statements are an integral part of these statements. 31 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2022 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds OPERATING ACTIVITIES Cash received from customers $ 29,302,816 $ 1,029,239 $ 5,042,566 $ 1,895,731 $ 37,270,352 $ 12,318,064 Cash payments to suppliers for goods and services (14,897,818) (306,851) (2,433,143) (1,361,727) (18,999,539) (8,485,347) Cash payments to employees for services (3,705,794) (457,252) (2,004,232) (407,831) (6,575,109) (141,546) Net cash provided by operating activities 10,699,204 265,136 605,191 126,173 11,695,704 3,691,171 NONCAPITAL FINANCING ACTIVITIES Transfer in - - 487,523 18,760 506,283 843,949 Transfer out (1,788,138) (46,150) - - (1,834,288) - Intergovernmental revenue 949,068 - 949,068 Net cash provided by (used in) noncapital financing activities (1,788,138) (46,150) 1,436,591 18,760 (378,937) 843,949 CAPITAL AND RELATED FINANCING ACTIVITIES Impact fees 182,749 - - 182,749 - Acquistion/constructionofcapital assets (1,851,320) (544,040) (71,335) (2,466,695) (1,743,415) Interest paid on capital debt (267,554) (71,465) (206) (339,225) Principal paid on capital debt (945,000) (520,000) - (1,465,000) Principal paid on leases (5,777) (7,167) (10,729) (23,673) - Proceeds from sale of capital assets 3,550 2,150 1,990 7,690 500,404 Net cash used in capital and related financing activities (2,883,352) (544,040) (596,482) (80,280) (4,104,154) (1,243,011) INVESTING ACTIVITIES Interest received on investments 120,022 7,654 11,008 13,987 152,671 77,578 Net cash provided by investing activities 120,022 7,654 11,008 13,987 152,671 77,578 Net change in cash and cash equivalents 6,147,736 (317,400) 1,456,308 78,640 7,365,284 3,369,687 Cash and cash equivalents, beginning ofyear 25,430,226 1,392,003 1,397,974 1,305,837 29,526,040 21,242,667 Cash and cash equivalents, end of year $ 31,577,962 $ 1,074,603 $ 2, 554,282 $ 1, 884,477 $ 36,891,324 $ 24,612,354 Noncash Financing Activities Contribution of capital assets $ 6,686,418 $ 2,109,613 $ - $ - $ 8,796,031 $ - Capital acquired with lease financing $ 24,238 $ - $ 557,878 $ 45,014 $ 227,130 $ The Notes to the Basic Financial Statements are an integral part of these statements. 32 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2022 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Reconciliation of operating income (loss) to net cash provided by operating activities Operating income (loss) $ 2,478,253 $ (298,389) $ 394,949 $ (313,467) $ 2,261,346 $ 2,756,627 Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization 2,305,569 781,545 438,693 465,759 3,991,566 1,478,176 Changes in assets and liabilities: Accounts receivable and unbilled revenue (182,155) (163,920) (100,998) (404,842) (851,915) (230,365) Prepaids and deposits 28,046 (1,098) 1,016 27,964 Inventory (1,003) (13,160) (23,893) (38,056) Net pension asset (51,182) (77,565) (42,729) (6,153) (177,629) Net OPEB liability 21,424 2,810 4,215 702 29,151 Net pension (1,548,121) (132,179) (271,888) (46,283) (1,998,471) Deferred outflows (212,473) (28,287) (39,693) (6,615) (287,068) Deferred inflows 1,048,787 139,168 201,295 426,973 1,816,223 - Accounts payable 184,166 27,921 11,045 27,383 250,515 108,293 Accrued salaries and wages 33,851 5,349 11,479 3,660 54,339 (1,511) Accrued insurance claims - - - - - (420,049) Compensated absences 18,507 8,683 (1,139) 1,933 27,984 Customer and escrow deposits 75,535 - 11,607 - 87,142 Unearned revenue 6,500,000 2,613 6,502,613 Net cash provided by operating activities $ 10699,204 $ 665,136 $ 005,191 $ 226,173 $ 11, 995,704 $ 3, 991,171 Reconciliation of cash to balance sheet: Cash -current $ 20,096,501 $ 1,074,603 $ 2,854,282 $ 1,384,477 $ 25,409,863 $ 24,314,961 Cash - restricted 11,481,461 11,481,461 297,393 Cash and cash equivalents $ 31,577,962 $ 1, 774,603 $ 2, 554,282 $ 1, 884,477 $ 36, 991,324 $ 24, 112,354 The Notes to the Basic Financial Statements are an integral part of these statements. 33 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION — FIDUCIARY FUNDS SEPTEMBER 30, 2022 Stars Center Escrow Custodial Fund ASSETS Investments at fair value Investment pool Money market account Fixed income funds Equity funds Total assets LIABILITIES Refunds payable Total liabilities NET POSITION Restricted for Debt service Other post -employment benefits Total net position $ 1,427,821 $ 1,427,821 OPEB Trust Fund 573,642 3,768,388 5,463,819 $ 9,805,849 7,274 $ - 7,274 - 1,420,547 - - 9,805,849 $ 1,420,547 $ 9,805,849 The Notes to the Basic Financial Statements are an integral part of these statements. 34 CITY OF EULESS, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED SEPTEMBER 30, 2022 ADDITIONS Employer contributions Other contributions Investment income (loss) Investment income (loss) Less: investment expense Net investment income (loss) Total additions (losses) DEDUCTIONS Payments to beneficiaries Insurance claims Administrative expenses Total deductions Change in net position Net position - beginning of year Net position - ending Stars Center Escrow OPEB Custodial Fund Trust Fund $ - $ 1,663,312 - 246,671 9,983 (1,865,323) - (63,170) 9,983 (1,928,493) am 9,983 (18,510) 1,053,109 144,973 9,983 1,198,082 - (1,216,592) 1,420,547 11,022,441 $ 1,420,547 $ 9,805,849 The Notes to the Basic Financial Statements are an integral part of these statements. 35 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Statement The City of Euless (the City) was incorporated on February 24, 1953. The City operates under a Council -Manager form of government and provides the following services as authorized by its charter: general government, police and fire protection, emergency ambulance service, road and traffic signal maintenance, water and wastewater operations, drainage system, parks and recreational facilities, courts, library services, planning land use, building inspection, and traffic control. The accounting and reporting policies of the City relating to the funds included in the accompanying basic financial statements conform to accounting principles generally accepted in the United States of America (GAAP) applicable to state and local governments. GAAP for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The more significant accounting policies of the City are described as follows: Financial Reporting Entity As required by GAAP, these basic financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. The blended component units, although legally separate entities, are, in substance, part of the primary government's operations. As such, data from these units is combined with data of the primary government. Blended Component Units The City includes four component units in the financial statements. The Euless Development Corporation (Corporation) is used to account for the accumulation of half -cent sales tax proceeds dedicated to building and improving City parks and facilities, enhancing library services, and stimulating economic development activities within the City. The Euless Crime Control and Prevention District (District) is used to account for the accumulation and use of quarter -cent sales tax proceeds dedicated for crime reduction programs. The Corporation and the District are reported as special revenue funds of the primary government. The Boards of Directors of both component units are substantively the same as the City Council. There are seven directors on each board, four of whom are council members which constitutes a voting majority of the City Council. The remaining three board members are residents of the City. Upon dissolution of the Corporation or the District, the entity's assets will be distributed to the City. Each component unit provides all of its services to the City. The financial statements for the units were obtained from the respective Boards of Directors. Financial information for both entities may be obtained from the City. 36 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Financial Reporting Entity — Continued Blended Component Units — Continued The Tax Increment Reinvestment Zone #3 — Glade Parks (TIRZ #3) is also a blended component unit of the City and is reflected in the financial statements as a special revenue fund. TIRZ #3 was created to stimulate development and enhance the value of taxable real property within the boundaries of the zone. Tarrant County and Tarrant County College District are taxing entities participating in TIRZ #3. The Board of Directors of TIRZ #3 is substantially the same as the City Council and management of the City has operational responsibility for TIRZ #3. The Board is comprised of seven directors, four of whom are council members which constitutes a voting majority of the Board. The remaining three board members are representatives selected by the other participating taxing entities and the Tarrant County Hospital District. Financial information for TIRZ #3 may be obtained from the City. The Tax Increment Reinvestment Zone #4 — Midtown (TIRZ #4) is also a blended component unit of the City and is reflected in the financial statements as a special revenue fund. The Midtown CIP Fund is also part of TIRZ#4. TIRZ #4 was created to stimulate development and enhance the value of taxable real property within the boundaries of the zone. Tarrant County, Tarrant County Hospital District, and Tarrant County College District are taxing entities participating in TIRZ #4. The Board of Directors of TIRZ #4 is substantially the same as the City Council and management of the City has operational responsibility for TIRZ #4. The Board is comprised of seven directors, four of whom are council members which constitutes a voting majority of the Board. The remaining three board members are representatives selected by the other participating taxing entities. Financial information for TIRZ #4 may be obtained from the City. Basis of Presentation The government -wide financial statements (the statement of net position and the statement of activities) report information on all of the activities of the City, except fiduciary funds. The effect of interfund activity, with the exception of interfund services provided or used, within the governmental and business -type activities columns, 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 user fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given program and 2) operating or capital grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items not properly included among program revenues are reported instead as general revenues. 37 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued Fund Financial Statements The City segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate compliance with various legal provisions. Separate statements are presented for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. These statements present each major fund as a separate column on the fund financial statements; all non -major funds are aggregated and presented in a single column. Governmental funds are those funds through which most governmental functions are typically financed. The measurement focus of governmental funds is on the sources, uses, and balances of current financial resources. The City has presented the following major governmental funds: General Fund The General Fund is the main operating fund of the City. This fund is used to account for all financial resources not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges, and capital improvement costs that are not paid through other funds are paid from the General Fund. Debt Service Fund The Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal, interest, and related costs on general long-term debt paid primarily from property taxes levied by the City. The fund balance of the Debt Service Fund is restricted for debt service expenditures. Car Rental Tax Fund The Car Rental Tax Fund is used to account for revenues received from the collection of short-term motor vehicle rental taxes and the expenditures thereof. Per contractual agreement, revenues are shared with the cities of Dallas and Fort Worth. The City's portion of the revenue is used primarily for debt reduction, one-time capital projects, and to maintain the property tax rate. 38 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued General CIP Fund The General CIP Fund is used to account for various general construction projects within the City. Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives are determinations of net income, financial position, and cash flow. All assets and liabilities are included on the statement of net position. The City has presented the following major proprietary funds: Water and Wastewater Fund Water and Wastewater Fund is used to account for the acquisition, operation and maintenance of a municipal water and wastewater utility, supported primarily by user charges. Drainage Utility Fund Drainage Utility Fund is used to account for the acquisition, operation, and maintenance of a municipal drainage utility, supported primarily by user charges. Golf Course Fund Golf Course Fund is used to account for operation and maintenance of the City's golf course, supported primarily by user charges. Other Recreation Enterprises Fund Other Recreation Enterprises Fund is used to account for operations and maintenance of recreation programming, Arbor Daze, and the Parks at Texas Star, supported by user charges. Additionally, the City reports the Internal Service Funds which are used to account for equipment replacement, risk management, and self -funded health insurance coverage and disability insurance provided to employees of the City. Proprietary funds distinguish operating revenues and expenses from non -operating 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. All revenues and expenses not meeting this definition are reported as non -operating revenues and expenses. Operating expenses for the proprietary funds include the cost of personnel and contractual services, supplies, and depreciation on capital assets. 39 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued The City also reports two fiduciary funds in the financial statements. The Stars Center Escrow Custodial Fund is a custodial fund that accounts for investments that will be held on behalf of the Dallas Stars until the debt issued for the specific purpose of purchasing the Stars Center is fully repaid. The OPEB Trust Fund accounts for the accumulation and use of resources for benefit payments related to post -employment health care. Custodial funds account for resources held for others in a custodial capacity. This fund type is used to account for assets held by the City as an agent. This fund was previously reported as an agency fund. The fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting. Reporting is oriented toward providing accountability for the sources, uses, and balances of resources held for others; therefore, the additions and deductions in fiduciary balances are reported. With this measurement focus, assets and liabilities which are due and payable associated with the operation of these funds are included on the funds' statements of net position. The funds' equity is segregated into restricted net position and unrestricted net position, if applicable. Measurement Focus and Basis of Accounting Measurement focus refers to what is being measured; basis of accounting refers to when revenues and expenditures/expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement made, regardless of the measurement focus applied. The government -wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. The economic resources measurement focus means all assets, deferred inflows/outflows of resources, and liabilities (whether current or noncurrent) are included on the statement of net position and the operating statements present increases and decreases in total net position. Under the accrual basis of accounting, revenues are recognized when earned, including unbilled water, wastewater, and drainage services which are accrued. Expenses are recognized at the time the liability is incurred. Governmental fund financial statements are reported using the current financial resources measurement focus and are accounted for using the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual; i.e., become both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes and other revenues as available if they are collected within 60 days of year end. Expenditures are recorded when the related fund liability is incurred. However, debt service expenditures, as well as expenditures related to compensated absences and other long-term liabilities are recorded only when payment is due. 40 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Measurement Focus and Basis of Accounting — Continued The significant revenues susceptible to accrual are property taxes, franchise fees, licenses, charges for service, interest income, and intergovernmental revenues. Sales taxes and short-term motor vehicle rental taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. All other governmental fund revenues are recognized when received. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Deposits and Investments Substantially all operating cash, deposits, and short-term investments are maintained in consolidated cash accounts or individual fund investment accounts. Related interest income is allocated to the various funds based primarily on ownership by each fund of specific investments. Cash equivalents consist of highly -liquid investments with original maturities of three months or less. For purposes of the statement of cash flows, the City considers all highly liquid investments to be cash equivalents. Investments in U.S. Treasury and agency obligations with maturities of one year or less when purchased are reported at amortized cost. All other investments are reported at fair value. State statutes authorize the City to invest in obligations of the U.S. Government or its agencies; obligations of the State of Texas or its agencies; and certain other obligations, repurchase agreements, money market mutual funds, and certificates of deposits within established criterion. Property Taxes Property taxes are levied for appropriation for the fiscal year beginning on October 1, are due October 1, attach as an enforceable lien on property as of January 1, and become delinquent on February 1. Property taxes are accrued based on the period for which they are levied and available. Delinquent taxes estimated not to be available are treated as deferred inflows of resources. Property taxes for cities, including those applicable to debt service, are limited by the Texas Constitution to $2.50 per $100 of assessed valuation. The City's current tax rate is $0.475 per $100 of assessed valuation ($0.4625 per $100 last year) and assessed valuation is approximately 100% of estimated value. Inventories Inventories, which are recognized as expenditures/expenses as consumed, are stated at cost (first - in, first -out method) for the General Fund, Enterprise Funds and Internal Service funds. 41 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Inventories — Continued Inventories consist primarily of expendable supplies for the General Fund and Internal Service funds and merchandise for resale for the Enterprise Funds. Prepaid Items Prepaid balances are for payments made by the City in the current year to provide services occurring in the subsequent fiscal year, and are recognized as expenditures utilizing the consumption method. Transactions Between Funds Interfund services provided and used are accounted for as revenues and expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as a reduction of expenditures or expenses in the fund reimbursed. All other interfund transactions are recorded as transfers. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the fund financial statements for proprietary funds. All capital assets are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated assets are recorded at acquisition value on the date donated. Repairs and maintenance are recorded as expenses. Renewals and betterments are capitalized. Assets capitalized have an original cost of $5,000 or more and over one year of useful life. Depreciation has been calculated on each class of depreciable property using the straight-line method. Estimated useful lives are as follows: Buildings 33 1/3 years Water and wastewater system 33 1/3 years Storm drainage system 33 1/3 years Infrastructure 7 - 40 years Machinery and equipment 5 - 15 years Improvements 25 years Right -to -use assets 5 - 15 years 42 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Leases - Lessee The City is a lessee for noncancellable leases of property and equipment. The City recognizes a lease liability, reported within long-term debt, and right -to -use lease asset (lease asset), reported with other capital assets in the government -wide and proprietary fund financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over the shorter of the lease term or its useful life. Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. • The City uses the interest charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. • Lease payments included in the measurement of the lease liability are composed of fixed payments, variable payments fixed in substance or that depend on an index or a rate, purchase option price that the City is reasonably certain to exercise, lease incentives receivable from the lessor, and any other payments that are reasonably certain of being required based on an assessment of all relevant factors. The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. Compensated Absences Employees may accumulate a maximum of two times their annual vacation accrual. The City's policy is to pay the employee accumulated vacation upon termination. The City does not pay employees for accumulated sick leave upon termination. The short-term portion of vacation pay accrued in the proprietary fund financial statements is reported as accrued salaries and wages (a current liability). The long-term component is reflected in non -current liabilities as compensated absences. Compensated absences are recorded in governmental funds as they mature (i.e. as taken). The liability for governmental fund compensated absences is typically liquidated in the general fund, the juvenile case fund, the half -penny sales tax fund, and the crime control and prevention district fund. 43 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Fund Balance Classifications Fund balances are classified as follows on the governmental fund financial statements: Nonspendable Restricted for Debt service Capital projects Developer agreements Court technology Juvenile case management Cable PEG fees Historical preservation Assigned Capital projects Betterments Emergency/radio systems Tourism and conference facilities Parks, library, and economic development Police department Grants Other Unassigned Total Reported in Nonmaj or Total Debt Service Car Rental Tax General CIP Governmental Governmental General Fund Fund Fund Fund Funds Funds $ 113,090 $ - $ - $ - $ 15,655 $ 128,745 - 2,242,815 - - 2,162,581 4,405,396 - - - 8,746,838 6,437,896 15,184,734 - - - - 2,230,259 2,230,259 108,919 - - - - 108,919 - - - - 189,156 189,156 644,986 644,986 - 843 843 - - - 2,748,203 4,422,823 7,171,026 94,789 - - - - 94,789 47,230 - - - - 47,230 - - - - 2,155,519 2,155,519 - - - - 7,302,465 7,302,465 - - - - 3,253,022 3,253,022 - - - - 277 277 45,630 - 8,698,251 - 4,308,950 13,052,831 24,896,247 - - - 24,896,247 $ 25,305,905 $ 2,242,815 $ 8,698,251 $ 11,495,041 $ 33,124,432 $ 80,866,444 Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The City has classified prepaid items and inventory as being nonspendable. Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. The City has recorded the following restrictions at year-end: a. Restricted for debt service represents that portion of fund equity legally restricted for retirement of bond principal and payment of interest and related charges. b. Restricted for capital projects represents that portion of fund equity legally restricted by debt covenant for capital projects and capital equipment purchases. 44 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Fund Balance Classifications — Continued c. Restricted for developer agreements represents the portion of fund equity that must be used for future improvements to various development areas within the City. d. Restricted for court technology represents funds collected from a court technology fee that must be used to upgrade court systems. e. Restricted for juvenile case processing represents funds collected from a fee on municipal court citations that must be used to support the expenditures associated with juvenile case processing. f. Restricted for cable PEG fees represents the portion of fund equity that must be used for the expansion of the City's public, educational, and government access channel. g. Restricted for historical preservation represents donations that must be used toward the preservation of the City's historical sites. Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action (ordinance) of the City Council. These amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. The City has no committed fund balance at year-end. Assigned: This classification includes amounts that are constrained by the City's intended use for a specific purpose but are neither restricted nor committed. The City Council delegates the authority for determining this intent to the City Manager. Assignments are made at the City Manager's discretion, but generally represent items for which specific funds have been informally dedicated internally. This classification also includes the remaining positive fund balance for all governmental funds except for the General Fund. The City has recorded the following assignments at year-end: a. Assigned for capital projects represents revenue sources that are to be used for capital projects for the City. b. Assigned for betterment represents funds donated by citizens that are to be used for the betterment of the community. c. Assigned for emergency/radio systems represents funding that is to be used to upgrade emergency and radio systems. d. Assigned for tourism and conference facilities represents funds to promote the City through tourism, conference booking, and historical preservation. e. Assigned for parks, libraries, and economic development represents funds from sales taxes that are to be used for park improvements, library activities, and economic development throughout the City. f. Assigned for the police department are funds from the Crime Control and Prevention District and police drug arrests and asset seizures to be used for police department expenditures. 45 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Fund Balance Classifications — Continued g. Assigned for grants are funds from specific revenues that are to be spent for allowable expenditures in accordance with specific grant requirements. h. Assigned for other are funds from specific revenues that are to be spent for facility remodel, victim assistance, and injured animals. Unassigned: This classification includes all amounts that are not included in other spendable classifications and the remaining negative fund balance for any governmental funds. The General Fund is the only fund that reports a positive unassigned fund balance. When available, the City uses restricted fund balances first, followed by committed resources, assigned resources, then unassigned resources, as appropriate opportunities arise. However, the City reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds. Net Position Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources of governmental and business -type activities and proprietary funds. Net investment in capital assets consists of capital assets, net of accumulated depreciation, plus capital -related deferred outflows of resources, reduced by the outstanding balances of any borrowing and capital related deferred inflows of resources used for the acquisition, construction, or improvements of those assets, plus unspent debt proceeds. Net position is reported as restricted when there are limitations imposed on its use, either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. Pensions For purposes of measuring the net pension liability (asset), pension related deferred outflows and inflows of resources, and pension expense, City specific information about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and additions to/deductions from the City's Fiduciary Net Position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Information regarding the City's Total Pension Liability is obtained from TMRS through a report prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith & Company, in compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions. 46 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Other Post -Employment Benefits (OPEB) For purposes of measuring the net OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB expense, City specific information about its Fiduciary Net Position and additions to/deductions from the City's Fiduciary Net Position have been determined on the same basis as they are reported. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Information regarding the City's OPEB liability is obtained from an actuarial valuation through a report prepared for the City by their consulting actuary in compliance with Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions. Deferred Outflows/Inflows of Resources In addition to assets, the statement of net position 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 assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following items that qualify for reporting as deferred outflows of resources: • Deferred charges on refundings — 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 debt or refunding debt. • Pension contributions after measurement date — these contributions are deferred and recognized in the following fiscal year. • Difference in expected and actual pension experience — this difference is deferred and amortized over a closed period that approximates the estimated average remaining lives of all members on the measurement date. • Difference in pension actuarial assumption changes — this difference is deferred and amortized over a closed period that approximates the estimated average remaining lives of all members on the measurement date. • Difference in projected and actual investment earnings on OPEB assets — this difference is deferred and amortized over a closed five-year period. In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting as deferred inflows of resources: • Difference in projected and actual investment earnings for pension assets — the difference is deferred and amortized over a closed five-year period. 47 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Deferred Outflows/Inflows of Resources — Continued • Difference in expected and actual OPEB experience — this difference is deferred and amortized over a closed period that approximates the estimated average remaining lives of all members on the measurement date. • Difference in OPEB actuarial assumption changes — this difference is deferred and amortized over a closed period that approximates the estimated average remaining lives of all members on the measurement date. • Leases — this amount results from the City's long-term lease agreements in which the City is a lessor. This amount is deferred and amortized over the lease period. Tax Abatements The City provides tax abatement programs through economic development agreements designed to promote local economic development and redevelopment; spur economic improvement; stimulate business and commercial activity within the City; retain, create, and attract jobs; train and retrain employees of local businesses; generate additional sales tax and enhance the property tax base and economic condition of the City. Agreements generally contain recapture provisions which may require repayment or termination if the recipients do not meet the required provisions. As of September 30, 2022, the City has two categories of tax abatement programs for economic development: Tax Abatements — The City has designated tax reinvestment zones and negotiated tax abatement agreements with applicants as authorized by the Texas Tax Code Chapter 312 and administered through the City's Tax Abatement Policy to promote development and redevelopment within the City. Such abatement agreements authorize the appraisal district to reduce the assessed value of the taxpayer's property by a percentage specified in the agreement, and the taxpayer will pay taxes on the lower assessed value during the term of the agreement. Recipients receiving tax abatements generally commit to the creation of new value of eligible property improvements, either for new or improved existing facilities, made subsequent to the agreement ranging from 35% to 75% for up to 10 years. No property taxes were abated under this program in fiscal year 2022. General Economic Development Agreements — The City has entered into various agreements under Texas Local Government Code Chapter 380 to stimulate economic development. Such agreements may provide rebates, grants, or loans for promotion of economic development including attracting new business and encouraging expansion or retention of existing businesses. Rebates may be a flat amount or percentage of property taxes or sales taxes received by the City. For fiscal year 2022, the City rebated $1,181,594 in sales taxes, or 4.11 % of the total sales tax revenues and $17,840 in property tax revenue, or less than 0.08% of the total property tax revenues. These rebates are reflected in non -departmental expenditures in the general fund and in general and administrative expenditures in the EDC fund. 48 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Leases - Lessor The City is a lessor for noncancellable leases of property and buildings. The City recognizes a lease receivable and a deferred inflow of resources in the government -wide, governmental fund and proprietary fund financial statements. At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease payments. • The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. • Lease payments included in the measurement of the lease receivable are composed of fixed payments from the lessee, variable payments from the lessee that are fixed in substance or that depend on an index or a rate, residual value guarantee payments from the lessee that are fixed in substance, and any lease incentives that are payable to the lessee. The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. Implementation of New Accounting Standards GASB Statement No. 87, Leases, (GASB 87), establishes a single model for lease accounting based on the foundational principle that leases are financings of the right -to -use an underlying asset. Under GASB 87, a lessee is required to recognized a lease liability and an intangible right - to -use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about a government's leasing activities. 49 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Implementation of New Accounting Standards — Continued The requirements of this statement were originally effective for reporting periods beginning after December 15, 2019; however, issuance of GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance (GASB 95), extended the effective date of GASB 87 to reporting periods beginning after June 15, 2021, with earlier application encouraged. GASB 87 was implemented in the City's 2022 financial statements, resulting in recognition of $339,262 in lease liabilities and lease assets, and $6,377,251 of lease receivables and deferred inflows of resources as of October 1, 2021 in the government -wide and proprietary fund financial statements to conform to the new standard. NOTE 2. DEPOSITS AND INVESTMENTS Deposits State statutes and the City's investment policy require that all uninsured deposits in financial institutions be fully collateralized by U.S. Government obligations or its agencies or instrumentalities or direct obligations of Texas or its agencies or instrumentalities that have a market value of not less than the principal amount of the deposits or by a letter of credit issued by a federal home loan bank. The City's deposits were fully insured or collateralized as required by state statutes as of September 30, 2022. At year-end, the carrying amount of the City's deposits was $999,166 with a bank balance of $1,209,302. The total bank balance is covered by Federal Depository Insurance Corporation (FDIC) insurance or by collateral for balances in excess of FDIC coverage. Collateral is held by Bank of NY Mellon in the City's name under a joint safekeeping agreement with Frost National Bank for City deposits at Frost Bank. The market value of the collateral provided by Frost Bank at the close of the fiscal year was $1,307,529. The balances at Bank of Texas (BOT) are covered by FDIC insurance and collateral pledged to cover the balances in the BOT short-term cash fund. Investments State statutes, City bond ordinances, and City resolutions authorize the City's investments. The City is authorized to invest in obligations of the U.S. Government and its agencies and instrumentalities, obligations of the State of Texas and its agencies and instrumentalities, fully - insured or collateralized certificates of deposit, fully -collateralized repurchase agreements and reverse repurchase agreements, government pools, and no-load SEC -registered money market funds consisting of any of these securities listed. 50 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued Because the City is responsible for the investment portfolio of its component units, the City's investment practices and policies disclosed herein apply equally to its component units. During the year ended September 30, 2022, the City did not own any types of securities other than those permitted by statute. Investment Tvne Interest bearing bank deposits Investments measured at amortized cost: Investment Pools: TexasClass TexPool TexSTAR Investments measured at fair value: U.S. Treasury CD U.S. Government Agency Securities: FNMA FFCB FHLB FHLMC FAMCA Total Book Value Fair Value Level 2 $ 398,088 27,051,405 31,023,037 25,239,483 1,998,320 1,936,933 5,210,000 5,118,130 982,500 970,800 30,481,080 29,933,570 26,993,512 26,575,770 3,000,000 2,969,680 1,997,444 1,938,300 $ 154,374,869 $ 69,443,183 % of Rating Portfolio WAM Rating Agency 0.3% 17.5% 24 AAArn S&P 20.1% 14 AAAm S&P 16.4% 12 AAAm S&P 1.3% 7 Aaa Moody's 3.4% 4 Not rated 0.6% 2 AA+/Aaa S&P/Moody's 19.7% 40 AA+/Aaa S&P/Moody's 17.5% 64 AA+/Aaa S&P/Moody's 1.9% 8 AA+/Aaa S&P/Moody's 1.3% 4 Not rated 1 UU% Weighted average maturity (WAM) of the portfolio by investment type categories reflected in the previous table is stated in days. For the investment pools, the Reset WAM is presented. Investment type acronyms displayed in the previous table are defined as follows: CD — Certificate of Deposit, FNMA — Federal National Mortgage Association, FFCB — Federal Farm Credit Bank, FHLB — Federal Home Loan Bank, FHLMC — Federal Home Loan Mortgage Corporation, and FAMCA — Federal Agricultural Mortgage Corporation. The rating agency acronyms are defined as follows: S&P — Standard and Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. and Moody's — Moody's Investor Service, Inc. Additional information about the rating agency or the significance of the ratings provided may be obtained from each agency's web site. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application provides a framework for measuring fair value which establishes a three -level fair value hierarchy that describes the inputs that are used to measure assets and liabilities. • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date. • Level 2 inputs are inputs — other than quoted prices included within Level 1 that are observable for an asset or liability, either directly or indirectly. • Level 3 inputs are unobservable inputs for an asset or liability. 51 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued Fair Value — Continued The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price for an identical asset or liability is not observable, a government should measure fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. The City has recurring fair value measurements as presented in the previous table. The City's investment balances and weighted average maturity of such investments are as shown. Investment pools are measured at amortized cost and are exempt from fair value reporting. U.S Treasury and U.S. Government Agency Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Certificates of Deposit classified in Level 2 of the fair value hierarchy are valued using inputs such as interest rates and yield curves that are observable at commonly quoted intervals. All of the public fund investment pools (pools) in which the City is a participant use amortized cost to value the portfolio. Amortized cost, in most cases, approximates the market value of the securities held. In order to meet the criteria to be recorded at amortized cost, investment pools must transact at a stable net asset value per share and maintain certain maturity, quality, liquidity and diversification requirements within the investment pool. The pools in which the City invests transact at a net asset value of $1.00 per share, have a weighted average maturity of 60 days or less and weighted average life of 120 days or less, hold investments that are highly rated by a nationally recognized statistical rating organization, have no more than 5% of the portfolio with one issuer (excluding U.S. government securities), and can meet reasonably foreseeable redemptions. The TexPool investment pool is an external investment pool valued at amortized cost. TexPool has a redemption notice period of one day and has no maximum transaction amounts. Texpool's 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 or state emergency that affects the pool's liquidity. 52 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued The TexSTAR investment pool is an external investment pool measured at amortized cost. TexSTAR's strategy is to seek preservation of principal, liquidity and current income through investment in a diversified portfolio of short-term marketable securities. TexSTAR has a redemption notice period of one day and may redeem daily. The investment pool's 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 or state emergency that affects the pool's liquidity. The MBIA Texas CLASS Investment Pool is governed by a Board of Trustees. The number of trustees is determined and elected by the participants in the pool annually but it must be comprised of an odd number with a minimum of three trustees. The Board meets upon the request of at least two trustees, but not less than once annually. The pool is tailored to comply with the Public Funds Investment Act. Duties of the governing board include oversight responsibility. TexPool falls under the purview of the Texas Comptroller of Public Accounts (Comptroller) who is responsible for oversight of TexPool operations. Federated Hermes is responsible for managing pool assets and day-to-day operations. TexSTAR is duly chartered and administered by HilltopSecurities Inc. and JP Investment Management, Inc. TexSTAR has established a governing board that is partially comprised of pool participants. Duties of the governing board include oversight responsibility. The Comptroller and the governing board exercise oversight of the pools' activities via daily, weekly, and monthly reporting requirements. Additionally, per the requirements of the Public Funds Investment Act (PFIA), all pools will maintain an AAA or equivalent rating from at least one nationally recognized rating agency. The PFIA also requires an annual examination of the financial statements of the pools by an independent certified public accounting firm. In connection with the financial audit, a compliance audit of management controls on investments and adherence to the investment policies is also required. Interest Rate Risk In compliance with the City's Investment Policy, as of September 30, 2022, the City minimized the interest rate risk, the risk relating to the decline in market value of securities in the portfolio, by: limiting the weighted average maturity to 365 days and the stated maturity to two years or less, with the exception of securities purchases related to reserve funds; structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities in the secondary market prior to maturity; monitoring credit ratings of portfolio positions to assure compliance with rating requirements imposed by the PFIA; and investing funds primarily in money market mutual funds, government investment pools, and shorter -term securities. 53 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Interest Rate Risk — Continued The following table details the maturity schedule for the City's investment portfolio as of September 30, 2022: Maturity Schedule Book Value Fair Value % of Portfolio Overnight Less than 1 month 1 to 6 months 6 to 9 months 9 to 12 months 12 to 18 months Over 18 months Total Credit Risk $ 83,712,013 1,249,700 20,214,763 17,486,657 10,713,236 16,998,500 $ 83,712,013 1,247,771 20,049,931 17,163,361 10,456,400 16,568,840 4,000,000 3,956,880 $ 154,374,869 $ 153,155,196 100% In compliance with the City's Investment Policy, as of September 30, 2022, the City minimized credit risk losses due to default of a security issuer or backer, by: limiting investments to the safest types of securities; primarily investing in U.S. Agency Bonds rated AA+ by Standard & Poor's; pre -qualifying financial institutions, brokers/dealers, and advisors with which the City will do business; and diversifying the investment portfolio so that the potential losses on securities are minimized. Custodial credit risk — risk that a government will not be able to recover (a) deposits if the depository financial institution fails or (b) the value of investment or collateral securities that are in the possession of an outside party if the counterparty to the investment or deposit transaction fails. To minimize such risk, the City requires collateralization of deposits in excess of FDIC coverage, utilizes the delivery vs. payment method for investment purchases, and contracts with a third -party collateral safekeeping agent. Per the terms of its depository agreement, for bank deposits in excess of the coverage provided by the FDIC, the City requires the depository bank to pledge to the City securities (collateral) equal to 105% of the largest balances the City maintains in the bank. The percentage as shown reflects the requirement based on market value of the pledged securities. The City actively monitors and manages collateral levels for all deposits. On September 30, 2022, the City's bank balances were fully insured or collateralized. The City's depository bank also acts as its safekeeping agent per the terms of the depository contract. City policy dictates that all securities rendered for payment will be sent delivery vs. payment, meaning that the funds required for purchase of a security will not be released until the safekeeping agent has received the security purchased in the City's name. No broker holds City funds. The City does not purchase securities from its depository bank or any subsidiary banks of the same bank holding company. 54 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2022, was as follows: Balance Balance Beginning Adjustment/ End of of Year Increase Decrease Transfer Year Governmental activities Capital assets not being depreciated/amortized Land $ 37,236,948 $ - $ - $ 5,710,381 $ 42,947,329 Construction in progress 26,565,928 6,936,491 (1,500) (13,567,206) 19,933,713 Total capital assets not being depreciated/amortized 63,802,876 6,936,491 (1,500) (7,856,825) 62,881,042 Capital assets being depreciated/amortized Buildings 70,045,190 - (1,194,636) 766,286 69,616,840 Improvements other than buildings 18,834,232 151,596 - 3,334,003 22,319,831 Infrastructure 102,533,369 66,710 - 3,600,785 106,200,864 Machinery and equipment 14,789,816 773,701 (235,215) 155,751 15,484,053 Right -to -use equipment - 259,697 - - 259,697 Total capital assets being depreciated/amortized 206,202,607 1,251,704 (1,429,851) 7,856,825 213,881,285 Less accumulated depreciation/amortization Buildings (31,399,512) (2,051,916) 192,972 - (33,258,456) Improvements other than buildings (5,996,045) (573,769) - - (6,569,814) Infrastructure (49,964,731) (2,777,574) - - (52,742,305) Machinery and equipment (8,721,353) (1,266,001) 234,462 - (9,752,892) Right -to -use equipment - (61,895) - - (61,895) Total accumulated depreciation/amortization (96,081,641) (6,731,155) 427,434 - (102,385,362) Total capital assets being depreciated/amortized, net 110,120,966 (5,479,451) (1,002,417) 7,856,825 111,495,923 Total governmental fund capital assets, net 173,923,842 1,457,040 (1,003,917) - 174,376,965 Internal service funds Capital assets being depreciated Machinery and equipment 16,039,445 1,743,416 (914,769) - 16,868,092 Total internal service assets being depreciated 16,039,445 1,743,416 (914,769) - 16,868,092 Less accumulated depreciation Machinery and equipment (10,192,532) (1,478,176) 906,390 - (10,764,318) Total internal service funds capital assets, net 5,846,913 265,240 (8,379) - 6,103,774 Total governmental activities capital assets, net $179,770,755 $ 1,722,280 $(1,012,296) $ - $180,480,739 55 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS — CONTINUED Business -type activities Capital assets not being depreciated/amortized Land Construction in progress Total capital assets not being depreciated/amortized Capital assets being depreciated/amortized Buildings Equipment Improvements Utility system Right -to -use equipment Total capital assets being depreciated/amortized Less accumulated depreciation and amortization Buildings Equipment Improvements Utility system Right -to -use equipment Total accumulated depreciation and amortization Total capital assets being depreciated/amortized, net Total business -type activities capital assets, net Balance Balance Beginning Adjustment/ End of of Year Increase Decrease Transfer Year $ 3,618,545 $ - $ - $ 2,100,000 $ 5,718,545 10,428,441 10,479,015 - (10,202,510) 10,704,946 14,046,986 10,479,015 - (8,102,510) 16,423,491 4,207,035 - - - 4,207,035 3,795,322 20,282 (41,005) - 3,774,599 21,276,623 65,081 (12,947) - 21,328,757 124,808,514 698,347 - 8,102,510 133,609,371 - 227,130 - - 227,130 154,087,494 1,010,840 (53,952) 8,102,510 163,146,892 (2,904,038) (124,217) - - (3,028,255) (2,355,147) (271,406) 37,301 - (2,589,252) (12,538,264) (613,877) 12,947 - (13,139,194) (65,068,631) (2,911,072) - - (67,979,703) - (23,671) - - (23,671) (82,866,080) (3,944,243) 50,248 - (86,760,075) 71,221,414 (2,933,403) (3,704) 8,102,510 76,386,817 $ 85,268,400 $ 7,545,612 $ (3,704) $ - $ 92,810,308 Capital asset depreciation and amortization expense was charged as a direct expense to programs of the primary government as follows: Governmental activities Culture and recreation Development General administrative Highways and streets Public safety Total capital asset depreciation and amortization expense - governmental activities Business -type activities Water and wastewater Drainage utility Golf course Other recreation enterprises Total capital asset depreciation and amortization expense - business -type activities $ 1,051,590 32,244 3,661,637 2,853,930 609,930 $ 8,209,331 $ 2,285,726 781,545 411,213 465,759 $ 3,944,243 Outstanding commitments at September 30, 2022, under authorized construction contracts, were $1,620,407. These outstanding commitments are to be financed by available deposit and investment balances, which include proceeds from previous bond issuances. 56 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT The following is a summary of long-term debt activity of the City for the year ended September 30, 2022: Governmental activities General obligation bonds Certificates of obligation Sales tax revenue bonds Tax notes Lease liability Premium on debt Discount on debt Net pension liability Net OPEB liability Compensated absences Total governmental activities Business -type activities Water and sewer revenue bonds General obligation refunding bonds Lease liability Premiums on debt Discounts on debt Net pension liability Net OPEB liability Compensated absences Total business -type activities Total primary government Balance Balance Due Beginning End within of Year Increases Decreases of Year One Year $ 4,115,000 $ - $ (1,105,000) $ 3,010,000 $1,140,000 54,930,000 - (2,370,000) 52,560,000 2,505,000 5,245,000 - (220,000) 5,025,000 225,000 2,370,000 7,660,000 (875,000) 9,155,000 1,990,000 259,697 - (61,895) 197,802 62,108 2,501,558 - (197,428) 2,304,130 197,426 (68,970) - 9,682 (59,288) (9,682) 10,905,541 - (10,905,541) - - 9,021,829 146,458 - 9,168,287 - 2,069,252 561,190 (411,647) 2,218,795 221,880 91,348,907 8,367,648 (16,136,829) 83,579,726 6,331,732 17,780,000 - (945,000) 16,835,000 960,000 3,295,000 - (520,000) 2,775,000 530,000 79,565 147,565 (23,672) 203,458 54,837 117,485 - (19,243) 98,242 19,241 (19,504) - 1,626 (17,878) (1,625) 1,998,471 - (1,998,471) - - 1,683,598 29,151 - 1,712,749 - 367,587 97,386 (69,402) 395,571 39,557 25,302,202 274,102 (3,574,162) 22,002,142 1,602,010 $116,651,109 $ 8,641,750 $ (19,710,991) $105,581,868 $7,933,742 Governmental fund net pension liability (asset) and net OPEB liability are typically liquidated by the general, half -penny sales tax, crime control and prevention district, and juvenile case funds. General Obligation Bonds General obligation bonds and general obligation refunding bonds provide funds for the acquisition and construction of major capital equipment, City facilities, and infrastructure assets and the refunding of previously issued debt instruments. General obligation bonds require voter authorization; whereas general obligation refunding bonds do not. General obligation bonds are direct obligations of the City, payable from a continuing and direct ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City as provided in the ordinances authorizing issuance of the bonds. 57 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED General Obligation Bonds — Continued The City is required to compute an interest and sinking fund tax rate sufficient to cover the annual debt service requirements inclusive of anticipated drawdown of reserves, transfers or revenues from self-supporting debt systems, and other miscellaneous sources. As of September 30, 2022, general obligation bonds currently outstanding are as follows: Interest Maturity Principal Rate % Dated Date Outstanding General Obligation Bonds Taxable Refunding, Series 2010 4.4% 08/15/2010 08/01/2025 $1,955,000 Refunding, Series 2012 3% — 3.125% 12/01/2011 02/15/2024 1,055,000 Refunding, Series 2012A 2.125% — 2.625% 11/01/2012 02/15/2027 2,775,000 Total $5,785,000 Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Governmental Activities Business -Type Activities Year Principal Interest Principal Interest Total 2023 $ 1,140,000 $ 110,539 $ 530,000 $ 60,444 $ 1,840,983 2024 1,185,000 67,099 540,000 48,738 1,840,837 2025 685,000 30,140 555,000 36,072 1,306,212 2026 - - 565,000 22,419 587,419 2027 - - 585,000 7,678 592,678 Total $ 3,010,000 $ 207,778 $ 2,775,000 $ 175,351 $ 6,168,129 The business -type activities general obligation refunding bonds outstanding were issued to refund previously issued golf course debt. The City anticipates repayment of the debt will occur from the golf system revenues. However, these plans are subject to change. 58 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Certificates of Obligation Certificates of obligation are issued for many of the same purposes as general obligation bonds, but certificates do not require voter authorization nor may they be used to refund existing debt. The certificates constitute direct obligations of the City, payable from (i) the levy and collection of a direct and continuing ad valorem tax, levied within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of the Net Revenues of the City's waterworks and sanitary sewer system. The City currently has the following certificates of obligation outstanding as of the end of the fiscal year: Interest Maturity Principal Rate % Dated Date Outstanding Certificates of Obligation Series 2011 4% — 4.25% 01/15/2011 08/15/2030 $1,600,000 Series 2014 3% — 5% 10/15/2014 08/15/2034 4,225,000 Series 2015 3% — 5% 10/27/2015 02/15/2035 2,390,000 Series 2016 2.25% — 4% 01/12/2016 02/15/2041 13,935,000 Series 2018 3% — 4% 03/01/2018 02/15/2038 7,910,000 Series 2019 3% — 5% 01/15/2019 02/15/2039 10,730,000 Series 2020 2% — 3.5% 01/14/2020 02/15/2040 6,575,000 Series 2021 1.625% — 4% 04/08/2021 02/15/2041 5,195,000 Total $52,560,000 Annual debt service requirements to maturity for the certificates of obligation are as follows: Fiscal Governmental Activities Year Principal Interest 2023 $ 2,505,000 $ 1,669,783 2024 2,590,000 1,574,117 2025 2,680,000 1,492,001 2026 2,765,000 1,402,901 2027 2,860,000 1,310,791 2028-2032 15,415,000 4,969,776 2033-2037 15,525,000 2,445,432 2038-2041 8,220,000 417,000 Total $ 52,560,000 $15,281,801 Total $ 4,174,783 4,164,117 4,172,001 4,167,901 4,170,791 20,384,776 17,970,432 8,637,000 $67,841,801 59 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Revenue Bonds Each series of revenue bonds is backed by the pledged revenue sources identified in the bond ordinances authorizing issuance of the bonds. The purpose and primary pledged revenue sources of each type of revenue bond are summarized as follows. Half -penny sales tax fund issues sales tax revenue bonds (STRB) to finance library, park, and economic development projects throughout the City. Sales tax revenue bonds are special obligations of the Euless Development Corporation (EDC), payable solely from and secured by a lien on and pledge of certain Pledged Revenues which includes the gross proceeds of a V20 sales and use tax levied within the City for the benefit of the EDC. The EDC is reflected in the financial statements of the City as a special revenue fund. Accordingly, the EDC's debt is reflected in governmental activities debt. Water and wastewater fund issues revenue bonds (W&WW) for the construction of and improvement to the City's combined waterworks and sanitary sewer infrastructure or to refund previously issued revenue bonds. Water and sewer revenue bonds and refunding bonds are payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's water and wastewater system. The City currently has the following revenue bonds outstanding at the end of the fiscal year: Revenue Bonds W&WW Refunding, Series 2012 W&WW Improvement, Series 2013 W&WW Improvement, Series 2015A W&WW Improvement, Series 2015B W&WW Improvement, Series 2018 W&WW Improvement, Series 2019 STRB, Series 2018 STRB, Series 2019 Interest Maturity Principal Rate % Dated Date Outstanding 2.03% 03/29/2012 3.625% — 5% 06/25/2013 0.96% — 1.98% 06/15/2015 0.66% —1.68% 06/15/2015 0.41%— 1.49% 04/12/2018 0.35% — 1.66% 04/25/2019 3% — 4% 10/15/2018 2.5% — 4% 12/12/2019 07/15/2024 $ 275,000 07/15/2033 1,010,000 07/15/2035 3,145,000 07/15/2035 1,660,000 07/15/2038 2,270,000 07/15/2049 8,475,000 09/15/2038 1,380,000 09/15/2039 3,645,000 Total $ 21,860,000 60 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT - CONTINUED Revenue Bonds - Continued Annual debt service requirements to maturity for revenue bonds are as follows: Fiscal Governmental Activities Business -Type Activities Year Principal Interest Principal Interest Total 2023 $225,000 $172,975 $960,000 $254,746 $1,612,721 2024 230,000 164,625 965,000 244,786 1,604,411 2025 245,000 156,075 840,000 233,658 1,474,733 2026 250,000 146,975 845,000 224,201 1,466,176 2027 260,000 136,975 860,000 213,835 1,470,810 2028-2032 1,455,000 527,900 4,510,000 869,061 7,361,961 2033-2037 1,710,000 276,150 3,575,000 482,655 6,043,805 2038-2042 650,000 28,750 1,780,000 282,223 2,740,973 2043-2047 - - 1,755,000 148,285 1,903,285 2048-2049 745,000 18,555 763,555 Total $5,025,000 $1,610,425 $16,835,000 $2,972,005 $26,442,430 The gross 1/20 sales tax revenues of the EDC recognized in the year ending September 30, 2022 totaled $7,179,484. The principal, interest and fiscal charges on the EDC debt for the same period totaled $402,125 which equates to approximately 5.6% of the gross 1/20 sales tax revenues. The recognized net revenues of the water and wastewater fund totaled $2,620,007 for the year ending September 30, 2022. Principal, interest and fiscal charges on the water and sewer revenue bonds totaled $1,210,575 which equates to approximately 46% of net system revenues. In accordance with the water and sewer revenue and refunding bond ordinances, the following reserves were established: Reserve for revenue bond debt service - to be used for retirement of the current portion of principal and interest payments due. Reserve for emergency - to be used for payment of extraordinary repairs or replacements to the system necessitated by an emergency for which no other funds are available. 61 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Revenue Bonds — Continued Revenue bond reserve — a reserve established at the time of issuance pursuant to the revenue bond covenants which will be used for principal and interest payments in the event of default by the issuer. Should the reserve for revenue bond debt service and/or the revenue bond reserve prove deficient, the reserve for emergency shall be used for the purpose of meeting principal and/or interest requirements of the bonds. All funding requirements for the above reserves were met at September 30, 2022. Investments of funds included in the bond reserve and emergency accounts are restricted to obligations of the United States or its agencies or instrumentalities (except for mortgage pass - through securities). Water and sewer revenue bonds authorized and unissued as of September 30, 2022, amounted to $1,200,000. The water and sewer bonds were authorized in 1970, and currently the City Council has no intent to issue these bonds. Tax Notes Tax notes are issued for the purchase of certain specified materials, supplies, equipment, and machinery for the City's authorized needs and purposes. In 2022, tax notes were issued to pay contractual obligations incurred (i) primarily for the costs of constructing, improving and equipping one or more fire stations; and (ii) professional services rendered in relation thereto. The City currently has the following tax notes outstanding as of the end of the fiscal year: Interest Maturity Principal Rate % Dated Date Outstanding Tax Notes Series 2020 1.07% 06/25/2020 02/15/2023 $ 375,000 Series 2021 4.00% 04/08/2021 02/15/2024 1,120,000 Series 2022 2.89% 09/20/2022 02/15/2025 7,660,000 $9,155,000 62 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT - CONTINUED Tax Notes - Continued Annual debt service requirements to maturity for the tax notes are as follows: Fiscal Governmental Activities Year Principal Interest Total 2023 $1,990,000 $220,362 $2,210,362 2024 1,590,000 187,257 19777,257 2025 1,050,000 145,945 1,195,945 2026 1,085,000 115,094 19200,094 2027 1,115,000 83,304 1,198,304 2028 - 2029 2,325,000 67,699 2,392,699 Total $9,155,000 $819,661 $9,974,661 Lease Liability The City leases equipment consisting of copiers and GPS equipment to utilize in various operations of the City. Prior to October 1, 2021, the City entered into a five-year lease agreement as lessee for the use of copiers. An initial lease liability was recorded in the amount of $346,263 during the current fiscal year due to the implementation of GASB 87. As of September 30, 2022, the value of the lease liability was $263,736. The City is required to make monthly principal and interest payments of $7,000. The lease has an interest rate of 1.9235%. The value of the right -to -use asset as of September 30, 2022 was $346,263 with accumulated amortization of $82,526. During the current fiscal year, the City entered into a four-year lease agreement as lessee for the use of GPS equipment. An initial lease liability was recorded in the amount of $140,564 during the current fiscal year. As of September 30, 2022, the value of the lease liability was $137,524. The City is required to make monthly principal and interest payments of $3,040. The lease has an interest rate of .527%. The value of the right -to -use asset as of September 30, 2022 was $140,564 with accumulated amortization of $3,040. The future principal and interest lease payments as of September 30, 2022 were as follows: Fiscal Year 2023 2024 2025 2026 Total Governmental Activities Principal $62,108 62,436 62,766 10,492 $197, 802 Interest $893 564 234 7 $1,698 63 Business -Type Activities Principal Interest Total $54,837 $2,642 $120,480 55,608 1,872 120,480 56,393 1,087 120,480 36,620 321 47,440 $203,458 $5,922 $408,880 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 5. COMMITMENTS AND CONTINGENT LIABILITIES The City entered into a contract dated January 21, 1972, with Trinity River Authority (TRA) whereby TRA agreed to provide treated water to the City. This contract was for an original term of thirty-five (35) years and continues in effect until all bonds, or any bonds issued to refund same, have been paid in full. Additionally, on October 10, 1973, the City entered into a contract with TRA to provide wastewater treatment services to the City. The contract remains in force and effect for a period of fifty (50) years and thereafter until any bonds, or any bonds issued to refund same, have been paid in full. Payments by the City are based on metered usage at rates designed to charge the City a prorata share of TRA's annual operating and maintenance expenses and principal and interest requirements on bonds issued by TRA. Payments under these contracts totaled $13,642,699 and are included as operating expenses of the water and wastewater fund. The City entered into a 20-year contract dated February 2, 2010, with the City of Fort Worth (Fort Worth) whereby Fort Worth agreed to provide reclaimed water service to the City. Payments by the City are based on metered volume. Payments under this contract totaled $558,934 in the year ended September 30, 2022 and are included as operating expenses of the water and wastewater fund. The City is involved in a number of lawsuits arising in the ordinary course of business. In the opinion of the City's legal counsel and management, any liability resulting from such litigation would not be material in relation to the City's financial position. NOTE 6. SERVICE CENTER The water and wastewater enterprise fund historically bears the major portion of the operating costs of the City's service center, which provides services to all City departments. 64 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS All interfund transfers between the various funds are approved supplements to the operations of those funds. Transfers in Non -major Subtotal General Debt Service General CIP Governmental Governmental Transfers out General $ - $ - $ 391,291 $ 2,540,195 $ 2,931,486 Debt service - - - 999,725 999,725 Car rental tax 1,212,886 - - 1,000,000 2,212,886 General CIP - - - 106,000 106,000 Water and wastewater 1,485,888 - - - 1,485,888 Drainage utility 46,150 - - - 46,150 Nonmajor governmental - 2,380,202 - 1,694,789 4,074,991 Total transfers in $ 2,744,924 $ 2,380,202 $ 391,291 $ 6,340,709 $ 11,857,126 Transfers in Major Enterprise Golf Other recreation Subtotal Total Internal Service Course enterprises Enterprise Transfers Out Transfers out General $ 302,250 $ 5,472 $ 18,760 $ 24,232 $ 3,257,968 Debt service - - - - 999,725 Car rental tax 239,449 - - - 2,452,335 General CIP - - - - 106,000 Water and wastewater 302,250 - - - 1,788,138 Drainage utility - - - - 46,150 Nonmajor governmental - 482,051 - 482,051 4,557,042 Total transfers in $ 843,949 $ 487,523 $ 18,760 $ 506,283 $ 13,207,358 Transfers are primarily used to move funds from: • The general fund to the general CIP fund and non -major governmental funds to fund approved capital projects and to satisfy grant matching requirements; and to the golf course fund for sales tax rebates. • The car rental tax fund, the water and wastewater fund, and the drainage utility fund to the general fund for general and administrative charges. • The car rental tax fund to the non -major governmental funds to provide funding for approved capital projects. • The car rental tax fund to the internal service funds for the replacement of capital assets. • The general CIP fund to the non -major governmental funds for approved capital project funding. • The non -major governmental funds to the non -major governmental funds to provide task force and project funding. 65 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS — CONTINUED • The non -major governmental funds to debt service funds for debt payments on previously issued debt. • The general fund and water and wastewater fund to the internal service funds for workers' compensation and general liability insurance claims. • The non -major governmental funds to the golf course fund to cover a portion of the operating and debt costs associated with the conference center. • The debt service fund to the nonmajor governmental fund to re-establish funding for the Midtown debt reserve. • The general fund to the other recreation enterprises fund for Arbor Daze. NOTE 8. 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; injuries to employees; and natural disasters. The City participates in the Texas Municipal League Intergovernmental Risk Pool (TMLIRP) to provide both general liability and property insurance. The City, along with other participating entities, contributes annual amounts determined by TMLIRP management. As claims arise they are submitted to and paid by TMLIRP. The City is not liable for payments beyond their annual contributions to TMLIRP and related deductibles. In fiscal year 2006, the City contracted with the Texas Municipal League Intergovernmental Risk Pool to provide workers' compensation insurance and effectively discontinued being self -insured for workers' compensation claims. This policy has no deductibles, includes all claims handling, and has a fixed premium. In fiscal years prior to 2006, the City was self -insured for workers' compensation claims. Contributions were made to a separate risk management fund by other funds and were available to pay claims, claim reserves, and administrative costs of the program. The City remains liable under its self-insurance program for any claims occurring prior to October 1, 2005. The City provides employee health insurance coverage on a self -insured basis. Premiums are paid into a separate insurance fund by other funds, by the City's employees, and by retirees. The premiums are used to fund claims, administrative costs of the program, and claim reserves. An excess coverage insurance policy covers individual claims in excess of $125,000, and aggregate claims in excess of $6,796,035. During fiscal year 2022, the City and the City's employees contributed approximately $4,718,258 and $1,436,801 respectively, for medical coverage. The City's contributions are accounted for as interfund services provided and used. Claims liabilities are based on estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and of claims that have been incurred but not reported, and are accounted for in the Insurance Internal Service Fund. 66 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8. RISK MANAGEMENT — CONTINUED Changes in the balances of health, dental, and prescription claims liabilities for the years ended September 30, 2022 and 2021 are as follows: Unpaid claims, beginning of year Incurred claims Paid claims Unpaid claims, end of year 2022 $ 840,000 4,253,801 (4,673,850) 2021 $ 639,000 4,585,628 (4,384,628) $ 419,951 $ 840,000 Settlement amounts have not exceeded stop loss insurance coverage for the year ended September 30, 2022 or any of the three preceding years ended September 30. NOTE 9. DEFINED BENEFIT PENSION PLAN Plan Description The City participates as one of 901 plans in the defined benefit cash -balance plan administered by the Texas Municipal Retirement System (TMRS). TMRS is a statewide public retirement plan created by the State of Texas and administered in accordance with the Texas Government Code, Title 8, Subtitle G (the TMRS Act) as an agent multiple -employer retirement system for employees of participating Texas cities. The TMRS Act places the general administration and management of TMRS with a six -member, Governor -appointed Board of Trustees; however, TMRS does not receive any funding from the State of Texas. TMRS issues a publicly available Annual Comprehensive Financial Report (Annual Report) that can be obtained at 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 member's benefit is calculated based on the sum of the member's contributions, with interest, the city -financed monetary credits with interest, and their age at retirement and other actuarial factors. The retiring member may select one of seven monthly benefit payment options. Members may also choose to receive a portion of their benefit as a lump sum distribution in an amount equal to 12, 24 or 36 monthly payments, which cannot exceed 75% of the total member contributions and interest. 67 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Benefits Provided — Continued Plan provisions for the City are as follows: Employee deposit rate Matching ratio (City to employee) A member is vested after Service retirement eligibility Updated service credit Annuity increase (to retirees) Employees Covered By Benefit Terms 7% 2 to 1 5 years 20 years at any age, 5 years at 60 and above 100% Repeating, Transfers 70% of CPI At the December 31, 2021 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 290 Inactive employees entitled to, but not yet receiving benefits 181 Active employees 378 Total 849 Contributions Member contribution rates in TMRS are either 5%, 6%, or 7% of the Member's total compensation, and the city matching percentages are either 1:1 (1 to 1), 1.5 :1 (1 1/2 to 1), or 2:1 (2 to 1), both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The city's contribution rate is based on the liabilities created from the benefit plan options selected by the City and any changes in benefits or actual experience over time. Employees for the City were required to contribute 7% of their annual gross earnings during the year ended September 30, 2022. The contribution rates for the City were 18.02% and 17.64% in calendar years 2021 and 2022, respectively. The City's contributions to TMRS for the year ended September 30, 2022 were $5,518,493 and were equal to the required contributions. Net Pension Asset The City's Net Pension Asset (NPA) was measured as of December 31, 2021, and the Total Pension Liability (TPL) used to calculate the Net Pension Asset was determined by an actuarial valuation as of that date. 68 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Actuarial Assumptions The TPL in the December 31, 2021 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 2.75% per year, adjusted down for population declines, if any Investment rate of return 6.75%, net of pension plan investment expense, including inflation Salary increases are based on a service -related table. Mortality rates for active members are based on the PUB(10) mortality tables with 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 are used with a 4-year set -forward for males and a 3-year set -forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and females respectively, to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by 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 Annuity Purchase Rates (APRs) is based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income 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. 69 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Actuarial Assumptions — Continued The target allocation and best estimates of real rates of return for each major asset class in fiscal year 2022 are summarized in the following table: Target Long -Term Expected Real Asset Class Allocation Rate of Return (Arithmetic Global Equity 35.0% 7.55% Core Fixed Income 6.0% 2.00% Non -Core Fixed Income 20.0% 5.68% Other Public and Private Markets 12.0% 7.22% Real Estate 12.0% 6.85% Hedge Funds 5.0% 5.35% Private Equity 10.0% 10.00% Total 100.0% 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 members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. 70 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Changes in the Net Pension (Asset) Liability Balance at 12/31/2020 Changes for the year: Service cost Interest Change in benefit terms* Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balance at 12/31/2021 Increase (Decrease Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (Asset) $ 238,139,637 $ 225,235,625 $ 12,904,012 5,642,742 - 5,642,742 15,918,254 - 15,918,254 2,211,218 - 2,211,218 5,511,185 (5,511,185) - 2,140,878 (2,140,878) - 29,364,122 (29,364,122) (10,270,056) (10,270,056) - (135,860) 135,860 930 (930) 13,502,158 26,611,199 (13,109,041) $ 251,641,795 $ 251,846,824 $ (205,029) *For TMRS, the "change in benefit terms" includes substantively automatic benefit status changes, if applicable. Sensitivity of the Net Pension Asset to Changes in the Discount Rate The following presents the net pension asset of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension asset 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: City's net pension liability/(asset) 1 % Decrease in Discount Rate (5.75%) $ 34,714,456 Discount Rate (6.75%) $ (205,029) 1% Increase in Discount Rate (7.75%) $ (28,971,518) 71 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Pension Plan Fiduciary Net Position Detailed information about the pension plan's Fiduciary Net Position is available in the Schedule of Changes in Fiduciary Net Position, by Participating City. That report may be obtained at tmrs.com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the valuation date of December 31, 2021, the City recognized pension income of $466,750. At September 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experience Changes in actuarial assumptions Difference between projected and actual investment earnings Contributions subsequent to the measurement date Total Deferred Deferred Outflows of Inflows of Resources Resources $ 1,215,542 $ - 57,237 - 15,122,786 4,163,280 - $ 5,436,059 $ 15,122,786 $4,163,280 reported as deferred outflows of resources related to the pension resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) for the year ended September 30, 2023. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Year December 31, Net Deferred Outflows/(Inflows) of Resources 2022 $ (2,409,976) 2023 (6,125,583) 2024 (2,881,047) 2025 (2,433,401) Total $ (13,850,007) 72 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS Postemployment Healthcare Plan Plan Description The City adopted the City of Euless Post -Employment Benefits Trust (OPEB Trust) by passage of Resolution No. 09-1319 on September 8, 2009 which authorized participation in the PARS Public Agencies Post -Retirement Health Care Plan Trust, including the City of Euless Public Agencies Post -Retirement Health Care Plan (the Plan), as part of the City's Retirement Program. Article III of the Public Agencies Post -Retirement Health Care Plan Master Plan Document as adopted provides for the determination of eligibility under the plan to each participating Employer to the extent provided in the Employer's applicable policies. The City's policies with regard to post -employment healthcare coverage are governed by the City of Euless Medical and Dental Plan, the City's group health insurance plan, the benefits of which are established by management. Benefits provided. The City provides post -employment medical, dental, life, and vision benefits under the Plan to eligible retirees and dependents qualifying as one of the eligible classes of dependents as described in the Plan. To be eligible for coverage under the Plan, an employee must retire with the City of Euless and be eligible for retirement through TMRS. TMRS retirement eligibility requirements are described in detail in Note 9. Additionally, written application to enroll himself/herself and all eligible dependents (for which coverage is elected) in the Plan must be made by the employee prior to or on the retirement date. The Plan provides lifetime benefits or until Medicare eligibility is attained. Regardless of Medicare enrollment status, the Plan will base payment of benefits as though Medicare were responsible for primary payment of benefits insomuch as allowed by Federal law. The Plan is a single -employer defined benefit healthcare plan administered by the City Manager, his/her successor, or his/her designee. Separate financial statements for the Plan are not issued, but rather are included in the financial statements of the City which are available on-line at https://www.eulesstx. o�partments/finance/comprehensive-annual-financial-report. The OPEB Trust is an agent multiple -employer trust arrangement established to provide economies of scale and efficiency of administration to public agencies. The OPEB Trust is established as a tax-exempt trust within the meaning of Section 115 of the Internal Revenue Code and is intended to hold the assets used to fund the City's post -employment benefits offered by the City to its employees as specified in the City's policies. Upon adoption of the Trust Agreement, a separate Agency Account was established under the OPEB Trust for the City, and all assets of the Trust attributable to the City are held in the City's Agency Account. The assets of the Trust are available only to pay post -employment healthcare benefits of eligible employees of the City and their dependents and other associated administrative costs. 73 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Funding Policy A Participant in the OPEB Trust is required from time -to -time to contribute to its Agency Account an amount determined by such Participant at its sole discretion. Such amount may, but need not, equal such Participant's actuarially determined contribution (ADC) as determined in accordance with GASB 74. However, it is currently the intent of the Plan Administrator to annually fund an amount equal to, or in excess of, the ADC. This intent is subject to change and is subject to annual appropriation. Contribution requirements of Plan members and the City are determined by the Plan Administrator and may be amended by same from time to time. Plan members contribute: Monthly Contribution Medical Plan Dental Vision Retiree Only $ 777.61 $ 38.55 $ 7.86 Retiree plus Children 1,477.45 73.24 12.84 Retiree plus Spouse 1,788.49 88.66 15.24 Retiree plus Family 2,255.05 111.80 21.56 Retired employees meeting all eligibility requirements as set forth in the Plan that were hired prior to October 1, 2006 and are either: a) Retired and enrolled in the Plan on or prior to September 30, 2007; or b) Retired and not enrolled in the Plan on or prior to September 30, 2007 and meet guidelines for reinstatement to the Plan; or c) Employees who were not retired as of September 30, 2007 that retire with at least ten years of service to the City of Euless and have a combined age and years of service equal to at least 70 will qualify for a service discount on their total premium, subject to annual appropriation, as set forth in the following table. Retired employees meeting all eligibility requirements as set forth in the Plan that were hired after October 1, 2006 and before October 1, 2014 retiring with a minimum of 20 years of service with a combined age and years of service to the City of Euless equal to at least 80 qualify for a service discount on their total premium, subject to annual appropriation, as set forth in the following: Service 10 to 14 years 15 to 19 years 20 to 24 years 25 to 29 years 30+ years Discounts on Premiums Hired Pre-10/2006 Hired Post-10/2006 Hired Post-10/2014 Retiree Retiree+ Retiree Retiree+ Retiree Retiree+ 15% 30% N/A N/A N/A N/A 25% 40% N/A N/A N/A N/A 35% 50% 35% 50% N/A N/A 50% 65% 50% 65% N/A N/A 60% 75% 60% 75% N/A N/A 74 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Funding Policy — Continued Retirees are permitted to participate with active employees in the healthcare plan but retirees must pay all premiums (less applicable discounts) assigned to them. The City will continue to apply the applicable discount to surviving spouse/dependents based upon a deceased employee's years of service. Employees hired on or after October 1, 2014 will not be eligible for premium discounts regardless of years of service. Per the requirements of GASB 74 and GASB 75, the following data is presented. Plan Membership At the October 1, 2021 actuarial valuation and measurement date, plan membership consisted of the following: Employees/retirees covered by the benefit terms: Inactive plan members or beneficiaries currently receiving benefit payments 51 Inactive plan members entitled to, but not yet receiving benefit payments 22 Active plan members 356 429 Investments Investment policy. The City's policy in regard to the allocation of invested assets is established and may be amended by the City Manager. The City Council appointed the City Manager or her successor or her designee as the City's Plan Administrator. The City Manager selected the balanced, moderately aggressive actively -managed investment option (HighMark PLUS) to provide growth of principal and income. While dividend and interest income are an important component of the objective's total return, it is expected that capital appreciation will comprise a larger portion of the total return. The portfolio will be allocated between equity and fixed income investments. Asset Class Equity Fixed income Cash Strategic Range 50-70% 30-50% 0-20% Target Allnnntinn 60% 35% 5% 100% 9/30/2022 A l l ncati nn 56% 38% 6% 100% Rate of return. For the year ended September 30, 2022, the annual money -weighted rate of return (loss) on investments, net of investment expense, was (16.33%). The money -weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 75 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Investments — Continued Concentrations. The following investments comprised 5% or more of the OPEB plan's fiduciary net position as of September 30, 2022: % of Asset Class Investment Vehicle Portfolio Equity Columbia Contrarian Core Inst3 5.81 % Equity Vanguard Growth & Income Adm 11.08% Equity Dodge & Cox Stock Fund 5.31 % Equity iShares Russell Midcap ETF 5.48% Fixed Income Vanguard Short -Term Investment -Grade Adm 7.75% Fixed Income DoubleLine Core Fixed Income I 9.93% Fixed Income PIMCO Total Rturn Intl Fund 9.95% Fixed Income PGIM Total Return Bond R6 9.92% Cash First American Government Oblig Z 5.85% Net OPEB Liability of the City The components of the net OPEB liability of the City at September 30 were as follows: 2022 2021 Total OPEB liability $ 20,686,885 $ 21,727,868 Plan fiduciary net position (905,849) (11,022,441) City's net OPEB liability $ 10,881,036 $ 10,705,427 Plan fiduciary net position as a percent of the total OPEB liability 47.40% 50.73% Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members at that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of plan assets, consistent with the long-term perspective of the calculations. 76 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Actuarial Methods and Assumptions — Continued An actuarial valuation was performed as of October 1, 2021 using the entry age normal actuarial cost method. The liability was then rolled forward to the measurement date of September 30, 2022. The actuarial assumptions include: Inflation Salary increases Investment rate of return Healthcare cost trend rates Dental cost trend rates 2.5% per annum 3.00% per annum 7.50% 7.10% with annual increases/decreases to an ultimate rate of 4.14% in 2042 3.00% Mortality rates were based on the sex distinct PUB 2010 general employee/retiree headcount weighted mortality table with mortality improvements scale MP-2021. The plan has not had a formal actuarial experience study performed. The expected return of each asset class is determined through a combination of historical rates of return, valuation projections, and economic expectations. Expected rates of return are developed and annually reviewed by HighMark's Asset Allocation Committee. The long-term expected rate of return on OPEB plan investments is then calculated by weighting the returns for each asset class according to the exposure as determined by the current strategic allocation. The anticipated long-term rate of return is 6.24% with an expected standard deviation of 10.20%. Anticipated long-term returns by asset class are not available. Discount rate. The discount rate used to measure the total OPEB liability was 7.5%. The projection of cash flows used to determine the discount rate assumed the City contributions will be made at rates at least equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Sensitivity of the OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (6.5%) or one percentage point higher (8.5%) than the current discount rate: 1% Decrease Discount Rate 1% Increase (6.5%) (7.5%) (8.5%) Net OPEB liability $ 14,600,349 $ 10,881,036 $ 7,915,311 77 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Actuarial Methods and Assumptions — Continued Sensitivity of the OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current healthcare cost trend rates: Net OPEB liability Net OPEB Liability Balance at 9/30/2021 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Difference in expected and actual net investment income Contributions - employer Contributions - other Net investment income Benefit payments, including refunds of employee contributions Administrative expense Net changes Balance at 9/30/2022 1 % Decrease $ 7,625,812 Current Trend Rates (7.10%) $ 10,881,036 Increase (Decrease 1% Increase $ 15,003,870 Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a) - (b) $ 21,727,868 $ 11,022,441 $ 10,705,427 331,127 - 331,127 1,603,744 - 1,603,744 (200,028) - (200,028) (1,824,415) - (1,824,415) - 1,663,312 (1,663,312) 246,671 246,671 - - (1,928,493) 1,928,493 (1,053,109) (144,973) (1,040,983) $ 20,686,885 (1,053,109) (144,973) (1,216,592) $ 9,805,849 175,609 $ 10,881,036 Assumption Changes. Since the prior valuation, the mortality tables were updated to the new sex distinct headcount weighted PUB-2010 general employee/retiree mortality tables based upon public plan experience only. Also, the mortality improvement scale was updated to use the MP- 2021 table. 78 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended September 30, 2022, the City recognized OPEB expense of $1,448,541. At September 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Changes in actuarial assumptions Difference between projected and actual investment earnings Total Deferred Deferred Outflows of Inflows of Resources Resources 1,159,071 $ 1,159,071 $ 807,890 Amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Net Deferred Ending Outflows/(Inflows) September 30, of Resources 2023 $ 217,733 2024 172,477 2025 174,682 2026 364,700 2027 (289,206) 2028 (289,205) Total $ 351,181 NOTE 11. EXCESS OF EXPENDITURES OVER APPROPRIATIONS As of September 30, 2022, the following funds had excess of expenditures over appropriations: - Car rental tax special revenue fund in the amount of $25,733. - Grant special revenue fund in the amount of $813. 79 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 12. LEASE RECEIVABLES During the year ended September 30, 2022, the City implemented GASB 87. The City leases various property and buildings to third -parties. The leases range from five to 23 years in length. The City receives annual payments from these leases of $815,185. The City recognized $649,386 in lease revenue and $165,799 in interest revenue during the current fiscal year related to these leases. As of September 30, 2022, the City's receivable and deferred inflows of resources for leases was $5,418,653 for governmental activities and $393,424 for business -type activities. The deferred inflow of resources associated with this lease will be recognized as revenue over the lease term. 80 REQUIRED SUPPLEMENTARY INFORMATION 81 H E C I T Y O EULESS 82 CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET) AND RELATED RATIOS FOR THE MEASUREMENT YEAR ENDED DECEMBER 31 2021* 2020* 2019* 2018* 2017* 2016* 2015* 2014* Total pension habitity Service cost $ 5,642,742 $ 5,645,675 $ 5,375,963 $ 5,253,722 $ 5,149,378 $ 4,868,631 $ 4,539,237 $ 4,331,759 Interest (on the total pension liability) 15,918,254 15,244,423 14,557,634 13,864,487 13,129,452 12,462,429 12,302,430 11,698,243 Difference in expected and actual experience 2,211,218 (728,824) (171,396) (206,128) 169,296 (361,966) (579,992) (752,184) Change in assumptions - 145,747 - (595,757) Benefit payments, including refunds (10,270,056) (10,084,210) (9,652,090) (7,756,635) (7,465,146) (6,990,135) (6,911,946) (6,588,671) Net change in total pension liability 13,502,158 10,077,064 10,255,858 11,155,446 10,982,980 9,978,959 8,753,972 8,689,147 Total pension liability, beginning of year 238,139,637 228,062,573 217,806,715 206,651,269 195,668,289 185,689,330 176,935,358 168,246,211 Total pension liability, ending of year $ 251,641,795 $ 238,139,637 $ 228,062,573 $ 217,806,715 $ 206,651,269 $ 195,668,289 $ 185,689,330 $ 176,935,358 Plan fiduciary net position Contributions - employer $ 5,511,185 $ 5,419,109 $ 5,192,816 $ 5,146,736 $ 5,027,855 $ 4,691,585 $ 4,644,735 $ 4,787,533 Contributions - employee 2,140,878 2,144,052 2,077,001 2,023,998 1,981,736 1,877,709 1,801,285 1,789,251 Net investment income 29,364,122 16,076,966 28,704,340 (5,754,957) 23,456,668 10,748,002 235,212 8,631,343 Benefit payments, including refunds (10,270,056) (10,084,210) (9,652,090) (7,756,635) (7,465,146) (6,990,135) (6,911,946) (6,588,671) Administrative expense (135,860) (104,023) (162,161) (111,206) (121,542) (121,371) (143,262) (90,113) Other 930 (4,058) (4,871) (5,810) (6,160) (6,539) (7,076) (7,409) Net change in plan fiduciary net position 26,611,199 13,447,836 26,155,035 (6,457,874) 22,873,411 10,199,251 (381,052) 8,521,934 Plan fiduciary net position - beginning 225,235,625 211,787,789 185,632,754 192,090,628 169,217,217 159,017,966 159,399,018 150,877,084 Plan fiduciary net position - ending $ 251,846,824 $ 225,235,625 $ 211,787,789 $ 185,632,754 $ 192,090,628 $ 169,217,217 $ 159,017,966 $ 159,399,018 Net pension liability (asset) - ending $ (205,029) $ 12,904,012 $ 16,274,784 $ 32,173,961 $ 14,560,641 $ 26,451,072 $ 26,671,364 $ 17,536,340 Plan fiduciary net position as a % of TPL 100.08% 94.58% 92.86% 85.23% 92.95% 86.48% 85.64% 90.09% Covered payroll $ 30,583,969 $ 30,616,434 $ 29,619,629 $ 28,914,263 $ 28,308,838 $ 26,824,411 $ 25,732,638 $ 25,560,729 Net pension liability (asset) as a % of covered payroll (.67%) 42.15% 54.95% 111.27% 51.44% 98.61% 103.65% 68.61% * The schedule is intended to show information for 10 years. Additional years will be displayed as they become available. 83 Actuarially determined contributions Actual contributions Contributions deficiency (excess) Covered payroll Ratio of actual contributions to covered payroll amount (1) CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS - PENSION FOR THE FISCAL YEAR ENDED SEPTEMBER 30 2022* 2021* 2020* 2019* 2018* 2017* 2016* 2015* $ 5,518,493 $ 5,534,917 $ 5,532,423 $ 5,174,020 $ 5,094,779 $ 4,971,811 $ 4,670,520 $ 4,602,538 (5,518,493) (5,534,917) (5,532,423) (5,174,020) (5,094,779) (4,971,811) (4,670,520) (4,602,538) $ 31,442,237 $ 30,853,753 $ 31,348,108 $ 29,411,252 $ 28,640,420 $ 28,113,691 $ 26,464,297 $ 25,453,407 17.55% 17.94% 17.65% 17.59% 17.79% 17.69% 17.65% 18.08% * The schedule is intended to show information for 10 years. Additional years will be displayed as they become available. Notes to Schedule Valuation Date Actuarial determined contribution rates are calculated as of December 31 st each year and become effective in January, 13 months later Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 23 years Asset Valuation Method 10 year smoothed market; 12% soft corridor Inflation 2.5% Salary Increases 3.5% to 11.5% including inflation Investment Rate of Return 6.75% Retirement Age Experience -based table of rates that are specific to the City s plan of benefits. Last updated for the 2019 valuation pursuant to an experience study of the period 2014 - 2018. Mortality Post -retirement: 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. 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 UMP. (1) Changed to actual calculation in 2022. Prior years have been restated. 84 CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED SEPTEMBER 30 Total OPEB liability Service cost Interest on total OPEB liability Effect of changes of benefit terms Effect of difference between expected and actual experience Contributions - other Effect of changes of assumptions Administrative expense Benefit payments Net change in OPEB liability Beginning balance Ending balance Plan fiduciary net position Contributions - employer Contributions - other Net investment income (loss) Difference in expected and actual net investment income Benefit payments Administrative expense Net change in plan fiduciary net position Beginning balance Ending balance City's net OPEB liability ending Plan fiduciary net position as a % of the total OPEB liability Covered employee payroll City's net OPEB liability as a % of covered employee payroll 2022* 2021* 2020* 2019* 2018* 2017* $ 331,127 $ 287,730 $ 267,668 $ 435,930 $ 447,155 $ 75,083 1,603,744 1,539,416 1,379,257 1,360,548 1,271,483 825,331 (200,028) - (627,155) - 1,459,988 432,425 246,671 281,524 276,885 270,205 - - (1,824,415) - 1,322,815 - (798,143) 5,480,748 (144,973) (140,970) (131,481) (135,119) - (1,053,109) (955,297) (898,811) (1,019,931) (1,230,281) (1,332,839) (1,040,983) 1,012,403 1,589,178 911,633 1,150,202 5,480,748 21,727,868 20,715,465 19,126,287 18,214,654 17,064,452 11,583,704 $ 20,686, 885 $ 21,727,868 $ 20,715,465 $ 19,126,287 $ 18,214,654 $ 17,064,452 $ 1,663,312 $ 1,515,094 $ 1,455,171 $ 1,583,715 $ 1,754,093 $ 1,832,839 246,671 281,524 276,885 270,205 320,471 - (1,928,493) 668,472 577,387 502,656 381,824 559,716 950,076 11,026 (226,279) - - (1,053,109) (955,297) (898,811) (1,019,931) (1,230,281) (1,332,839) (144,973) (140,970) (131,481) (135,119) (147,597) (13,525) (1,216,592) 2,318,899 1,290,177 975,247 1,078,510 1,046,191 11,022,441 8,703,542 7,413,365 6,438,118 5,359,608 4,313,417 $ 9,805,849 $ 11,022,441 $ 8,703,542 $ 7,413,365 $ 6,438,118 $ 5,359,608 $ 10,881,036 $ 10,705,427 $ 12,011,923 $ 11,712,922 $ 11,776,536 $ 11,704,844 47% $ 31,442,237 35% 51% $ 30,853,753 35% 42% 39% $ 31,348,108 $ 29,411,252 38% 40% 35% $ 28,640,420 41% 31% $ 25,944,080 * This schedule is presented to illustrate the requirement to show ten years of information. However, until a full ten-year trend is available, the schedule will present the information that is available. 85 45% CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS - OPEB TRUST FOR THE FISCAL YEAR ENDED SEPTEMBER 30 Actuarially determined contribution Contributed in relation to the actuarially determined contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered employee payroll 2022* 2021* 2020* 2019* 2018* 2017* $ 1,300,719 $ 1,421,454 $ 1,388,216 $ 1,486,177 $ 1,492,738 $ 1,226,144 1,663,312 1,515,094 1,455,171 1,583,715 1,754,093 1,832,839 $ (362,593) $ (93,640) $ (66,955) $ (97,538) $ (261,355) $ (606,695) $ 31,442,237 $ 30,853,753 $ 31,348,108 $ 29,411,252 $ 28,640,420 $ 25,944,080 5.3% 4.9% 4.6% 5.4% 6.1% 7.1% * This schedule is presented to illustrate the requirement to show ten years of information. However, until a full ten-year trend is available, the schedule will present the information that is available. Notes to Schedule Significant assumptions used in preparation of actuarial valuation Valuation date 10/1/2021 Actuarial cost method Entry Age Normal Amortization method Level Dollar Method Remaining amortization period 25 years - closed period Amortization period for new losses 25 years - closed period Asset valuation method Market value Discount rate 7.5% Inflation 2.5% Healthcare cost trend rates 7.10% declining annually to 4.14% in 2042+ Dental cost trend rates 3.0% per annum Salary increases including inflation 3.00% Long-term investment rate of return, net of investment expense 7.5% Retirement age Varies with age and service level Mortality Sex distinct PUB 2010 general employee retiree mortality tables based upon public plan experience only. Mortality improvement scale used is the MP- 2021 table. 86 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2022 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues General property tax Current and delinquent taxes $ 19,177,531 $ 19,177,531 $ 19,291,537 $ 114,006 Penalty and interest 71,400 71,400 86,681 15,281 Total property tax 19,248,931 19,248,931 19,378,218 129,287 Gross receipts and mixed beverage tax Telephone line access fee 108,521 108,521 98,763 (9,758) Electric company 1,584,507 1,584,507 1,654,195 69,688 Gas company 363,180 363,180 563,968 200,788 Cable TV 200,000 200,000 245,178 45,178 City garbage service 316,312 316,312 324,755 8,443 Water and wastewater system 1,386,264 1,386,264 1,485,888 99,624 Others 158,416 158,416 226,965 68,549 Total gross receipts and mixed beverage tax 4,117,200 4,117,200 4,599,712 482,512 General sales tax 14,412,718 14,412,718 17,498,088 3,085,370 Fines and fees Municipal court fines 1,270,028 1,270,028 1,801,577 531,549 Jail income 730,000 730,000 675,025 (54,975) Dog licenses and pound fees 7,500 7,500 7,385 (115) Ambulance fees 738,000 738,000 1,066,967 328,967 Library fees 2,000 2,000 5,821 3,821 Zoning fees 15,500 15,500 14,464 (1,036) Deferred adjudication fee 72,072 72,072 81,486 9,414 Total fines and fees 2,835,100 2,835,100 3,652,725 817,625 Licenses and permits Building permits 300,000 300,000 774,403 474,403 Miscellaneous permits 269,800 269,800 256,936 (12,864) Minimum housing 65,000 65,000 96,303 31,303 Total licenses and permits 634,800 634,800 1,127,642 492,842 Investment income 71,838 71,838 173,661 101,823 Intergovernmental 426,350 426,350 908,347 481,997 Other revenues Rental income 602,516 602,516 915,489 312,973 Swimming pools 198,000 198,000 299,986 101,986 Miscellaneous income 187,225 187,225 221,656 34,431 Total other revenues 987,741 987,741 1,437,131 449,390 Total revenues 42,734,678 42,734,678 48,775,524 6,040,846 87 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2022 Expenditures Current Culture and recreation Development services General and administrative Highways and streets Public safety Debt service Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Proceeds from sale of assets Issuance of lease Transfers in Transfers out Total other financing sources (uses), net Net change in fund balance Fund balance, beginning of year Fund balance, end of year (Continued) Budgeted Amounts Original Final Actual GAAP Basis Variance with Hnal Budget Positive (Negative) $ 3,708,474 $ 3,708,474 $ 3,568,318 $ 140,156 864,887 886,399 785,980 100,419 11,637,398 11,685,432 10,485,491 1,199,941 1,817,776 1,814,776 1,641,145 173,631 28,317,585 28,317,585 27,449,656 867,929 - - 63,086 (63,086) 46,346,120 46,412,666 43,993,676 2,418,990 (3,611,442) (3,677,988) 4,781,848 8,459,836 5,000 5,000 30,650 25,650 - - 259,697 259,697 2,641,531 2,641,531 2,744,924 103,393 (3,432,248) (3,457,831) (3,257,968) 199,863 (785,717) (811,300) (222,697) 588,603 (4,397,159) (4,489,288) 4,559,151 9,048,439 20,746,754 20,746,754 20,746,754 - $ 16,349,595 $ 16,257,466 $ 25,305,905 $ 9,048,439 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE CAR RENTAL SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Car rental tax Investment income Total revenues Expenditures General and administrative Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 10,915,975 $ 10,915,975 $ 18,372,898 $ 7,456,923 25,300 25,300 137,438 112,138 10,941,275 10,941,275 18,510,336 7,569,061 7,377,317 11,739,655 12,248,360 (508,705) 482,972 482,972 - 482,972 7,860,289 12,222,627 12,248,360 (25,733) 3,080,986 (1,281,352) 6,261,976 7,543,328 (2,452,335) (3,179,391) (2,452,335) 727,056 (2,452,335) (3,179,391) (2,452,335) 727,056 628,651 (4,460,743) 3,809,641 8,270,384 Fund balance, beginning of year 4,888,610 41888,610 4,888,610 - Fund balance, end of year $ 5,517,261 $ 427,867 $ 8,698,251 $ 8,270,384 89 CITY OF EULESS, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION NOTE 1. BUDGET BASIS OF ACCOUNTING The City Council adheres to the following procedures in establishing budgetary data reflected in the financial statements: Prior to August 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following October 1. The operating budget includes proposed expenditures and expenses and means of financing them. 2. Public hearings are conducted to obtain taxpayers' comments. 3. Prior to September 30, the budget is legally enacted through passage of an ordinance and a budgetary report is prepared. 4. The City Manager is authorized to transfer budgeted amounts between departments within any fund; however, any revision that alters the total expenditures or expenses of any fund must be approved by the City Council. The budget presented reflects revisions made during the year. The legal level of control is at the fund level. 5. A budget is legally adopted for the general fund and special revenue funds on a basis consistent with accounting principles generally accepted in the United States of America. Formal budgetary integration is employed as a management control device during the year for the general fund and special revenue funds. Appropriations and encumbrances lapse at year-end. 6. Formal budgetary integration is not employed for the debt service funds because effective budgetary control is alternatively achieved through general obligation bond indenture provisions. 7. Budgetary data for the capital projects funds has not been presented in the accompanying basic financial statements as such funds are budgeted over the life of the respective projects and not on an annual basis. Accordingly, formal budgetary integration of the capital projects funds is not employed and comparison of actual results of operations to budgetary data for such funds is not presented. 8. Appropriated budgets for the proprietary funds are also adopted but have not been presented since reporting on such budgets is not legally required. The Budgetary Comparison Schedules — general fund and car rental tax special revenue fund present a comparison of budgetary data to actual results. These funds utilize the same basis of accounting for both budgetary purposes and actual results. A budgetary comparison schedule is not presented for the Glade Parks PID fund due to lack of budgeted activity for the prior and current years. 90 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 91 NON -MAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Hotel/Motel Fund — to account for the operations and expenditures for which hotel/motel occupancy taxes are used. Occupancy tax revenues are used primarily for advertising and promotion of the City. Half -Penny Sales Tax Fund — to account for the sales tax revenues and expenditures of the Euless Development Corporation, a component unit of the City of Euless. The revenues can only be spent on parks, library, debt service, and economic development activities within the City of Euless. Police Drug Enforcement Fund — to account for proceeds from the sale of assets seized in connection with drug arrests. Revenues are used solely for police department expenditures. Crime Control and Prevention District Fund — to account for the revenues and expenditures of this component unit of the City of Euless. The revenues are collected from sales taxes and expenditures can only be spent for police department operations and capital as approved by the Crime Control and Prevention District Board. Grant Fund — to account for grant revenues received by the City, which must be spent in accordance with grant provisions. Police Seized Asset Fund — to account for resources received from asset forfeiture pursuant to court judgment File No. 09-13-640 to be administered in compliance with Chapter 59, Texas Code of Criminal Procedure. Juvenile Case Fund — to account for a fee added to municipal court citations. This fee is used to support the expenditures associated with juvenile case processing. Glade Parks Public Improvement District (PID) Fund — to account for the accumulation of resources from an assessment levied upon properties within the district boundaries. The resources are utilized for the repayment of debt issued to fund public improvements within the district. The district assesses property owners only for the portion of the debt payment not covered with resources of the Glade Parks TIRZ #3. Tax Increment Reinvestment Zone (TIRZ) #3 — Glade Parks Fund (TIRZ #3) — to account for the accumulation of a portion of the incremental property taxes from taxing entities participating in the tax increment reinvestment zone. The resources are used for the repayment of debt issued to fund public improvements within the zone. 92 NON -MAJOR GOVERNMENTAL FUNDS — Continued Midtown Public Improvement District (PID) Fund — to account for the accumulation of resources from an assessment levied upon properties within the district boundaries. The resources are utilized for the repayment of debt issued to fund public improvements within the district. Midtown TIRZ #4 Fund — to account for the accumulation of a portion of the incremental property taxes from taxing entities participating in the tax increment reinvestment zone. The resources are used for the repayment of debt issued to fund public improvements within the zone. The TIRZ #4 fund revenues reduce the amount of revenue needed from the Midtown PID fund to pay debt service. Cable PEG Fees Fund — to account for a 1% fee collected from cable channel providers for expansion of the city's public, educational, and governmental access channel. CAPITAL PROJECTS FUNDS Half -Penny Sales Tax CIP Fund — to account for bond proceeds and sales tax receipts to be expended for capital projects funded by the Euless Development Corporation, a component unit of the City of Euless. Developers' Contribution Fund — to account for funds received for the purpose of making new and future improvements to various development areas within the City. Streets CIP Fund — to account for street construction and reconstruction projects and the means of financing such improvements. Redevelopment CIP Fund — to account for land acquisition and revitalization projects designed to enhance development and promote redevelopment throughout the community. Midtown Reserve Fund — to account for resources used to re-establish the Midtown debt reserve. TIRZ #4 Midtown CIP Fund — to account for construction projects and the means of financing such projects within the development area generally known as Founders Pare, formerly Euless Midtown. Car Rental CIP Fund — to account for building and infrastructure projects that are funded from short-term motor vehicle rental tax. 93 CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2022 ASSETS Deposits and investments Accounts receivable Property taxes receivable Accrued interest receivable Due from other governments Lease receivable Prepaids Restricted deposits and investments Total assets LIABILITIES Accounts payable Contracts payable Accrued salaries and wages Unearned revenue Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue Leases Total deferred inflows of resources FUND BALANCES Nonspendable Restricted, debt service Restricted, capital projects Restricted, developer agreements Restricted, juvenile case management Restricted, cable PEG fees Restricted, historical preservation Assigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances Suecial Revenue Funds Police Crime Drug Control and Hotel/ Half -Penny Enforce- Prevention Motel Sales Tax ment District Grant Fund Fund Fund Fund Fund $ 2,017,323 $ 6,661,178 $ 558,664 $ 1,983,724 $ 980,812 436,408 - - - 8,918 - 11,009 - - - - 1,267,840 15,000 621,966 - - 1,769,097 - - - - 2,858 12,797 $ 2,453,731 $ 9,711,982 S 573,664 $ 2,618,487 $ 989,730 $ 297,369 $ 161,201 $ 67,330 $ 17,122 $ - 63,505 64,940 594 - - - - 988,859 297,369 224,706 67,330 82,062 989,453 1,769,097 - - - - 1,769,097 - - - 2,858 - 12,797 - - 412,856 - - - 843 - - - - 2,155,519 7,302,465 506,334 2,523,628 277 2,156,362 7,718,179 506,334 25536,425 277 $ 2,453,731 $ 9,711,982 $ 573,664 $ 2,618,487 $ 989,730 94 Revenue Funds Police Cable Special Seized Juvenile Glade Parks TIRZ#3 Midtown TIRZ#4 PEG Revenue Assets Case PID Glade Parks PID Midtown Fees Funds Fund Fund Fund Fund Fund Fund Fund Totals $ 223,516 $ 189,997 $ 750,000 $ 3,358,220 $ 102,945 $ 781,245 $ 627,425 $ 18,235,049 - 4,666 - 67,569 - 2,248 18,000 537,809 - - - 33,172 - 5,262 - 38,434 - - - - - - - 11,009 - - - - - - - 1,904,806 - - - - - - 1,769,097 - - - - - 15,655 $ 223,516 $ 194,663 $ 750,000 $ 3,458,961 $ 102,945 $ 788,755 $ 645,425 $ 22,511,859 $ - $ 202 $ - $ - $ 2,488 $ - $ 439 $ 546,151 456 614 - 130,109 - - - - - 988,859 456 816 - 2,488 439 1,665,119 - 4,691 - 39,223 - - 43,914 - - - - - - 1,769,097 - 4,691 - 39,223 - - 1,813,011 - - 15,655 750,000 - 1,162,856 189,156 - - - 189,156 - - - 644,986 644,986 - - - - - - 843 223,060 - - 3,458,961 61,234 788,755 - 17,020,233 223,060 189,156 750,000 3,458,961 61,234 788,755 644,986 19,033,729 $ 223,516 $ 194,663 $ 750,000 $ 3,458,961 $ 102,945 $ 788,755 $ 645,425 $ 22,511,859 95 ASSETS Deposits and investments Accounts receivable Property taxes receivable Accrued interest receivable Due from other governments Lease receivable Prepaids Restricted deposits and investments Total assets LIABILITIES CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2022 Accounts payable Contracts payable Accrued salaries and wages Unearned revenue Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue Leases Total deferred inflows of resources FUND BALANCES Nonspendable Restricted, debt service Restricted, capital projects Restricted, developer agreements Restricted, juvenile case management Restricted, cable PEG fees Restricted, historical preservation Assigned Total fund balances Total liabilities, deferred inflows of resources, and fund balances ect Funds Half -Penny Sales Tax Developers' Street Redevelopment CIP Contribution CH, CIP Fund Fund Fund Fund $ 1,042,935 $ 2,338,194 $ 748,890 $ 1,009,143 - - 3,550 - 308 88 7,815 - 168,825 - 7,012,741 - $ 1,212,068 $ 2,338,282 $ 7,772,996 $ 1,009,143 $ 2,068 $ 108,023 $ 59,965 $ 36,258 - - 813,145 - 2,068 108,023 873,110 36,258 168,825 - 6,199,596 - - 2,230,259 - - 1,041,175 - 700,290 972,885 1,210,000 212305259 61899,886 972,885 $ 1,212,068 $ 2,338,282 $ 7,772,996 $ 1,009,143 96 Capital Project Funds TIRZ #4 Car Capital Total Midtown Midtown Rental Project Non -major Reserve CIP CIP Funds Governmental Fund Fund Fund Totals Funds $ $ - $ 1,708,369 $ 6,847,531 $ 25,082,580 - - 3,550 541,359 - - - 38,434 - - 104 8,315 19,324 - - - - 1,904,806 - - - - 1,769,097 - - - 15,655 999,725 1,069,200 - 9,250,491 9,250,491 $ 999,725 $ 1,069,200 $ 1,708,473 $ 16,109,887 $ 38,621,746 $ - $ - $ $ 206,314 $ 752,465 - 999,725 - 1,812,870 1,812,870 - - - - 130,109 - - - - 988,859 - 999,725 - 2,019,184 3,684,303 - - - - 43,914 - - - - 1,769,097 - - - - 1,813,011 - - - - 15,655 999,725 - - 999,725 2,162,581 - 69,475 - 6,437,896 6,437,896 - - - 2,230,259 2,230,259 - - - - 189,156 - - - - 644,986 - - - - 843 - - 1,708,473 41422,823 21,443,056 999,725 69,475 1,708,473 14,090,703 33,124,432 $ 999,725 $ 1,069,200 $ 1,708,473 $ 16,109,887 $ 38,621,746 97 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NON -MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2022 Special Revenue Funds Police Crime Drug Control and Hotel/ Half -Penny Enforce- Prevention Motel Sales Tax ment District Grant Fund Fund Fund Fund Fund Revenues General property tax $ - $ - $ - $ - $ - Gross receipts tax 1,736,088 - - - - General sales tax - 7,179,484 - 3,565,228 - Investment income 12,497 70,504 3,473 12,525 - DEA revenues - - 42,175 - - Intergovernmental - - - - 128,055 Rents and royalties - 79,198 - - - Other revenues - - - 10,925 - Total revenues 1,748,585 7,329,186 45,648 3,588,678 128,055 Expenditures Culture and recreation - 3,669,283 - - - Development services - 207,847 - - - General and administrative 316,591 348,641 - - - Highways and streets - - - - - Public safety - - 147,247 2,909,620 143,960 Debt service Principal - 220,000 - - - Interest and fiscal charges - 182,125 - - - Capital outlay - 81,034 - 126,780 - Total expenditures 316,591 4,708,930 147,247 3,036,400 143,960 Excess (deficiency) of revenues over (under) expenditures 1,431,994 2,620,256 (101,599) 552,278 (15,905) Other financing sources (uses) Proceeds from sale of assets - - - - - Transfers in - - 5,000 - 15,195 Transfers out (482,051) (864,229) - (5,000) - Total other financing sources (uses) (482,051) (864,229) 5,000 (5,000) 15,195 Net change in fund balances 949,943 1,756,027 (96,599) 547,278 (710) Fund balance, beginning of year 1,206,419 5,962,152 602,933 1,989,147 987 Fund balance, end of year $ 2,156,362 $ 7,718,179 $ 506,334 $ 2,536,425 $ 277 98 cial Revenue Funds Police Cable Special Seized Juvenile Glade Parks TIRZ #3 Midtown TIRZ #4 PEG Revenue Asset Case PID Glade Parks PID Midtown Fees Funds Fund Fund Fund Fund Fund Fund Fund Totals $ - $ 1,493,318 $ - $ 678,553 $ - $ 2,171,871 - - - - - - 79,783 1,815,871 - - - 434,221 - 16,400 - 11,195,333 1,422 1,170 - 22,563 1,024 - 4,020 129,198 - - - - - - - 42,175 - - - - - - - 128,055 - - - - - - - 79,198 - 50,180 - - 717,124 - - 778,229 1,422 51,350 - 1,950,102 718,148 694,953 83,803 16,339,930 - - - - - - - 3,669,283 - - - - - - - 207,847 - 58,551 - - 13,107 - 28,269 765,159 11,600 - - - - - - 3,212,427 - - - - - - - 220,000 - - - - - - - 182,125 - - - - - - - 207,814 11,600 58,551 - - 13,107 - 28,269 8,464,655 (10,178) (7,201) - 1,950,102 705,041 694,953 55,534 7,875,275 - - - - - - - 20,195 - - - (1,136,374) (765,972) (303,691) - (3,557,317) - - - (1,136,374) (765,972) (303,691) - (3,537,122) (10,178) (7,201) - 813,728 (60,931) 391,262 55,534 4,338,153 233,238 196,357 750,000 2,645,233 122,165 397,493 589,452 14,695,576 $ 223,060 $ 189,156 $ 750,000 $ 3,458,961 $ 61,234 $ 788,755 $ 644,986 $ 19,033,729 99 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — NON -MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2022 Revenues General property tax Gross receipts tax General sales tax Investment income DEA revenues Intergovernmental Rents and royalties Other revenues Total revenues Expenditures Culture and recreation Development services General and administrative Highways and streets Public safety Debt service Principal Interest and fiscal charges Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balance, beginning of year Fund balance, end of year ect Funds Half -Penny Sales Tax CH, Fund Developers' Contribution Fund Street CH, Fund Redevelopment CIP Fund 6,758 9,517 49,259 6,179 - - 3,550 - 1,687 421 - 7,300 8,445 9,938 52,809 13,479 110,204 - - - - - - 74,871 - - 9,872 - 199,916 - 7,828,275 1,683,217 310,120 - 7,838,147 1,758,088 (301,675) 690,064 9,938 (7,785,338) (1,744,609) - - 168,750 - 1,131,000 2,500,000 690,064 - 1,131,000 2,668,750 388,389 9,938 (6,654,338) 924,141 821,611 2,220,321 13,554,224 48,744 $ 1,210,000 $ 2,230,259 $ 6,899,886 $ 972,885 100 Canital Proiect Funds TIRZ #4 Car Capital Midtown Midtown Rental Project Reserve CIP CIP Funds Fund Fund Fund Totals Total Non -major Governmental Funds $ - $ 2,171,871 - - 1,815,871 - 11,195,333 6,881 78,594 207,792 - - - - 42,175 3,550 131,605 - - 79,198 - - 881 10,289 788,518 7,762 92,433 16,432,363 - - - 110,204 3,779,487 - - - - 207,847 17,671 92,542 857,701 - - - 9,872 9,872 - - - - 3,212,427 - - - - 220,000 - - - - 182,125 - 999,725 161,873 10,873,006 11,080,820 - 999,725 179,544 11,085,624 19,550,279 - (999,725) (171,782) (10,993,191) (3,117,916) - - - 168,750 168,750 999,725 999,725 - 6,320,514 6,340,709 (999,725) - - (999,725) (4,557,042) - 999,725 - 5,489,539 1,952,417 - - (171,782) (5,503,652) (1,165,499) 999,725 69,475 1,880,255 19,594,355 34,289,931 $ 999,725 $ 69,475 $ 1,708,473 $ 14,090,703 $ 33,124,432 101 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL HOTEL / MOTEL SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Gross receipts tax Investment income Total revenues Expenditures General and administrative Total expenditures Excess of revenues over expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 582,740 $ 582,740 $ 1,736,088 $ 1,153,348 400 400 12,497 12,097 583,140 583,140 1,748,585 1,165,445 172,160 346,181 316,591 29,590 172,160 346,181 316,591 29,590 410,980 236,959 1,431,994 1,195,035 (482,051) (482,051) (482,051) - (482,051) (482,051) (482,051) - (71,071) (245,092) 949,943 1,195,035 1,206,419 1,206,419 1,206,419 - $ 1,135,348 $ 961,327 $ 2,156,362 $ 1,195,035 102 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL HALF -PENNY SALES TAX SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues General sales tax Investment income Rents and royalties Total revenues Expenditures Culture and recreation Development services General and administrative Debt service Principal Interest and fiscal charges Total expenditures Excess of revenues over expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 5,765,088 $ 5,765,088 $ 7,179,484 $ 1,414,396 3,300 3,300 70,504 67,204 109,580 109,580 79,198 (30,382) 5,877,968 5,877,968 7,329,186 1,451,218 4,228,240 4,228,240 3,750,317 477,923 817,018 817,018 207,847 609,171 364,920 374,595 348,641 25,954 220,000 220,000 220,000 - 182,125 182,125 182,125 - 5,812,303 5,821,978 4,708,930 1,113,048 65,665 55,990 2,620,256 2,564,266 (905,084) (905,084) (864,229) 40,855 (905,084) (905,084) (864,229) 40,855 (839,419) (849,094) 1,756,027 2,605,121 5,962,152 5,962,152 5,962,152 - $ 5,122,733 $ 5,113,058 $ 7,718,179 $ 2,605,121 103 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL POLICE DRUG ENFORCEMENT SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Investment income DEA revenues Total revenues Expenditures Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources Transfers in Total other financing sources Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 500 $ 500 $ 3,473 $ 2,973 15,000 15,000 42,175 27,175 15,500 15,500 45,648 30,148 159,903 159,983 147,247 12,736 159,903 159,983 147,247 12,736 (144,403) (144,483) (101,599) 42,884 5,000 5,000 5,000 - 5,000 5,000 5,000 - (139,403) (139,483) (96,599) 42,884 602,933 602,933 602,933 - $ 463,530 $ 463,450 $ 506,334 $ 42,884 104 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL CRIME CONTROL AND PREVENTION DISTRICT SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues General sales tax Other revenue Investment income Total revenues Expenditures Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final $ 2,886,565 462 2,887,027 Actual GAAP Basis $ 2,886,565 $ 3,565,228 - 10,925 462 12,525 2,887,027 3,588,678 Variance with Final Budget Positive (Negative) $ 678,663 10,925 12.063 701,651 3,293,491 3,306,691 3,036,400 270,291 3,293,491 3,306,691 3,036,400 270,291 (406,464) (419,664) (5,000) (5,000) 552,278 5.000 971,942 (5,000) (5,000) (5,000) - (411,464) (424,664) 547,278 971,942 1,989,147 1,989,147 1,989,147 - $ 1,577,683 $ 1,564,483 $ 2,536,425 $ 971,942 105 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL GRANTS SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Intergovernmental Other Total revenues Expenditures Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final 5,196,973 5,280,491 45,960 45,960 5,242,933 5,326,451 Variance with Actual Final Budget GAAP Positive Basis (Negative) 128,055 $ (5,152,436) - (45,960) 128,055 (5,198,396) 58,978 143,147 143,960 (813) 58,978 143,147 143,960 (813) 5,183,955 5,183,304 (15,905) (5,199,209) 13,018 13,018 15,195 2,177 (9,405,087) (9,405,087) - 9,405,087 (9,392,069) (9,392,069) 15,195 9,407,264 (4,208,114) (4,208,765) (710) 4,208,055 987 987 987 - ($ 4,207,127) ($ 4,207,778) $ 277 $ 4,208,055 106 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL POLICE SEIZED ASSETS SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Investment income Total revenues Expenditures Public safety Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 100 $ 100 $ 1,422 $ 1,322 100 100 1,422 1,322 34,104 34,104 34,104 34,104 (34,004) (34,004) 11,600 22,504 11,600 22,504 (10,178) 23,826 233,238 233,238 233,238 - $ 199,234 $ 199,234 $ 223,060 $ 23,826 107 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL JUVENILE CASE SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Investment income Other revenues Total revenues Expenditures General and administrative Total expenditures Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 200 $ 200 $ 1,170 $ 970 43,322 43,322 50,180 6,858 43,522 43,522 51,350 7,828 73,637 73,637 58,551 15,086 73,637 73,637 58,551 15,086 Net change in fund balance (30,115) (30,115) (7,201) 22,914 Fund balance, beginning of year 196,357 196,357 196,357 - Fund balance, end of year $ 166,242 $ 166,242 $ 189,156 $ 22,914 108 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL TIRZ #3 GLADE PARKS SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues General property tax $ 1,498,206 $ 1,498,206 $ 1,493,318 $ (4,888) General sales tax 367,815 367,815 434,221 66,406 Investment income 1,000 1,000 22,563 21,563 Total revenues 1,867,021 1,867,021 1,950,102 83,081 Other financing uses Transfers out (1,136,374) (1,136,374) (1,136,374) - Total other financing uses (1,136,374) (1,136,374) (1,136,374) - Net change in fund balance 730,647 730,647 813,728 83,081 Fund balance, beginning of year 2,645,233 2,645,233 2,645,233 - Fund balance, end of year $ 3,375,880 $ 3,375,880 $ 3,458,961 $ 83,081 109 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL MIDTOWN PID SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Other revenues Investment income Total revenues Expenditures General and administrative Total expenditures Excess of revenues over expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 803,338 $ 803,338 $ 717,124 $ (86,214) - - 1,024 1,024 803,338 803,338 718,148 (85,190) 37,366 37,366 13,107 24,259 37,366 37,366 13,107 24,259 765,972 765,972 705,041 (60,931) (765,972) (765,972) (765,972) - (765,972) (765,972) (765,972) - - - (60,931) (60,931) 122,165 122,165 122,165 - $ 122,165 $ 122,165 $ 61,234 $ (60,931) 110 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL TIRZ #4 MIDTOWN SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Property tax revenues General sales tax Total revenues Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Budgeted Amounts Original Final Actual GAAP Basis Variance with Final Budget Positive (Negative) $ 675,309 $ 675,309 $ 678,553 $ 3,244 22,672 22,672 16,400 (6,272) 697,981 697,981 694,953 (3,028) (303,691) (303,691) (303,691) - (3035691) (303,691) (303,691) - 394,290 394,290 391,262 (3,028) 397,493 397,493 397,493 - $ 791,783 $ 791,783 $ 788,755 $ (3,028) ill CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL CABLE PEG FEES SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2022 Revenues Gross receipts tax Investment income Total revenues Expenditures General and administrative Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 90,600 $ 90,600 $ 79,783 $ (10,817) 400 400 4,020 3,620 91,000 91,000 83,803 (7,197) 35,600 35,600 28,269 7,331 55,000 80,000 - 80,000 90,600 115,600 28,269 87,331 400 (24,600) 55,534 80,134 589,452 589,452 589,452 - $ 589,852 $ 564,852 $ 644,986 $ 80,134 112 INTERNAL SERVICE FUNDS Internal service funds are used to account for the financing of goods or services provided by one department to other departments of the City on a cost reimbursement basis. Equipment Replacement Fund — to account for the accumulation of funds to be used for replacement of existing equipment. Funding is provided annually by the user departments. Insurance Fund — to account for the revenues and expenses resulting from providing health insurance to the City's employees. Risk Management/Workers' Compensation (Risk/WC) Fund — to account for the revenue and expenses applicable to providing workers' compensation coverage for all City employees, as well as, general liability and property coverage. 113 CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2022 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total ASSETS Current Assets Deposits and investments $ 15,817,764 $ 5,956,546 $ 2,540,651 $ 24,314,961 Accounts receivable - 403,948 58,885 462,833 Prepaid expenses 958,744 - - 958,744 Accrued interest receivable 46,550 4,537 - 51,087 Restricted deposits and investments 297,393 - - 297,393 Total current assets 17,120,451 6,365,031 2,599,536 26,085,018 Non -current Assets Property, plant, and equipment, at cost Equipment 16,697,935 - 170,157 16,868,092 Less accumulated depreciation 10,665,357 - 98,961 10,764,318 Net property, plant, and equipment 6,032,578 - 71,196 6,103,774 Total assets 23,153,029 6,365,031 2,670,732 32,188,792 LIABILITIES Current Liabilities Accounts payable 49,381 23,800 349,281 422,462 Accrued salary and wages - 3,063 2,742 5,805 Current portion of compensated absences - 111 233 344 Accrued insurance claims - 419,951 - 419,951 Total current liabilities 49,381 446,925 352,256 848,562 Non -current Liabilities Compensated absences - 1,001 2,096 3,097 Total non -current liabilities - 1,001 2,096 3,097 Total liabilities 49,381 447,926 354,352 851,659 NET POSITION Net investment in capital assets 6,032,578 - 71,196 6,103,774 Unrestricted 17,071,070 5,917,105 2,245,184 25,233,359 Total net position $ 23,103,648 $ 5,917,105 $ 2,316,380 $ 31,337,133 114 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2022 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total Operating revenues Insurance premiums $ - $ 6,155,059 $ 508,486 $ 6,663,545 Service fees and miscellaneous 4,809,255 1,075,629 - 5,884,884 Total operating revenues 4,809,255 7,230,688 508,486 12,548,429 Operating expenses General and administrative Insurance costs Depreciation Total operating expenses Operating income (loss) Nonoperating revenues Gain on sale of capital assets Investment income Total nonoperating revenues Income (loss) before transfers Transfers Transfers in Total transfers Change in net position Net position, beginning of year Net position, end of year 200,640 1,839,414 96,275 2,136,329 - 5,268,975 908,322 6,177,297 1,462,547 - 15,629 1,478,176 1,663,187 7,108,389 1,020,226 9,791,802 3,146,068 122,299 (511,740) 2,756,627 492,026 - - 492,026 88,248 22,633 14,197 125,078 580,274 22,633 14,197 617,104 3,726,342 144,932 (497,543) 3,373,731 239,449 - 6041500 843,949 239,449 - 604,500 843,949 3,965,791 144,932 106,957 4,217,680 19,137,857 5,772,173 2,209,423 27,119,453 $ 23,103,648 $ 5,917,105 $ 2,316,380 $ 31,337,133 115 CITY OF EULESS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2022 OPERATING ACTIVITIES Cash received from customers Cash payments to suppliers for goods and services Cash payments to employees for services Net cash provided by (used in) operating activities NONCAPITAL FINANCING ACTIVITIES Transfers in Net cash provided by noncapital financing activities CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition/construction of capital assets Proceeds from sale of capital assets Net cash used in capital and related financing activities INVESTING ACTIVITIES Interest received on investments Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation expense Change in assets and liabilities Receivables Accounts payable Accrued salaries and wages Accrued insurance claims Net cash provided by (used in) operating activities Reconciliation of cash to balance sheet: Cash - current Cash - restricted Equipment Replacement Insurance Risk/WC Fund Fund Fund Total $ 4,809,255 $ 7,000,323 $ 508,486 $ 12,318,064 (163,345) (7,451,344) (870,658) (8,485,347) - (76,801) (64,745) (141,546) 4,645,910 (527,822) (426,917) 3,691,171 239,449 - 604,500 843,949 239,449 - 604,500 843,949 (1,743,415) - - (1,743,415) 500,404 - - 500,404 (1,243,011) - - (1,243,011) 44,532 18,806 145240 77,578 44,532 18,806 14,240 77,578 3,686,880 (509,016) 191,823 3,369,687 12,428,277 6,465,562 2,348,828 21,242,667 $ 16,115,157 $ 5,956,546 $ 2,540,651 $ 24,612,354 $ 3,146,068 $ 122,299 $ (511,740) $ 2,756,627 1,462,547 - 15,629 1,478,176 - (230,365) - (230,365) 37,295 2,977 68,021 108,293 - (2,684) 1,173 (1,511) - (420,049) - (420,049) $ 4,645,910 $ (527,822) $ (426,917) $ 31691,171 $ 15,817,764 $ 5,956,546 $ 2,540,651 $ 24,314,961 297,393 - - 297,393 Cash and cash equivalents $ 16,115,157 $ 5,956,546 $ 2,540,651 $ 24,612,354 116 STATISTICAL SECTION (Unaudited) 117 STATISTICAL SECTION (Unaudited) The statistical section of the City of Euless' 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 Tables Financial Trends 1-4 The financial trend schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Revenue Capacity 5-8 The revenue capacity schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. Debt Capacity 9-12 The debt capacity schedules present information to help the reader assess the affordability of the City's current level of outstanding debt (including that of its blended component units) and the City's ability to issue additional debt in the future. Demographic and Economic Information 13-14 The demographic and economic schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities occur. Operating Information l 5-17 The operating information schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services it provides and the activities it performs. 118 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted for debt service Restricted for capital projects Restricted for impact fees Unrestricted Total business -type activities net position Primary government CITY OF EULESS, TEXAS NET POSITION BY COMPONENT — LAST TEN FISCAL YEARS (Accrual Basis of Accounting — Unaudited) Table 1 Fiscal Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 88,228,282 $ 94,162,906 $ 99,539,958 $ 108,135,655 $ 113,509,089 $ 112,710,338 $ 99,744,023 $ 104,018,729 $ 130,459,839 $ 123,862,163 4,138,774 4,999,085 5,666,450 17,508,943 10,293,057 13,620,993 26,158,342 30,103,225 7,441,090 7,579,559 24,910,579 23,921,387 17,302,574 3,610,521 12,466,943 10,698,663 18,071,669 25,147,659 37,117,415 60,034,944 $ 117,277,635 $ 123,083,378 $ 122,508,982 S 129,255,119 $ 136,269,089 $ 137,029,994 $ 143,974,034 $ 159,269,613 $ 175,018,344 $ 191,476,666 $ 52,334,570 $ 55,160,900 $ 55,396,268 $ 59,184,256 $ 62,421,284 $ 63,283,054 $ 65,621,697 $ 66,554,698 $ 64,950,870 $ 73,306,877 314,171 317,758 733,562 733,164 733,264 1,018,037 1,426,830 1,425,701 1,426,103 1,348,929 - 232,300 1,183,350 4,265,268 1,166,442 3,962,644 10,646,450 4,256,167 - - 2,740,656 1,876,393 1,966,315 1,980,150 2,467,095 2,895,677 3,047,942 3,010,687 3,247,897 3,234,445 18,150,441 15,047,592 12,554,695 11,122,601 14,528,797 12,286,319 7,130,279 14,728,131 23,441,214 26,895,689 $ 73,539,838 $ 72,634,943 $ 71,834,190 $ 77,285,439 $ 81,316,882 $ 83,445,731 $ 87,873,198 $ 89,975,384 $ 93,066,084 $ 104,785,940 Net investment in capital assets $ 140,562,852 $ 149,323,806 $ 154,936,226 $ 167,319,911 $ 175,930,373 $ 175,993,392 $ 165,365,720 $ 170,573,427 $ 195,410,709 $ 197,169,040 Restricted 7,193,601 7,425,536 9,549,677 24,487,525 14,659,858 21,497,351 41,279,564 38,795,780 12,115,090 12,162,933 Unrestricted 43,061,020 38,968,979 29,857,269 14,733,122 26,995,740 22,984,982 25,201,948 39,875,790 60,558,629 86,930,633 Total primary government net position $ 190,817,473 $ 195,718,321 $ 194,343,172 $ 206,540,558 $ 217,585,971 $ 220,475,725 $ 231,847,232 $ 249,244,997 $ 268,084,428 $ 296,262,606 Source: Annual Comprehensive Financial Reports 119 CITY OF EULESS, TEXAS CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (Accrual Basis of Accounting - Unaudited) Table 2 Fiscal Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Expenses Governmental activities: Culture and recreation $ 6,025,540 $ 6,424,683 $ 6,468,332 $ 6,998,904 $ 7,349,035 $ 7,070,484 $ 7,330,168 $ 5,538,905 $ 6,890,021 $ 7,714,207 Development services 1,155,089 1,367,005 877,713 918,214 999,153 1,038,328 1,057,414 1,062,784 903,633 934,100 General and administrative 17,145,752 18,017,535 19,949,733 20,722,236 20,816,148 21,356,342 21,112,696 20,827,914 20,604,298 24,293,764 Highways and streets 3,334,188 3,578,341 3,374,422 3,708,184 4,143,412 3,787,336 7,193,189 3,601,998 3,905,567 4,015,628 Public safety 23,324,328 24,278,144 23,807,143 26,673,966 28,265,072 27,424,253 30,352,705 27,354,689 27,489,405 27,379,929 Interest on long-term debt 1,227,084 1,126,017 1,136,786 1,807,001 1,502,912 1,632,302 2,010,814 2,560,933 2,507,261 2,417,173 Total governmental activities expenses 52,211,981 54,791,725 55,614,129 60,828,505 63,075,732 62,309,045 69,056,986 60,947,223 62,300,185 66,754,801 Business -type activities: Water and wastewater 18,554,761 20,298,024 19,970,346 21,009,701 21,673,844 23,225,786 23,493,321 25,333,182 24,823,460 26,754,590 Drainage utility 1,245,838 1,373,036 1,319,999 1,414,483 1,396,736 1,515,183 1,563,021 1,502,275 1,571,836 1,517,199 Golf 4,750,359 4,152,015 4,155,834 4,409,773 4,632,475 4,764,095 4,731,810 3,997,255 4,201,337 4,703,615 Other recreation enterprises 2,312,949 2,288,337 2,009,582 2,211,065 2,321,414 2,416,337 2,270,768 1,491,533 1,568,441 2,024,308 Total business -type activities expenses 26,863,907 28,111,412 27,455,761 29,045,022 30,024,469 31,921,401 32,058,920 32,324,245 32,165,074 34,999,712 Total primary government expenses 79,075,888 82,903,137 83,069,890 89,873,527 93,100,201 94,230,446 101,115,906 93,271,468 94,465,259 101,754,513 Program Revenues Governmental activities: Fees, fines, and charges for services Culture and recreation 297,361 304,283 317,024 291,349 264,307 252,000 266,091 10,124 $ 295,097 $ 319,544 Development services 1,186,347 1,321,040 1,409,703 1,717,416 2,019,496 1,875,120 2,133,420 1,697,637 1,578,146 1,149,319 General and administrative 1,383,779 1,347,600 1,342,091 1,285,797 1,156,745 1,066,075 861,929 1,067,485 687,136 787,552 Highways and streets 112,736 218,012 93,258 350,920 607,588 988,302 1,114,507 1,075,865 982,070 717,124 Public safety 3,355,604 3,567,917 3,452,086 3,383,743 3,151,407 3,104,895 2,541,205 2,288,377 2,325,458 3,200,585 Operating grants and contributions 2,978,933 633,080 597,437 578,007 592,870 740,969 622,061 3,594,939 810,821 1,054,703 Capital grants and contributions 1,213,341 1,552,118 3,228,945 3,375,733 2,356,556 2,354,450 1,304,420 2,190,770 396,317 550,799 Total governmental activities program revenues 10,528,101 8,944,050 10,440,544 10,982,965 10,148,969 10,381,811 8,843,633 11,925,197 7,075,045 7,779,626 Business -type activities: Charges for services Water and wastewater 19,183,198 19,353,144 20,593,262 23,759,236 24,178,812 27,504,814 26,400,731 26,934,154 28,571,921 29,412,986 Drainage utility 708,984 712,971 716,595 725,152 730,202 818,622 826,711 833,890 842,003 1,193,159 Golf 4,520,224 3,622,952 4,168,578 4,187,728 4,247,345 4,337,003 4,067,026 3,363,915 4,350,610 5,131,494 Other recreation enterprises 2,138,600 2,241,920 1,848,434 2,059,413 2,168,944 2,123,825 2,197,926 884,286 1,433,139 1,905,434 Operating grants and contributions - - - - - - - - - - Capital grants and contributions 1,847,097 2,037,263 1,746,638 2,943,188 2,280,769 1,729,219 3,058,291 2,677,913 1,002,393 1,254,532 Total business -type activities program revenues 28,398,103 27,968,250 29,073,507 33,674,717 33,606,072 36,513,483 36,550,685 34,694,158 36,200,066 38,897,605 Total primary government program revenues 38,926,204 36,912,300 39,514,051 44,657,682 43,755,041 46,895,294 45,394,318 46,619,355 43,275,111 46,677,231 (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) 120 Net (Expense) Revenue Governmental activities Business -type activities Total primary government net expense General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes, levied for general purposes Sales taxes Car rental taxes Mixed beverage taxes Hotel/motel occupancy taxes Gross receipts taxes Investment income Rents and royalties Gain on sale of assets Miscellaneous Transfers Total governmental activities Business -type activities: Investment income Gain on disposal of assets Miscellaneous Transfers Total business -type activities Total primary government Change in Net Position CITY OF EULESS, TEXAS CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (Accrual Basis of Accounting - Unaudited) - Continued Table 2 $ (41,683,880) $ (45,847,675) $ (45,173,585) $ (49,845,540) $ (52,926,763) $ (51,927,234) $ (60,213,353) $ (49,022,026) $ (55,225,140) $ (58,975,175) 1,534,196 (143,162) 1,617,746 4,629,695 3,581,603 4,592,082 4,491,765 2,369,913 4,034,992 3,897,893 (40,149,684) (45,990,837) (43,555,839) (45,215,845) (49,345,160) (47,335,152) (55,721,588) (46,652,113) (51,190,148) (55,077,282) 12,744,753 13,488,816 14,358,074 14,752,044 16,656,028 18,630,301 20,428,821 22,837,075 24,195,500 24,974,349 16,142,357 17,525,123 18,359,717 20,364,878 21,252,491 20,728,210 21,419,831 22,088,364 24,373,082 28,693,421 13,592,255 14,082,518 14,112,552 14,842,109 14,401,763 14,776,566 14,797,320 10,042,659 13,062,591 18,372,898 60,823 69,160 84,533 101,503 128,250 154,035 138,219 146,188 171,687 201,348 329,368 343,312 391,991 696,805 798,905 864,829 841,588 924,551 1,182,845 1,736,088 4,209,564 4,458,682 4,556,355 4,467,535 4,455,137 4,811,119 4,549,026 4,238,664 4,221,250 4,478,146 106,521 70,374 127,367 271,786 451,406 963,670 1,882,696 1,054,661 123,646 804,074 1,481,305 1,390,283 1,166,832 1,105,829 1,149,534 1,223,788 1,348,465 1,462,429 1,574,739 1,567,269 117,763 84,664 - - 124,792 - - - - - 35,884 48,773 35,128 692,939 755,996 772,773 930,764 971,040 1,081,893 1,304,396 692,951 531,974 722,702 (703,751) (233,569) 760,590 820,663 551,974 986,638 (6,698,492) 49,513,544 52,093,679 53,915,251 56,591,677 59,940,733 63,685,881 67,157,393 64,317,605 70,973,871 75,433,497 40,045 34,063 40,282 104,618 158,805 385,513 746,865 368,999 42,346 174,403 41,630 - 4,199 13,185 57,466 2,873 9,500 (84,752) - - - - - - - - 949,068 (692,951) (531,974) (722,702) 703,751 233,569 (760,590) (820,663) (551,974) (986,638) 6,698,492 (611,276) (497,911) (678,221) 821,554 449,840 (372,204) (64,298) (267,727) (944,292) 7,821,963 48,902,268 51,595,768 53,237,030 57,413,231 60,390,573 63,313,677 67,093,095 64,049,878 70,029,579 83,255,460 Governmental activities 7,829,664 6,246,004 8,741,666 6,746,137 7,013,970 11,758,647 6,944,040 15,295,579 15,748,731 16,458,322 Business -type activities 922,920 (641,073) 939,525 5,451,249 4,031,443 4,219,878 4,427,467 2,102,186 3,090,700 11,719,856 Total primary government $ 8,752,584 $ 5,604,931 $ 9,681,191 $ 12,197,386 $ 11,045,413 $ 15,978,525 $ 11,371,507 $ 17,397,765 $ 18,839,431 $ 28,178,178 (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) Source: Annual Comprehensive Financial Reports 121 General Fund Nonspendable Restricted Assigned Unreserved/Unassigned Total general fund All Other Governmental Funds Nonspendable Restricted for: Debt service Capital projects Other Assigned Total all other governmental funds CITY OF EULESS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting - Unaudited) Table 3 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 49,262 $ 48,072 $ 47,834 $ 35,250 $ 52,050 $ 51,409 $ 74,835 $ 158,975 $ 223,609 $ 113,090 124,312 120,093 109,618 121,041 104,340 125,753 132,954 123,748 117,674 108,919 121,542 121,334 116,336 113,655 107,657 121,708 135,720 145,057 164,801 187,649 9,595,558 10,560,958 10,775,542 11,973,524 13,185,421 14,255,823 16,630,106 19,790,726 20,240,670 24,896,247 $ 9,890 674 $ 10 50 457 $ 11,049,330 $ 12,243,470 $ 13,449,468 $ 14,554,693 $ 16,973,615 $ 20 218,506 $ 20,746,754 $ 25,305,905 $ 9,464 $ 34,704 $ 15,399 $ 7,738 $ 22,028 $ 12,427 $ - $ 24,873 $ 1,086 $ 15,655 1,776,644 2,377,710 2,477,981 1,995,548 2,285,719 2,765,013 3,429,240 3,828,633 4,316,041 4,405,396 365,641 398,756 594,211 12,715,424 4,985,922 7,501,009 19,287,010 22,369,460 18,996,535 15,184,734 1,872,178 2,089,735 2,455,941 2,718,045 2,952,158 3,229,218 3,309,138 3,081,384 3,007,375 3,065,244 13,504,412 12,692,185 13,765,385 12,541,184 14,730,171 21,356,289 19,461,628 17,221,925 22,761,358 32,889,510 $ 17,528,339 $ 17,593,090 $ 19,308,917 $ 29,977,939 $ 24,975,998 $ 34,863,956 $ 45,487,016 $ 46,526,275 $ 49,082,395 $ 55,560,539 Source: Annual Comprehensive Financial Reports 122 Revenues: General property tax Gross receipts tax General sales tax Car rental tax Fines and fees Licenses and permits Investment income DEA revenues Intergovernmental Rents and royalties Other revenues Total Revenues Expenditures: Culture and recreation Development services General and administrative Highways and streets Public safety Debt Service: Principal Interest and fiscal charges Issuance costs Capital outlay Total expenditures Excess (deficiency) ofrevenues over (under) expenditures Other Financing Sources (Uses): Issuance of lease Issuance of debt Payment of escrow for refunding Premiums on issuance of debt Proceeds from sale of assets Transfers in Transfers out Total other financing sources Net change in fund balances Debt service as a percentage of noncapital expenditures CITY OF EULESS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting - Unaudited) Table 4 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ 12,893,583 $ 13,468,394 $ 14,351,598 $ 14,771,632 $ 16,674,673 $ 18,652,639 $ 20,408,581 $ 22,736,528 $ 24,144,693 $ 25,236,242 4,599,755 4,871,154 5,032,879 5,265,843 5,382,292 5,829,983 5,528,832 5,309,401 5,575,782 6,415,583 16,142,357 17,525,123 18,359,717 20,364,878 21,252,491 20,728,209 21,419,831 22,088,364 24,373,083 28,693,421 13,592,255 14,082,518 14,112,552 14,842,109 14,401,763 14,776,566 14,797,320 10,042,659 13,062,591 18,372,898 4,627,199 4,646,390 4,289,681 4,461,439 3,961,369 3,806,964 3,313,059 2,835,050 2,702,221 3,652,725 1,152,875 1,286,753 1,379,332 1,682,431 1,997,082 1,847,315 2,105,716 1,673,143 1,552,088 1,127,642 92,118 57,880 105,443 237,949 385,769 821,642 1,623,907 869,827 103,170 711,952 3,571 15,316 39,292 18,274 9,994 2,656 18,353 13,678 117,144 42,175 2,839,545 461,484 906,695 507,966 1,490,142 813,633 629,332 3,738,184 793,091 1,039,952 1,024,021 1,390,283 637,196 612,365 628,486 668,036 635,553 635,464 711,814 620,575 1,383,172 1,210,086 1,795,395 1,943,007 1,996,374 2,217,797 2,362,730 2,387,958 2,125,528 2,574,468 58,350,451 59,015,381 61,009,780 64,707,893 68,180,435 70,165,440 72,843,214 72,330,256 75,261,205 88,487,633 5,171,477 5,558,463 5,704,520 6,023,057 6,324,436 6,372,535 6,258,492 6,785,529 6,120,370 7,335,273 806,275 1,017,903 882,212 862,571 931,119 1,036,278 1,001,587 1,065,028 924,919 993,827 17,207,934 17,711,441 18,357,428 18,975,116 18,985,489 19,790,021 19,038,500 18,727,050 19,881,563 22,755,689 1,144,223 1,351,404 1,606,372 1,688,714 1,616,714 1,222,905 4,555,735 1,322,786 1,180,954 1,528,043 22,192,488 23,121,457 23,521,280 24,698,550 26,068,993 26,977,362 27,738,238 28,322,488 28,534,814 30,662,083 3,975,000 5,567,404 4,284,197 3,530,000 3,848,825 4,761,697 4,828,848 4,605,000 4,635,000 4,631,897 1,241,776 1,148,069 1,243,589 1,743,450 1,516,936 1,662,399 1,943,495 2,627,550 2,462,387 2,432,243 26,064 - - - - - - - - - 10,390,582 2,672,010 9,086,345 14,871,624 10,600,631 6,839,864 8,979,048 16,839,574 14,879,407 15,714,436 62,155,819 58,148,151 64,685,943 72,393,082 69,893,143 68,663,061 74,343,943 80,295,005 78,619,414 86,053,491 (3,805,368) 867,230 (3,676,163) (7,685,189) (1,712,708) 1,502,379 (1,500,729) (7,964,749) (3,358,209) 2,434,142 1,446,603 - - 249,370 - - - - 259,697 1,160,000 11,400,000 20,760,000 - 9,805,000 13,420,000 12,345,000 6,985,000 7,660,000 (1,190,252) (6,074,450) - - - - - - 79,046 789,428 403,354 264,116 869,936 524,348 401,414 - - - - - - 23,513 25,625 118,830 20,525 199,400 6,278,531 4,366,649 5,897,789 7,468,038 8,845,061 13,942,847 11,040,601 10,122,378 8,193,943 11,857,126 (5,839,245) (4,209,345) (6,421,904) (9,083,041) (11,177,666) (14,544,672) (10,813,451) (10,861,657) (9,158,305) (11,373,070) 1,934,683 157,304 5,590,863 19,548,351 (2,083,235) 9,490,804 14,542,711 12,248,899 6,442,577 8,603,153 $ (1,870,685) $ 1,024,534 $ 1,914,700 $ 11,863,162 $ (3,795,943) $ 10,993,183 $ 13,041,982 $ 4,284,150 $ 3,084,368 $ 11,037,295 10.1% 12.1% 9.9% 9.2% 9.0% 10.4% 10.4% 11.4% 11.1% 10.0% Source: Annual Comprehensive Financial Reports 123 CITY OF EULESS, TEXAS ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY — LAST TEN FISCAL YEARS (Unaudited) Estimated Value Fiscal Real Personal Year Property Property Total Value Less: Tax -Exempt Property Table 5 Total Direct Total Taxable Tax Value Rate 2013 2,661,959,213 445,909,463 3,107,868,676 351,726,906 2,756,141,770 2014 2,759,268,619 461,065,240 3,220,333,859 356,283,956 2,864,049,903 2015 2,920,206,326 509,189,960 3,429,396,286 369,393,032 3,060,003,254 2016 3,352,029,682 513,118,652 3,865,148,334 410,557,810 3,454,590,524 2017 3,470,371,005 531,751,946 4,002,122,951 450,853,105 3,551,269,846 2018 3,922,338,493 564,286,167 4,486,624,660 492,318,425 3,994,306,235 2019 4,353,413,236 576,907,417 4,930,320,653 549,709,999 4,380,610,654 2020 4,877,396,769 628,387,146 5,505,783,915 599,654,547 4,906,129,368 2021 5,160,656,914 666,521,372 5,827,178,286 631,904,229 5,195,274,057 2022 5,445,666,114 637,973,264 6,083,639,378 768,537,626 5,315,101,752 Source: Tarrant Appraisal District 124 0.470000 0.470000 0.467500 0.467500 0.462500 0.462500 0.462500 0.462500 0.462500 0.475000 CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of Assessed Value) - LAST TEN FISCAL YEARS (Unaudited) Table 6 City Direct Rates General Fiscal Operating / Obligation Debt Year General Rate Service Total Direct Rate 2013 0.355130 0.114870 0.470000 2014 0.360619 0.109381 0.470000 2015 0.364505 0.102995 0.467500 2016 0.366571 0.100929 0.467500 2017 0.363053 0.099447 0.462500 2018 0.361056 0.101444 0.462500 2019 0.371710 0.090790 0.462500 2020 0.377974 0.084526 0.462500 2021 0.381954 0.080546 0.462500 2022 0.402888 0.072112 0.475000 Sources: City of Euless Budget Office, Tarrant Appraisal District Overlapping Rates Grapevine- Tarrant County Tarrant County Hurst -Euless- Colleyville Hospital Community Bedford ISD ISD Tarrant County District College 1.4075 1.3201 0.2640 0.2279 0.1490 1.3875 1.3201 0.2640 0.2279 0.1495 1.3750 1.3201 0.2640 0.2279 0.1495 1.3500 1.3201 0.2640 0.2279 0.1495 1.3160 1.3967 0.2540 0.2279 0.1447 1.2630 1.3967 0.2440 0.2244 0.1401 1.2730 1.3967 0.2340 0.2244 0.1361 1.2200 1.3267 0.2340 0.2244 0.1302 1.1980 1.3031 0.2340 0.0819 0.1302 1.1608 1.2751 0.2290 0.2244 0.1302 125 Fiscal Year 2022 TaWayer Brazos TX Partners LLC/Stoneleigh at Bear Creek Apt. Westdale Hills 2013 LP Star Monticello LLC/Star Kensington LLC Intercapital AC Overlook LLC/hitergerman Enclave LLC Creekwood Trinity Union LLC CH Realty IX-Knightvest MF Mandolin Owner LP Glade Wine 1 LLC/Glade Wine2 LLC/Glade Lifest Oakmont of Bear Creek LLP/Parkside on the Creek LLC Bedrock Holdings H (Dallas) LLC CMF 15 Portfolio LLC Total Source: Tarrant County Tax Office CITY OF EULESS, TEXAS PRINCIPAL PROPERTY TAXPAYERS Current Year and Nine Years Ago (Unaudited) Percentage of Total City Taxable Taxable Assessed Assessed Value Value (1) Taxnaver $ 170,900,000 3.22 % EAN Holdings, LLC 104,864,890 1.97 Avis Rent A Car System LLC 101,900,000 1.92 The Hertz Corp. 94,800,000 1.78 UDR The Mandolin LLC 88,000,000 1.66 IRA Stoneleigh FEECO LLC 80,981,553 1.52 AP WP Seramont Reit LLC 78,468,777 1.48 CMF 15 Portfolio LLC 77,300,000 1.45 AP WP Vineyard Reit LLC 66,900,000 1.26 Oncor Electric Delivery Co. LLC 66,500,000 1.25 Big Vineyard Village MSV LLC $ 930,615,220 17.51 % Total Notes: (1) Total Taxable Value including real and personal property for tax year 2021 (fiscal year 2022) is $5,315,101,752. (2) Total Taxable Value including real and personal property for tax year 2012 (fiscal year 2013) is $2,756,141,770. 126 Table 7 Fiscal Year 2013 Percentage of Total City Taxable Taxable Assessed Assessed Value Value (2) $ 59,616,590 2.16 % 50,649,087 1.84 49,171,866 1.78 45,630,000 1.66 41,000,000 1.49 37,650,000 1.37 34,980,000 1.27 34,765,700 1.26 34,393,728 1.25 34,250,623 1.24 $ 422,107,594 15.32 % Fiscal 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS — LAST TEN FISCAL YEARS (Unaudited) Taxes Levied Adjustments Within the to Levy in Fiscal Year Subsequent of the Levy Years 12,926,215 (227,24_ 13,426,248 (70,74, 14,245,865 (194,61, 13,671,980 870,93, 15,828,162 378,17, 18,199,497 (72,81, 19,850,820 (59,3D 22,134,132 (98,26' 23,340,538 (107,91, 24,283,254 Collected within the Adjusted Fiscal Year of the Levy Taxes Levied for the Percentage Fiscal Year Amount of Levy 12,698,974 12,648,635 99.60% 13,355,506 13,303,694 99.61% 14,051,251 14,049,020 99.98% 14,542,912 14,481,033 99.57% 16,206,334 16,191,555 99.91% 18,126,683 18,131,429 99.86% 19,791,491 19,769,021 99.89% 22,035,865 21,970,578 99.70% 23,232,626 23,180,576 99.78% 24,283,254 24,176,819 99.56% Source: Tarrant County Tax Office and Tarrant Appraisal District 127 Table 8 Total Collection Delinquent Taxes Collections in Subsequent Percentage Percentage Years Amount of Levy Amount of Levy 37,051 12,685,686 99.90% 13,288 0.11% 35,767 13,339,461 99.88% 16,045 0.13% (11,725) 14,037,295 99.90% 13,956 0.11% 45,628 14,526,661 99.89% 16,251 0.12% (1,005) 16,190,550 99.90% 15,784 0.11% 9,245 18,140,674 100.08% (13,991) 0.11% (2,364) 19,766,657 99.87% 24,834 0.19% 21,669 21,992,247 99.80% 43,618 0.20% (3,751) 23,176,825 99.76% 55,801 0.24% - 24,176,819 99.56% 106,435 0.44% CITY OF EULESS, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE — LAST TEN FISCAL YEARS (Unaudited) Table 9 Governmental Activities Business -Type Activities Premiums/ Premiums/ Discounts General Discounts General Certificates Sales Tax on Debt Issues W&S Obligation on Debt Issues Total Percentage Fiscal Obligation of Tax Revenue and Losses on Revenue Refunding and Losses on Primary of Personal Per Year Bonds Obligation Notes Bonds Leases Refundings (1) Bonds Bonds Leases Refundings (1) Government Income (3) Capita (3) 2013 $ 27,095,000 $ 2,910,000 $ - $ 2,050,000 $ 1,631,602 $ (396,737) $ 4,690,000 $ 7,495,000 $ $ (610,729) $ 44,864,136 3.30% $ 867 2014 24,070,000 2,780,000 1,175,000 94,196 622,367 (2) 4,285,000 6,915,000 237,146 (2) 40,178,709 2.53% $ 731 2015 20,655,000 8,365,000 285,000 - 994,148 (2) 10,940,000 6,320,000 211,601 (2) 47,770,749 2.98% $ 884 2016 17,425,000 27,710,000 1,280,000 120,000 - 1,497,876 (2) 10,305,000 5,695,000 186,063 (2) 64,218,939 3.94% $ 1,184 2017 14,490,000 27,350,000 860,000 75,000 160,545 1,099,640 (2) 9,540,000 5,240,000 168,446 (2) 58,983,631 3.62% $ 1,075 2018 11,460,000 35,660,000 735,000 40,000 83,848 1,211,502 (2) 11,545,000 4,770,000 150,830 (2) 65,656,180 3.82% $ 1,190 2019 8,805,000 46,200,000 - 1,565,000 - 1,887,637 (2) 19,905,000 4,295,000 133,213 (2) 82,790,850 4.49% $ 1,474 2020 6,040,000 51,710,000 1,110,000 5,450,000 2,195,218 (2) 18,725,000 3,805,000 115,597 (2) 89,150,815 4.84% $ 1,587 2021 4,115,000 54,930,000 2,370,000 5,245,000 (4) 2,432,587 (2) 17,780,000 3,295,000 97,984 (2) 90,265,571 4.48% $ 1,549 2022 3,010,000 52,560,000 9,155,000 5,025,000 197,802 2,244,842 (2) 16,835,000 2,775,000 203,458 80,364 (2) 92,086,466 4.10% $ 1,498 Note: Details regarding the City s outstanding debt can be found in the notes to the Financial Statements. (1) Column added to table in 2016; prior year figures have been restated to include amounts reflected. (2) Calculations for fiscal years after 2013 do not include losses on refundings due to their balance sheet reclassification to Deferred Inflows of Resources. (3) See Table 13 for personal income and population data. (4) Figure updated in FY2022. 128 CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO TAXABLE ASSESSED VALUE AND NET BONDED DEBT PER CAPITA — LAST TEN FISCAL YEARS (Unaudited) Table 10 General Bonded Debt Outstanding Premiums/ Discounts General Certificates on Debt Issues Less: Debt Net O/S Net Debt Net General Fiscal Obligation of and Losses on Service Debt Estimated Taxable to Taxable Debt Per Year Bonds Obligation Refundings (1) Reserves Total (6) Population (2) Value (3) Value Capita 2013 34,590,000 2,910,000 (721,626) 807,054 35,971,320 51,750 2,756,141,770 1.31% $ 695 2014 30,985,000 2,780,000 883,948 (5) 796,454 33,852,494 53,780 2,864,049,903 1.18% $ 629 2015 26,975,000 8,365,000 1,228,901 (5) 813,841 35,755,060 54,050 3,060,003,254 1.17% $ 662 2016 (4) 23,120,000 27,710,000 1,446,619 (5) 1,056,021 51,220,598 54,250 3,454,590,524 1.48% $ 944 2017 19,730,000 27,350,000 1,288,664 (5) 1,398,495 46,970,169 54,870 3,551,269,846 1.32% $ 856 2018 16,230,000 35,660,000 1,381,631 (5) 1,914,141 51,357,490 55,170 3,994,306,235 1.29% $ 931 2019 13,100,000 46,200,000 2,038,856 (5) 2,415,379 58,923,477 56,160 4,380,610,654 1.35% $ 1,049 2020 9,845,000 51,710,000 2,066,094 (5) 2,676,299 60,944,795 56,160 4,906,129,368 1.24% $ 1,085 2021 7,410,000 54,930,000 2,546,006 (5) 3,154,199 61,731,807 58,260 5,195,274,057 1.19% $ 1,060 2022 5,785,000 52,560,000 2,105,638 (5) 2,242,815 58,207,823 61,480 5,315,101,752 1.10% $ 947 Note: Details regarding the City s outstanding debt can be found in the Notes to the Financial Statements. Total does not include revenue bonds. Source: (1) Column added to table in 2016, prior years restated to include amounts shown- (2) Estimates by North Central Texas Council of Governments and Euless Planning and Development Department (3) Tarrant Appraisal District (4) Taxable value restated to fiscal year end amounts. (s) Calculations for fiscal years after 2013 do not include losses on refimdings due to their balance sheet reclassification to Deferred Inflows of Resources. (6) For the 9/30/2018 and beyond presentations, tax notes and leases were removed as these debt instruments are not considered bonded debt. 129 CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2021— (Unaudited) Governmental Unit Debt repaid with property taxes Debt Outstanding Estimated Percentage Applicable Table 11 Estimated Share of Overlapping Debt Grapevine-Colleyville Independent School District $ 311,711,018 9.32% $ 29,051,467 Hurst -Euless -Bedford Independent School District 321,965,000 20.57% 66,228,201 Tarrant County 404,360,000 2.42% 9,785,512 Tarrant County Hospital District 12,825,000 2.42% 310,365 Tarrant County College District 610,315,000 2.42% 14,769,623 Subtotal, overlapping debt 120,145,168 Debt repaid with property taxes and sales taxes City of Euless (direct debt) 72,192,644 100.00% 72,192,644 Total direct and overlapping debt repaid with property taxes $ 192,337,812 Notes: The percentage of overlapping debt applicable is estimated using taxable property values. Applicable percentages were estimated by determining the portion of another governmental units taxable value that is within the City's boundaries and dividing it by each unit's total taxable value. The current year calculation of direct debt includes all general governmental activities debt including sales tax revenue bonds which are not repaid with property taxes. Amounts shown have been adjusted for losses on prior refundings, premiums, and discounts. Source: Debt outstanding data provided by Municipal Advisory Council of Texas and City records. 130 CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE WATER AND WASTEWATER BONDS — LAST TEN FISCAL YEARS (Unaudited) Table 12 Interest Less Net and Fiscal Total Operating Revenue Fiscal Coverage Year Revenues (1) Expenses (2) Available Principal Charges Total Ratio 2013 19,399,314 16,660,397 2,738,917 330,000 82,110 412,110 6.65 2014 19,729,539 18,269,093 1,460,446 405,000 122,229 527,229 2.77 2015 21,182,560 17,879,209 3,303,351 410,000 129,703 539,703 6.12 2016 24,311,965 18,625,302 5,686,663 635,000 181,747 816,747 6.96 2017 24,353,525 19,249,699 5,103,826 765,000 175,682 940,682 5.43 2018 27,828,648 20,880,984 6,947,664 780,000 184,154 964,154 7.21 2019 27,603,615 21,006,298 6,597,317 915,000 191,327 1,106,327 5.96 2020 27,683,951 23,101,386 4,582,565 1,180,000 306,354 1,486,354 3.08 2021 29,072,318 22,122,296 6,950,022 945,000 274,924 1,219,924 5.70 2022 29,733,939 24,625,613 5,108,326 945,000 267,554 1,212,554 4.21 Notes: (1) Operating and nonoperating revenues of water and wastewater fund (2) Total operating expenses of water and wastewater fund exclusive of depreciation and amortization 131 CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS — LAST TEN FISCAL YEARS (Unaudited) Table 13 Personal Per Income Fiscal Estimated Capita (thousands Median School Unemployment Year Population (1) Income (2) of dollars) Age (2) Enrollment (3) Rate (4) 2013 51,750 $ 26,299 $ 1,360,973 34.6 21,814 5.4% 2014 53,780 $ 28,947 $ 1,556,770 31.8 22,138 5.0% 2015 54,050 $ 29,651 $ 1,602,637 34.7 22,762 3.6% 2016 54,250 $ 30,054 $ 1,630,430 34.9 23,090 3.8% 2017 54,870 $ 29,730 $ 1,631,285 34.9 23,425 3.2% 2018 55,170 $ 31,117 $ 1,716,725 34.9 23,632 3.5% 2019 56,160 $ 32,810 $ 1,842,610 36.1 23,624 (5) 3.6% 2020 57,550 $ 34,575 $ 1,989,791 35.3 23,756 8.9% 2021 58,260 $ 34,575 $ 2,014,340 35.3 22,884 4.6% 2022 61,480 $ 36,494 $ 2,243,651 35.6 22,815 3.5% Notes: (1) Estimates by North Central Texas Council of Governments (2) Estimates by Claritas Site Reports; Research & Demographic Solutions; 2014. forward. from US Census Bureau (3) Hurst -Euless -Bedford Independent School District (4) Texas Workforce Commission; Bureau of Labor Statistics (5) Updated from projected to actual 132 CITY OF EULESS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) Table 14 2022* 2013 Percentage of Percentage of Estimated Total Estimated Total Employer Employees City Employment Employer Employees City Employment HEB ISD 1,033 4.16% HEB ISD 818 3.25% LSG Sky Chefs, Inc. 663 2.67% LSG Sky Chefs, Inc. 800 3.18% City of Euless 398 1.60% City of Euless 360 1.45% Target 250 1.01% Redi-Mix Concrete 355 1.41% Lowe's 225 0.91% Autogrill Group, Inc. 350 1.39% Life Outreach International 186 0.75% Life Outreach International 181 0.72% Redi-Mix Concrete 185 0.74% Super Target 150 0.60% Dave and Buster's 150 0.60% Lowe's 125 0.50% QuikTrip 130 0.52% Home Depot 122 0.48% Flynn BEC, LP 120 0.48% TJ Lambrecht Construction 120 0.48% Thirsty Lion 120 0.48% Total 3,460 13.92% Source: City of Euless Planning and Development Department * Prior year data used if updated information was unavailable. 133 3,381 13.46% CITY OF EULESS, TEXAS FULL-TIME CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Function/Program 2013 2014 2015 2016 2017 2018 2019 General Government and Administration 48.50 48.50 48.00 49.50 50.00 51.00 50.50 Public Safety 132.00 135.00 136.00 136.00 136.00 137.00 137.00 Fire Safety 72.00 72.00 72.00 72.00 75.00 75.00 75.00 Development Services 6.00 7.50 7.50 7.50 8.00 7.50 7.50 Culture and Recreational 30.50 33.25 34.25 34.25 35.25 35.25 35.25 Water and Wastewater 42.00 42.00 42.00 42.50 42.50 43.50 43.00 Golf Course 12.00 10.75 11.75 11.75 11.75 11.75 11.75 Public Works 18.50 18.50 20.00 20.00 21.00 22.50 23.50 Service Center 5.00 5.00 5.00 5.00 5.00 5.00 5.00 Risk Management / Insurance 1.50 1.50 1.50 1.50 1.50 1.50 1.50 Total 368.00 374.00 378.00 380.00 386.00 390.00 390.00 Source: City Budget Office 134 Table 15 2020 2021 2022 50.50 49.00 49.50 139.00 139.00 142.00 75.00 75.00 78.00 7.50 7.50 7.50 34.25 34.25 34.25 44.00 43.50 45.00 11.75 11.75 11.75 23.50 23.50 23.50 5.00 5.00 5.00 1.50 1.50 1.50 392.00 390.00 398.00 CITY OF EULESS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Function/Program Public Safety Police Number of Certified Officers Number of Citations Issued Fire Number of Certified Firefighters Number of Alarms Number ofEMS Calls Municipal Court Cases Filed Development Number Residential Inspections - New Number Commercial Inspections - New Number Multifamily Inspections - New Public Works Street Overlay (Square Footage) Cultural and Recreational Parks and Recreation Recreation Center Memberships Water and Wastewater Number of Water Consumers Water Produced (hi Gallons x 1000) Water Purchased - TRA (In Gallons x 1000) Water Supplied (hi Gallons x 1000) Annual Rainfall (In Inches) Golf Course Number of Paid Rounds Played Source: City Departments Annual Comprehensive Financial Report City Budget Office Table 16 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 87 92 92 92 87 91 91 86 85 93 26,356 25,500 24,573 18,483 25,061 19,100 16,552 11,154 9,283 17,224 70 70 70 70 72 73 74 72 75 74 4,296 4,505 4,686 4,770 4,678 3,758 4,324 4,735 4,827 6,245 3,108 3,230 3,424 3,431 3,772 3,468 2,958 3,256 3,204 3,910 32,192 31,172 28,885 25,957 25,061 25,101 22,472 15,400 12,751 17,224 42 107 176 186 176 214 93 3 0 0 16 29 33 15 36 32 18 12 13 7 0 1 1 0 0 1 6 0 0 0 540,613 631,260 430,504 1,156,833 1,549,065 1,063,046 1,289,759 1,010,016 421,848 483,310 5,137 6,261 6,742 a1 6,975 6,528 7,183 7,125 2,820 3,886 5,008 25,039 25,319 26,014 25,812 25,970 26,200 26,659 27,467 27,855 27,942 416,843 380,864 741,225 540,921 439,255 580,337 569,697 8,520 131 0 (4) 0 (4) 2,133,211 2,154,469 1,628,651 1,787,547 1,766,692 1,767,677 1,586,667 2,250,350 2,187,563 2,586,490 2,550,054 2,535,333 2,369,876 2,328,468 2,205,947 2,348,014 2,156,364 2,258,870 2,187,563 2,586,490 24.41 23.98 44.45 53.16 34.96 42.39 48.20 45.27 33.41 29.92 35,890 22,110 (2) 33,735 32,852 33,237 32,557 32,016 30,860 42,429 41,645 Notes: (0 Amount restated to include recreation, aquatic and senior memberships. (2) Golf course closed for 3'h months for renovations in 2014. (3) Wells were out of operation for most of the year; two wells are in the process of being replaced. (4) All wells inoperational for the entire fiscal year; the two under construction are nearing completion. 135 CITY OF EULESS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Function/Proeram 2013 2014 2015 2016 2017 2018 2019 2020 Public Safety Police Stations 1 1 1 1 1 1 1 1 Fire Stations 3 3 3 3 3 3 3 3 Public Works cn Streets - Paved 333.4 340.62 342.8 344.77 350.12 350.12 351.74 351.74 Cultural and Recreational Aquatic Facilities 4 3 3 3 3 3 3 2 Parks 121 16 16 16 16 16 16 16 16 Parks Land (Acres) (3) 341 341 341 341 341 341 341 341 Other Facilities (Acres) (3) 291 291 291 291 291 291 291 291 Community Buildings 6 6 6 6 6 6 6 6 Ampitheater 2 3 3 3 3 3 3 3 Conference Centre 1 1 1 1 1 1 1 1 Golf Course 1 1 1 1 1 1 1 1 Softball Facility (4) 1 1 1 1 1 1 1 1 Athletic Fields 33 28 28 30 30 30 30 30 Library Holdings 111,312 105,500 98,596 101,160 85,123 80,241 81,353 82,501 Water and Wastewater Water Mains - Potable (5) 231.06 232.28 234.84 235.50 236.30 239.10 241.93 242.28 Water Mains - Reclaimed (5) 1.73 3.22 3.70 3.82 3.96 4.12 7.15 11.65 Fire Hydrants 1,579 1,633 1,648 1,674 1,719 1,798 1,805 1,836 Wastewater Mains (5) 187.6 191.3 192.4 193.2 195.2 197.0 198.4 201.0 Source: City Departments (1) Reported in lane miles. (2) Restated to exclude Softball Facility (3) Restated to reflect Golf Course and Softball Facility land separately (4) Softball Facility operations were combined with Parks at Texas Star in FY2021. (5) Miles of lines. Fiscal year 2012 figures have been restated to exclude approximately two miles of TRA lines that had been accidentally included as City lines. 136 Table 17 2021 2022 1 1 3 3 352.60 352.60 2 2 16 16 341 341 291 291 6 6 3 3 1 1 1 1 31 31 85,010 88,577 243.00 244.50 11.65 11.65 1,845 1,886 202.1 203.0