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HomeMy WebLinkAboutFY 2024 Annual Comprehensive Financial Report City of Euless, Texas Annual Comprehensive Financial Report Fiscal Year Ended September 30, 2024 Prepared by City of Euless Finance Department 201 North Ector Drive Euless, TX 76039 CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2024 C O N T E N T S Page(s) INTRODUCTORY SECTION 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) 5-19 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 20 Statement of Activities 21 Fund Financial Statements Governmental Funds Balance Sheet 22-23 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 25 Statement of Revenues, Expenditures and Changes in Fund Balances 26-27 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 29 Proprietary Funds Statement of Net Position 30-31 Statement of Revenues, Expenses, and Changes in Net Position 32-33 Statement of Cash Flows 34-35 Fiduciary Funds Statement of Net Position 36 Statement of Changes in Fiduciary Net Position 37 Notes to Basic Financial Statements 39-85 Required Supplementary Information Schedule of Changes in Net Pension Liability/(Asset) and Related Ratios (Texas Municipal Retirement System) 88 Schedule of Contributions (Texas Municipal Retirement System) 89 Schedule of Changes in Net OPEB Liability and Related Ratios 90 Schedule of Contributions – OPEB Trust 91 Budgetary Comparison Schedules General Fund 92-93 Car Rental Special Revenue Fund 94 Notes to Required Supplementary Information 95 Combining and Individual Fund Statements and Schedules Non-Major Governmental Funds Combining Balance Sheet 100-103 CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2024 C O N T E N T S – CONTINUED Page(s) Combining and Individual Fund Statements and Schedules - Continued Non-Major Governmental Funds Combining Statement of Revenues, Expenditures, and Changes in Fund Balances 104-107 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Hotel/Motel Special Revenue Fund 108 Half-Penny Sales Tax Special Revenue Fund 109 Police Drug Enforcement Special Revenue Fund 110 Crime Control and Prevention District Special Revenue Fund 111 Grant Special Revenue Fund 112 Police Seized Assets Special Revenue Fund 113 Juvenile Case Special Revenue Fund 114 TIRZ #3 Glade Parks Special Revenue Fund 115 Midtown Public Improvement District Special Revenue Fund 116 TIRZ #4 Midtown Special Revenue Fund 117 Cable PEG Fees Special Revenue Fund 118 Internal Service Funds Combining Statement of Net Position 120 Combining Statement of Revenues, Expenses, and Changes in Net Position 121 Combining Statement of Cash Flows 122 STATISTICAL SECTION (Unaudited) Table Net Position by Component 1 125 Changes in Net Position 2 126-127 Fund Balances, Governmental Funds 3 128 Changes in Fund Balances, Governmental Funds 4 129 Estimated Actual Value of Taxable Property 5 130 Direct and Overlapping Property Tax Rates 6 131 Principal Property Taxpayers 7 132 Property Tax Levies and Collections 8 133 Ratio of Outstanding Debt by Type 9 134 Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita 10 135 Direct and Overlapping Governmental Activities Debt 11 136 Schedule of Revenue Bond Coverage Water and Wastewater Bonds 12 137 Demographic Statistics 13 138 Principal Employers 14 139 Full-time City Government Employees by Function/Program 15 140 Operating Indicators by Function/Program 16 141 Capital Asset Statistics by Function/Program 17 142 INTRODUCTORY SECTION i 201 N. Ector Drive, Euless TX 76039-3595 817/685-1400 Metro 817/267-4403 Fax 817/685-1416 www.eulesstx.gov February 25, 2025 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, 2024. 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, 2024, 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, 2024, 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. ii 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 encompasses approximately 16.2 square miles and serves a population of approximately 61,555. 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. iii 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 component units 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 1st 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 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 third largest in terms of passengers in the world, handling 79.7 million passengers annually. According to the North Texas Commission, DFW is the 4th largest region in the U.S. 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 fourth largest labor force of U.S. metropolitan areas, an 8.1% job growth rate, and is home to 23 Fortune 500 Firms, 33 colleges and universities, 113 school districts, and 58 public charter schools. 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 $120 billion in economic impact with over 575 companies, generating 66,000 direct jobs. It is anchored by the inland port known as the Alliance iv Global Logistics Hub. This area offers a variety of commercial real estate options, industrial space, office space, and retail facilities. Assessed value for all residential and commercial property in the City of Euless is estimated at approximately $7.3 billion for tax year 2024, which is a 6.8% increase from the prior year, due to increases in both residential and commercial real estate property values and to new growth. Sales tax collections decreased almost 1.6% from FY2022-23 to FY2023-24. 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. 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 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 54,050 to 61,555 in ten years (North Central Texas Council of Governments). The City’s median household income is $77,403, which compares favorably to $73,035 for Texas and $75,149 for the United States (U.S. Census Bureau). The City’s educational level is 91.2% high school graduate or higher, which again is favorable to 85.2% for Texas and 89.1% for the United States (U.S. Census Bureau). The City of Euless has approximately 397.42 acres of undeveloped land. 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 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 fire and police stations, streets, utility infrastructure, and development of parks and open spaces. v 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 149 days of operations. 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 102-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, 2024, the revenue bond reserve totaled $715,087 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 at AA+ and has 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 participates in tax abatement programs as addressed in the Notes to Basic Financial Statements Note 1. Currently, there are no active property tax abatement agreements. Requests are considered on a case by case basis for economic development, redevelopment, stimulus, or retention. The City has various General Economic Development Agreements via Texas Local Government Code Chapter 380. These agreements are to stimulate economic development in the City, are authorized by City Council, are considered on a case by case basis, and are reflected in the budget and financial statements of the General Fund Non-Departmental Division and the Euless Development Corporation Fund. 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 is vi currently being updated, focuses on improving the quality of life for the community, includes additional hike/bike trails, park amenities and upgrades. The City believes it is critical that the street, water, wastewater, and drainage systems are properly maintained 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. Work continues on a significant number of these capital improvement projects. Paving work on West Pipeline Road is underway and should be completed over the course of the upcoming year. Street maintenance and overlays were completed in accordance with Pavement Condition Index (PCI) scoring criteria during FY2023-24. Public Works continued their partnership with Tarrant County to complete several street improvements throughout the City. Water and wastewater line replacement projects are proceeding in the Trailwood Addition and in multiple areas in South Euless. Fire Station No. 2 is expected to be completed early this year. Renovation of the animal shelter will begin as soon Fire Station No. 2 personnel completes their move to the new facility. The Police and Court facility renovation is proceeding on schedule. A new volleyball court was added at Midway Park and Wilshire Park was completed. Staff is now working on providing new playgrounds and shade structures at several different parks. Design work is underway for an additional restroom facility at the PATS near the soccer fields. 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 space and includes a unique residential component. In an effort to promote development in this area, the City created a 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. The remaining approximately 63 acres was sold and is being developed as a separate master planned development, known as Watercolor. This project includes approximately 141 villas and row homes, 201 townhomes and urban lofts. The infrastructure work and the work on the primary water feature is nearing completion. In 2015, the City 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, vii water distribution system, sanitary sewer and storm sewer collections systems, hardscaping, and amenities. During the upcoming year, we expect to see construction of the long-awaited HEB Grocery store. HEB ISD is also planning several major capital projects including the renovation of Trinity High School, Wilshire Elementary and Midway Park Elementary. 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, 2023. 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. The City has been awarded a Certificate of Achievement for the last 37 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 33 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, Chris Barker Janina Jewell City Manager Director of Finance viii ix x xi FINANCIAL SECTION xii 2300 North Field Street, Suite 1000 Dallas, Texas 75201 972-490-1970 Weaver and Tidwell, L.L.P. 1 CPAs AND ADVISORS | WEAVER.COM 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 (City) as of and for the year ended September 30, 2024, 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, 2024, 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 (Government Auditing Standards). 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. Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. The Honorable Mayor, City Council and City Manager 2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and the required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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 GAAS, 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. The Honorable Mayor, City Council and City Manager 3 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 GAAS. 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 and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 24, 2025, 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 the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 24, 2025 4 5 CITY OF EULESS, TEXAS MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2024 (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, 2024. 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 125-142 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 $351,962,304 (net position). This number must be viewed in the context that the vast majority of the City’s net position of $211,262,237 (60%) 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 $13,907,316 (4%). The remaining $126,792,751 (36%) 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 $27,082,563 and business-type activities realized an increase in total net position of $8,459,857 bringing the total increase in net position for the City to $35,542,420.  At the close of the current fiscal year, the City of Euless’ governmental funds reported combined ending fund balances of $116,639,057 which represents an increase of $6,689,019. Within this total, $5,127,305 is restricted for debt service; $27,607,196 is restricted by bond covenants for capital projects; $117,184 and $252,130 are restricted for court technology and juvenile case management, respectively; and another $2,776,788 is restricted for capital projects by developer agreements. Amounts restricted for cable PEG fees and historical preservation total $665,638 and $843, respectively. Another $34,808 is restricted for opioid remediation. Non-spendable fund balance of $262,087 represents fund balance amounts for inventories and prepaid items. Fund balances of $57,055,508 represent assigned fund balance in the general, special revenue, and capital projects funds. The unassigned fund balance in the General Fund of $22,771,542 can be used for any lawful 6 purpose. The General Fund unassigned balance represents 44% of fiscal year 2024 total fund expenditures.  The City’s total capital and intangible assets (net of accumulated depreciation and amortization) increased by $11,903,493 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 decreased by $7.4 million or 7% due primarily to payments on existing debt plus amortization of premiums and discounts outpacing new debt issuance. 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. The government-wide financial statements can be found on pages 20-21 of this report. 7 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-four 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, General CIP and Police 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 22-29 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 be major funds of the City. The internal service funds are combined into a single, aggregate 8 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 30-35 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 36 and 37 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 39-85 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 88- 95 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, other post-employment benefits (“OPEB”), and budgetary comparisons. Combining and individual fund statements and schedules can be found on pages 100-122 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 $351,962,304 as of September 30, 2024. The largest portion of the City’s net position (60%) 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. 9 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 $126,792,751 (36%) may be used to meet the City’s ongoing obligations to citizens, creditors, and employees. Net Position Governmental Business-type Amounts shown in 000's activities activities Total 2024 2023 2024 2023 2024 2023 Current and other assets 171,825$ 158,965$ 51,774$ 50,979$ 223,599$ 209,944$ Capital assets 190,818 182,695 94,682 90,901 285,500 273,596 Total assets 362,643 341,660 146,456 141,880 509,099 483,540 Total deferred outflows 12,223 19,438 2,489 3,948 14,712 23,386 Long-term liabilities 107,629 128,149 21,345 25,776 128,974 153,925 Other liabilities 20,718 18,058 10,767 12,637 31,485 30,695 Total liabilities 128,347 146,207 32,112 38,413 160,459 184,620 Total deferred inflows 9,950 5,405 1,440 481 11,390 5,886 Net position: Net investment in capital assets 133,199 130,728 78,063 72,764 211,262 203,492 Restricted 9,033 8,186 4,874 4,659 13,907 12,845 Unrestricted 94,337 70,572 32,456 29,511 126,793 100,083 Total net position 236,569$ 209,486$ 115,393$ 106,934$ 351,962$ 316,420$ As of September 30, 2024, 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 $26,709,898 in fiscal year 2024 as compared to the unrestricted net position for the prior year. Restricted net position realized an increase of $1,062,676 and the amount invested in capital assets, net of related debt increased by $7,769,846. The increase in total net position of more than $35.5 million results primarily from current year operating results flowing to the net investment in capital assets and unrestricted categories of net position. The details of the results of current year operations are found in the table shown on the following page. 10 Changes in Net Position Governmental Business-type Amounts shown in 000's Activities Activities Totals 2024 2023 2024 2023 2024 2023 REVENUES Program revenues: Charges for services 7,525$ 6,804$ 40,918$ 38,973$ 48,443$ 45,777$ Operating grants and contributions 579 1,163 - - 579 1,163 Capital grants and contributions 851 530 7,446 1,019 8,297 1,549 General revenues: Property taxes 30,133 27,569 - - 30,133 27,569 Sales taxes 29,310 29,779 - - 29,310 29,779 Car rental taxes 20,229 18,710 - - 20,229 18,710 Mixed beverage taxes 213 215 - - 213 215 Occupancy taxes 1,656 1,830 - - 1,656 1,830 Gross receipts taxes 4,674 4,634 - - 4,674 4,634 Investment income 8,707 5,180 1,708 1,097 10,415 6,277 Rents and royalties 1,144 1,346 - - 1,144 1,346 Miscellaneous 1,769 1,355 - - 1,769 1,355 Total revenues 106,790 99,115 50,072 41,089 156,862 140,204 EXPENSES Culture and recreation 8,565 8,017 - - 8,565 8,017 Development services 1,284 1,304 - - 1,284 1,304 General government 28,889 31,849 - - 28,889 31,849 Highways and streets 4,765 4,591 - - 4,765 4,591 Public safety 33,777 33,625 - - 33,777 33,625 Interest and fiscal charges 2,912 2,414 - - 2,912 2,414 Water and wastewater - - 31,567 29,143 31,567 29,143 Drainage utility - - 1,595 1,747 1,595 1,747 Golf course - - 5,741 5,330 5,741 5,330 Recreation enterprises - - 2,225 2,026 2,225 2,026 Total expenses 80,192 81,800 41,128 38,246 121,320 120,046 Increase (decrease) in net position before transfers 26,598 17,315 8,944 2,843 35,542 20,158 Transfers 485 695 (485) (695) - - Increase (decrease) in net position 27,083 18,010 8,459 2,148 35,542 20,158 Net position, beginning 209,486 191,476 106,934 104,786 316,420 296,262 Net position ending 236,569$ 209,486$ 115,393$ 106,934$ 351,962$ 316,420$  Governmental activities. Governmental activities increased the City’s net position by $27,082,563 thereby accounting for most of the growth (76%) in total net position. 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 $26,597,138. Total revenue for the governmental activities (excluding transfers) increased from the previous year by $7.7 million mainly due to a net increase in general revenues of $7.2 million. Program revenues consisting of charges for services, grants, and contributions also realized an increase of $457,000 overall. General revenues are primarily comprised of property taxes, sales taxes, and car rental taxes as well as investment income, rents and royalties, and miscellaneous revenues. Property tax revenue increased due to an overall increase in taxable values of 11.9% over the prior year values (See Statistical Table 5). The continued resurgence in the travel industry produced increased car rental taxes which reached an all-time high of $20.2 million by the end of the fiscal year. Culture and 11 recreation total program revenues rose by more than $129,000 due primarily to the award of an Energy Efficiency and Conservation Block Grant from the state for the Parks at Texas Star lighting project. Public safety charges for services revenues fell by $1.2 million for the year predominantly due to the prior year funding of a portion of patrol salaries with American Rescue Plan Act (“ARPA”) funds. Streets and highways realized a decrease of $189,000 in operating grants and contributions due to the finalization of the collaborative project with the City of Bedford for intersection improvements to Cheek-Sparger Road at State Highway 121. A majority of the funding from City of Bedford was collected in the previous fiscal year. Total expenses of governmental activities decreased by $1.6 million from FY2023 to FY2024. The FY2024 Operating Budget included a 3.5% raise package for public safety plus merit increases expected to average 3.5% for non-public safety employees across all funds. These raise packages increased governmental salary expenses by about $1.9 million across all governmental functions. Benefits based upon salaries also increased accordingly. Several positions were added in FY2024 including a school resource officer, a public service officer, a public works inspector, an animal control officer, and an assistant conference center manager. Pension-related entries increased salary- related expenses in the prior year, but decreased governmental expenses by approximately $1.3 million in FY2024. The overall difference between the two years’ expenses totals more than $3.9 million mostly due to the recording of changes in and amortization of deferred outflows and deferred inflows ($35.9 million increase) combined with a decrease of $39.8 million in the net pension liability. 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 $1.1 million compared to a decrease in expenses of $553,000 in the prior year. Rebates and revenue sharing increased by $1.2 million primarily as a result of higher car rental tax collections. In the previous fiscal year, development services realized an increase of $95,000 in professional services due to consulting services and commercial plan review resulting from staffing shortages. In the current year, only $10,000 in expense was incurred. Insurance and prescription claims decreased by more than $1.9 million predominantly due to savings realized from the implementation of a new third-party administrator contract. Savings in administrative fees of almost $123,000 were also recorded in the current year. Supplies expense rose by more than $300,000 primarily due to higher costs for janitorial supplies such as soaps and paper products, partial payment for the installation of the Flock camera system, and irrigation costs for Highland Drive beautification. Additional supply costs were also incurred for the purchase of fire protection gear, ballistic vests, pharmaceuticals, shades and carpet for the library, and postage. Purchase quantities and inflationary pressures account for the majority of the increase in supplies. Interest increased by $498,000 because of higher scheduled payments primarily resulting from the 2023 certificates of obligation which were issued in August of 2023. No interest costs were paid on these obligations in the prior fiscal year. The net position of general governmental operations accounts for 67% of total net position.  Business-type activities. Business-type activities increased the City’s net position by $8,459,857. The change in net position before transfers is $8,945,282. Charges for services program revenues for the business-type activities increased from the previous year by $1.9 million due primarily to increased Water and Wastewater (“W&WW”) revenues and recreation revenues of $2.4 million and $157,000, respectively. Water rates increased $1 on the monthly residential base rate to cover the City’s operational cost increases. Volumetric rates for water increased 58¢ per thousand gallons to cover the pass-through increase from Trinity River Authority (“TRA”) for water purchases. Wastewater base rates increased by $1 per month to cover the City’s operational cost increases. The volumetric rate increased by 46¢ per thousand gallons to cover the pass-through increase from TRA for treatment costs. The City received almost $1.1 million from TRA for the annual water and 12 wastewater cost true-up calculations. In the current year, golf course rounds were below those of the prior year by almost 9,000 rounds and green fees decreased by $358,000. Capital grants and contributions increased by more than $6.4 million due largely to additional developer contributions of W&WW and drainage infrastructure combined with American Rescue Plan Act (ARPA) funding for water and wastewater projects. Investment revenues increased by $610,000 due to improved market rates as well as the availability of additional funds to invest. At fiscal year-end, a large portion of the American Rescue Plan Act (ARPA) funding for W&WW projects remained unspent resulting in unearned revenue ($3.9 million) per reporting requirements. Overall, total business-type expenses realized a net increase for the year of $2.88 million combined. Net pension, net OPEB, and related deferral entries combined increased expenses by almost $800,000 in the business-type activities this year compared to a decline of approximately $105,000 in the prior year. Water purchases and wastewater treatment costs climbed from the prior year predominantly as a result of increased TRA rates. Increased costs of $411,000 at the golf course resulted mostly from higher costs for salaries, benefits, and equipment replacement as well as adjustments for pension and OPEB. Drainage utility realized an expense decrease of almost $152,000, while other recreation enterprises expenses rose by nearly $199,000 over the prior year. Net position for business-type activities represents 33% 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 $116,639,057, which represents an increase of $6,689,019 in comparison with prior year. Approximately 20% or $22.7 million constitutes unassigned fund balance in the general fund that is available for spending at the City’s discretion. Another $262,087 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 ($5,127,305); 2) to pay for specific capital improvements per developer agreements ($2,776,788); 3) restricted by bond covenants for specific capital projects ($27,607,196); and 4) for a variety of other restricted purposes ($1,070,603). 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 $57,055,508 and includes assigned fund balance in the general fund of $207,125 and $56,848,383 represents positive 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. General fund budgetary analysis. In the General Fund, the City budgeted for a decrease in fund balance (i.e. a planned reduction) of $8,355,205 which was revised to a decrease of $8,788,874. Due to a positive budget variance in overall revenues and expenditures, the General Fund ended the year with a decrease in fund balance of only $1,066,627. This figure represents a positive budget variance of 13 $7,722,247 resulting primarily from sales tax collections, electric franchise fees, jail revenue, ambulance fees, rental income, building permit revenue, and investment income realizing significant increases over expectations. The positive variance in sales tax collections results from conservative estimates used for budgetary purposes. Electric franchise fees rose due to increased billings and collections by the provider. Rental income exceeded budget expectations because the income from one building is contingent upon the amount of sales tax paid by the occupant. Due to the volatile nature of the contingency, nothing is included in the budget for this building rental. For several years, building permit revenue has exceeded projected levels. Management intentionally decided to conservatively budget this revenue stream so that the City does not become overly dependent upon a finite revenue source. As the City nears build-out, building permit collections will decline until reaching a point more aligned with reconstruction and renovation levels. Permits for new construction will decline drastically over time. Investment income results from much-improved market rates and additional funds available for investment. Jail revenues outpaced projections due to the implementation of a new intergovernmental contract to house City of Hurst detainees. Budget estimates included only the housing of City of Bedford detainees. The Hurst contract was effective for the third and fourth quarters of the fiscal year. General Fund budgetary expenditure savings total $2.6 million before transfers. General and administrative (“G&A”) expenditures account for approximately $1.1 million of the savings. New positions and the raise package previously mentioned account for increases of $379,000 in this expense category. Capital purchases realized budgetary savings of almost $996,000; all of which was rolled to FY2025 for continuing projects at fiscal year-end. Subscription-based information technology arrangement expenditures attained budgetary savings of $408,000 which included funding for financial and human resource system software which was not implemented in FY2024. Budgetary overages were experienced in janitorial supplies due to increased costs for soap and paper products and rebates exceeded budget parameters due in large part to higher than anticipated sales tax collections. Public safety expenditures recognized budgetary savings of $1.2 million of which 83% is related to salaries and benefits. A variety of open positions in the police department throughout the year is primarily responsible for this variance. Public works added an inspector position during the fiscal year. The remainder of the variances in general fund expenditures are predominantly attributable to salary and benefit increases. General fund. Several General Fund revenue categories realized increases over the prior year including current property tax collections, franchise fees, investment earnings, jail income, ambulance fees and miscellaneous income. Taxable property values increased over the prior year values by 11.9%, while the tax rate dropped from 46¢ to 45.75¢ per $100 of taxable property valuation resulting in increased property tax collections of more than $1.4 million. Overall franchise fee receipts rose by just over $50,000 due to increased sales in electric service and water and wastewater system revenues. Natural gas and cable fees dropped $76,000 and $31,000, respectively. Due to a relatively mild winter, natural gas sales declined taking franchise fees down in the process. Legislative changes for providers of telephone and cable service are responsible for the decrease in cable fees. The increase in jail income is attributable to the midyear implementation of an intergovernmental contract with the City of Hurst for housing of detainees. Building permit revenues outpaced prior year collections by close to $1.2 million due predominantly to increased inspections performed and activity in the Watercolor development. Investment income realized an increase of more than $500,000 due to favorable market conditions and having additional funds available for investing. In the prior year, ARPA revenues of approximately $2 million were recognized in intergovernmental revenues along with another $614,000 in state and local reimbursements. In the current year, no ARPA funds were recognized in the general fund, thereby 14 accounting for the decline of $2 million in intergovernmental income. Total revenues surpassed prior year levels by nearly $1.6 million. Expenditures declined $245,000 or .5% below the prior year resulting from a combination of increases and decreases across expenditure categories. All of the decrease is realized in G&A expenditures which dropped close to $2.7 million as compared to the previous fiscal year. In the prior fiscal year, one-time lump sum non-merit raises were given to employees that were topped out on their pay ranges. No such expenditures were approved for the current year resulting in a decrease from the prior year of $400,000. Software purchases increased by more than $458,000 stemming from the FY2024 implementation of a new SBITA contract. One-time capital purchases declined by more than $987,000 primarily due to the timing of purchases and deliveries. Unspent funding for these purchases was rolled into FY2025 for continuing projects. Prior year transfers to equipment replacement included a $3.2 million one-time transfer to fund replacement depreciation on existing equipment. The current year amount dropped by $2.9 million as a consequence of eliminating the one-time transfer and establishing monthly transfers for the remaining useful lives of the equipment. Maintenance expenditure increases included plumbing repairs, structural maintenance, and roof repairs to aging structures. Public safety expenditures increased over prior year levels by $1.9 million and is primarily attributable to salaries and benefits ($1.5 million) as previously described. Other expenditures rose by $371,000 due in large part to the implementation of traffic management services and the purchase of fire protection equipment combined with increased participation in the Trinity GAP rescue program. Equipment replacement fees also increased for public safety as did maintenance costs that included various subscriptions, consulting, support, software and data backup services. Culture and recreation realized an overall increase in expenditures of $186,000 mainly due to higher costs for equipment replacement, salaries, and benefits. Land betterment costs increased due primarily to the replacement of playground chips and landscaping rock. Special events increased by more than $11,000 due to holding of the Trunk or Treat, the Christmas Parade, and the Daddy/Daughter Dance events. These events were charged elsewhere in the prior fiscal year. Due to staffing shortages, development services incurred costs of $95,000 for consulting services and commercial plan review in the prior fiscal year. Similar costs were not incurred in the current fiscal year. This decrease combined with the salary and benefit increases account for the growth in expenditures over the prior year. Streets and highways expenditures were $255,000 over the previous year’s figures. This is predominantly due to implementation of the raise package during the year as well as the purchase of sign materials which were minimal in the prior year. Additionally, pavement marking service costs rose due in part to the expansion of the street overlay program which increased from 345,000 square feet in the prior year to 650,000 square feet in the current year. Debt service expenditures in the general fund result from principal and interest payments on leases and subscription- based information technology arrangements and were relatively flat with prior year levels. Debt service fund. The Debt Service fund balance increased $235,875 which is $180,025 better than the anticipated increase of $55,850. Compared to the prior year, revenues increased by $959,000. Property taxes improved by $894,000 over the prior year due in large part to higher taxable values. Investment revenues exceeded prior year amounts by $46,000 due to favorable market conditions. Expenditures rose by $931,000 due to scheduled payments exceeding those of the prior fiscal year. Car rental tax fund. The Car Rental Tax fund balance was originally anticipated to decrease $4.5 million but the revised budget showed a projected decrease of $5.7 million. This fund ended the year with a fund balance decrease of $2,265,655 due in large part to the continued improvement in the travel industry. Car rental tax revenues, which are highly dependent upon the travel sector, exceeded those of the prior year by $1.5 million. Investment income was approximately $133,000 more than prior year levels due to favorable market rates combined with an increase in investable balances in this fund. Per 15 contractual agreement, the car rental revenues are shared with the cities of Dallas and Fort Worth. The increased collections resulted in additional expenditures of $1,013,000, while one-time capital transfers rose due mainly to the $6.1 million contribution to the animal shelter project. Operating transfers to other funds increased over the prior year by $1.9 million due to the reinstatement of the amount contributed to the general fund. The prior year transfer was not made from car rental tax fund; the expenditures were funded with ARPA monies. General CIP fund. The General CIP fund balance increased by $3.3 million due predominantly to project funding from transfers exceeding capital expenditures on projects. More than $6.1 million was transferred to fund the animal shelter expansion. Another $4 million was transferred for future projects and to cover increased costs due to inflationary pressures in ongoing projects. Investment income rose to over $1 million due to additional funds available for investment and favorable market conditions. Most of the capital expenditures were incurred for the fire station #2 remodel project ($7.5 million) and architectural services for the animal shelter expansion project ($249,000). Police CIP fund. For the Police CIP fund, transfers of $1,250,000 from the crime control and prevention district (“CCPD”) and accumulated funding for equipment replacement of $1,834,236 were made to the police department/municipal court remodel project. Investment income totaled nearly $1.4 million for the current year due to the amounts invested as well as favorable market conditions. Professional and construction service costs totaling $2.3 million were incurred on this project. This fund realized an increase in fund balance of $2.1 million. Non-major governmental funds. Please note the General CIP fund, which was formerly shown as a non-major governmental fund in the prior year, was reclassified as a major fund in the current year financial statements. The non-major governmental funds realized a combined increase in fund balance of $4,335,724; special revenue funds contributed $3,043,034, while the capital projects funds contributed $1,292,690 to the balance. The car rental, TIRZ#4 Midtown, and half-penny sales tax CIP funds realized fund balance decreases as expenditures on projects outpaced new funding. The remaining non-major capital projects funds contributed nearly $2.9 million to the combined fund balance. Current year project funding for all CIP funds from transfers totaled $5.8 million while project expenditures totaled $5.7 million. The CCPD, police seized asset, and the Midtown PID funds drew down fund balance by $919,658, $24,575 and $67,899, respectively. A drawdown of $1.3 million was budgeted in the CCPD for the approved funding for the police/court remodel project. Midtown PID revenues fell short of projections causing expenditures and transfers out to exceed collections. Hotel/motel collections exceeded expectations by approximately $50,000, but dropped below prior year collections by $174,000. Hotel/motel fund expenditures and transfers finished out the year under budget parameters. This fund added $235,000 to fund balance for the year. The Half-Penny Sales Tax (“EDC”) fund increased fund balance by $1.8 million largely due to a decline in expenditures of $630,000, combined with increased revenues of $31,000. Transfers to CIP and debt service approved for the current year fell below prior year levels by $3 million. A large number of projects were funded in the prior fiscal year and many of those projects were ongoing in the current year. As such, due to a decline in the number of new projects, less funding was needed in the current year. The TIRZ #3 Glade Parks and the TIRZ #4 Midtown funds increased fund balance mainly due to property tax collections and sales taxes receipts from participating entities outpacing debt service expenditures. The juvenile case and cable PEG fees funds each added a small amount to fund balance for the year. 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 16 exceeded that of a “normal” year by more than ten inches and was also over prior year levels by nearly 19 inches. The W&WW fund realized a decline in operating income of $250,000 resulting principally from increased operating revenues of close to $2 million combined with an increase in expenses of $2.2 million. The W&WW fund revenues increased largely as a result of volumetric rate increases in water consumption and wastewater treatment passed through from TRA. Residential base rates also increased $1 per month for both water and wastewater to cover the City’s increased operating costs. Water purchases and wastewater treatment costs grew by nearly $1.8 million combined. Salary and benefit expenses (excluding non-departmental) increased by almost $183,000 resulting from the raises previously mentioned. Non-departmental salary and benefit expenses declined by more than $519,000 primarily due to the collective changes in the net pension liability, 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 $86,000 each from the prior year primarily as a result of increased rates; electric service rose by $94,000; and software subscriptions dropped by $46,000. Non-operating revenues include $3.5 million in ARPA funding for water and wastewater capital projects. Investment income and developer contributions totaled $1.4 million and $2.6 million, respectively. Including nonoperating and other revenues and expenses, an increase of more than $7 million was realized in the W&WW fund for FY2024. In an effort to prolong the life of the greens, Texas Star Golf Course instituted closures on Tuesdays for the performance of course maintenance. Additionally, tee times were spread out to every twenty minutes to limit player count and reduce wear and tear. As a result, paid golf rounds dropped by nearly 9,000 and green fees fell by $358,000. The course realized total revenues of close to $4.6 million and expenses of $5.7 million leading to an operating loss of $1.16 million. Last year, the operating loss was $377,000 which equates to a difference of $785,000. Operating revenues which are directly linked to the number of paid rounds dropped by $601,000. Operating expenses increased by $185,000 including depreciation and amortization. Combined entries relating to net pension and net OPEB liabilities and related deferrals increased salary expenses by $154,000 as compared to last year’s increase of $38,000. Other salary and related benefits increased due to employee raises which added $292,000 to operating costs. Increases in user fee transfers to equipment replacement totaled $446,000 which represents an increase of $191,000; while cost of goods sold decreased by $52,000 for food, beverage, and alcohol sales. Net position for the golf course dropped by $350 for FY2024. The increase in net position of the drainage utility fund results largely from developer contribution of capital assets. Operating costs decreased by $107,000. The drainage utility fund recorded a gain in net position of $703,000. Other recreation enterprises operating revenues increased by $157,000, while operating expenses decreased $51,000. Costs decreases include instructor fees, camp programs, and recreational supplies. User fees paid to the equipment replacement fund declined. Maintenance costs increased by approximately $49,000 due in large part to inflationary pressures. The net result of the other recreational activity was net income of $187,000. 17 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, 2024, totaled $285,499,618 (net of accumulated depreciation and amortization). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, intangible assets, and construction in progress. The net increase in the City’s investment in capital assets for the current fiscal year was $11,903,493 or about 4%. Major capital asset activity that occurred during the current fiscal year included the following:  Capital asset contributions included $536,000 in developer dedications of streets, water and wastewater infrastructure, drainage structures and land. Community Development Block Grant (“CDBG”) funding of wastewater lines totaled almost $26,000.  Capital asset additions for governmental activities include, but are not limited to, a multi-purpose hard court at Midway Park, LED lighting for the outdoor volleyball courts, and a self-loan station at the library. Completed projects for the year include the city-wide fiber optic project Phase I, PATS North staff building and parking lot, Blessing Branch and Wilshire park improvements, lighting upgrades at PATS South, FY2024 street improvements project, and the reconstruction of South Pipeline Road, Highland Drive, and West Harwood Road.  Construction-in-progress related to general government activity of $13,170,648 primarily consists of the following projects: fire station #2 ($8.6M), West Pipeline Road reconstruction ($1M), police and courts remodel ($2.9M), PATS North entryway sign ($122K), and animal shelter remodel design ($269K).  The Huntington Drive water line replacement project was completed at a cost of almost $469,000. Wastewater lines along South Main Street from Alexander Lane to East Huitt Lane were replaced and the 48th and 49th year CDBG project was completed during the fiscal year.  Construction-in-progress related to business-type operations of $4,744,539 principally consists of water line replacements at Midway Park 1st addition ($606K), at Oakwood Terrace ($1.1M), and along South Main Street ($1.5M). Wastewater line replacements at Cedar Hills Estates South Phases I & II ($300K) and at Trailwood Addition ($1.2M) are also in progress. Capital Assets (Net of Accumulated Depreciation) Amounts shown in 000s activities activities Total 2024 2023 2024 2023 2024 2023 Land 44,105$ 43,526$ 5,719$ 5,719$ 49,824$ 49,245$ Buildings 39,730 40,258 4,061 4,283 43,791 44,541 Other improvements 17,636 15,654 7,132 7,649 24,768 23,303 M&E 15,278 13,634 908 1,020 16,186 14,654 Infrastructure 59,883 53,134 72,020 70,685 131,903 123,819 Right-to-use equipment 73 136 93 148 166 284 Right-to-use software 942 224 5 9 947 233 Construction in Progress 13,171 16,129 4,744 1,388 17,915 17,517 Total 190,818$ 182,695$ 94,682$ 90,901$ 285,500$ 273,596$ Governmental Business-type Additional information on the City’s capital assets can be found in Note 3 of this report. 18 Long-term debt. At fiscal year-end, the City’s outstanding debt totaled $95,873,962 net of unamortized losses on prior refundings. Of this amount, $76,296,207 comprises debt backed by the full faith and credit of the government, where $2,241,270 is the amount of self-supported debt for Texas Star Golf Course and Stars Center. The remainder of the City’s debt, $19,577,755, represents debt secured solely by specific revenue sources (i.e. revenue bonds). Outstanding Debt Amounts shown in 000s activities activities Total 2024 2023 2024 2023 2024 2023 GO Bonds 685$ 1,870$ 1,705$ 2,245$ 2,390$ 4,115$ COs 67,465 70,675 - - 67,465 70,675 Premiums/discounts 3,391 3,687 45 63 3,436 3,750 Leases 73 136 93 149 166 285 Subscriptions 942 224 5 9 947 233 Tax notes 5,575 7,165 - - 5,575 7,165 Revenue bonds 4,570 4,800 14,910 15,875 19,480 20,675 Deferred charges (10) (51) (139) (204) (149) (255) Totals 82,691$ 88,506$ 16,619$ 18,137$ 99,310$ 106,643$ Governmental Business-type In fiscal year 2024, the City did not issue any new general bonded debt. One new governmental SBITA was implemented at a cost of $1,046,792 during the year. No new bonded debt was issued for the City’s enterprise operations during the year. The City’s total debt decreased $7,018,462 (exclusive of deferred losses) or 6.8% during fiscal year 2024 and is attributed to scheduled payments outpacing the issuance of new debt. The City’s debt continues to be highly rated by both Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Ratings Services (“S&P”). Moody’s maintains an Aa2 rating on the City’s debt, while S&P rates the City’s general obligation debt and water and wastewater revenue debt at AA+. Both agencies recognized the City’s strong financial position, and specifically cited consistent budgetary performance, effective financial management, and healthy reserves as a basis for reaching this conclusion. Additionally, factors such as long-term financial and capital planning, along with positive economic growth indicators, contributed to the high ratings and reinforced the City’s stable fiscal outlook and ability to meet debt service obligations. Economic Factors and Next Year’s Budgets and Rates In the FY2024-25 budget, general fund revenues and transfers in are budgeted to increase by 7% from the FY2023-24 original budget. Property taxes account for 41% of budgeted revenues and sales taxes comprise approximately 32% of budgeted revenues. Certified assessed taxable valuations as of July 25, 2024 increased 6.8% from the preceding year. The property tax rate decreased from 45.75¢ per $100 of taxable assessed valuation to 44.67¢ per $100 of taxable assessed valuation for FY2024-25. In the FY2024-25 budget, total sales tax receipts are projected to increase approximately $707,000 over the FY2023-24 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 FY2023-24, monthly car rental tax receipts were exceeding expectations. However, the budget preparation work was completed prior to receipt of final collection results for FY2023-24. In the FY2024-25 budget, total car rental tax receipts 19 are projected to increase roughly $1,440,000 over the FY2023-24 original projections, but are about $1,094,000 less than final FY2023-24 collections. Baseline budgeted expenditures in the general fund are projected to increase around 7% from the FY2023-24 original budget excluding capital programs. The proposed employee pay plan includes a baseline salary increase of 3.5% for public safety personnel and funding for merit-based increases for non-public safety employees. The anticipated average increase for the merit raises is 3.5%. The City elected to use excess reserves to fund capital needs. For the Water and Wastewater Fund, the FY2024-25 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 $5.67 to $8.30 per thousand gallons. A wastewater volume charge of $5.35 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 will remain the same as in the previous year. The City increased annual funding for pay-as-you-go capital expenses by $25,000 for a total of $1,125,000. W/WW capital projects include funding for the Phase II water line replacement at Sotogrande Boulevard. The engineering phase of the Oakwood Terrace North projects is scheduled to begin next year and funding has been allocated accordingly. Appropriation of the 51st year Community Development Block Grant funding has been assigned to the Fair Oaks Boulevard and Lone Oak Circle wastewater line replacement project. 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 Golfweek. 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. During FY2024-25 the course will be closed for several months for greens replacement. Budgetary projections have taken this planned closure into consideration and excess reserves will be utilized to offset lost revenues. The adopted budget includes revenue projections of $5,651,184 and budgeted operating expenses of $5,647,329. Request for Information The financial report is designed to provide citizens, customers, investors, and creditors with a general overview of the City’s finances. If you have questions about this report or need additional information, contact the Finance Department, Attn: Janina Jewell, Director of Finance, at 201 North Ector Drive, Euless, Texas 76039, call (817) 685-1626, or e-mail jjewell@eulesstx.gov. CITY OF EULESS, TEXAS GOVERNMENT-WIDE STATEMENT OF NET POSITION SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 20 Primary Government Governmental Business-type Activities Activities Total Deposits and investments 132,606,503$ 30,005,587$ 162,612,090$ Receivables, net of allowances 11,418,271 5,578,720 16,996,991 Lease receivables 4,140,191 318,226 4,458,417 Internal balances (6,700,480) 6,700,480 - Inventories, at cost 11,344 276,520 287,864 Prepaid items 1,029,814 40,961 1,070,775 Restricted assets Deposits and investments 29,320,048 8,854,162 38,174,210 Capital assets Land and construction in progress 57,276,134 10,463,084 67,739,218 Other capital assets, net of accumulated depreciation 132,526,708 84,120,999 216,647,707 Intangible right-to-use assets, net of accumulated amortization 1,014,938 97,755 1,112,693 Total assets 362,643,471 146,456,494 509,099,965 Deferred outflows related to pension 10,870,636 2,089,586 12,960,222 Deferred outflows related to OPEB 1,342,377 259,955 1,602,332 Deferred charges on refunding 9,584 139,146 148,730 Total deferred outflows of resources 12,222,597 2,488,687 14,711,284 Accounts payable 15,959,173 3,894,407 19,853,580 Contracts payable 2,619,903 - 2,619,903 Accrued liabilities 1,798,058 328,861 2,126,919 Accrued interest payable 340,336 54,012 394,348 Unearned revenue - 4,058,364 4,058,364 Money held in escrow - 2,430,833 2,430,833 Noncurrent liabilities Due within one year 6,878,569 1,517,318 8,395,887 Due in more than one year 100,750,899 19,828,145 120,579,044 Total liabilities 128,346,938 32,111,940 160,458,878 Deferred inflows related to pension 1,404,190 270,408 1,674,598 Deferred inflows related to OPEB 4,406,022 851,030 5,257,052 Deferred inflows related to leases 4,140,191 318,226 4,458,417 Total deferred inflows of resources 9,950,403 1,439,664 11,390,067 Net investment in capital assets 133,199,143 78,063,094 211,262,237 Restricted for Debt service 5,127,305 1,331,015 6,458,320 Impact fees - 3,543,589 3,543,589 Developer agreements 2,776,788 - 2,776,788 Court technology 117,184 - 117,184 Juvenile cases 252,130 - 252,130 Cable PEG fees 665,638 - 665,638 Historical preservation 843 - 843 Opioid remediation 92,824 - 92,824 Unrestricted 94,336,872 32,455,879 126,792,751 Total net position 236,568,727$ 115,393,577$ 351,962,304$ ASSETS LIABILITIES NET POSITION DEFERRED OUTFLOWS OF RESOURCES DEFERRED INFLOWS OF RESOURCES CITY OF EULESS, TEXAS GOVERNMENT-WIDE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 21 Primary Government Operating Capital Business- Charges Grants and Grants and Governmental Type Program Activities Expenses for Services Contributions Contributions Activities Activities Total Primary government Governmental activities Culture and recreation 8,564,660$ 305,064$ 583$ 117,300$ (8,141,713)$ -$ (8,141,713)$ Development services 1,283,753 2,471,248 - - 1,187,495 - 1,187,495 General and administrative 28,888,669 713,362 10,562 - (28,164,745) - (28,164,745) Highways and streets 4,765,479 261,316 6,000 616,995 (3,881,168) - (3,881,168) Public safety 33,776,738 3,774,206 561,843 116,415 (29,324,274) - (29,324,274) Interest 2,912,405 - - - (2,912,405) - (2,912,405) Total governmental activities 80,191,704 7,525,196 578,988 850,710 (71,236,810) - (71,236,810) Business-type activities Water and wastewater 31,566,816 33,255,251 - 6,109,155 - 7,797,590 7,797,590 Drainage utility 1,594,990 945,588 - 1,337,110 - 687,708 687,708 Golf course 5,741,319 4,558,952 - - - (1,182,367) (1,182,367) Other recreation enterprises 2,224,471 2,158,949 - - - (65,522) (65,522) Total business-type activities 41,127,596 40,918,740 - 7,446,265 - 7,237,409 7,237,409 Total primary government 121,319,300$ 48,443,936$ 578,988$ 8,296,975$ (71,236,810) 7,237,409 (63,999,401) General Revenues Taxes Property taxes 30,132,666 - 30,132,666 Sales taxes 29,309,986 - 29,309,986 Car rental taxes 20,228,890 - 20,228,890 Mixed beverage taxes 213,322 - 213,322 Hotel/motel occupancy taxes 1,655,528 - 1,655,528 Gross receipts taxes 4,673,962 - 4,673,962 Investment income 8,706,659 1,707,873 10,414,532 Rents and royalties 1,144,401 - 1,144,401 Miscellaneous 1,768,534 - 1,768,534 Transfers 485,425 (485,425) - Total general revenues and transfers 98,319,373 1,222,448 99,541,821 Change in net position 27,082,563 8,459,857 35,542,420 NET POSITION, beginning of year 209,486,164 106,933,720 316,419,884 NET POSITION, end of year 236,568,727$ 115,393,577$ 351,962,304$ Net (Expense) Revenue and Changes in Net Position Program Revenues CITY OF EULESS, TEXAS BALANCE SHEET – GOVERNMENTAL FUNDS SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 22 Debt Car General Service Rental Tax Fund Fund Fund Deposits and investments 21,927,396$ 2,999,557$ 19,877,081$ Receivables Property taxes 270,281 71,036 - Accounts receivable 587,601 - - Accrued interest receivable 205,428 - 48,210 Due from other governments 3,227,006 - 3,363,031 Lease receivable 893,244 1,649,060 - Prepaids and deposits 167,071 - - Inventories, at cost 11,344 - - Restricted deposits and investments - - - Total assets 27,289,371$ 4,719,653$ 23,288,322$ Accounts payable 1,583,361$ 50,474$ 12,211,273$ Contracts payable - - - Accrued liabilities 982,404 - - Total liabilities 2,565,765 50,474 12,211,273 Unavailable revenue - property taxes 270,281 68,061 - Unavailable revenue - other 251,007 - - Deferred inflow related to leases 893,244 1,649,060 - Total deferred inflows of resources 1,414,532 1,717,121 - Nonspendable Prepaids, deposits, and inventories 178,415 - - Restricted fo r Debt service - 2,952,058 - Capital projects - - - Developer agreements - - - Court technology 117,184 - - Juvenile case management - - - Cable PEG fees - - - Historical preservation - - - Opioid remediatio n 34,808 - - Assigned 207,125 - 11,077,049 Unassigned 22,771,542 - - Total fund balances 23,309,074 2,952,058 11,077,049 Total liabilities, deferred inflows of resources, and fund balances 27,289,371$ 4,719,653$ 23,288,322$ ASSETS LIABILITIES DEFERRED INFLOWS OF RESOURCES FUND BALANCES 23 General Police Non-major Total CIP CIP Governmental Governmental Fund Fund Funds Funds 15,664,421$ 4,132,813$ 31,651,759$ 96,253,027$ - - 64,948 406,265 6,428 - 494,212 1,088,241 17,669 81,715 20,517 373,539 - - 1,946,279 8,536,316 - - 1,597,887 4,140,191 - - 83,672 250,743 - - - 11,344 1,970,787 21,260,630 6,088,631 29,320,048 17,659,305$ 25,475,158$ 41,947,905$ 140,379,714$ 158$ 2,933$ 1,352,007$ 15,200,206$ 1,712,852 886,823 20,228 2,619,903 - - 172,134 1,154,538 1,713,010 889,756 1,544,369 18,974,647 - - - 338,342 - - 36,470 287,477 - - 1,597,887 4,140,191 - - 1,634,357 4,766,010 - - 83,672 262,087 - - 2,175,247 5,127,305 257,935 21,260,630 6,088,631 27,607,196 - - 2,776,788 2,776,788 - - - 117,184 - - 252,130 252,130 - - 665,638 665,638 - - 843 843 - - - 34,808 15,688,360 3,324,772 26,758,202 57,055,508 - - (31,972) 22,739,570 15,946,295 24,585,402 38,769,179 116,639,057 17,659,305$ 25,475,158$ 41,947,905$ 140,379,714$ 24 CITY OF EULESS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 25 Total fund balances - governmental funds 116,639,057$ Capital assets of governmental funds are not current financial resources, therefore, capital assets are not reported in the governmental funds balance sheet. 183,085,112 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. (340,336) Internal service funds are used by management to charge the cost of certain activities, such as insurance and equipment replacement, to individual funds. The assets and liabilities ofthe internalservice funds are net of the amount allocated to business-type activities. 37,773,598 Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 625,819 Funds comprising the net OPEB liability ($4,204,697), deferred inflows ($4,406,022), and deferred outflows $1,342,377 of resources related to OPEB are not current financial resources, therefore, they are not reported in the governmental funds balance sheet. (7,268,342) (8,850,205) Long-termliabilities, includingbonds payable, deferred charges on refundings, and compensated absences (excluding those ofinternal service funds) are not due and payable in the current period, therefore, theyare not reported inthe fund financial statements. (85,095,976) Net position of governmental activities 236,568,727$ Amounts reported for governmental activities in the statement of net position are different because: Funds comprising the net pension liability ($18,316,651), deferred inflows ($1,404,190), and deferred outflows $10,870,636 of resources related to the pension are not current financial resources, therefore, they are not reported in the governmental funds balance sheet. CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 26 Debt Car General Service Rental Tax Fund Fund Fund Revenues Property tax 21,307,423$ 6,022,040$ -$ Gross receipts tax 4,613,971 - - Mixed beverage tax 213,322 - - Sales tax 17,829,107 - - Car rental tax - - 20,228,890 Fines and fees 4,222,869 - - Licenses and permits 2,333,992 - - Investment income 1,289,662 368,789 1,302,551 Drug enforcement revenues - - - Intergovernmental 561,842 - - Rents and royalties - 465,367 - Other revenues 1,345,581 - - Total revenues 53,717,769 6,856,196 21,531,441 Expenditures Current Culture and recreation 3,931,722 - - Development services 1,073,819 - - General and administrative 10,931,239 - 13,485,926 Highways and streets 1,892,782 - - Public safety 31,494,202 - - Debt service Principal 167,680 6,203,816 - Interest and fiscal charges 6,086 2,752,594 - Capital outlay 2,114,178 - - Total expenditures 51,611,708 8,956,410 13,485,926 Excess (deficiency) of revenues over (under) expenditures 2,106,061 (2,100,214) 8,045,515 Other financing sources (uses) Issuance of subscription debt 1,046,792 - - Proceeds from sale of assets 8,650 - - Transfers in 3,682,112 2,336,089 - Transfers out (7,910,242) - (10,311,170) Total other financing sources (uses), net (3,172,688) 2,336,089 (10,311,170) Net change in fund balances (1,066,627) 235,875 (2,265,655) Fund balances, beginning of year, as previously presented 24,375,701 2,716,183 13,342,704 Change within financial reporting entity (nonmajor to major fund) - - - Fund balances, end of year, as adjusted 23,309,074$ 2,952,058$ 11,077,049$ 27 General Police Non-major Total CIP CIP Governmental Governmental Fund Fund Funds Funds -$ -$ 2,862,547$ 30,192,010$ - - 1,715,519 6,329,490 - - - 213,322 - - 11,480,879 29,309,986 - - - 20,228,890 - - - 4,222,869 - - - 2,333,992 1,001,632 1,351,445 1,734,495 7,048,574 - - 156,853 156,853 - - 239,715 801,557 30,908 - 81,878 578,153 2,200 - 817,243 2,165,024 1,034,740 1,351,445 19,089,129 103,580,720 - - 3,779,012 7,710,734 - - 237,928 1,311,747 - - 701,537 25,118,702 - - 57,147 1,949,929 - - 3,429,811 34,924,013 - - 234,634 6,606,130 - - 165,847 2,924,527 7,850,852 2,294,867 6,161,748 18,421,645 7,850,852 2,294,867 14,767,664 98,967,427 (6,816,112) (943,422) 4,321,465 4,613,293 - - - 1,046,792 - - - 8,650 10,125,000 3,084,236 5,858,178 25,085,615 - - (5,843,919) (24,065,331) 10,125,000 3,084,236 14,259 2,075,726 3,308,888 2,140,814 4,335,724 6,689,019 - 22,444,588 47,070,862 109,950,038 12,637,407 - (12,637,407) - 15,946,295$ 24,585,402$ 38,769,179$ 116,639,057$ 28 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, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 29 Net change in fund balances - total governmental funds 6,689,019$ Governmental funds report capital outlays as expenditures. However, inthe statement of activities the cost of those assets is allocated over the estimated useful lives and reported as depreciationexpense. This is the amount of capital expenditures recorded in the current period. 18,421,645 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.(3,449,382) Depreciation and amortization expense on capitaland intangible assets is reported inthe 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. (7,565,947) The issuance oflong-termdebt provides current financialresources to governmental funds, but has no effect on net position.(1,046,792) The repayment of the principal of long-term debt consumes current financial resources o f governmental funds, but has no effect on net position. 6,606,130 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. 255,262 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. (112,533) 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. 12,123 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. 1,058,562 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. 1,344,285 Internal service funds are used by management to charge the costs of certain activities, such as insurance and equipment replacement, 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. 5,109,340 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. (239,149) Change in net position of governmental activities 27,082,563$ Amounts reported for governmental activities in the statement of activities are different because: CITY OF EULESS, TEXAS STATEMENT OF NET POSITION – PROPRIETARY FUNDS SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 30 Governmental Activities - Other Total Internal Water and Draina ge Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Current assets Deposits and investments 23,272,828$ 1,188,264$ 3,180,815$ 2,363,680$ 30,005,587$ 36,353,476$ Accounts receivable and unbilled revenue less allowance for uncollectibles of $23,470 for water and wastewater and $660 for drainage utility 5,145,591 109,737 185,706 8,442 5,449,476 708,720 Accrued interest receivable 129,244 - - - 129,244 305,190 Lease receivable - - - 38,860 38,860 - Prepaids and deposits 19,316 - 21,645 - 40,961 779,071 Inventory 128,720 - 123,316 24,484 276,520 - Total unrestricted current assets 28,695,699 1,298,001 3,511,482 2,435,466 35,940,648 38,146,457 Restricted deposits and investments W&WW impact fees 3,543,589 - - - 3,543,589 - Capital projects 3,979,558 - - - 3,979,558 - Revenue bond reserve for debt service 1,331,015 - - - 1,331,015 - Total restricted assets 8,854,162 - - - 8,854,162 - Total current assets 37,549,861 1,298,001 3,511,482 2,435,466 44,794,810 38,146,457 Non-current assets Lease receivable - - - 279,366 279,366 - Property, plant, and equipment in service, at cost Land 3,676,667 559,826 897,520 584,532 5,718,545 - Building 3,324,896 - 3,621,666 488,275 7,434,837 - Equipment 1,153,716 114,380 535,782 1,645,153 3,449,031 20,674,261 Improvements 1,097,774 1,346,583 8,963,462 9,989,968 21,397,787 - Construction in progress 4,744,539 - - - 4,744,539 - Utility syste m 113,198,351 32,882,561 - - 146,080,912 - Total property, plant, and equipment in service 127,195,943 34,903,350 14,018,430 12,707,928 188,825,651 20,674,261 Less accumulated depreciation 56,825,223 19,794,753 9,864,924 7,756,668 94,241,568 12,941,593 Net property, plant, and equipment in service 70,370,720 15,108,597 4,153,506 4,951,260 94,584,083 7,732,668 Intangible assets Right-to-use equipment 24,238 - 157,878 45,014 227,130 - Right-to-use software 14,233 - - - 14,233 - Total intangible assets 38,471 - 157,878 45,014 241,363 - Less accumulated amortization 26,891 - 84,401 32,316 143,608 Net intangible assets 11,580 - 73,477 12,698 97,755 - Total non-current assets 70,382,300 15,108,597 4,226,983 5,243,324 94,961,204 7,732,668 Total assets 107,932,161 16,406,598 7,738,465 7,678,790 139,756,014 45,879,125 Deferred outflows related to pension 1,598,971 187,317 251,464 51,834 2,089,586 - Deferred outflows related to OPEB 191,055 22,810 39,681 6,409 259,955 - Deferred charges on refunding - - 139,146 - 139,146 - Total deferred outflows of resources 1,790,026$ 210,127$ 430,291$ 58,243$ 2,488,687$ -$ ASSETS DEFERRED OUTFLOWS OF RESOURCES Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF NET POSITION – PROPRIETARY FUNDS – CONTINUED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 31 Governmental Activities - Other Total Internal Water and Draina geGolfRecreationEnterprise Service Wastewater Utility Course Enterprises Funds Funds Current liabilities Payable from current assets Accounts payable 3,732,994$ -$ 99,501$ 61,912$ 3,894,407$ 758,967$ Accrued salaries and wages 179,212 20,345 109,674 19,630 328,861 10,519 Current portion of bonds payable 838,715 - 573,902 - 1,412,617 - Current portion of compensated absences 30,179 2,811 8,191 1,383 42,564 256 Current portion of lease liability 5,858 - 40,657 10,879 57,394 - Current portion of subscription liability 4,743 - - - 4,743 - Accrued insurance claims - - - - - 633,001 Unearned revenue 3,979,558 - 78,806 - 4,058,364 - Accrued interest 48,679 - 5,333 - 54,012 - Total current liabilities 8,819,938 23,156 916,064 93,804 9,852,962 1,402,743 Non-current liabilities Customer and escrow deposits 2,307,498 - 123,335 - 2,430,833 - Net pension liabilit y 2,662,863 264,203 401,392 81,574 3,410,032 - Net OPEB liability 559,915 55,874 116,290 19,826 751,905 - Bonds payable 14,059,711 - 1,187,807 - 15,247,518 - Compensated absences 271,611 25,303 73,710 12,448 383,072 2,304 Lease liability 979 - 32,820 1,819 35,618 - Total non-current liabilities 19,862,577 345,380 1,935,354 115,667 22,258,978 2,304 Total liabilities 28,682,515 368,536 2,851,418 209,471 32,111,940 1,405,047 Deferred inflows related to pensions 198,402 23,590 41,718 6,698 270,408 - Deferred inflows related to OPEB 625,243 74,222 130,537 21,028 851,030 - Deferred inflows related to leases - - - 318,226 318,226 - Total deferred inflows of resources 823,645 97,812 172,255 345,952 1,439,664 - NET POSITION Net investment in capital assets 55,472,294 15,108,597 2,530,943 4,951,260 78,063,094 7,732,668 Restricted for Impact fees 3,543,589 - - - 3,543,589 - Debt service 1,331,015 - - - 1,331,015 - Unrestricted 19,869,129 1,041,780 2,614,140 2,230,350 25,755,399 36,741,410 Total net position 80,216,027$ 16,150,377$ 5,145,083$ 7,181,610$ 108,693,097 44,474,078$ Reconciliation to government-wide statement of net position Adjustment to reflect the consolid ation of internal service funds' activities related to enterprise funds 6,700,480 Net position of business-type activities 115,393,577$ LIABILITIES DEFERRED INFLOWS OF RESOURCES Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 32 Governmental Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Operating revenues Water service 18,131,512$ -$ -$ -$ 18,131,512$ -$ Reclaimed water service 800,868 - - - 800,868 - Wastewater service 11,851,372 - - - 11,851,372 - Drainage fees - 945,588 - - 945,588 - Recreation fees - - - 661,880 661,880 - Insurance premiums - - - - - 7,740,896 Service fees and miscellaneous 2,471,499 - 4,558,797 1,497,029 8,527,325 6,263,800 Total operating revenues 33,255,251 945,588 4,558,797 2,158,909 40,918,545 14,004,696 Operating expenses General and administrative 603,629 - - - 603,629 1,944,960 Water production 11,825,965 - - - 11,825,965 - Water distribution 1,764,185 - - - 1,764,185 - Utility engineering 511,090 - - - 511,090 - Wastewater collection and treatment 6,878,126 - - - 6,878,126 - Nondepartmental 4,897,980 - - - 4,897,980 - Geographic information systems 696,095 - - - 696,095 - Service center 1,452,451 - - - 1,452,451 - Drainage - 774,492 - - 774,492 - Recreation classes - - - 443,140 443,140 - Golf course - - 1,994,626 - 1,994,626 - Pro shop - - 459,820 - 459,820 - Food and beverage - - 1,539,857 - 1,539,857 - Conference center - - 933,223 - 933,223 - Cart operations - - 323,211 - 323,211 - Parks at Texas Star - - - 1,166,447 1,166,447 - Arbor Daze - - - 149,034 149,034 - Insurance costs - - - - - 6,294,411 Depreciation 2,711,546 820,031 404,244 453,568 4,389,389 2,054,429 Amortization 30,305 - 66,439 10,822 107,566 - Total operating expenses 31,371,372 1,594,523 5,721,420 2,223,011 40,910,326 10,293,800 Operating income (loss) 1,883,879 (648,935) (1,162,623) (64,102) 8,219 3,710,896 Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION – PROPRIETARY FUNDS – CONTINUED YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 33 Governmental Activities - Other Total Internal Water and Draina geGolfRecreationEnterprise Service Wastewater Utility Course Enterprises Funds Funds Nonoperating revenues (expenses) Gain (loss) on sale of capital assets -$ -$ 155$ 40$ 195$ 329,258$ Intergovernmental revenue 3,509,301 - - - 3,509,301 - Investment income 1,411,334 62,623 128,495 105,421 1,707,873 1,658,086 Interest expense (222,274) - (48,939) (98) (271,311) - Total nonoperating revenues, net 4,698,361 62,623 79,711 105,363 4,946,058 1,987,344 Income (loss) before contributions and transfers 6,582,240 (586,312) (1,082,912) 41,261 4,954,277 5,698,240 Developer contributions 2,599,854 1,337,110 - - 3,936,964 - Transfers in - - 1,082,562 145,508 1,228,070 1,749,377 Transfers out (2,115,553) (47,942) - - (2,163,495) (1,834,236) Net income (loss) 7,066,541 702,856 (350) 186,769 7,955,816 5,613,381 Net position, beginning 73,149,486 15,447,521 5,145,433 6,994,841 38,860,697 Net position, end of year 80,216,027$ 16,150,377$ 5,145,083$ 7,181,610$ 44,474,078$ Reconciliation to government-wide statement of net position Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds 504,041 Change in net position of business-type activities 8,459,857$ Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 34 Governmental Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds OPERATING ACTIVITIES Cash received from customers 29,961,482$ 949,879$ 4,560,448$ 2,217,361$ 37,689,170$ 14,957,407$ Cash payments to suppliers for goods and services (23,521,918) (320,019) (2,913,500) (1,343,686) (28,099,123) (7,757,072) Cash payments to employees for services (4,190,314) (492,297) (2,457,143) (428,782) (7,568,536) (138,010) Net cash provided by (used in) operating activities 2,249,250 137,563 (810,195) 444,893 2,021,511 7,062,325 NONCAPITAL FINANCING ACTIVITIES Transfer in - - 1,082,562 145,508 1,228,070 1,749,377 Transfer out (2,115,553) (47,942) - - (2,163,495) (1,834,236) Net cash provided by (used in) noncapital financing activities (2,115,553) (47,942) 1,082,562 145,508 (935,425) (84,859) CAPITAL AND RELATED FINANCING ACTIVITIES Impact fees 267,991 - - - 267,991 - Acquisition/construction of capital/intangible assets (4,349,967) (205,000) - (6,668) (4,561,635) (2,824,749) Interest paid on capital debt (247,861) - (50,458) (98) (298,417) - Principal paid on capital debt (965,000) - (540,000) - (1,505,000) - Principal paid on leases (5,827) - (38,959) (10,822) (55,608) - Principal paid on subscriptions (4,634) - - - (4,634) - Capital contributions - cash and cash equivalents 3,509,301 - - - 3,509,301 - Proceeds from sale of capital assets - - 155 40 195 383,379 Net cash used in capital and related financing activities (1,795,997) (205,000) (629,262) (17,548) (2,647,807) (2,441,370) INVESTING ACTIVITIES Interest received on investments 1,400,214 62,623 128,495 105,421 1,696,753 1,606,093 Net cash provided by investing activities 1,400,214 62,623 128,495 105,421 1,696,753 1,606,093 Net change in cash and cash equivalents (262,086) (52,756) (228,400) 678,274 135,032 6,142,189 Cash and cash equivalents, beginning of year 32,389,076 1,241,020 3,409,215 1,685,406 38,724,717 30,211,287 Cash and cash equivalents, end of year 32,126,990$ 1,188,264$ 3,180,815$ 2,363,680$ 38,859,749$ 36,353,476$ Noncash Financing Activities Contribution of capital assets 2,331,863$ 1,337,110$ -$ -$ 3,668,973$ -$ Right-to-use assets acquired with subscription financing -$ -$ -$ -$ -$ -$ Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS – CONTINUED YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 35 Governmental 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 (used in) operating activities Operating income (loss) 1,883,879$ (648,935)$ (1,162,623)$ (64,102)$ 8,219$ 3,710,896$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 2,741,851 820,031 470,683 464,390 4,496,955 2,054,429 Changes in assets and liabilities: Accounts receivable and unbilled revenue (230,218) 4,291 39,822 58,452 (127,653) 952,711 Prepaids and deposits (5,321) - (14,689) - (20,010) 279,184 Inventor y 9,411 - (22,852) 15,480 2,039 - Net OPEB liabilit y (575,839) (67,746) (120,975) (19,356) (783,916) - Net pension liabilit y (1,522,266) (179,090) (319,804) (51,168) (2,072,328) - Deferred outflows 1,040,912 120,517 198,403 34,274 1,394,106 - Deferred inflows 732,691 85,465 154,585 (13,560) 959,181 - Accounts payable 1,220,500 (617) (30,966) 13,249 1,202,166 417,498 Accrued salaries and wages 23,111 1,506 25,026 6,418 56,061 606 Accrued insurance claims - - - - - (352,999) Compensated absences (5,910) 2,141 11,366 816 8,413 - Customer and escrow deposits 92,816 - (31,348) - 61,468 - Unearned revenue (3,156,367) - (6,823) - (3,163,190) - Net cash provided by (used in) operating activities 2,249,250$ 137,563$ (810,195)$ 444,893$ 2,021,511$ 7,062,325$ Reconciliation of cash to balance sheet: Cash - current 23,272,828$ 1,188,264$ 3,180,815$ 2,363,680$ 30,005,587$ 36,353,476$ Cash - restricted 8,854,162 - - - 8,854,162 - Cash and cash equivalents 32,126,990$ 1,188,264$ 3,180,815$ 2,363,680$ 38,859,749$ 36,353,476$ Business-Type Activities - Enterprise Funds CITY OF EULESS, TEXAS STATEMENT OF NET POSITION – FIDUCIARY FUNDS SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 36 Star Center Escrow OPEB Custodial Fund Trust Fund ASSETS Investments at fair value Investment pool 1,439,494$ -$ Money market account - 346,877 Fixed income funds - 5,595,281 Equity funds - 9,139,461 Total assets 1,439,494 15,081,619 LIABILITIES Refunds payable 18,947 - Total liabilities 18,947 - NET POSITION Restricted for Debt service 1,420,547 - Other post-employment benefits - 15,081,619 Total net position 1,420,547$ 15,081,619$ CITY OF EULESS, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED SEPTEMBER 30, 2024 The Notes to the Basic Financial Statements are an integral part of these statements. 37 Star Center Escrow OPEB Custodial Fund Trust Fund ADDITIONS Employer contributions -$ 1,275,600$ Other contributions - 263,735 Investment income Investment income 76,173 2,801,934 Less: investment expense - (66,736) Net investment income 76,173 2,735,198 Total additions 76,173 4,274,533 DEDUCTIONS Payments to beneficiaries 76,173 - Insurance claims - 604,237 Administrative expenses - 171,718 Total deductions 76,173 775,955 Change in net position - 3,498,578 Net position - beginning of year 1,420,547 11,583,041 Net position - ending 1,420,547$ 15,081,619$ 38 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 39 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 40 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 41 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. Police CIP Fund The Police CIP Fund is used to account for various construction projects related to the City Police and Courts building renovation primarily funded with Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2023 issuance. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 42 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 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. 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. 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. 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 43 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Basis of Presentation – Continued The OPEB Trust Fund accounts for the accumulation and use of resources for benefit payments related to post-employment health care. 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, proprietary fund and fiduciary 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 44 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 $0.4575 per $100 of assessed valuation ($0.4600 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 45 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. Capitalized assets 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 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 46 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 with 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 no interest rate is provided by the lessor, 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. Subscription-Based Information Technology Arrangements (SBITAs) The City has noncancellable contracts with SBITA vendors for the right-to-use information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets). The City recognizes a subscription liability, reported with long-term debt, and a right‐to‐use subscription asset (an intangible asset), reported with other capital assets, in the government‐wide and proprietary fund financial statements. The City recognizes subscription liabilities with an initial, individual value of $25,000 or more. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 47 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Subscription-Based Information Technology Arrangements (SBITAs) - Continued At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of SBITA payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for SBITA payments made at or before the SBITA commencement date, plus certain initial implementation costs. Subsequently, the subscription asset is amortized on a straight‐line basis over the shorter of the subscription term or the useful life of the underlying IT assets. Key estimates and judgments related to SBITAs include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments. The City uses the interest rate charged by the SBITA vendor as the discount rate. When no interest rate is provided by the vendor, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs. The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments, variable payments fixed in substance or that depend on an index or a rate, termination penalties if the City is reasonably certain to exercise such options, subscription contract incentives receivable from the SBITA vendor, 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 SBITAs and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription 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 short-term compensated absences (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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 48 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Fund Balance Classifications Fund balances are classified as follows on the governmental fund financial statements: General Fund Debt Service Fund Car Rental Tax Fund General CIP Fund Police CIP Fund Nonmajor Governmental Funds Total Governmental Funds Nonspendable 178,415$ -$ -$ -$ -$ 83,672$ 262,087$ Restricted for Debt service - 2,952,058 - - - 2,175,247 5,127,305 Capital projects - - - 257,935 21,260,630 6,088,631 27,607,196 Developer agreements - - - - - 2,776,788 2,776,788 Court technology 117,184 - - - - - 117,184 Juvenile case management - - - - - 252,130 252,130 Cable PEG fees - - - - - 665,638 665,638 Historical preservation - - - - - 843 843 Opioid remediation 34,808 - - - - 34,808 Assigned Capital projects - - - 15,688,360 3,324,772 7,431,424 26,444,556 Betterments 104,781 - - - - - 104,781 Emergency/radio systems 47,230 - - - - - 47,230 Tourism and conference facilities - - - - - 2,592,358 2,592,358 Parks, library, and economic development - - - - - 7,218,356 7,218,356 Police department - - - - - 2,213,872 2,213,872 Other 55,114 - 11,077,049 - - 7,302,192 18,434,355 Unassigned 22,771,542 - - - - (31,972) 22,739,570 Total 23,309,074$ 2,952,058$ 11,077,049$ 15,946,295$ 24,585,402$ 38,769,179$ 116,639,057$ Reported in Non-spendable: 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 non-spendable. 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 49 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. h. Restricted for opioid remediation represents the portion of fund equity that must be used for opioid remediation activities. 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 50 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Fund Balance Classifications – Continued 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. g. Assigned for other are funds from specific revenues that are to be spent for facility remodel, victim assistance, and injured animals, as well as residual balances of selected special revenue funds. 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, 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 51 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 and liabilities, the statement of net position reports a separate section for deferred outflows of resources and deferred inflows of resources. These separate financial statement elements, deferred outflows of resources and deferred inflows of resources, represent a consumption and acquisition of net assets that apply to a future period(s) and will not be recognized as an outflow or inflow of resources (expense/expenditure or revenue) until then. The City has the following items that qualify for reporting as deferred outflows and inflows of resources:  Deferred charges on refundings – deferred charges on refundings result 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 (deferred outflow of resources).  Pension contributions subsequent to the measurement date – these contributions are deferred and recognized in the following fiscal year (deferred outflow of resources).  Difference in pension expected and actual 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 (deferred outflow and inflow of resources).  Changes in pension actuarial assumptions – this difference is deferred and amortized over a closed period that approximates the estimated average remaining lives of all members on the measurement date (deferred inflow of resources).  Difference in projected and actual investment earnings for pension assets – the difference is deferred and amortized over a closed five-year period (deferred outflow of resources).  Difference in OPEB expected and actual investment 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 (deferred inflow of resources).  Changes 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 (deferred outflow and inflow of resources). CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 52 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED Deferred Outflows/Inflows of Resources – Continued  Difference in projected and actual investment earnings on OPEB assets – this difference is deferred and amortized over a closed five-year period (deferred inflow of resources).  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 (deferred inflow of resources). 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, 2024, 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 2024. 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 2024, the City rebated $1,136,453 in sales taxes, or 3.88% of the total sales tax revenues and $17,601 in property tax revenue, or less than 0.06% 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 53 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. 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, 2024. At year-end, the carrying amount of the City’s deposits was $1,232,470, with a bank balance of $1,584,096. 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 OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 54 NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED Deposits – Continued City deposits at Frost Bank. The market value of the collateral provided by Frost Bank at the close of the fiscal year was $1,776,645 plus FDIC coverage of $250,000. Investments State statutes, City bond ordinances, and City resolutions authorize the City’s investments. The City is authorized to invest in obligations of the U.S. Government and its agencies and instrumentalities, obligations of the State of Texas and its agencies and instrumentalities, fully-insured or collateralized certificates of deposit, fully-collateralized repurchase agreements and reverse repurchase agreements, government pools, and no-load SEC-registered money market funds consisting of any of these securities listed. Because the City is responsible for the investment portfolio of its component units, the City’s investment practices and policies disclosed herein apply equally to its component units. During the year ended September 30, 2024, the City did not own any types of securities other than those permitted by statute. Book Value Fair Value Level 2 % of Portfolio WAM Rating Rating Agency Investments measured at amortized cost: Investment Pools: TexasClass 45,150,149$ 22.3% 12 AAAm S&P TexPool 46,741,384 23.2% 26 AAAm S&P TexSTAR 47,088,141 23.4% 24 AAAm S&P Investments measured at fair value: Certificates of Deposit 4,080,000 4,142,061 2.0% 10 Not rated U.S. Government Agency Securities: FNMA 8,000,000 8,012,609 4.0% 21 AA+/Aaa S&P/Moody's FFCB 7,000,000 7,062,237 3.5% 16 AA+/Aaa S&P/Moody's FHLB 30,445,158 30,596,626 15.1% 87 AA+/Aaa S&P/Moody's FHLMC 10,000,000 10,010,584 5.0% 20 AA+/Aaa S&P/Moody's FAMCA 3,000,000 3,026,934 1.5% 8 Not rated Totals 201,504,832$ 62,851,051$ 100% Investment Type 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: 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 55 NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED Investments – Continued 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. 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 56 NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED Investments – Continued Fair Value – Continued 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 that 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. The TexSTAR investment pool is an external investment pool with an investment strategy that seeks 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. The Comptroller exercises oversight of the pools’ activities via daily, weekly, and monthly reporting requirements. Federated Hermes is responsible for managing pool assets and day-to-day operations. TexSTAR is duly chartered and administered by HilltopSecurities Inc. and JP Morgan Asset Management. TexSTAR has established a governing board that is partially comprised of pool participants. Duties of the governing board include oversight responsibility. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 57 NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED Investments – Continued Fair Value – Continued 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, 2024, 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. The following table details the maturity schedule for the City’s investment portfolio as of September 30, 2024: Maturity Schedule Book Value Fair Value % of Portfolio Overnight 138,979,674$ 138,979,674$ 69% Less than 1 month 2,000,000 2,000,160 1% 1 to 6 months 8,425,158 8,477,753 4% 6 to 9 months 5,480,000 5,502,660 3% 9 to 12 months 4,480,000 4,494,378 2% 12 to 18 months 14,720,000 14,773,915 7% 18 to 24 months 7,960,000 8,019,522 4% 24 to 36 months 19,460,000 19,582,663 10% Total 201,504,832$ 201,830,725$ 100% CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 58 NOTE 2. DEPOSITS AND INVESTMENTS – CONTINUED Credit Risk In compliance with the City’s Investment Policy, as of September 30, 2024, 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, 2024, 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 59 NOTE 3. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2024, was as follows: Balance Balance Beginning Adjustment/ End of of Yea r Increase Decrease Transfer Year Governmental activities Capital assets - nondepreciable Land 43,526,306$ -$ -$ 579,180$ 44,105,486$ Construction in progress 16,128,702 16,831,604 - (19,789,658) 13,170,648 Total nondepreciable capital assets 59,655,008 16,831,604 - (19,210,478) 57,276,134 Capital assets - depreciable Buildings 75,084,338 - (171,536) 1,794,367 76,707,169 Improvements other than buildings 22,932,561 76,992 (174,825) 2,811,045 25,645,773 Infrastructure 108,776,349 115,087 - 9,599,044 118,490,480 Machinery and equipment 17,393,978 471,757 (530,556) 1,783,530 19,118,709 Total depreciable capital assets 224,187,226 663,836 (876,917) 15,987,986 239,962,131 Less accumulated depreciation Buildings (34,825,547) (2,184,425) 32,665 - (36,977,307) Improvements other than buildings (7,278,628) (730,803) - - (8,009,431) Infrastructure (55,642,130) (2,965,451) - - (58,607,581) Machinery and equipment (10,776,407) (1,294,140) 496,775 - (11,573,772) Total accumulated depreciation (108,522,712) (7,174,819) 529,440 - (115,168,091) Total depreciable capital assets, net 115,664,514 (6,510,983) (347,477) 15,987,986 124,794,040 Intangible right-to-use assets - amortizable Equipment 259,697 - - - 259,697 Software 337,794 1,046,792 - - 1,384,586 Total amortizable intangible assets 597,491 1,046,792 - - 1,644,283 Less accumulated amortization Equipment (124,003) (62,435) - - (186,438) Software (114,214) (328,693) - - (442,907) Total accumulated amortization (238,217) (391,128) - - (629,345) Total amortizable intangible assets, net 359,274 655,664 - - 1,014,938 Total governmental fund capital assets, net 175,678,796 10,976,285 (347,477) (3,222,492) 183,085,112 Internal service funds Capital assets - depreciable Machinery and equipment 18,743,829 2,824,750 (894,318) - 20,674,261 Total depreciable internal service assets 18,743,829 2,824,750 (894,318) - 20,674,261 Less accumulated depreciation Machinery and equipment (11,727,360) (2,054,429) 840,196 - (12,941,593) Total internal service funds capital assets, net 7,016,469 770,321 (54,122) - 7,732,668 Total governmental activities capital and intangible assets, net 182,695,265$ 11,746,606$ (401,599)$ (3,222,492)$ 190,817,780$ CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 60 NOTE 3. CAPITAL ASSETS – CONTINUED Balance Balance Beginning Adjustment/ End of of Year Increase Decrease Transfer Year Business-type activities Capital assets - nondepreciable Land 5,718,545$ -$ -$ -$ 5,718,545$ Construction in progress 1,387,836 4,580,684 - (1,223,981) 4,744,539 Total nondepreciable capital assets 7,106,381 4,580,684 - (1,223,981) 10,463,084 Capital assets - depreciable Buildings 7,434,837 - - - 7,434,837 Equipment 3,338,360 6,670 - 104,000 3,449,030 Improvements 21,296,788 - - 101,000 21,397,788 Utility system 141,418,676 3,643,255 - 1,018,981 146,080,912 Total depreciable capital assets 173,488,661 3,649,925 - 1,223,981 178,362,567 Less accumulated depreciation Buildings (3,152,471) (221,051) - - (3,373,522) Equipment (2,317,713) (223,495) - - (2,541,208) Improvements (13,648,195) (617,257) - - (14,265,452) Utility system (70,733,800) (3,327,586) - - (74,061,386) Total accumulated depreciation (89,852,179) (4,389,389) - - (94,241,568) Total depreciable capital assets, net 83,636,482 (739,464) - 1,223,981 84,120,999 Intangible right-to-use assets - amortizable Equipment 227,130 - - - 227,130 Software 14,233 - - - 14,233 Total amortizable intangible assets 241,363 - - - 241,363 Less accumulated amortization Equipment (78,510) (55,608) - - (134,118) Software (4,856) (4,634) - - (9,490) Total accumulated amortization (83,366) (60,242) - - (143,608) Total amortizable intangible assets, net 157,997 (60,242) - - 97,755 Total business-type activities capital assets, net 90,900,860$ 3,780,978$ -$ -$ 94,681,838$ 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 1,034,651$ Development 32,244 General administrative 4,366,167 Highways and streets 2,918,153 Public safety 1,269,161 Total capital asset depreciation and amortization expense - governmental activities 9,620,376$ Business-type activities Water and wastewater 2,722,007$ Drainage utility 820,031 Golf course 443,203 Other recreation enterprises 464,390 Total capital asset depreciation and amortization expense - business-type activities 4,449,631$ CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 61 NOTE 3. CAPITAL ASSETS – CONTINUED Outstanding commitments at September 30, 2024, under authorized construction contracts, were $28,446,300. These outstanding commitments are to be financed by available deposit and investment balances, which include proceeds from previous bond issuances. NOTE 4. LONG-TERM DEBT The following is a summary of long-term debt activity of the City for the year ended September 30, 2024: Balance Balance Due Beginning End within of Year Increases Decreases of Year One Year Governmental activities General obligation bonds 1,870,000$ -$ (1,185,000)$ 685,000$ 685,000$ Certificates of obligation 70,675,000 - (3,210,000) 67,465,000 3,985,000 Sales tax revenue bonds 4,800,000 - (230,000) 4,570,000 245,000 Tax notes 7,165,000 - (1,590,000) 5,575,000 1,050,000 Premium on debt 3,737,139 - (306,123) 3,431,016 306,123 Discount on debt (49,606) - 9,682 (39,924) (9,682) Lease liability 135,695 - (62,436) 73,259 62,765 Subscription liability 223,580 1,046,792 (328,694) 941,678 313,654 Net pension liability 29,036,476 - (10,719,825) 18,316,651 - Net OPEB liability 8,259,771 - (4,055,074) 4,204,697 - Compensated absences 2,295,667 522,427 (411,003) 2,407,091 240,709 Total governmental activities 128,148,722 1,569,219 (22,088,473) 107,629,468 6,878,569 Business-type activities Water and sewer revenue bonds 15,875,000 - (965,000) 14,910,000 840,000 General obligation refunding bonds 2,245,000 - (540,000) 1,705,000 555,000 Premiums on debt 79,001 - (19,240) 59,761 19,240 Discounts on debt (16,252) - 1,626 (14,626) (1,626) Lease liability 148,620 - (55,608) 93,012 57,394 Subscription liability 9,377 - (4,634) 4,743 4,743 Net pension liability 5,482,360 - (2,072,328) 3,410,032 - Net OPEB liability 1,535,821 - (783,916) 751,905 - Compensated absences 417,223 49,562 (41,149) 425,636 42,567 Total business-type activities 25,776,150 49,562 (4,480,249) 21,345,463 1,517,318 Total primary government 153,924,872$ 1,618,781$ (26,568,722)$ 128,974,931$ 8,395,887$ Governmental fund net pension liability and net OPEB liability are typically liquidated by the general, half-penny sales tax, crime control and prevention district, and juvenile case funds. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 62 NOTE 4. LONG-TERM DEBT – CONTINUED 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. 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, 2024, 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 $ 685,000 Refunding, Series 2012A 2.375% – 2.625% 11/01/2012 02/15/2027 1,705,000 Total $2,390,000 Annual debt service requirements to maturity for general obligation bonds are as follows: Fiscal Year Principal Interest Principal Interest Total 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 $685,000 $30,140 $1,705,000 $66,169 $2,486,309 Governmental Activities Business-Type Activities 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 63 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 per issue) 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 $1,245,000 Series 2014 Series 2015 Series 2016 Series 2018 Series 2019 Series 2020 Series 2021 Series 2023 3% 3% – 3.5% 3% – 3.25% 3% – 4% 3.25% – 5% 2% – 3% 1.625% – 4% 4% – 5% 10/15/2014 10/27/2015 01/12/2016 03/01/2018 01/15/2019 01/14/2020 04/08/2021 09/07/2023 08/15/2034 02/15/2035 02/15/2041 02/15/2038 02/15/2039 02/15/2040 02/15/2041 02/15/2038 3,625,000 2,095,000 12,775,000 7,155,000 9,820,000 5,995,000 4,755,000 20,000,000 Total $67,465,000 Annual debt service requirements to maturity for the certificates of obligation are as follows: Fiscal Governmental Activities Year Principal Interest Total 2025 $3,985,000 $2,416,651 $6,401,651 2026 4,025,000 2,269,951 6,294,951 2027 4,080,000 2,115,841 6,195,841 2028 4,090,000 1,958,563 6,048,563 2029 4,260,000 1,792,850 6,052,850 2030-2034 22,970,000 6,377,414 29,347,414 2035-2039 2040-2041 21,420,000 2,635,000 2,117,981 77,925 23,537,981 2,712,925 Total $67,465,000 $19,127,176 $86,592,176 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 64 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 ½¢ 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 improvements 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: Interest Maturity Principal Rate % Dated Date Outstanding Revenue Bonds: W&WW Improvement, Series 2013 4% – 5% 06/25/2013 07/15/2033 $ 860,000 W&WW Improvement, Series 2015A 1.25% – 1.98% 06/15/2015 07/15/2035 2,700,000 W&WW Improvement, Series 2015B W&WW Improvement, Series 2018 W&WW Improvement, Series 2019 STRB, Series 2018 STRB, Series 2019 0.95% – 1.68% 0.67% – 1.49% 0.5% – 1.66% 3% – 4% 2.5% – 4% 06/15/2015 04/12/2018 04/25/2019 10/15/2018 12/12/2019 07/15/2035 07/15/2038 07/15/2049 09/15/2038 09/15/2039 1,420,000 2,005,000 7,925,000 1,250,000 3,320,000 Total $ 19,480,000 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 65 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 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 270,000 126,575 870,000 201,924 1,468,499 2029 280,000 115,775 885,000 189,096 1,469,871 2030-2034 1,555,000 429,000 4,545,000 711,089 7,240,089 2035-2039 1,710,000 161,450 2,575,000 378,384 4,824,834 2040-2044 - - 1,675,000 229,543 1,904,543 2045-2049 - - 1,815,000 90,747 1,905,747 Total $4,570,000 $1,272,825 $14,910,000 $2,472,477 $23,225,302 The gross ½¢ sales tax revenues of the EDC recognized in the year ending September 30, 2024 totaled $7,331,559. The principal, interest and fiscal charges on the EDC debt for the same period totaled $400,481 which equates to approximately 5.5% of the gross ½¢ sales tax revenues. The recognized net revenues of the water and wastewater fund totaled $3,295,215 for the year ending September 30, 2024. Principal, interest and fiscal charges on the water and sewer revenue bonds totaled $1,209,786 which equates to approximately 36.7% 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. 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 66 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, 2024. 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, 2024, 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 payments made for the acquisition, design, construction, improvement, expansion, and equipment for one or more fire stations and the costs of professional services rendered in connection therewith and the financing thereof. 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 2022 2.89% 09/20/2022 02/15/2029 $5,575,000 $5,575,000 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 67 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 2025 $1,050,000 $145,945 $1,195,945 2026 2027 2028 2029 1,085,000 1,115,000 1,145,000 1,180,000 115,094 83,304 50,647 17,051 1,200,094 1,198,304 1,195,647 1,197,051 Total $5,575,000 $412,041 $5,987,041 Lease Liability The City leases equipment consisting of printers, 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 printers and copiers. An initial lease liability was recorded in the amount of $346,263. As of September 30, 2024, the value of the lease liability was $97,678. The City is required to make monthly principal and interest payments of $7,000. The lease has an implicit interest rate of 1.9235%. The value of the right-to-use asset as of September 30, 2024 was $346,263 with accumulated amortization of $248,585. During the year ended September 30, 2022, 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. As of September 30, 2024, the value of the lease liability was $68,593. 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, 2024 was $140,564 with accumulated amortization of $71,971. The future principal and interest lease payments as of September 30, 2024 were as follows: Fiscal Governmental Activities Business-Type Activities Year Principal Interest Principal Interest Total 2025 $62,766 $234 $56,393 $1,087 $120,480 2026 10,493 7 36,619 322 47,441 Total $73,259 $241 $93,012 $1,409 $167,921 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 68 NOTE 4. LONG-TERM DEBT – CONTINUED Subscription-based IT Arrangements The City leases certain software under subscription-based IT arrangements (SBITAs). In August 2023, the City entered into a three-year subscription arrangement for the use of certain software. An initial subscription liability was recorded in the amount of $35,130. As of September 30, 2024, the value of the subscription liability was $12,700. The City is required to make annual principal and interest payments that range from $12,000 to $13,000. The subscription has an implicit interest rate of 2.363%. The value of the right-to-use asset as of September 30, 2024 was $35,130 with accumulated amortization of $22,430. In April 2023, the City entered into a three-year subscription arrangement for the use of certain software. An initial subscription liability was recorded in the amount of $237,215. As of September 30, 2024, the value of the subscription liability was $79,056. The City is required to make annual principal and interest payments of $80,926. The subscription has an implicit interest rate of 2.3633%. The value of the right-to-use asset as of September 30, 2024 was $237,215 with accumulated amortization of $158,159. In July 2023, the City entered into a three-year subscription arrangement for the use of certain software. An initial subscription liability was recorded in the amount of $79,682. As of September 30, 2024, the value of the subscription liability was $26,688. The City is required to make annual principal and interest payments of $27,552. The subscription has an implicit interest rate of 3.238%. The value of the right-to-use asset as of September 30, 2024 was $79,682 with accumulated amortization of $52,994. In January 2024, the City entered into a five-year subscription arrangement for the use of certain software. An initial subscription liability was recorded in the amount of $1,046,792. As of September 30, 2024, the value of the subscription liability was $827,977. The City is required to make annual principal and interest payments of $226,895. The implicit interest rate is 2.31%. The value of the right-to-use asset as of September 30, 2024 was $1,046,792 with accumulated amortization of $218,814. The future principal and interest lease payments as of September 30, 2024 were as follows: Fiscal Year Principal Interest Principal Interest Total 2025 $313,654 $21,859 $4,743 $112 $340,368 2026 204,574 14,316 - - 218,890 2027 209,304 9,586 - - 218,890 2028 214,146 4,748 - - 218,894 Total $941,678 $50,509 $4,743 $112 $997,042 Governmental Activities Business-Type Activities CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 69 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 in the year ended September 30, 2024 totaled $16,428,560 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 $448,911 in the year ended September 30, 2024 and are included as operating expenses of the water and wastewater fund. The City is involved in a number of lawsuits arising in the ordinary course of business. In the opinion of the City's legal counsel and management, any liability resulting from such litigation would not be material in relation to the City's financial position. NOTE 6. SERVICE CENTER The water and wastewater enterprise fund historically bears the major portion of the operating costs of the City's service center, which provides services to all City departments. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 70 NOTE 7. INTERFUND TRANSFERS All interfund transfers between the various funds are approved supplements to the operations of those funds. General Debt Service Police CIP General CIP Non-major Governmental Subtotal Governmental Transfers out General -$ -$ -$ 4,000,000$ 3,312,996$ 7,312,996$ Car rental tax 1,968,617 - - 6,125,000 1,500,000 9,593,617 Water and wastewater 1,665,553 - - - - 1,665,553 Drainage utility 47,942 - - - - 47,942 Nonmajor governmental - 2,336,089 1,250,000 - 1,045,182 4,631,271 Internal service - - 1,834,236 - - 1,834,236 Total transfers in 3,682,112$ 2,336,089$ 3,084,236$ 10,125,000$ 5,858,178$ 25,085,615$ Golf Other recreation Subtotal Total Internal Service Course enterprises Enterprise Transfers Out Transfers out General 581,824$ 15,422$ -$ 15,422$ 7,910,242$ Car rental tax 717,553 - - - 10,311,170 Water and wastewater 450,000 - - - 2,115,553 Drainage utility - - - - 47,942 Nonmajor governmental - 1,067,140 145,508 1,212,648 5,843,919 Internal service - - - - 1,834,236 Total transfers in 1,749,377$ 1,082,562$ 145,508$ 1,228,070$ 28,063,062$ Transfers in Transfers in 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.  The car rental tax fund to the general fund primarily to maintain the property tax rate.  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 general CIP and 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 non-major governmental funds to the Police CIP fund for approved capital project funding.  The non-major governmental funds to the non-major governmental funds to provide task force and project funding. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 71 NOTE 7. INTERFUND TRANSFERS – CONTINUED  The non-major governmental funds to the other recreation enterprises funds to provide festival funding.  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 health insurance premiums and workers’ compensation and general liability insurance claims.  The general fund to the golf course fund to rebate a portion of city sales tax paid by golf operations.  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 internal service funds to the Police CIP fund for approved project funding. 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 $7,723,838. During fiscal year 2024, the City and the City's employees contributed approximately $5,665,274 and $1,546,965 respectively, for medical coverage. The City's contributions are accounted for as interfund services provided and used. Claims liabilities are based on estimates of the ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled, and of claims that have been incurred but not reported and are accounted for in the Insurance Internal Service Fund. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 72 NOTE 8. RISK MANAGEMENT – CONTINUED Changes in the balances of health, dental, and prescription claims liabilities for the years ended September 30, 2024 and 2023 are as follows: 2024 2023 Unpaid claims, beginning of year 986,000$ 419,951$ Incurred claims 4,743,399 5,480,216 Paid claims (5,096,398) (4,914,167) Unpaid claims, end of year 633,001$ 986,000$ Settlement amounts have not exceeded stop loss insurance coverage for the year ended September 30, 2024 or any of the three preceding years ended September 30. NOTE 9. DEFINED BENEFIT PENSION PLAN Plan Description The City participates as one of 934 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 TMRS Act, Subtitle G, Title 8, Texas Government Code (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 is not fiscally dependent on 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 73 NOTE 9. DEFINED BENEFIT PENSION PLAN – CONTINUED Benefits Provided – Continued Plan provisions for the City are as follows: Employee deposit rate 7% Matching ratio (City to employee) 2 to 1 A member is vested after 5 years Service retirement eligibility 20 years at any age, 5 years at 60 and above Updated service credit 100% Repeating, Transfers Annuity increase (to retirees) 70% of CPI Employees Covered By Benefit Terms At the December 31, 2023 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 309 Inactive employees entitled to, but not yet receiving benefits 209 Active employees 391 Tota l 909 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 ½ 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, 2024. The contribution rates for the City were 17.71% and 18.66% in calendar years 2023 and 2024, respectively. The City’s contributions to TMRS for the year ended September 30, 2024 totaled $6,558,023 and were equal to the required contributions. Net Pension Liability The City’s Net Pension Liability (NPL) was measured as of December 31, 2023, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 74 NOTE 9. DEFINED BENEFIT PENSION PLAN – CONTINUED Actuarial Assumptions The TPL in the December 31, 2023 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 2.75% per year, adjusted down for population declines, if any Investment rate of return 6.75%, net of pension plan investment expense, including inflation Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB(10) mortality tables with 110% of the Public Safety table used for males and 100% of the General Employee table used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender-distinct 2019 Municipal Retirees of Texas mortality tables. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by the most recent Scale MP-2021 to account for future mortality improvements. For disabled annuitants, the same mortality tables for healthy retirees are used with a 4-year set-forward for males and a 3- year set-forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and females respectively, to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by the most recent Scale MP-2021 to account for future mortality improvements subject to the 3.5% and 3.0% floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2018 to December 31, 2022. The assumptions were adopted in 2023 and first used in the December 31, 2023 actuarial valuation. The post-retirement mortality assumption for Annuity Purchase Rates (APRs) is based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income 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 by best estimate ranges of expected returns for each major asset class. The long-term expected rate of return is determined by weighting the expected return for each major asset class by the respective target asset allocation percentage. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 75 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 for the year ended December 31, 2023 are summarized in the following table: Asset Class Target Allocation Long-Term Expected Real Rate of Return (Arithmetic) Global Equity 35.0% 6.70% Core Fixed Income 6.0% 4.70% Non-Core Fixed Income 20.0% 8.00% Other Public and Private Markets 12.0% 8.00% Real Estate 12.0% 7.60% Hedge Funds 5.0% 6.40% Private Equity 10.0% 11.60% 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 76 NOTE 9. DEFINED BENEFIT PENSION PLAN – CONTINUED Changes in the Net Pension Liability Total Pension Liability (a) Plan Fiduciary Net Position (b) Net Pension Liability (a) - (b) Balance at 12/31/2022 265,151,312$ 230,632,476$ 34,518,836$ Changes for the year: Service cost 6,375,962 - 6,375,962 Interest 17,715,585 - 17,715,585 Change in benefit terms - - - Difference between expected and actual experience (396,247) - (396,247) Changes of assumptions (1,543,563) - (1,543,563) Contributions - employer - 6,044,874 (6,044,874) Contributions - employee - 2,389,279 (2,389,279) Net investment income - 26,680,738 (26,680,738) Benefit payments, including refunds of employee contributions (11,772,376) (11,772,376) - Administrative expense - (169,815) 169,815 Other changes - (1,186) 1,186 Net changes 10,379,361 23,171,514 (12,792,153) Balance at 12/31/2023 275,530,673$ 253,803,990$ 21,726,683$ Increase (Decrease) There were no changes in benefit terms during the year. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate: 1% Decrease in Discount Rate (5.75%) Discount Rate (6.75%) 1% Increase in Discount Rate (7.75%) City’s net pension liability 58,686,783$ 21,726,683$ (8,853,752)$ CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 77 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, 2023, the City recognized pension expense of $4,951,079. At September 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience 1,762,097$ (458,061)$ Changes in actuarial assumptions - (1,216,537) Difference between projected and actual investment earnings 6,317,220 - Contributions subsequent to the measurement date 4,880,905 - Totals 12,960,222$ (1,674,598)$ $4,880,905 reported as deferred outflows of resources related to the pension resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ended September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Net Deferred Year Outflows/(Inflows) December 31, of Resources 2024 1,890,038$ 2025 2,337,686 2026 4,695,502 2027 (2,518,507) Total 6,404,719$ CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 78 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.gov/departments/finance/annual-comprehensive-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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 79 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. For the year ending September 30, 2024, plan members contributed: Medical Plan Dental Vision Retiree Only 876.16$ 39.04$ 7.86$ Retiree plus Children 1,664.69 74.16 12.84 Retiree plus Spouse 2,015.15 89.78 15.24 Retiree plus Family 2,540.84 113.21 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 Retiree Retiree+ Retiree Retiree+ Retiree Retiree+ 10 to 14 years 15% 30% N/A N/A N/A N/A 15 to 19 years 25% 40% N/A N/A N/A N/A 20 to 24 years 35% 50% 35% 50% N/A N/A 25 to 29 years 50% 65% 50% 65% N/A N/A 30+ years 60% 75% 60% 75% N/A N/A Hired Pre-10/2006 Hired Post-10/2006 Hired Post-10/2014 Discounts on Premiums CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 80 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, 2023 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 58 Inactive plan members entitled to, but not yet receiving benefit payments 15 Active plan members 335 408 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 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 Strategic Range Target Allocation 9/30/2024 Allocation Equity 50-70% 60% 61% Fixed income 30-50% 35% 37% Cash 0-20% 5% 2% 100% 100% Rate of return. For the year ended September 30, 2024, the annual money-weighted rate of return on investments, net of investment expense, was 23.78%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 81 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, 2024: % of Asset Class Investment Vehicle Portfolio Fixed Income FDS Investment Grade 9.70% Fixed Income Dodge & Cox Income 9.30% Fixed Income iShares MBS ETF 9.30% Equity Schwab US Large-Cap ETF 7.20% Fixed Income iShares Core US Aggregate Bond ETF 7.00% Equity Columbia Contrarian Core Inst3 6.20% Equity iShares Russell Midcap ETF 5.80% Net OPEB Liability of the City The components of the net OPEB liability of the City at September 30 were as follows: 2024 2023 Total OPEB liability 20,038,221$ 21,378,634$ Plan fiduciary net position (15,081,619) (11,583,042) City's net OPEB liability 4,956,602$ 9,795,592$ Plan fiduciary net position as a percent of the total OPEB liability 75.26% 54.18% 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. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 82 NOTE 10. OTHER POSTEMPLOYMENT BENEFITS – CONTINUED Actuarial Methods and Assumptions – Continued An actuarial valuation was performed as of October 1, 2023 using the entry age normal actuarial cost method. The liability was then rolled forward to the measurement date of September 30, 2024. The actuarial assumptions include: Inflation 2.50% per annum Salary increases 3.00% per annum Investment rate of return 7.50% Healthcare cost trend rates 6.51% with annual increases/decreases to an ultimate rate of 4.2% in 2048 Dental cost trend rates 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. 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 6.58% with an expected standard deviation of 9.7%. 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 (6.5%) Discount Rate (7.5%) 1% Increase (8.5%) Net OPEB liability 8,436,358$ 4,956,602$ 2,197,703$ CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 83 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: 1% Decrease Current Trend Rates (6.51%) 1% Increase Net OPEB liability 1,941,033$ 4,956,602$ 8,790,444$ Net OPEB Liability Total OPEB Liability (a) Plan Fiduciary Net Position (b) Net OPEB Liability (a) - (b) Balance at 9/30/2023 21,378,634$ 11,583,042$ 9,795,592$ Changes for the year: Service cost 175,050 - 175,050 Interest 1,307,026 - 1,307,026 Difference between expected and actual experience (3,738,721) - (3,738,721) Changes of assumptions 1,428,452 - 1,428,452 Difference in expected and actual net investment income - 887,464 (887,464) Contributions - employer - 1,275,600 (1,275,600) Contributions - other 263,735 263,735 - Net investment income - 1,847,733 (1,847,733) Benefit payments, including refunds of employee contributions (604,237) (604,237) - Administrative expense (171,718) (171,718) - Net changes (1,340,413) 3,498,577 (4,838,990) Balance at 9/30/2024 20,038,221$ 15,081,619$ 4,956,602$ Increase (Decrease) CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 84 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, 2024, the City recognized OPEB expense of $15,079. At September 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Difference between expected and actual investment experience -$ (3,498,106)$ Changes in actuarial assumptions 1,602,332 (1,042,521) Difference between projected and actual investment earnings - (716,425) Total 1,602,332$ (5,257,052)$ 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 2025 (577,327)$ 2026 (387,309) 2027 (1,041,216) 2028 (988,790) 2029 (330,038) 2030 (330,040) Total (3,654,720)$ NOTE 11. EXCESS OF EXPENDITURES OVER APPROPRIATIONS AND FUND DEFICIT For the year ended September 30, 2024, the following funds had excess of expenditures over appropriations: - Car rental special revenue fund expenditures exceeded appropriations by $47,273. As of September 30, 2024, the Midtown PID fund had a deficit fund balance of $31,972. CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 85 NOTE 12. LEASE RECEIVABLES The City leases various property and buildings to other entities. The leases range from five to 23 years in length. The City received annual payments from these leases of $818,669. The City recognized $690,419 in lease revenue and $128,250 in interest revenue during the current fiscal year related to these leases. As of September 30, 2024, the City’s receivable and deferred inflows of resources for leases was $4,140,191 for governmental activities and $318,226 for business-type activities. The deferred inflow of resources associated with these leases will be recognized as revenue over the lease terms. The future principal and interest lease payments to be received as of September 30, 2024 were as follows: Fiscal Year Principal Interest Principal Interest Total 2025 $659,426 $102,297 $38,860 $4,040 $804,623 2026 452,183 85,208 39,386 3,514 580,291 2027 385,789 72,368 40,733 2,980 501,870 2028 404,202 59,406 42,432 2,418 508,458 2029 421,098 45,774 43,006 1,844 511,722 2030-2034 898,988 111,553 113,809 2,054 1,126,404 2035-2039 407,928 64,475 - - 472,403 2040-2044 483,964 24,949 - - 508,913 2045 26,613 79 - - 26,692 Total $4,140,191 $566,109 $318,226 $16,850 $5,041,376 Governmental Activities Business-Type Activities NOTE 13. CHANGE TO OR WITHIN THE FINANCIAL REPORTING ENTITY The City’s General CIP fund met the quantitative threshold for reporting as a major fund for the year ended September 30, 2024. The effect of this change is displayed on the financial statements. 86 87 REQUIRED SUPPLEMENTARY INFORMATION CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET) AND RELATED RATIOS FOR THE MEASUREMENT YEAR ENDED DECEMBER 31 88 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Total pension liability Service cost 6,375,962$ 5,966,121$ 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) 17,715,585 16,821,152 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 (396,247) 1,567,444 2,211,218 (728,824) (171,396) (206,128) 169,296 (361,966) (579,992) (752,184) Change in assumptions (1,543,563) - - - 145,747 - - - (595,757) - Benefit payments, including refunds (11,772,376) (10,845,200) (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 10,379,361 13,509,517 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 265,151,312 251,641,795 238,139,637 228,062,573 217,806,715 206,651,269 195,668,289 185,689,330 176,935,358 168,246,211 Total pension liability, ending of year 275,530,673$ 265,151,312$ 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 6,044,874$ 5,713,524$ 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 2,389,279 2,267,255 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 26,680,738 (18,380,677) 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 (11,772,376) (10,845,200) (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 (169,815) (159,083) (135,860) (104,023) (162,161) (111,206) (121,542) (121,371) (143,262) (90,113) Other (1,186) 189,833 930 (4,058) (4,871) (5,810) (6,160) (6,539) (7,076) (7,409) Net change in plan fiduciary net position 23,171,514 (21,214,348) 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 230,632,476 251,846,824 225,235,625 211,787,789 185,632,754 192,090,628 169,217,217 159,017,966 159,399,018 150,877,084 Plan fiduciary net position - ending 253,803,990$ 230,632,476$ 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 21,726,683$ 34,518,836$ (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 92.11% 86.98% 100.08% 94.58% 92.86% 85.23% 92.95% 86.48% 85.64% 90.09% Covered payroll 34,132,558$ 32,389,362$ 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 63.65% 106.57% (0.67%) 42.15% 54.95% 111.27% 51.44% 98.61% 103.65% 68.61% CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS – PENSION FOR THE FISCAL YEAR ENDED SEPTEMBER 30 89 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 Actuarially determined contributions 6,558,023$ 5,917,958$ 5,518,493$ 5,534,917$ 5,532,423$ 5,174,020$ 5,094,779$ 4,971,811$ 4,670,520$ 4,602,538$ Actual contributions (6,558,023) (5,917,958) (5,518,493) (5,534,917) (5,532,423) (5,174,020) (5,094,779) (4,971,811) (4,670,520) (4,602,538) Contributions deficiency (excess) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Covered payroll 35,591,209$ 33,832,208$ 31,442,237$ 30,853,753$ 31,348,108$ 29,411,252$ 28,640,420$ 28,113,691$ 26,464,297$ 25,453,407$ Ratio of actual contributions to covered payroll amount 18.43% 17.49% 17.55% 17.94% 17.65% 17.59% 17.79% 17.69% 17.65% 18.08% Notes to Schedule Valuation Date Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 21 years Asset Valuation Method 10 year smoothed market; 12% soft corridor Inflation 2.5% Salary Increases 3.60% to 11.85% including inflation Investment Rate of Return 6.75% Retirement Age Mortality Other information: Notes: There were no benefit changes during the year. Experience-based table of rates that vary by age. Last updated for the 2023 valuation pursuant to an experience study of the period ending 2022. Actuarially determined contribution rates are calculated as of December 31st each year and become effective in January, 13 months later. Post-retirement: 2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by 103% and female rates are mult iplied by 105%. The rates are projected on a fully generational basis by the most recent Scale MP-2021 (with immediate convergence). Pre-retirement: PUB (10) mortality tables with the 110% of the Public Safety table used for males and the 100% of the General Employee table used for females. The rates are projected on a fully generational basis by the most recent Scale MP-2021 (with immediate convergence). CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED SEPTEMBER 30 90 2024* 2023* 2022* 2021* 2020* 2019* 2018* 2017* Total OPEB liability Service cost 175,050$ 306,311$ 331,127$ 287,730$ 267,668$ 435,930$ 447,155$ 75,083$ Interest on total OPEB liability 1,307,026 1,531,512 1,603,744 1,539,416 1,379,257 1,360,548 1,271,483 825,331 Effect of changes of benefit terms - - - - - - - - Effect of difference between expected and actual experience (3,738,721) - (200,028) - (627,155) - 1,459,988 432,425 Contributions - other 263,735 252,575 246,671 281,524 276,885 270,205 - - Effect of changes of assumptions 1,428,452 - (1,824,415) - 1,322,815 - (798,143) 5,480,748 Administrative expense (171,718) (171,897) (144,973) (140,970) (131,481) (135,119) - - Benefit payments (604,237) (1,226,752) (1,053,109) (955,297) (898,811) (1,019,931) (1,230,281) (1,332,839) Net change in OPEB liability (1,340,413) 691,749 (1,040,983) 1,012,403 1,589,178 911,633 1,150,202 5,480,748 Beginning balance 21,378,634 20,686,885 21,727,868 20,715,465 19,126,287 18,214,654 17,064,452 11,583,704 Ending balance 20,038,221$ 21,378,634$ 20,686,885$ 21,727,868$ 20,715,465$ 19,126,287$ 18,214,654$ 17,064,452$ Plan fiduciary net position Contributions - employer 1,275,600$ 1,906,655$ 1,663,312$ 1,515,094$ 1,455,171$ 1,583,715$ 1,754,093$ 1,832,839$ Contributions - other 263,735 252,575 246,671 281,524 276,885 270,205 320,471 - Net investment income (loss) 887,464 754,490 (1,928,493) 668,472 577,387 502,656 381,824 559,716 Difference in expected and actual net investment income 1,847,733 262,122 - 950,076 11,026 (226,279) - - Benefit payments (604,237) (1,226,752) (1,053,109) (955,297) (898,811) (1,019,931) (1,230,281) (1,332,839) Administrative expense (171,718) (171,897) (144,973) (140,970) (131,481) (135,119) (147,597) (13,525) Net change in plan fiduciary net position 3,498,577 1,777,193 (1,216,592) 2,318,899 1,290,177 975,247 1,078,510 1,046,191 Beginning balance 11,583,042 9,805,849 11,022,441 8,703,542 7,413,365 6,438,118 5,359,608 4,313,417 Ending balance 15,081,619$ 11,583,042$ 9,805,849$ 11,022,441$ 8,703,542$ 7,413,365$ 6,438,118$ 5,359,608$ City's net OPEB liability ending 4,956,602$ 9,795,592$ 10,881,036$ 10,705,427$ 12,011,923$ 11,712,922$ 11,776,536$ 11,704,844$ Plan fiduciary net position as a % of the total OPEB liability 75.26% 54.18% 47.40% 50.73% 42.01% 38.76% 35.35% 31.41% Covered employee payroll 35,591,209$ 33,832,208$ 31,442,237$ 30,853,753$ 31,348,108$ 29,411,252$ 28,640,420$ 25,944,080$ City's net OPEB liability as a % of covered employee payroll 13.93% 28.95% 34.61% 34.70% 38.32% 39.82% 41.12% 45.12% * This schedule is presented to illustrate the requirement to show ten years of information. However, until a full ten-year tr end is available, the schedule will present the information that is available. CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS – OPEB TRUST FOR THE FISCAL YEAR ENDED SEPTEMBER 30 91 2024* 2023* 2022* 2021* 2020* 2019* 2018* 2017* Actuarially determined contribution 748,653$ 1,297,029$ 1,300,719$ 1,421,454$ 1,388,216$ 1,486,177$ 1,492,738$ 1,226,144$ Contributed in relation to the actuarially determined contribution 1,275,600 1,906,655 1,663,312 1,515,094 1,455,171 1,583,715 1,754,093 1,832,839 Contribution deficiency (excess) (526,947)$ (609,626)$ (362,593)$ (93,640)$ (66,955)$ (97,538)$ (261,355)$ (606,695)$ Covered employee payroll 35,591,209$ 33,832,208$ 31,442,237$ 30,853,753$ 31,348,108$ 29,411,252$ 28,640,420$ 25,944,080$ Contributions as a percentage of covered employee payroll 3.6% 5.6% 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 tr end is available, the schedule will present the information that is available. Notes to Schedule Significant assumptions used in preparation of actuarial valuation Valuation date 10/1/2023 Actuarial cost method Entry Age Normal Amortization method Level Dollar Method Remaining amortization period 23 years - closed period Amortization period for new losses 25 years - closed period Asset valuation method Market value Discount rate 7.5% Inflation 2.5% per annum Healthcare cost trend rates 6.51% increasing/decreasing annually to 4.2% in 2048+ Dental cost trend rates 3.0% per annum Payroll growth rate 3.0% per annum 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 headcount weighted mortality table with mortality improvement scale MP-2021. CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2024 92 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues General property tax Current and delinquent taxes 21,907,546$ 21,907,546$ 21,276,645$ (630,901)$ Penalty and interes t 75,000 75,000 30,778 (44,222) Total property tax 21,982,546 21,982,546 21,307,423 (675,123) Gross receipts tax Telephone line access fee 71,550 71,550 75,391 3,841 Electric company 1,662,860 1,662,860 1,721,471 58,611 Gas company 568,645 568,645 567,351 (1,294) Cable TV 180,000 180,000 181,734 1,734 City garbage service 345,177 345,177 368,597 23,420 Water and wastewater system 1,656,790 1,656,790 1,665,553 8,763 Others 238,885 238,885 247,196 8,311 Total gross receipts tax 4,723,907 4,723,907 4,827,293 103,386 General sales ta x 17,293,580 17,293,580 17,829,107 535,527 Fines and fees Municipal court fines 1,617,362 1,617,362 1,674,035 56,673 Jail income 716,625 716,625 1,128,723 412,098 Dog licenses and pound fees 7,500 7,500 8,755 1,255 Ambulance fees 936,000 936,000 1,218,619 282,619 Library fees 5,214 5,214 7,878 2,664 Zoning fees 14,500 14,500 20,708 6,208 Deferred adjudication fee 73,978 73,978 59,032 (14,946) Total fines and fees 3,371,179 3,371,179 4,117,750 746,571 Licenses and permits Building permits 300,000 300,000 1,967,413 1,667,413 Miscellaneous permits 245,429 245,429 307,506 62,077 Minimum housing 96,600 96,600 59,073 (37,527) Total licenses and permits 642,029 642,029 2,333,992 1,691,963 Investment income 112,404 112,404 1,289,662 1,177,258 Intergovernmental 565,834 565,834 561,842 (3,992) Other revenues Rental income 485,050 485,050 767,563 282,513 Swimming pools 221,000 221,000 270,918 49,918 Miscellaneous income 220,295 220,295 412,219 191,924 Total other revenues 926,345 926,345 1,450,700 524,355 Total revenues 49,617,824 49,617,824 53,717,769 4,099,945 Budgeted Amounts CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2024 (Continued) 93 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Expenditures Current Culture and recreation 4,246,032$ 4,285,032$ 3,931,722$ 353,310$ Development services 1,099,025 1,099,025 1,073,819 25,206 General and administrative 14,292,047 14,097,209 13,045,417 1,051,792 Highways and streets 1,977,088 1,977,088 1,892,782 84,306 Public safet y 32,257,559 32,715,242 31,494,202 1,221,040 Debt service Principal - - 167,680 (167,680) Interest and fiscal charges - - 6,086 (6,086) Total expenditures 53,871,751 54,173,596 51,611,708 2,561,888 Excess (deficiency) of revenues over (under) expenditures (4,253,927) (4,555,772) 2,106,061 6,661,833 Other financing sources (uses) Issuance of subscription debt - - 1,046,792 1,046,792 Proceeds from sale of assets 5,000 5,000 8,650 3,650 Transfers in 3,672,917 3,672,917 3,682,112 9,195 Transfers out (7,779,195) (7,911,019) (7,910,242) 777 Total other financing sources (uses), net (4,101,278) (4,233,102) (3,172,688) 1,060,414 Net change in fund balance (8,355,205) (8,788,874) (1,066,627) 7,722,247 Fund balance, beginning of yea r 24,375,701 24,375,701 24,375,701 - Fund balance, end of year 16,020,496$ 15,586,827$ 23,309,074$ 7,722,247$ Budgeted Amounts CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE CAR RENTAL SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2024 94 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Car rental tax 17,717,551$ 17,717,551$ 20,228,890$ 2,511,339$ Investment income 352,750 352,750 1,302,551 949,801 Total revenues 18,070,301 18,070,301 21,531,441 3,461,140 Expenditures General and administrative 11,911,700 13,065,681 13,485,926 (420,245) Capital outlay 372,972 372,972 - 372,972 Total expenditures 12,284,672 13,438,653 13,485,926 (47,273) Excess of revenues over expenditures 5,785,629 4,631,648 8,045,515 3,413,867 Other financing uses Transfers out (10,311,170) (10,311,170) (10,311,170) - Total other financing uses (10,311,170) (10,311,170) (10,311,170) - Net change in fund balance (4,525,541) (5,679,522) (2,265,655) 3,413,867 Fund balance, beginning of year 13,342,704 13,342,704 13,342,704 - Fund balance, end of year 8,817,163$ 7,663,182$ 11,077,049$ 3,413,867$ Budgeted Amounts CITY OF EULESS, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 95 NOTE 1. BUDGET BASIS OF ACCOUNTING The City Council adheres to the following procedures in establishing budgetary data reflected in the financial statements: 1. 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. 96 97 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 98 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 drug seizures and 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 #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. 99 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. Street 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 Parc, formerly Euless Midtown. Car Rental CIP Fund – to account for building and infrastructure projects that are funded from short-term motor vehicle rental tax. CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2024 100 Police Crime Drug Control and Hotel/ Half-Penny Enforce- Prevention Motel Sales Tax ment District Grant Fund Fund Fund Fund Fund ASSETS Deposits and investments 2,535,166$ 6,630,954$ 850,331$ 787,884$ -$ Accounts receivable 320,856 - - - 82,017 Property taxes receivable - - - - - Accrued interest receivable - 20,517 - - - Due from other governments - 1,290,802 8,050 647,427 - Lease receivable - 1,597,887 - - - Prepaids and deposits - 1,903 - 78,334 - Restricted deposits and investments - - - - - Total assets 2,856,022$ 9,542,063$ 858,381$ 1,513,645$ 82,017$ LIABILITIES Accounts payable 262,821$ 216,593$ 177,048$ 5,657$ 81,610$ Contracts payable - - - - - Accrued salaries and wages - 81,802 - 88,078 407 Total liabilities 262,821 298,395 177,048 93,735 82,017 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other - - - - - Deferred inflows related to leases - 1,597,887 - - - Total deferred inflows of resources - 1,597,887 - - - FUND BALANCES Nonspendable - 1,903 - 78,334 - Restricted, debt service - 425,522 - - - Restricted, capital projects - - - - - Restricted, developer agreements - - - - - Restricted, juvenile case management - - - - - Restricted, cable PEG fees - - - - - Restricted, historical preservation 843 - - - - Assigned 2,592,358 7,218,356 681,333 1,341,576 - Unassigned - - - - - Total fund balances 2,593,201 7,645,781 681,333 1,419,910 - Total liabilities, deferred inflows of resources, and fund balances 2,856,022$ 9,542,063$ 858,381$ 1,513,645$ 82,017$ Special Revenue Funds 101 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 192,119$ 252,928$ 750,000$ 6,031,276$ 7,229$ 1,130,020$ 650,638$ 19,818,545$ - - - 74,148 - 1,800 15,000 493,821 - - - 58,659 - 6,289 - 64,948 - - - - - - - 20,517 - - - - - - - 1,946,279 - - - - - - - 1,597,887 - - - - - - 3,435 83,672 - - - - - - - - 192,119$ 252,928$ 750,000$ 6,164,083$ 7,229$ 1,138,109$ 669,073$ 24,025,669$ -$ 107$ -$ -$ 2,731$ -$ -$ 746,567$ - - - - - - - - 1,156 691 - - - - - 172,134 1,156 798 - - 2,731 - - 918,701 - - - - 36,470 - - 36,470 - - - - - - - 1,597,887 - - - - 36,470 - - 1,634,357 - - - - - - 3,435 83,672 - - 750,000 - - - - 1,175,522 - - - - - - - - - - - - - - - - - 252,130 - - - - - 252,130 - - - - - - 665,638 665,638 - - - - - - - 843 190,963 - - 6,164,083 - 1,138,109 - 19,326,778 - - - - (31,972) - - (31,972) 190,963 252,130 750,000 6,164,083 (31,972) 1,138,109 669,073 21,472,611 192,119$ 252,928$ 750,000$ 6,164,083$ 7,229$ 1,138,109$ 669,073$ 24,025,669$ Special Revenue Funds CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2024 102 Half-Penny Sales Tax Developers' Street Redevelopment CIP Contribution CIP CIP Fund Fund Fund Fund ASSETS Deposits and investments 2,916,989$ 2,884,810$ 3,646,472$ 1,156,645$ Accounts receivable - - 391 - Property taxes receivable - - - - Accrued interest receivable - - - - Due from other governments - - - - Lease receivable - - - - Prepaids and deposits - - - - Restricted deposits and investments - - 6,027,640 - Total assets 2,916,989$ 2,884,810$ 9,674,503$ 1,156,645$ LIABILITIES Accounts payable 23,614$ 108,022$ 402,280$ 9,270$ Contracts payable - - 20,228 - Accrued salaries and wages - - - - Total liabilities 23,614 108,022 422,508 9,270 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other - - - - Deferred inflows related to leases - - - - Total deferred inflows of resources - - - - FUND BALANCES Nonspendable - - - - Restricted, debt service - - - - Restricted, capital projects - - 6,027,640 - Restricted, developer agreements - 2,776,788 - - Restricted, juvenile case management - - - - Restricted, cable PEG fees - - - - Restricted, historical preservation - - - - Assigned 2,893,375 - 3,224,355 1,147,375 Unassigned - - - - Total fund balances 2,893,375 2,776,788 9,251,995 1,147,375 Total liabilities, deferred inflows of resources, and fund balances 2,916,989$ 2,884,810$ 9,674,503$ 1,156,645$ Capital Project Funds 103 TIRZ #4 Car Capital Total Midtown Midtown Rental Project Non-major Reserve CIP CIP Funds Governmental Fund Fund Fund Totals Funds 999,725$ -$ 228,573$ 11,833,214$ 31,651,759$ - - - 391 494,212 - - - - 64,948 - - - - 20,517 - - - - 1,946,279 - - - - 1,597,887 - - - - 83,672 60,991 - 6,088,631 6,088,631 999,725$ 60,991$ 228,573$ 17,922,236$ 41,947,905$ -$ -$ 62,254$ 605,440$ 1,352,007$ - - - 20,228 20,228 - - - - 172,134 - - 62,254 625,668 1,544,369 - - - - 36,470 - - - - 1,597,887 - - - - 1,634,357 - - - - 83,672 999,725 - - 999,725 2,175,247 - 60,991 - 6,088,631 6,088,631 - - - 2,776,788 2,776,788 - - - - 252,130 - - - - 665,638 - - - - 843 - - 166,319 7,431,424 26,758,202 - - - - (31,972) 999,725 60,991 166,319 17,296,568 38,769,179 999,725$ 60,991$ 228,573$ 17,922,236$ 41,947,905$ Capital Project Funds CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2024 104 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 1,655,528 - - - - General sales tax - 7,331,559 - 3,649,530 - Investment income 128,203 302,146 24,913 26,877 - Drug enforcement revenues - - 156,853 - - Intergovernmental - - - - 116,415 Rents and royalties - 81,878 - - - Other revenues - 1,530 - 12,627 - Total revenues 1,783,731 7,717,113 181,766 3,689,034 116,415 Expenditures Culture and recreation - 3,709,316 - - - Development services - 237,928 - - - General and administrative 314,304 268,845 - - - Highways and streets - - - - - Public safety - - 10,904 3,331,735 52,396 Debt service Principal - 234,634 - - - Interest and fiscal charges - 165,847 - - - Capital outlay 21,608 289,732 - 21,957 75,750 Total expenditures 335,912 4,906,302 10,904 3,353,692 128,146 Excess (deficiency) of revenues over (under) expenditures 1,447,819 2,810,811 170,862 335,342 (11,731) Other financing sources (uses) Transfers in - - 5,000 - 11,731 Transfers out (1,212,648) (1,023,838) - (1,255,000) - Total other financing sources (uses), net (1,212,648) (1,023,838) 5,000 (1,255,000) 11,731 Net change in fund balances 235,171 1,786,973 175,862 (919,658) - Fund balance, beginning of year, as previously presented 2,358,030 5,858,808 505,471 2,339,568 - Change within financial reporting entity - - - - - Fund balance, end of year 2,593,201$ 7,645,781$ 681,333$ 1,419,910$ -$ Special Revenue Funds 105 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 -$ -$ -$ 1,908,024$ -$ 954,523$ -$ 2,862,547$ - - - - - - 59,991 1,715,519 - - - 488,345 - 11,445 - 11,480,879 10,201 11,309 - 277,141 2,413 - 31,570 814,773 - - - - - - - 156,853 - - - - - - - 116,415 - - - - - - - 81,878 - 45,362 - - 261,316 - - 320,835 10,201 56,671 - 2,673,510 263,729 965,968 91,561 17,549,699 - - - - - - - 3,709,316 - - - - - - - 237,928 - 23,961 - - 9,190 - 34,076 650,376 - - - - - - - - 34,776 - - - - - - 3,429,811 - - - - - - - 234,634 - - - - - - - 165,847 - - - - - - - 409,047 34,776 23,961 - - 9,190 - 34,076 8,836,959 (24,575) 32,710 - 2,673,510 254,539 965,968 57,485 8,712,740 - - - - - - - 16,731 - - - (1,130,113) (322,438) (742,400) - (5,686,437) - - - (1,130,113) (322,438) (742,400) - (5,669,706) (24,575) 32,710 - 1,543,397 (67,899) 223,568 57,485 3,043,034 215,538 219,420 750,000 4,620,686 35,927 914,541 611,588 18,429,577 - - - - - - - - 190,963$ 252,130$ 750,000$ 6,164,083$ (31,972)$ 1,138,109$ 669,073$ 21,472,611$ Special Revenue Funds CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – NON-MAJOR GOVERNMENTAL FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2024 106 Formerly Half-Penny Non-major Sales Tax Developers' Street General Redevelopment CIP Contribution CIP CIP CIP Fund Fund Fund Fund Fund Revenues General property tax -$ -$ -$ -$ Gross receipts tax - - - - General sales tax - - - - Investment income 172,648 132,269 519,084 67,264 DEA revenues - - - - Intergovernmental 117,300 - 6,000 - Rents and royalties - - - - Other revenues - 496,408 - - Total revenues 289,948 628,677 525,084 67,264 Expenditures Culture and recreation 69,078 618 - - Development services - - - - General and administrative - - - 42,234 Highways and streets - - 57,147 - Public safety - - - - Debt service Principal - - - - Interest and fiscal charges - - - - Capital outlay 1,650,169 - 1,533,506 1,494,299 Total expenditures 1,719,247 618 1,590,653 1,536,533 Excess (deficiency) of revenues over (under) expenditures (1,429,299) 628,059 (1,065,569) (1,469,269) Other financing sources (uses) Transfers in 882,700 - 3,458,747 1,500,000 Transfers out - (157,482) - - Total other financing sources (uses), net 882,700 (157,482) 3,458,747 1,500,000 Net change in fund balances (546,599) 470,577 2,393,178 30,731 Fund balance, beginning of year, as previously presented 3,439,974 2,306,211 6,858,817 12,637,407 1,116,644 Change within financial reporting entity - - - (12,637,407) - Fund balance, end of year 2,893,375$ 2,776,788$ 9,251,995$ -$ 1,147,375$ Capital Project Funds 107 TIRZ #4 Car Capital Total Midtown Midtown Rental Project Non-major Reserve CIP CIP Funds Governmental Fund Fund Fund Totals Funds -$ -$ -$ -$ 2,862,547$ - - - - 1,715,519 - - - - 11,480,879 - - 28,457 919,722 1,734,495 - - - - 156,853 - - - 123,300 239,715 - - - - 81,878 - - - 496,408 817,243 - - 28,457 1,539,430 19,089,129 - - - 69,696 3,779,012 - - - - 237,928 - 8,484 443 51,161 701,537 - - - 57,147 57,147 - - - - 3,429,811 - - - - 234,634 - - - - 165,847 - - 1,074,727 5,752,701 6,161,748 - 8,484 1,075,170 5,930,705 14,767,664 - (8,484) (1,046,713) (4,391,275) 4,321,465 - - - 5,841,447 5,858,178 - - - (157,482) (5,843,919) - - - 5,683,965 14,259 - (8,484) (1,046,713) 1,292,690 4,335,724 999,725 69,475 1,213,032 28,641,285 47,070,862 - - - (12,637,407) (12,637,407) 999,725$ 60,991$ 166,319$ 17,296,568$ 38,769,179$ Capital Project Funds 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, 2024 108 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Gross receipts tax 1,605,135$ 1,605,135$ 1,655,528$ 50,393$ Investment income 27,755 27,755 128,203 100,448 Total revenues 1,632,890 1,632,890 1,783,731 150,841 Expenditures General and administrative 674,430 674,430 335,912 338,518 Total expenditures 674,430 674,430 335,912 338,518 Excess of revenues over expenditures 958,460 958,460 1,447,819 489,359 Other financing uses Transfers out (1,217,140) (1,217,140) (1,212,648) 4,492 Total other financing uses (1,217,140) (1,217,140) (1,212,648) 4,492 Net change in fund balance (258,680) (258,680) 235,171 493,851 Fund balance, beginning of year 2,358,030 2,358,030 2,358,030 - Fund balance, end of year 2,099,350$ 2,099,350$ 2,593,201$ 493,851$ Budgeted Amounts 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, 2024 109 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues General sales tax 7,087,974$ 7,087,974$ 7,331,559$ 243,585$ Investment income 32,157 32,157 302,146 269,989 Rents and royalties 115,267 115,267 81,878 (33,389) Other revenue - - 1,530 1,530 Total revenues 7,235,398 7,235,398 7,717,113 481,715 Expenditures Culture and recreation 4,363,123 4,363,123 3,999,048 364,075 Development services 1,087,800 1,087,800 237,928 849,872 General and administrative 378,367 378,367 268,845 109,522 Debt service Principal 230,000 230,000 234,634 (4,634) Interest and fiscal charges 165,626 165,626 165,847 (221) Total expenditures 6,224,916 6,224,916 4,906,302 1,318,614 Excess of revenues over expenditures 1,010,482 1,010,482 2,810,811 1,800,329 Other financing sources (uses) Transfers out (1,096,890) (1,096,890) (1,023,838) 73,052 Total other financing sources (uses), net (1,096,890) (1,096,890) (1,023,838) 73,052 Net change in fund balance (86,408) (86,408) 1,786,973 1,873,381 Fund balance, beginning of year 5,858,808 5,858,808 5,858,808 - Fund balance, end of year 5,772,400$ 5,772,400$ 7,645,781$ 1,873,381$ Budgeted Amounts 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, 2024 110 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Investment income 15,729$ 15,729$ 24,913$ 9,184$ Drug enforcement revenues 15,000 15,000 156,853 141,853 Total revenues 30,729 30,729 181,766 151,037 Expenditures Public safety 220,000 220,000 10,904 209,096 Total expenditures 220,000 220,000 10,904 209,096 Excess (deficiency) of revenues over (under) expenditures (189,271) (189,271) 170,862 360,133 Other financing sources Transfers in 5,000 5,000 5,000 - Total other financing sources 5,000 5,000 5,000 - Net change in fund balance (184,271) (184,271) 175,862 360,133 Fund balance, beginning of year 505,471 505,471 505,471 - Fund balance, end of year 321,200$ 321,200$ 681,333$ 360,133$ Budgeted Amounts 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, 2024 111 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues General sales tax 3,500,062$ 3,500,062$ 3,649,530$ 149,468$ Other revenue 10,925 10,925 12,627 1,702 Investment income 21,181 21,181 26,877 5,696 Total revenues 3,532,168 3,532,168 3,689,034 156,866 Expenditures Public safety 3,556,279 3,556,279 3,353,692 202,587 Total expenditures 3,556,279 3,556,279 3,353,692 202,587 Excess (deficiency) of revenues over (under) expenditures (24,111) (24,111) 335,342 359,453 Other financing uses Transfers out (1,255,000) (1,255,000) (1,255,000) - Total other financing uses (1,255,000) (1,255,000) (1,255,000) - Net change in fund balance (1,279,111) (1,279,111) (919,658) 359,453 Fund balance, beginning of year 2,339,568 2,339,568 2,339,568 - Fund balance, end of year 1,060,457$ 1,060,457$ 1,419,910$ 359,453$ Budgeted Amounts CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL GRANT SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2024 112 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Intergovernmental 812,915$ 812,915$ 116,415$ (696,500)$ Total revenues 812,915 812,915 116,415 (696,500) Expenditures Public safety 950,445 950,445 128,146 822,299 Total expenditures 950,445 950,445 128,146 822,299 Excess (deficiency) of revenues over (under) expenditures (137,530) (137,530) (11,731) 125,799 Other financing sources (uses) Transfers in 137,530 137,530 11,731 (125,799) Transfers out (635,925) (635,925) - 635,925 Total other financing sources (uses), net (498,395) (498,395) 11,731 510,126 Net change in fund balance (635,925) (635,925) - 635,925 Fund balance, beginning of year - - - - Fund balance, end of year (635,925)$ (635,925)$ -$ 635,925$ Budgeted Amounts CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL POLICE SEIZED ASSET SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2024 113 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Investment income 9,826$ 9,826$ 10,201$ 375$ Total revenues 9,826 9,826 10,201 375 Expenditures Public safety 51,048 51,048 34,776 16,272 Total expenditures 51,048 51,048 34,776 16,272 Net change in fund balance (41,222) (41,222) (24,575) 16,647 Fund balance, beginning of year 215,538 215,538 215,538 - Fund balance, end of year 174,316$ 174,316$ 190,963$ 16,647$ Budgeted Amounts 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, 2024 114 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Investment income 6,251$ 6,251$ 11,309$ 5,058$ Other revenues 46,277 46,277 45,362 (915) Total revenues 52,528 52,528 56,671 4,143 Expenditures General and administrative 40,005 40,005 23,961 16,044 Total expenditures 40,005 40,005 23,961 16,044 Net change in fund balance 12,523 12,523 32,710 20,187 Fund balance, beginning of year 219,420 219,420 219,420 - Fund balance, end of year 231,943$ 231,943$ 252,130$ 20,187$ Budgeted Amounts 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, 2024 115 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues General property tax 2,023,408$ 2,023,408$ 1,908,024$ (115,384)$ General sales ta x 430,212 430,212 488,345 58,133 Investment income 137,686 137,686 277,141 139,455 Total revenues 2,591,306 2,591,306 2,673,510 82,204 Other financing uses Transfers out (1,130,113) (1,130,113) (1,130,113) - Total other financing uses (1,130,113) (1,130,113) (1,130,113) - Net change in fund balance 1,461,193 1,461,193 1,543,397 82,204 Fund balance, beginning of year 4,620,686 4,620,686 4,620,686 - Fund balance, end of year 6,081,879$ 6,081,879$ 6,164,083$ 82,204$ Budgeted Amounts 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, 2024 116 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Other revenues 361,321$ 361,321$ 261,316$ (100,005)$ Investment income 5,143 5,143 2,413 (2,730) Total revenues 366,464 366,464 263,729 (102,735) Expenditures General and administrative 38,883 38,883 9,190 29,693 Total expenditures 38,883 38,883 9,190 29,693 Excess (deficiency) of revenues over (under) expenditures 327,581 327,581 254,539 (73,042) Other financing uses Transfers out (322,438) (322,438) (322,438) - Total other financing uses (322,438) (322,438) (322,438) - Net change in fund balance 5,143 5,143 (67,899) (73,042) Fund balance, beginning of year 35,927 35,927 35,927 - Fund balance, end of year 41,070$ 41,070$ (31,972)$ (73,042)$ Budgeted Amounts 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, 2024 117 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Property tax revenues 1,028,582$ 1,028,582$ 954,523$ (74,059)$ General sales tax 4,690 4,690 11,445 6,755 Total revenues 1,033,272 1,033,272 965,968 (67,304) Other financing uses Transfers out (742,400) (742,400) (742,400) - Total other financing uses (742,400) (742,400) (742,400) - Net change in fund balance 290,872 290,872 223,568 (67,304) Fund balance, beginning of year 914,541 914,541 914,541 - Fund balance, end of year 1,205,413$ 1,205,413$ 1,138,109$ (67,304)$ Budgeted Amounts 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, 2024 118 Variance with Actual Final Budget GAAP Positive Original Final Basis (Negative) Revenues Gross receipts tax 74,032$ 74,032$ 59,991$ (14,041)$ Investment income 21,602 21,602 31,570 9,968 Total revenues 95,634 95,634 91,561 (4,073) Expenditures General and administrative 35,600 35,600 34,076 1,524 Capital outlay 84,400 84,400 - 84,400 Total expenditures 120,000 120,000 34,076 85,924 Net change in fund balance (24,366) (24,366) 57,485 81,851 Fund balance, beginning of year 611,588 611,588 611,588 - Fund balance, end of year 587,222$ 587,222$ 669,073$ 81,851$ Budgeted Amounts 119 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. CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2024 120 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total Current Assets Deposits and investments 25,031,378$ 8,153,376$ 3,168,722$ 36,353,476$ Accounts receivable - 535,485 173,235 708,720 Prepaid expenses 779,071 - - 779,071 Accrued interest receivable 230,186 65,698 9,306 305,190 Total current assets 26,040,635 8,754,559 3,351,263 38,146,457 Non-current Assets Property, plant, and equipment, at cost Equipment 20,566,693 - 107,568 20,674,261 Less accumulated depreciation 12,877,933 - 63,660 12,941,593 Net property, plant, and equipment 7,688,760 - 43,908 7,732,668 Total assets 33,729,395 8,754,559 3,395,171 45,879,125 Current Liabilities Accounts payable 344,834 131,842 282,291 758,967 Accrued salary and wages - 4,454 6,065 10,519 Current portion of compensated absences - - 256 256 Accrued insurance claims - 633,001 - 633,001 Total current liabilities 344,834 769,297 288,612 1,402,743 Non-current Liabilities Compensated absences - - 2,304 2,304 Total non-current liabilities - - 2,304 2,304 Total liabilities 344,834 769,297 290,916 1,405,047 Net investment in capital assets 7,688,760 - 43,908 7,732,668 Unrestricted 25,695,801 7,985,262 3,060,347 36,741,410 Total net position 33,384,561$ 7,985,262$ 3,104,255$ 44,474,078$ ASSETS LIABILITIES NET POSITION CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2024 121 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total Operating revenues Insurance premiums -$ 7,212,239$ 528,657$ 7,740,896$ Service fees and miscellaneous 4,593,672 1,670,128 - 6,263,800 Total operating revenues 4,593,672 8,882,367 528,657 14,004,696 Operating expenses General and administrative 403,110 1,432,287 109,563 1,944,960 Insurance costs - 5,223,078 1,071,333 6,294,411 Depreciation 2,044,435 - 9,994 2,054,429 Total operating expenses 2,447,545 6,655,365 1,190,890 10,293,800 Operating income (loss) 2,146,127 2,227,002 (662,233) 3,710,896 Nonoperating revenues Gain on sale of capital assets 329,258 - - 329,258 Investment income 1,163,705 356,100 138,281 1,658,086 Total nonoperating revenues 1,492,963 356,100 138,281 1,987,344 Income (loss) before transfers 3,639,090 2,583,102 (523,952) 5,698,240 Transfers Transfers in 717,553 131,824 900,000 1,749,377 Transfers out (1,834,236) - - (1,834,236) Total transfers (1,116,683) 131,824 900,000 (84,859) Change in net position 2,522,407 2,714,926 376,048 5,613,381 Net position, beginning of year 30,862,154 5,270,336 2,728,207 38,860,697 Net position, end of year 33,384,561$ 7,985,262$ 3,104,255$ 44,474,078$ CITY OF EULESS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2024 122 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total OPERATING ACTIVITIES Cash received from customers 4,593,672$ 9,949,428$ 414,307$ 14,957,407$ Cash payments to suppliers for goods and services 215,876 (6,876,806) (1,096,142) (7,757,072) Cash payments to employees for services - (59,129) (78,881) (138,010) Net cash provided by (used in) operating activities 4,809,548 3,013,493 (760,716) 7,062,325 NONCAPITAL FINANCING ACTIVITIES Transfers in 717,553 131,824 900,000 1,749,377 Transfers out (1,834,236) - - (1,834,236) Net cash provided by noncapital financing activities (1,116,683) 131,824 900,000 (84,859) CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition/construction of capital assets (2,824,749) - - (2,824,749) Proceeds from sale of capital assets 383,379 - - 383,379 Net cash used in capital and related financing activities (2,441,370) - - (2,441,370) INVESTING ACTIVITIES Interest received on investments 1,124,191 343,803 138,099 1,606,093 Net cash provided by investing activities 1,124,191 343,803 138,099 1,606,093 Net change in cash and cash equivalents 2,375,686 3,489,120 277,383 6,142,189 Cash and cash equivalents, beginning of year 22,655,692 4,664,256 2,891,339 30,211,287 Cash and cash equivalents, end of year 25,031,378$ 8,153,376$ 3,168,722$ 36,353,476$ Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) 2,146,127$ 2,227,002$ (662,233)$ 3,710,896$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation expense 2,044,435 - 9,994 2,054,429 Changes in assets and liabilities Receivables - 1,067,061 (114,350) 952,711 Prepaids 279,184 - - 279,184 Accounts payable 339,802 72,690 5,006 417,498 Accrued salaries and wages - (261) 867 606 Accrued insurance claims - (352,999) - (352,999) Net cash provided by (used in) operating activities 4,809,548$ 3,013,493$ (760,716)$ 7,062,325$ Reconciliation of cash to balance sheet: Cash - current 25,031,378$ 8,153,376$ 3,168,722$ 36,353,476$ Cash and cash equivalents 25,031,378$ 8,153,376$ 3,168,722$ 36,353,476$ 123 STATISTICAL SECTION (Unaudited) 124 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 15-17 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. CITY OF EULESS, TEXAS NET POSITION BY COMPONENT – LAST TEN FISCAL YEARS (Accrual Basis of Accounting – Unaudited) Table 1 125 Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Governmental activities Net investment in capital assets 99,539,958$ 108,135,655$ 113,509,089$ 112,710,338$ 99,744,023$ 104,018,729$ 130,459,839$ 123,862,163$ 130,728,192$ 133,199,143 Restricted 5,666,450 17,508,943 10,293,057 13,620,993 26,158,342 30,103,225 7,441,090 7,579,559 8,185,722 9,032,712 Unrestricted 17,302,574 3,610,521 12,466,943 10,698,663 18,071,669 25,147,659 37,117,415 60,034,944 70,572,250 94,336,872 Total governmental activities net position 122,508,982$ 129,255,119$ 136,269,089$ 137,029,994$ 143,974,034$ 159,269,613$ 175,018,344$ 191,476,666$ 209,486,164$ 236,568,727$ Business-type activities Net investment in capital assets 55,396,268$ 59,184,256$ 62,421,284$ 63,283,054$ 65,621,697$ 66,554,698$ 64,950,870$ 73,306,877$ 72,764,199$ 78,063,094$ Restricted for debt service 733,562 733,164 733,264 1,018,037 1,426,830 1,425,701 1,426,103 1,348,929 1,348,271 1,331,015 Restricted for capital projects 1,183,350 4,265,268 1,166,442 3,962,644 10,646,450 4,256,167 - - - - Restricted for impact fees 1,966,315 1,980,150 2,467,095 2,895,677 3,047,942 3,010,687 3,247,897 3,234,445 3,310,647 3,543,589 Unrestricted 12,554,695 11,122,601 14,528,797 12,286,319 7,130,279 14,728,131 23,441,214 26,895,689 29,510,603 32,455,879 Total business-type activities net position 71,834,190$ 77,285,439$ 81,316,882$ 83,445,731$ 87,873,198$ 89,975,384$ 93,066,084$ 104,785,940$ 106,933,720$ 115,393,577$ Primary government Net investment in capital assets 154,936,226$ 167,319,911$ 175,930,373$ 175,993,392$ 165,365,720$ 170,573,427$ 195,410,709$ 197,169,040$ 203,492,391$ 211,262,237$ Restricted 9,549,677 24,487,525 14,659,858 21,497,351 41,279,564 38,795,780 12,115,090 12,162,933 12,844,640 13,907,316 Unrestricted 29,857,269 14,733,122 26,995,740 22,984,982 25,201,948 39,875,790 60,558,629 86,930,633 100,082,853 126,792,751 Total primary government net position 194,343,172$ 206,540,558$ 217,585,971$ 220,475,725$ 231,847,232$ 249,244,997$ 268,084,428$ 296,262,606$ 316,419,884$ 351,962,304$ Source: Annual Comprehensive Financial Reports CITY OF EULESS, TEXAS CHANGES IN NET POSITION – LAST TEN FISCAL YEARS (Accrual Basis of Accounting – Unaudited) Table 2 126 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Expenses Governmental activities: Culture and recreation 6,468,332$ 6,998,904$ 7,349,035$ 7,070,484$ 7,330,168$ 5,538,905$ 6,890,021$ 7,714,207$ 8,016,590$ 8,564,660$ Development services 877,713 918,214 999,153 1,038,328 1,057,414 1,062,784 903,633 934,100 1,304,416 1,283,753 General and administrative 19,949,733 20,722,236 20,816,148 21,356,342 21,112,696 20,827,914 20,604,298 24,293,764 31,849,368 28,888,669 Highways and streets 3,374,422 3,708,184 4,143,412 3,787,336 7,193,189 3,601,998 3,905,567 4,015,628 4,591,037 4,765,479 Public safety 23,807,143 26,673,966 28,265,072 27,424,253 30,352,705 27,354,689 27,489,405 27,379,929 33,625,098 33,776,738 Interest on long-term debt 1,136,786 1,807,001 1,502,912 1,632,302 2,010,814 2,560,933 2,507,261 2,417,173 2,414,153 2,912,405 Total governmental activities expenses 55,614,129 60,828,505 63,075,732 62,309,045 69,056,986 60,947,223 62,300,185 66,754,801 81,800,662 80,191,704 Business-type activities: Water and wastewater 19,970,346 21,009,701 21,673,844 23,225,786 23,493,321 25,333,182 24,823,460 26,754,590 29,142,646 31,566,816 Drainage utility 1,319,999 1,414,483 1,396,736 1,515,183 1,563,021 1,502,275 1,571,836 1,517,199 1,746,667 1,594,990 Golf 4,155,834 4,409,773 4,632,475 4,764,095 4,731,810 3,997,255 4,201,337 4,703,615 5,330,321 5,741,319 Other recreation enterprises 2,009,582 2,211,065 2,321,414 2,416,337 2,270,768 1,491,533 1,568,441 2,024,308 2,025,933 2,224,471 Total business-type activities expenses 27,455,761 29,045,022 30,024,469 31,921,401 32,058,920 32,324,245 32,165,074 34,999,712 38,245,567 41,127,596 Total primary government expenses 83,069,890 89,873,527 93,100,201 94,230,446 101,115,906 93,271,468 94,465,259 101,754,513 120,046,229 121,319,300 Program Revenues Governmental activities: Fees, fines, and charges for services Culture and recreation 317,024 291,349 264,307 252,000 266,091 10,124 295,097 319,544 293,667 305,064 Development services 1,409,703 1,717,416 2,019,496 1,875,120 2,133,420 1,697,637 1,578,146 1,149,319 1,144,743 2,471,248 General and administrative 1,342,091 1,285,797 1,156,745 1,066,075 861,929 1,067,485 687,136 787,552 62,769 713,362 Highways and streets 93,258 350,920 607,588 988,302 1,114,507 1,075,865 982,070 717,124 287,767 261,316 Public safety 3,452,086 3,383,743 3,151,407 3,104,895 2,541,205 2,288,377 2,325,458 3,200,585 5,015,159 3,774,206 Operating grants and contributions 597,437 578,007 592,870 740,969 622,061 3,594,939 810,821 1,054,703 1,163,344 578,988 Capital grants and contributions 3,228,945 3,375,733 2,356,556 2,354,450 1,304,420 2,190,770 396,317 550,799 530,101 850,710 Total governmental activities program revenues 10,440,544 10,982,965 10,148,969 10,381,811 8,843,633 11,925,197 7,075,045 7,779,626 8,497,550 8,954,894 Business-type activities: Charges for services Water and wastewater 20,593,262 23,759,236 24,178,812 27,504,814 26,400,731 26,934,154 28,571,921 29,412,986 30,852,319 33,255,251 Drainage utility 716,595 725,152 730,202 818,622 826,711 833,890 842,003 1,193,159 958,637 945,588 Golf 4,168,578 4,187,728 4,247,345 4,337,003 4,067,026 3,363,915 4,350,610 5,131,494 5,159,600 4,558,952 Other recreation enterprises 1,848,434 2,059,413 2,168,944 2,123,825 2,197,926 884,286 1,433,139 1,905,434 2,001,970 2,158,949 Operating grants and contributions - - - - - - - 949,068 - - Capital grants and contributions 1,746,638 2,943,188 2,280,769 1,729,219 3,058,291 2,677,913 1,002,393 1,254,532 1,018,715 7,446,265 Total business-type activities program revenues 29,073,507 33,674,717 33,606,072 36,513,483 36,550,685 34,694,158 36,200,066 39,846,673 39,991,241 48,365,005 Total primary government program revenues 39,514,051 44,657,682 43,755,041 46,895,294 45,394,318 46,619,355 43,275,111 47,626,299 48,488,791 57,319,899 (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) CITY OF EULESS, TEXAS CHANGES IN NET POSITION – LAST TEN FISCAL YEARS (Accrual Basis of Accounting – Unaudited) – Continued Table 2 127 Net (Expense) Revenue Governmental activities (45,173,585)$ (49,845,540)$ (52,926,763)$ (51,927,234)$ (60,213,353)$ (49,022,026)$ (55,225,140)$ (58,975,175)$ (73,303,112)$ (71,236,810)$ Business-type activities 1,617,746 4,629,695 3,581,603 4,592,082 4,491,765 2,369,913 4,034,992 4,846,961 1,745,674 7,237,409 Total primary government net expense (43,555,839) (45,215,845) (49,345,160) (47,335,152) (55,721,588) (46,652,113) (51,190,148) (54,128,214) (71,557,438) (63,999,401) General Revenues and Other Changes in Net Position Governmental activities: Taxes Property taxes 14,358,074 14,752,044 16,656,028 18,630,301 20,428,821 22,837,075 24,195,500 24,974,349 27,569,306 30,132,666 Sales taxes 18,359,717 20,364,878 21,252,491 20,728,210 21,419,831 22,088,364 24,373,082 28,693,421 29,778,805 29,309,986 Car rental taxes 14,112,552 14,842,109 14,401,763 14,776,566 14,797,320 10,042,659 13,062,591 18,372,898 18,709,978 20,228,890 Mixed beverage taxes 84,533 101,503 128,250 154,035 138,219 146,188 171,687 201,348 215,340 213,322 Hotel/motel occupancy taxes 391,991 696,805 798,905 864,829 841,588 924,551 1,182,845 1,736,088 1,829,672 1,655,528 Gross receipts taxes 4,556,355 4,467,535 4,455,137 4,811,119 4,549,026 4,238,664 4,221,250 4,478,146 4,633,488 4,673,962 Investment income 127,367 271,786 451,406 963,670 1,882,696 1,054,661 123,646 804,074 5,180,191 8,706,659 Rents and royalties 1,166,832 1,105,829 1,149,534 1,223,788 1,348,465 1,462,429 1,574,739 1,567,269 1,345,885 1,144,401 Gain on sale of assets - - 124,792 - - - - - - - Miscellaneous 35,128 692,939 755,996 772,773 930,764 971,040 1,081,893 1,304,396 1,354,694 1,768,534 Transfers 722,702 (703,751) (233,569) 760,590 820,663 551,974 986,638 (6,698,492) 695,251 485,425 Total governmental activities 53,915,251 56,591,677 59,940,733 63,685,881 67,157,393 64,317,605 70,973,871 75,433,497 91,312,610 98,319,373 Business-type activities: Investment income 40,282 104,618 158,805 385,513 746,865 368,999 42,346 174,403 1,097,357 1,707,873 Gain on disposal of assets 4,199 13,185 57,466 2,873 9,500 (84,752) - - - - Transfers (722,702) 703,751 233,569 (760,590) (820,663) (551,974) (986,638) 6,698,492 (695,251) (485,425) Total business-type activities (678,221) 821,554 449,840 (372,204) (64,298) (267,727) (944,292) 6,872,895 402,106 1,222,448 Total primary government 53,237,030 57,413,231 60,390,573 63,313,677 67,093,095 64,049,878 70,029,579 82,306,392 91,714,716 99,541,821 Change in Net Position Governmental activities 8,741,666 6,746,137 7,013,970 11,758,647 6,944,040 15,295,579 15,748,731 16,458,322 18,009,498 27,082,563 Business-type activities 939,525 5,451,249 4,031,443 4,219,878 4,427,467 2,102,186 3,090,700 11,719,856 2,147,780 8,459,857 Total primary government 9,681,191$ 12,197,386$ 11,045,413$ 15,978,525$ 11,371,507$ 17,397,765$ 18,839,431$ 28,178,178$ 20,157,278$ 35,542,420$ (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) Source: Annual Comprehensive Financial Reports CITY OF EULESS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS – LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting – Unaudited) Table 3 128 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Fund Nonspendable 47,834$ 35,250$ 52,050$ 51,409$ 74,835$ 158,975$ 223,609$ 113,090$ 257,194$ 178,415$ Restricted 109,618 121,041 104,340 125,753 132,954 123,748 117,674 108,919 111,942 151,992 Assigned 116,336 113,655 107,657 121,708 135,720 145,057 164,801 187,649 203,295 207,125 Unreserved/Unassigned 10,775,542 11,973,524 13,185,421 14,255,823 16,630,106 19,790,726 20,240,670 24,896,247 23,803,270 22,771,542 Total general fund 11,049,330$ 12,243,470$ 13,449,468$ 14,554,693$ 16,973,615$ 20,218,506$ 20,746,754$ 25,305,905$ 24,375,701$ 23,309,074$ All Other Governmental Funds Nonspendable 15,399$ 7,738$ 22,028$ 12,427$ -$ 24,873$ 1,086$ 15,655$ 12,219$ 83,672$ Restricted for: Debt service 2,477,981 1,995,548 2,285,719 2,765,013 3,429,240 3,828,633 4,316,041 4,405,396 4,884,252 5,127,305 Capital projects 594,211 12,715,424 4,985,922 7,501,009 19,287,010 22,369,460 18,996,535 15,184,734 36,154,995 27,607,196 Other 2,455,941 2,718,045 2,952,158 3,229,218 3,309,138 3,081,384 3,007,375 3,065,244 3,125,843 3,695,399 Assigned 13,765,385 12,541,184 14,730,171 21,356,289 19,461,628 17,221,925 22,761,358 32,889,510 41,397,028 56,848,383 Unassigned - - - - - - - - - (31,972) Total all other governmental funds 19,308,917$ 29,977,939$ 24,975,998$ 34,863,956$ 45,487,016$ 46,526,275$ 49,082,395$ 55,560,539$ 85,574,337$ 93,329,983$ Source: Annual Comprehensive Financial Reports CITY OF EULESS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting – Unaudited) Table 4 129 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenues: Property tax 14,351,598$ 14,771,632$ 16,674,673$ 18,652,639$ 20,408,581$ 22,736,528$ 24,144,693$ 25,236,242$ 27,594,201$ 30,192,010$ Gross receipts tax 5,032,879 5,265,843 5,382,292 5,829,983 5,528,832 5,309,401 5,575,782 6,415,583 6,678,500 6,542,812 Sales tax 18,359,717 20,364,878 21,252,491 20,728,209 21,419,831 22,088,364 24,373,083 28,693,421 29,778,805 29,309,986 Car rental tax 14,112,552 14,842,109 14,401,763 14,776,566 14,797,320 10,042,659 13,062,591 18,372,898 18,709,978 20,228,890 Fines and fees 4,289,681 4,461,439 3,961,369 3,806,964 3,313,059 2,835,050 2,702,221 3,652,725 3,521,246 4,222,869 Licenses and permits 1,379,332 1,682,431 1,997,082 1,847,315 2,105,716 1,673,143 1,552,088 1,127,642 1,117,424 2,333,992 Investment income 105,443 237,949 385,769 821,642 1,623,907 869,827 103,170 711,952 4,174,317 7,048,574 Drug enforcement revenues 39,292 18,274 9,994 2,656 18,353 13,678 117,144 42,175 35,377 156,853 Intergovernmental 906,695 507,966 1,490,142 813,633 629,332 3,738,184 793,091 1,039,952 3,107,263 801,557 Rents and royalties 637,196 612,365 628,486 668,036 635,553 635,464 711,814 620,575 577,890 578,153 Other revenues 1,795,395 1,943,007 1,996,374 2,217,797 2,362,730 2,387,958 2,125,528 2,574,468 1,589,138 2,165,024 Total Revenues 61,009,780 64,707,893 68,180,435 70,165,440 72,843,214 72,330,256 75,261,205 88,487,633 96,884,139 103,580,720 Expenditures: Culture and recreation 5,704,520 6,023,057 6,324,436 6,372,535 6,258,492 6,785,529 6,120,370 7,335,273 7,241,266 7,710,734 Development services 882,212 862,571 931,119 1,036,278 1,001,587 1,065,028 924,919 993,827 1,187,377 1,311,747 General and administrative 18,357,428 18,975,116 18,985,489 19,790,021 19,038,500 18,727,050 19,881,563 22,755,689 28,851,315 25,118,702 Highways and streets 1,606,372 1,688,714 1,616,714 1,222,905 4,555,735 1,322,786 1,180,954 1,528,043 1,949,997 1,949,929 Public safety 23,521,280 24,698,550 26,068,993 26,977,362 27,738,238 28,322,488 28,534,814 30,662,083 32,871,946 34,924,013 Debt Service: Principal 4,284,197 3,530,000 3,848,825 4,761,697 4,828,848 4,605,000 4,635,000 4,631,897 6,036,322 6,606,130 Interest and fiscal charges 1,243,589 1,743,450 1,516,936 1,662,399 1,943,495 2,627,550 2,462,387 2,432,243 2,565,221 2,924,527 Issuance costs - - - - - - - - Capital outlay 9,086,345 14,871,624 10,600,631 6,839,864 8,979,048 16,839,574 14,879,407 15,714,436 9,220,011 18,421,645 Total expenditures 64,685,943 72,393,082 69,893,143 68,663,061 74,343,943 80,295,005 78,619,414 86,053,491 89,923,455 98,967,427 Excess (deficiency) of revenues over (under) expenditures (3,676,163) (7,685,189) (1,712,708) 1,502,379 (1,500,729) (7,964,749) (3,358,209) 2,434,142 6,960,684 4,613,293 Other Financing Sources (Uses): Issuance of lease - - 249,370 - - - - 259,697 - - Issuance of subscription debt - - - - - - - - 337,794 1,046,792 Issuance of debt 11,400,000 20,760,000 - 9,805,000 13,420,000 12,345,000 6,985,000 7,660,000 20,620,000 - Payment of escrow for refunding (6,074,450) - - - - - - - - - Premiums on issuance of debt 789,428 403,354 - 264,116 869,936 524,348 401,414 - 1,630,433 - Proceeds from sale of assets - - - 23,513 25,625 118,830 20,525 199,400 61,913 8,650 Transfers in 5,897,789 7,468,038 8,845,061 13,942,847 11,040,601 10,122,378 8,193,943 11,857,126 13,373,428 25,085,615 Transfers out (6,421,904) (9,083,041) (11,177,666) (14,544,672) (10,813,451) (10,861,657) (9,158,305) (11,373,070) (13,900,658) (24,065,331) Total other financing sources 5,590,863 19,548,351 (2,083,235) 9,490,804 14,542,711 12,248,899 6,442,577 8,603,153 22,122,910 2,075,726 Net change in fund balances 1,914,700$ 11,863,162$ (3,795,943)$ 10,993,183$ 13,041,982$ 4,284,150$ 3,084,368$ 11,037,295$ 29,083,594$ 6,689,019$ Debt service as a percentage of noncapital expenditures 9.9% 9.2% 9.0% 10.4% 10.4% 11.4% 11.1% 10.0% 10.7% 11.8% Source: Annual Comprehensive Financial Reports CITY OF EULESS, TEXAS ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY – LAST TEN FISCAL YEARS (Unaudited) Table 5 130 Total Less: Direct Fiscal Real Personal Total Tax-Exempt Total Taxable Tax Year Property Property Value Property Value Rate 2015 2,920,206,326$ 509,189,960$ 3,429,396,286$ 369,393,032$ 3,060,003,254$ 0.467500 2016 3,352,029,682 513,118,652 3,865,148,334 410,557,810 3,454,590,524 0.467500 2017 3,470,371,005 531,751,946 4,002,122,951 450,853,105 3,551,269,846 0.462500 2018 3,922,338,493 564,286,167 4,486,624,660 492,318,425 3,994,306,235 0.462500 2019 4,353,413,236 576,907,417 4,930,320,653 549,709,999 4,380,610,654 0.462500 2020 4,877,396,769 628,387,146 5,505,783,915 599,654,547 4,906,129,368 0.462500 2021 5,160,656,914 666,521,372 5,827,178,286 631,904,229 5,195,274,057 0.462500 2022 5,445,666,114 637,973,264 6,083,639,378 768,537,626 5,315,101,752 0.475000 2023 6,024,406,774 734,267,287 6,758,674,061 810,917,542 5,947,756,519 0.460000 2024 6,651,035,261 872,086,428 7,523,121,689 868,672,694 6,654,448,995 0.457500 Source: Tarrant Appraisal District Estimated Value CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of Assessed Value) – LAST TEN FISCAL YEARS (Unaudited) Table 6 131 Fiscal Year Operating / General Rate General Obligation Debt Service Total Direct Rate Hurst-Euless- Bedford ISD Grapevine- Colleyville ISD Tarrant County Tarrant County Hospital District Tarrant County College District 2015 0.364505 0.102995 0.467500 1.3750 1.3201 0.2640 0.2279 0.1495 2016 0.366571 0.100929 0.467500 1.3500 1.3201 0.2640 0.2279 0.1495 2017 0.363053 0.099447 0.462500 1.3160 1.3967 0.2540 0.2279 0.1447 2018 0.361056 0.101444 0.462500 1.2630 1.3967 0.2440 0.2244 0.1401 2019 0.371710 0.090790 0.462500 1.2730 1.3967 0.2340 0.2244 0.1361 2020 0.377974 0.084526 0.462500 1.2200 1.3267 0.2340 0.2244 0.1302 2021 0.381954 0.080546 0.462500 1.1980 1.3031 0.2340 0.2244 * 0.1302 2022 0.402888 0.072112 0.475000 1.1608 1.2751 0.2290 0.2244 0.1302 2023 0.370847 0.089153 0.460000 1.1098 1.1308 0.2240 0.2244 0.1302 2024 0.362697 0.094803 0.457500 0.9211 0.9247 0.1945 0.1945 0.1122 Sources: City of Euless Budget Office, Tarrant Appraisal District * Corrected in FY2024 Overlapping RatesCity Direct Rates CITY OF EULESS, TEXAS PRINCIPAL PROPERTY TAXPAYERS Current Year and Nine Years Ago (Unaudited) Table 7 132 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Taxpayer Value Value (1)Taxpayer Value Value (2) EAN Holdings, LLC 153,041,860$ 2.30 %EAN Holdings, LLC 70,545,871$ 2.31 % Stoneleigh at Bear Creek Apt./Fountainwood Apt. LLC 139,900,000 2.10 JLB Glade Road LP 56,970,000 1.86 Star Monticello LLC/Star Kensington LLC 131,900,000 1.98 Westdale Hills 2013 LP 56,777,649 1.86 Westdale Hills 2013 LP 129,955,128 1.95 UDR The Mandolin, LLC 52,839,810 1.73 1045 EDGE LLC 120,936,615 1.82 Hertz Corp 50,643,127 1.66 Creekwood Trinity Union LLC 112,000,000 1.68 Avis Rent A Car System LLC 45,397,075 1.48 CH Realty 1X-Knightvest MF Mandolin Owner LP 105,000,000 1.58 Stoneleigh at Bear Creek 45,200,000 1.48 Oakmont of Bear Creek LLP/Parkside on the Creek LLC 101,800,000 1.53 AT&T Mobility, LLC 45,106,267 1.47 BVA Glade SPE LLC 99,278,374 1.49 AP WP Vineyard Reit LLC 43,000,000 1.41 CMF 15 Portfolio LLC 91,000,000 1.37 AP WP Seramont Reit LLC 40,300,000 1.32 Total 1,184,811,977$ 17.80 %Total 506,779,799$ 16.58 % Source: Tarrant County Tax Office Notes: (1) Total Taxable Value including real and personal property for tax year 2023 (fiscal year 2024) is $6,654,448,995. (2) Total Taxable Value including real and personal property for tax year 2014 (fiscal year 2015) is $3,060,003,254. Fiscal Year 2024 Fiscal Year 2015 CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS – LAST TEN FISCAL YEARS (Unaudited) Table 8 133 Taxes Levied Adjustments Adjusted Within the to Levy in Taxes Levied Collections Fiscal Fiscal Year Subsequent for the Percentage in Subsequent Percentage Percentage Year of the Levy Years Fiscal Year Amount of Levy Years Amount of Levy Amount of Levy 2015 14,245,865 (194,614) 14,051,251 14,049,020 99.98% (10,556) 14,038,464 99.91% 12,787 0.09% 2016 13,671,980 870,928 14,542,908 14,481,033 99.57% 46,852 14,527,885 99.90% 15,023 0.10% 2017 15,828,162 378,113 16,206,275 16,191,555 99.91% 134 16,191,689 99.91% 14,586 0.09% 2018 18,199,497 (43,030) 18,156,467 18,131,429 99.86% 10,802 18,142,231 99.92% 14,236 0.08% 2019 19,850,820 (62,056) 19,788,764 19,769,021 99.89% (2,213) 19,766,808 99.89% 21,956 0.11% 2020 22,134,132 (149,576) 21,984,556 21,970,578 99.71% (20,681) 21,949,897 99.84% 34,659 0.16% 2021 23,340,538 (187,234) 23,153,304 23,180,576 99.86% (61,174) 23,119,402 99.85% 33,902 0.15% 2022 24,283,254 (172,749) 24,110,505 24,176,819 99.98% (112,697) 24,064,122 99.81% 46,383 0.19% 2023 26,481,396 (234,213) 26,247,183 26,384,135 99.63% (178,241) 26,205,894 99.84% 41,289 0.16% 2024 29,363,359 - 29,363,359 29,327,018 99.88% - 29,327,018 99.88% 36,341 0.12% Source: Tarrant County Tax Office and Tarrant Appraisal District Delinquent TaxesTotal Collection Collected within the Fiscal Year of the Levy CITY OF EULESS, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE – LAST TEN FISCAL YEARS (Unaudited) Table 9 134 General General C ertificates Sales Tax Premiums/W&S Obligation Premiums/Total Percentage Fiscal Obligation of Tax Revenue Discounts Revenue Refunding Discounts Primary of Personal Per Year Bonds Obligation Notes Bonds Leases Subscriptions on Debt Issues (1)Bonds Bonds Leases Subscriptions on Debt Issues (1)Government Income (2)Capita (2) 2015 20,655,000$ 8,365,000$ -$ 285,000$ -$ -$ 994,148$ $10,940,000 6,320,000$ -$ -$ 211,601$ 47,770,749$ 2.98% 884$ 2016 17,425,000 27,710,000 1,280,000 120,000 - - 1,497,876 10,305,000 5,695,000 - - 186,063 64,218,939 3.94% 1,184$ 2017 14,490,000 27,350,000 860,000 75,000 160,545 - 1,099,640 9,540,000 5,240,000 - - 168,446 58,983,631 3.62% 1,075$ 2018 11,460,000 35,660,000 735,000 40,000 83,848 - 1,211,502 11,545,000 4,770,000 - - 150,830 65,656,180 3.82% 1,190$ 2019 8,805,000 46,200,000 -1,565,000 - - 1,887,637 19,905,000 4,295,000 - - 133,213 82,790,850 4.49% 1,474$ 2020 6,040,000 51,710,000 1,110,000 5,450,000 - - 2,195,218 18,725,000 3,805,000 - - 115,597 89,150,815 4.48% 1,549$ 2021 4,115,000 54,930,000 2,370,000 5,245,000 (3)- (3)- 2,432,587 17,780,000 3,295,000 - - 97,984 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 16,835,000 2,775,000 203,458 -80,364 92,086,466 4.57% 1,581$ 2023 1,870,000 70,675,000 7,165,000 4,800,000 135,695 223,580 3,687,533 15,875,000 2,245,000 148,620 9,377 62,749 106,897,554 4.43% 1,737$ 2024 685,000 67,465,000 5,575,000 4,570,000 73,259 941,678 3,391,092 14,910,000 1,705,000 93,012 4,743 45,135 99,458,919 3.96% 1,616$ 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)See Table 13 for personal income and population data. (3)Figure updated in FY2022. Business-Type Activities Governmental Activities CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA AS OF SEPTEMBER 30, 2024 – (Unaudited) Table 10 135 Premiums/ Discounts General Certificates on Debt Issues Less: Debt Net General Debt Net General Fiscal Obligation of and Losses on Service Net O/S Estimated Taxable to Taxable Debt Per Year Bonds Obligation Refundings (1)Reserves (5)Debt Population (2)Value (3)Value Capita 2015 (4)26,975,000 8,365,000 1,228,901 813,841 35,755,060 54,050 3,060,003,254 1.17% 662$ 2016 23,120,000 27,710,000 1,446,619 2,055,746 51,220,598 54,250 3,454,590,524 1.48% 944$ 2017 19,730,000 27,350,000 1,288,664 2,398,220 46,970,169 54,870 3,551,269,846 1.32% 856$ 2018 16,230,000 35,660,000 1,381,631 2,913,866 51,357,490 55,170 3,994,306,235 1.29% 931$ 2019 13,100,000 46,200,000 2,038,856 3,415,104 58,923,477 56,160 4,380,610,654 1.35% 1,049$ 2020 9,845,000 51,710,000 2,066,094 3,676,024 60,944,795 57,550 4,906,129,368 1.24% 1,059$ 2021 7,410,000 54,930,000 2,546,006 4,153,924 61,731,807 58,260 5,195,274,057 1.19% 1,060$ 2022 5,785,000 52,560,000 2,105,638 3,242,540 58,207,823 61,480 5,315,101,752 1.10% 947$ 2023 4,115,000 70,675,000 3,543,290 3,715,908 75,617,107 61,544 5,947,756,519 1.27% 1,229$ 2024 2,390,000 67,465,000 3,715,908 3,951,783 70,682,107 61,555 6,654,448,995 1.06% 1,148$ Note: 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) Amounts provided by Tarrant Appraisal District (4) Taxable value restated to fiscal year end amounts. (5) Amounts from 2016 to the present year restated to include Midtown Debt Reserves. General Bonded Debt Outstanding Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. Total does not include revenue bonds. CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2024 (Unaudited) Table 11 136 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt Debt repaid with property taxes Grapevine-Colleyville Independent School District 272,665,659$ 10.25% 27,948,230$ Hurst-Euless-Bedford Independent School District 837,940,000 21.10% 176,805,340 Tarrant County 345,130,000 2.42% 8,352,146 Tarrant County Hospital District 440,020,000 2.42% 10,648,484 Tarrant County College District 569,915,000 2.42% 13,791,943 Subtotal, overlapping debt 237,546,143 Debt repaid with property taxes and sales taxes City of Euless (direct debt)88,547,224 100.00% 88,547,224 Total direct and overlapping debt repaid with property taxes and EDC sales taxes 326,093,367$ Notes:The percentage of overlapping debt applicable is estimated using taxable property values. Applicable percentages were estimated by determining the portion of another governmental unit's 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. CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE WATER AND WASTEWATER BONDS – LAST TEN FISCAL YEARS (Unaudited) Table 12 137 Interest Less Net and Fiscal Total Operating Revenue Fiscal Coverage Year Revenues (1)Expenses (2)Available Principal Charges Total Ratio 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 2023 (3)32,139,886 26,660,040 5,479,846 960,000 255,341 1,215,341 4.51 2024 38,175,886 28,629,521 9,546,365 965,000 244,787 1,209,787 7.89 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 (3)Restated CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS – LAST TEN FISCAL YEARS (Unaudited) Table 13 138 Personal Per Income Fiscal Estimated Capita (thousands Median School Unemployment Year Population (1)Income (2)of dollars) Age (2)Enrollment (3)Rate (4) 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% 2023 61,544 39,240$ 2,414,987$ 35.6 22,971 3.7% 2024 61,555 40,783$ 2,570,398$ 34.3 23,092 3.9% 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 CITY OF EULESS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) Table 14 139 Percentage of Percentage of Estimated Total Estimated Total Employer Employees City Employment Employer Employees City Employment HEB ISD 1,210 4.34% HEB ISD 1,000 3.63% LSG Sky Chefs, Inc. 663 2.38% LSG Sky Chefs, Inc. 600 2.18% City of Euless 408 1.46% Autogrill Group, Inc. 450 1.64% Target 250 0.90% City of Euless 434 1.58% Lowe's 225 0.81% Life Outreach International 180 0.65% Life Outreach International 186 0.67% Super Target 160 0.51% Smyrna Concrete 185 0.66% Lowe's 140 0.58% Dave and Buster's 150 0.54% Home Depot 125 0.45% QuikTrip 130 0.47% Redi-Mix Concrete 67 0.24% Flynn BEC, LP 120 0.43% Structural and Steel Products 40 0.15% Thirsty Lion 120 0.43% Total 3,647 13.09% 3,196 11.61% Source: City of Euless Planning and Development Department * Prior year data used if updated information was unavailable. 2024* 2015 CITY OF EULESS, TEXAS FULL–TIME CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 15 140 Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 General Government and Administration 48.00 49.50 50.00 51.00 50.50 50.50 49.00 49.50 49.50 49.50 Public Safety 136.00 136.00 136.00 137.00 137.00 139.00 139.00 142.00 142.00 144.00 Fire Safety 72.00 72.00 75.00 75.00 75.00 75.00 75.00 78.00 78.00 78.00 Development Services 7.50 7.50 8.00 7.50 7.50 7.50 7.50 7.50 8.50 8.50 Culture and Recreational 34.25 34.25 35.25 35.25 35.25 34.25 34.25 34.25 35.25 35.00 Water and Wastewater 42.00 42.50 42.50 43.50 43.00 44.00 43.50 45.00 45.00 45.00 Golf Course 11.75 11.75 11.75 11.75 11.75 11.75 11.75 11.75 11.75 13.00 Public Works 20.00 20.00 21.00 22.50 23.50 23.50 23.50 23.50 26.50 28.50 Service Center 5.00 5.00 5.00 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 1.50 1.50 1.50 Total 378.00 380.00 386.00 390.00 390.00 392.00 390.00 398.00 403.00 408.00 Source: City Budget Office CITY OF EULESS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 16 141 Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety Police Number of Certified Officers 92 92 87 91 91 86 85 93 85 87 Number of Citations Issued 24,573 18,483 25,061 19,100 16,552 11,154 9,283 17,224 12,993 13,242 Fire Number of Certified Firefighters 70 70 72 73 74 72 75 74 76 76 Number of Alarms 4,686 4,770 4,678 3,758 4,324 4,735 4,827 6,245 6,179 6,523 Number of EMS Calls 3,424 3,431 3,772 3,468 2,958 3,256 3,204 3,910 4,202 4,525 Municipal Court Cases Filed 28,885 25,957 25,061 25,101 22,472 15,400 12,751 17,224 14,236 15,956 Development Number Residential Inspections - New 176 186 176 214 93 3 0 0 3 19 Number Commercial Inspections - New 33 15 36 32 18 12 13 7 12 9 Number Multifamily Inspections - New 1 0 0 1 6 0 0 0 0 0 Public Works Street Overlay (Square Footage) 430,504 1,156,833 1,549,065 1,063,046 1,289,759 1,010,016 421,848 483,310 344,965 650,288 Cultural and Recreational Parks and Recreation Recreation Center Memberships 6,742 (1)6,975 6,528 7,183 7,125 2,820 3,886 5,008 5,321 5,209 Water and Wastewater Number of Water Consumers 26,014 25,812 25,970 26,200 26,659 27,467 27,855 27,942 28,249 28,006 Water Produced (In Gallons x 1000) 741,225 540,921 439,255 580,337 569,697 8,520 #0 (3) 0 (3) 267,803 355,011 Water Purchased - TRA (In Gallons x 1000) 1,628,651 1,787,547 1,766,692 1,767,677 1,586,667 2,250,350 2,187,563 2,586,490 2,421,154 2,265,173 Water Supplied (In Gallons x 1000) 2,369,876 2,328,468 2,205,947 2,348,014 2,156,364 2,258,870 2,187,563 2,586,490 2,688,957 2,620,184 Annual Rainfall (In Inches) 44.45 53.16 34.96 42.39 48.20 45.27 33.41 29.92 28.88 47.59 Golf Course Number of Paid Rounds Played 33,735 32,852 33,237 32,557 32,016 30,860 42,429 41,645 41,727 32,729 Source: City Departments Annual Comprehensive Financial Report City Budget Office Notes: (1) Amount restated to include recreation, aquatic and senior memberships. (2) Wells were out of operation for most of the year; two wells are in the process of being replaced. (3) All wells inoperable for the entire fiscal year; the two under construction are substantially complete but not yet in service. CITY OF EULESS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM – LAST TEN FISCAL YEARS (Unaudited) Table 17 142 Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Fire Stations 333333 3 3 3 3 Public Works Streets - Paved (1)342.8 344.77 350.12 350.12 351.74 351.74 352.60 352.60 352.40 352.40 Cultural and Recreational Aquatic Facilities 3 3 3 3 3 2 2 2 1 1 Parks (2)16 16 16 16 16 16 16 16 16 16 Parks Land (Acres) (3)341 341 341 341 341 341 341 341 341 341 Other Facilities (Acres) (3)291 291 291 291 291 291 291 291 291 291 Community Buildings 6 6 6 6 6 6 6 6 6 6 Amphitheater 3 3 3 3 3 3 3 3 3 3 Conference Centre 1 1 1 1 1 1 1 1 1 1 Golf Course 1 1 1 1 1 1 1 1 1 1 Softball Facility (4)111 1 1 1 - - - - Athletic Fields 28 30 30 30 30 30 31 31 31 31 Library Holdings 98,596 101,160 85,123 80,241 81,353 82,501 85,010 88,577 91,560 93,590 Water and Wastewater Water Mains - Potable (5)234.84 235.50 236.30 239.10 241.93 242.28 243.00 244.50 248.74 248.80 Water Mains - Reclaimed (5)3.70 3.82 3.96 4.12 7.15 11.65 11.65 11.65 11.65 11.65 Fire Hydrants 1,648 1,674 1,719 1,798 1,805 1,836 1,845 1,886 1,903 1,901 Wastewater Mains (5)192.4 193.2 195.2 197.0 198.4 201.0 202.1 203.0 203.0 203.3 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.