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HomeMy WebLinkAbout1 FY 202425 Annual Comprehensive Financial ReportCity of Euless Annual comprehensive Financial Report Fiscal Year Ended September 30, 2025 201 N. Ector Drive, Euless, TX 76039 www.eulesstx.gov THE CITY OF EULESS City of Euless, Texas Annual Comprehensive Financial Report Fiscal Year Ended September 30, 2025 Prepared by City of Euless Finance Department 201 North Ector Drive Euless, TX 76039 THE CITY OF EULESS CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2025 CONTENTS INTRODUCTORY SECTION Page(s) Letter of Transmittal i-vii City Officials viii Organizational Chart ix GFOA Certificate of Achievement x FINANCIAL SECTION Independent Auditor's Report 1-3 Management's Discussion and Analysis (unaudited) 5-19 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 39-84 Required Supplementary Information Schedule of Changes in Net Pension Liability/(Asset) and Related Ratios (Texas Municipal Retirement System) 87 Schedule of Contributions (Texas Municipal Retirement System) 88 Schedule of Changes in Net OPEB Liability and Related Ratios 89 Schedule of Contributions — OPEB Trust 90 Budgetary Comparison Schedules General Fund 91-92 Car Rental Special Revenue Fund 93 Notes to Required Supplementary Information 94 Combining and Individual Fund Statements and Schedules Non -Major Governmental Funds Combining Balance Sheet 98-101 CITY OF EULESS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT YEAR ENDED SEPTEMBER 30, 2025 CONTENTS -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 102-105 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual Hotel/Motel Special Revenue Fund 106 Half -Penny Sales Tax Special Revenue Fund 107 Police Drug Enforcement Special Revenue Fund 108 Crime Control and Prevention District Special Revenue Fund 109 Elementary School Resource Officer (ESRO) Special Revenue Fund 110 Grant Special Revenue Fund 111 Police Seized Assets Special Revenue Fund 112 Juvenile Case Special Revenue Fund 113 Glade Parks Public Improvement District 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 THE CITY OF EULESS T H EEC I T Y OF LESS March 10, 2026 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, 2025. 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, 2025, 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, 2025, 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. 201 N. Ector Drive, Euless TX 76039-3595 817/685-1400 Metro 817/267-4403 Fax 817/685-1416 www.eulesstx.gov This report is presented in three sections: Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, a listing of City Officials, and an organizational chart of the City. The Financial Section includes the Independent Auditor's Report on the basic financial statements, Management's Discussion and Analysis ("MD&A"), Basic Financial Statements, the Notes to the Basic Financial Statements, and Combining and Individual Fund Statements and Schedules. The MD&A is a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement, and should be read in conjunction with, the MD&A. The City of Euless' MD&A can be found immediately following the independent auditor's report. The Statistical Section includes financial and demographic information relevant to readers of the City's financial statements. The statistical data is generally presented on a multi -year basis. Profile of the City of Euless, Texas The City of Euless is located in North Central Texas in Northeast Tarrant County approximately 16 miles west of Dallas and 16 miles east of Fort Worth. Euless is readily accessible by State Highway 183 which is a multi -lane expressway linking Dallas to Fort Worth. Other major highways through the City include State Highway 121, State Highway 360, State Highway 10 and Farm -to -Market Road 157. Euless' centralized location provides quick access to both Dallas and Fort Worth metropolitan areas and is adjacent to Dallas -Fort Worth International Airport ("DFW Airport"), one of the world's busiest airports. The City encompasses approximately 16.2 square miles and serves a population of approximately 61,601. The City of Euless was incorporated February 24, 1953 and is a home rule city operating under a Council/Manager form of government. The City Council is comprised of the mayor and six council members who are elected at large. The Council has the authority to enact local legislation, levy taxes, adopt budgets, determine policies, incur debt, and appoint the City Secretary, City Attorney, Municipal Court Judge, and the City Manager. The City Manager reports directly to the City Council, and is responsible for the daily management of the various City departments. Council members serve three-year staggered terms, with two council members elected each year. The Mayor is elected to serve a three-year term. In addition, several boards and commissions were created to assist the City Council in deciding matters of policy and procedure and meet on various issues throughout the year. The City of Euless provides a full range of services to its citizens including: police and fire protection; emergency ambulance services; municipal court operations; development and code services; construction and maintenance of streets and highways, parks, and recreational facilities; water service and wastewater collection and treatment; and library operations. The City also operates a top -ranked, 18-hole golf course and conference center, youth athletic complex, and an aquatics center. Internal services of the City account for risk management, equipment replacement, and employee insurance coverage activities on a cost reimbursement basis. Private contractors, through franchise agreements, provide solid waste and recycling collections and disposal services for the City. ii Four component units of the City, the Euless Development Corporation, the Euless Crime Control and Prevention District, Tax Increment Reinvestment Zone ("TIRZ") #3 - Glade Parks, and Tax Increment Reinvestment Zone ("TIRZ") #4 - Midtown, are presented in the financial statements of the City as blended component units. Data for these 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 86.9 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 8.5 million, a Gross Domestic Product of $596.2 billion, a labor force of over 4 million with the fourth largest labor force of U.S. metropolitan areas, a 3.18% job growth rate, and is home to 21 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 $130 billion in economic impact with over 590 companies, generating 66,000 direct jobs. It is anchored by the inland port known as the Alliance iii 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 $7.4 billion for tax year 2025, which is a 1.2% increase from the prior year, due to increases in both residential and commercial real estate property values and to new growth. Sales tax collections increased 9.3% from FY2023-24 to FY2024-25. 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 61,601 in eleven years (North Central Texas Council of Governments). The City's median household income is $80,897, which compares favorably to $76,292 for Texas and $78,538 for the United States (U.S. Census Bureau). The City's educational level is 91.1% high school graduate or higher, which again is favorable to 85.7% for Texas and 89.4% for the United States (U.S. Census Bureau). The City of Euless has approximately 310.86 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 iv government facilities such as fire and police stations, streets, utility infrastructure, and development of parks and open spaces. The City's fiscal policies state current expenditures will be paid with current revenues. Deferrals, short-term loans, or one-time sources will be avoided as budget balancing techniques. Reserves will be used for emergencies or nonrecurring expenditures, except when balances can be reduced because levels exceed guidelines or legally -required minimums. Fiscal policies provide for a General Fund reserve equal to between 30 and 60 days of working capital. At no time shall the reserve fall below 8.3% of the General Fund expenditure budget (i.e. 30-day level). The current operating reserve is at 171 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 92-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, 2025, the revenue bond reserve totaled $695,299 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. v The City's Capital Improvements Program and Americans With Disability Act ("ADA") Transition Plan address facility needs of the City. The Parks Master Plan, recently 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. Street reconstruction 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 FY2024-25. Public Works continued their partnership with Tarrant County to complete several street improvements throughout the City. Water and wastewater line replacement projects were substantially completed in the Trailwood Addition, Cedar Hill Estates, and in multiple areas in South Euless. Fire Station No. 2 was completed last year and the renovation of the animal shelter be completed soon. The Police and Court facility renovation is proceeding on schedule. New playgrounds and shade structures at several different parks were completed during FY2024-25. Other projects starting include Kiddie Carr Park improvements, Parks at Texas Star redevelopment, and South Euless Park improvements. Waterbend, a large ongoing 66-acre mixed -use development, combining residential living with shopping, dining, and entertainment, is currently underway. This vibrant community will offer abundant open space, a signature water feature, and an environment designed for connection and convenience. Trinity High School is undergoing a massive, multi -phase rebuilding project funded by the HEB ISD Bond 2023, replacing its aging 1969 campus with modern facilities, including a new main academic building, competition gym, arts wing, and consolidated learning spaces, all while students remain on -site in a carefully phased construction plan that began in 2024-2025 and extends through the early 2030s. Additionally, three elementary schools will be impacted through new campus designs and modern learning spaces, with schools like Wilshire, Bell Manor, and Midway Park being part of the bond funding. The H-E-B Euless grocery store, currently under construction in the Glade Parks area of Euless, is set to open in 2026, offering expanded departments, fresh Texas BBQ, sushi, Fuel & Car Wash, drive-thru pharmacy, and curbside pickup, aiming to serve the Mid - Cities community. Glade Parks, a large, evolving 194-acre mixed -use center, is a massive, multi -phase project that has been developing for years and is still growing, adding substantial retail, restaurant, and entertainment options. New hotel construction continues at a brisk pace with projects such as a new 107-room Cambria Hotel, near East Airport Freeway and Fuller -Wiser Road, a new 114-room Holiday Inn Express, near Highway 360, and a new 104-room Atwell Suites Hotel, near vi Fuller -Wiser Road and the Highway 183 frontage road. Newly opened restaurants in Euless include Cold Beers and Cheeseburgers, in the Glade Parks development, Valerie's Taco Shop on East Airport Freeway, HTeaO on North Main Street, Argentina 163 on West Harwood Road, The Brass Tap in the Shops at Vineyard Village, and Euless' second location of Raising Cane's on South Industrial Boulevard. 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, 2024. 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 38 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 34 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 City Manager Janina Jewell Director of Finance vii City of Euless FISCAL YEAR 2024-25 Council Members LINDA MARTIN, MAYOR Tim Stinneford, Mayor Pro Tem, Place One Jeremy Tompkins, Place Two Eddie Price, Place Three Perry Bynum, Place Four Annabel Eads, Place Five Tika Paudel, Place Six Chris Barker, City Manager Steven Viera, Assistant City Manager Lawrence Bryant, Assistant City Manager viii THE CITY OF EULESS ORGANIZATIONAL CHART CITIZENS OF EULESS MAYOR & COUNCIL Chris Barker, City Manager February 5, 2026 CITY ATTORNEY Wayne K. Olson 1-r ASSISTANT CITY MANAGER Lawrence Bryant CITY SECRETARY Kim Sutter CITY MANAGER Chris Barker MUNICIPAL COURT JUDGE Lacy Britten MUNICIPAL COURT OF RECORD DIRECTOR OF PUBLIC WORKS Meier Janes DIRECTOR OF FINANCE Janina Jewell LIBRARY DIRECTOR Angela Jones GENERAL MANAGER TEXAS STAR Glenda Hartsell -Shelton INUNI CI PAL COURT MANAGER Claudia Ondntern POLICE CHIEF Gary nder5 FIRE CHIEF Dana Bennett DIRECTOR OF PLANNING AND ECONOMIC DEVELOPMENT LW Payne{Inter]rni ASSISTANT CITY MANAGER Steven Viera DIRECTOR OF PARRS AND COMMUNITY SERVICES Duane Straws FLEET AND FACILITIES DIRECTOR XyIe McAdams DIRECTOR OF HUMAN RESOURCES AND RISK MANAGEMENT Heather Moorhead INFORMATION SERVICES DIRECTOR 5entt lance ix Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Euless Texas For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2024 aeu it" P- tei t( Executive Director/CEO x FINANCIAL SECTION THE CITY OF EULESS we ave ram► sort' 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 2300 North Field Street, Suite 1000 Dallas, Texas 75201 972-490-1970 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, 2025, 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, 2025, 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. Weaver and Tidwell, L.L.P. 1 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor, City Council and City Manager Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material 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. 2 The Honorable Mayor, City Council and City Manager Other Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining and individual nonmajor fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with 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 March 10, 2026, 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. Lf�PfiiLcP/L WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 10, 2026 3 THE CITY OF EULESS CITY OF EULESS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED SEPTEMBER 30, 2025 (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, 2025. 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 $394,548,403 (net position). This number must be viewed in the context that the vast majority of the City's net position of $254,181,773 (64%) 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 $13,645,962 (4%). The remaining $126,720,668 (32%) 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 $32,054,038 and business -type activities realized an increase in total net position of $10,532,061 bringing the total increase in net position for the City to $42,586,099. • At the close of the current fiscal year, the City of Euless' governmental funds reported combined ending fund balances of $105,268,296 which represents a decrease of $11,370,761. Within this total, $4,368,968 is restricted for debt service; $10,820,938 is restricted by bond covenants for capital projects; $162,433 and $292,813 are restricted for court technology/building security and juvenile case management, respectively; and another $2,912,798 is restricted for capital projects by developer agreements. Amounts restricted for cable PEG fees and historical preservation total $652,693 and $843, respectively. Another $62,463 is restricted for opioid remediation. Nonspendable fund balance of $231,179 represents fund balance amounts for inventories and prepaid items. Fund balances of $56,448,263 represent assigned fund balance in the general, special revenue, and capital projects funds. The unassigned fund balance in the General Fund of $29,343,626 can be used for any 5 lawful purpose, while the Midtown PID fund has a deficit fund balance of $28,721. The General Fund unassigned balance represents 53% of fiscal year 2025 total fund expenditures. • The City's total capital and intangible assets (net of accumulated depreciation and amortization) increased by $36,030,402 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 $15.6 million or 16% due primarily to payments on existing debt plus amortization of premiums and discounts outpacing new debt issuance. The early redemption of a large portion of the Glade Parks Debt and the Golf Course Debt accounts for approximately $8 million of the decrease. OVERVIEW OF THE FINANCIAL STATEMENTS The discussion and analysis are intended to serve as an introduction to the City of Euless' basic financial statements which are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other required supplementary information in addition to the basic financial statements themselves. Government -wide Financial Statements. The government -wide financial statements are designed to provide readers with a broad overview of the City of Euless' finances, in a manner similar to a private - sector business. The statement of net position presents information on all of the City of Euless' assets and deferred outflows of resources and liabilities and deferred inflows of resources, with the difference between them reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Euless is improving or deteriorating. The statement of activities presents information showing how the City's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash receipts and cash outlays in future fiscal periods (e.g., uncollected taxes and earned but unused compensated absences). The government -wide financial statements distinguish between functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business - type activities). The governmental activities functions of the City include general and administrative, public safety, highways and streets, development services, and culture and recreation. The business -type activities of the City include water and wastewater system, drainage system, golf course, and other recreational enterprises. The government -wide financial statements include not only the City of Euless (the primary government), but also the Euless Development Corporation, the Crime Control and Prevention District, the Tax Increment Reinvestment Zone #3 — Glade Parks, and Tax Increment Reinvestment Zone #4 — Midtown which are legally separate entities that are financially accountable to the City. A blended presentation has been used to report the financial information of these component units. 6 The government -wide financial statements can be found on pages 20-21 of this report. Fund Financial Statements. A fund is a self -balancing set of accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Euless, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government -wide financial statements with the exclusion of internal service fund activity. However, unlike the government -wide financial statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near -term financing requirements. Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide financial statements. By doing so, the reader may better understand the long-term impact of the government's near -term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains twenty-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. 7 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 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 39-84 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 87-94 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 98-122 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 fmancial position. In the case of the City of Euless, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $394,548,403 as of September 30, 2025. The largest portion of the City's net position (64%) reflects its investment in capital assets (i.e., land, buildings, equipment, improvements, construction in progress, and infrastructure) net of accumulated depreciation and amortization, 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. 8 Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position (4%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of unrestricted net position of $126,720,668 (32%) may be used to meet the City's ongoing obligations to citizens, creditors, and employees. Net Position Amounts shown in 000's Governmental activities 2025 2024 Current and other assets $ 165,448 $ 171,825 Capital assets 220,592 190,818 Total assets 386,040 362,643 Total deferred outflows 8,500 12,223 Long-term liabilities 91,217 107,629 Other liabilities 22,891 20,718 Total liabilities 114,108 128,347 Total deferred inflows 11,809 9,950 Net position: Net investment in capital assets Restricted Unrestricted Total net position Business -type activities Total 2025 2024 2025 2024 $ 49,715 $ 51,774 100,938 94,682 $ 215,163 $ 223,599 321,530 285,500 150,653 146,456 536,693 509,099 1,628 2,489 10,128 14,712 18,078 21,345 109,295 128,974 6,645 10,767 29,536 31,485 24,723 32,112 138,831 160,459 1,633 1,440 13,442 11,390 167,340 133,199 86,841 78,063 254,181 211,262 8,453 9,033 5,193 4,874 13,646 13,907 92,830 94,337 33,891 32,456 126,721 126,793 $ 268,623 $236,569 $ 125,925 $115,393 $ 394,548 $ 351,962 As of September 30, 2025, 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 decreased by $72,083 in fiscal year 2025 as compared to the unrestricted net position for the prior year. Restricted net position realized a decrease of $261,354 and the amount invested in capital assets, net of related debt increased by $42,919,536. The increase in total net position of nearly $42.6 million results primarily from current year operating results flowing to the net investment in capital assets. The details of the results of current year operations are found in the table shown on the following page. 9 Changes in Net Position Amounts shown in 000's Governmental Business -type Activities Activities Totals 2025 2024 2025 2024 2025 2024 REVENUES Program revenues: Charges for services $ 12,180 $ 7,525 $ 40,826 $ 40,918 $ 53,006 $ 48,443 Operating grants and contributions 547 579 547 579 Capital grants and contributions 7,423 851 9,624 7,446 17,047 8,297 General revenues: Property taxes 31,877 30,133 - 31,877 30,133 Sales taxes 32,032 29,310 - 32,032 29,310 Car rental taxes 20,255 20,229 - 20,255 20,229 Mixed beverage taxes 259 213 - 259 213 Occupancy taxes 1,698 1,656 - 1,698 1,656 Gross receipts taxes 4,700 4,674 - 4,700 4,674 Investment income 7,611 8,707 1,506 1,708 9,117 10,415 Rents and royalties 1,424 1,144 - 1,424 1,144 Miscellaneous 2,157 1,769 - 2,157 1,769 Total revenues 122,163 106,790 51,956 50,072 174,119 156,862 EXPENSES Culture and recreation 9,713 8,565 - 9,713 8,565 Development services 1,887 1,284 - 1,887 1,284 General government 29,658 28,889 - 29,658 28,889 Highways and streets 5,037 4,765 - 5,037 4,765 Public safety 39,200 33,777 - 39,200 33,777 Interest and fiscal charges 2,732 2,912 - 2,732 2,912 Water and wastewater 33,066 31,567 33,066 31,567 Drainage utility 1,678 1,595 1,678 1,595 Golf course 6,101 5,741 6,101 5,741 Recreation enterprises - 2,461 2,225 2,461 2,225 Total expenses 88,227 80,192 43,306 41,128 131,533 121,320 Increase (decrease) in net position before transfers 33,936 26,598 8,650 8,944 42,586 35,542 Transfers (1,882) 485 1,882 (485) Increase (decrease) in net position 32,054 27,083 10,532 8,459 42,586 35,542 Net position, beginning 236,569 209,486 115,393 106,934 351,962 316,420 Net position ending $ 268,623 $ 236,569 $ 125,925 $ 115,393 $ 394,548 $ 351,962 Governmental activities. Governmental activities increased the City's net position by $32,054,038 thereby accounting for most of the growth (75%) 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 $33,936,110. 10 Total revenue for the governmental activities (excluding transfers) increased from the previous year by $15.4 million due in part to a net increase in general revenues of $4.2 million. Program revenues consisting of charges for services, grants, and contributions also realized an increase of $11.2 million overall a large portion of which was realized in development charges for services and capital contributions. 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 7.3% over the prior year values (See Statistical Table 5). Rising consumer confidence, elevated demand, and continued inflationary pressures are driving costs upward resulting in increased tax revenues across all categories. Development services revenues were more than double those of the prior year primarily due to the issuance of building permits for the Waterbend development (formerly Watercolor). Public safety charges for services revenues rose by $857,000 for the year predominantly due to a full year of jail revenue related to the Hurst detainee contract and the establishment of the Elementary School Resource Officer (ESRO) Program with the Hurst -Euless -Bedford (HEB) ISD. Streets and highways realized an increase of $6.6 million in capital grants and contributions due to developer dedications for the Waterbend development and the recognition of American Rescue Plan Act (ARPA) proceeds. Total expenses of governmental activities increased by $8 million from FY2024 to FY2025. The FY2025 Operating Budget included a 3.5% baseline salary increase for public safety personnel plus merit increases expected to average 3.5% for non-public safety employees across all funds. Benefits based upon salaries also increased accordingly. Several positions were added in FY2025 including an ESRO manager, a public works water field technician and a parks field technician. Additionally, the budget included an upgrade for an office technician at Texas Star Golf Course. The implementation of the new GASB standard for compensated absences accounts for an increase in governmental activities expenses of more than $3.3 million. Pension -related entries decreased salary -related expenses by $1.3 million in the prior year, and decreased governmental expenses by approximately $12,000 in FY2025. The overall difference between the two years' expenses totals almost $4.2 million mostly due to the recording of changes in and amortization of deferred outflows and deferred inflows combined with a decrease of $5.2 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 $1.8 million compared to a decrease in expenses of less than $1.1 million in the prior year. Rebates and revenue sharing increased by $1 million primarily as a result of increased sales, occupancy, and car rental taxes. Additionally, Euless and Bedford entered into an interlocal agreement related to revenue sharing of the HEB grocery store currently under construction. The facility spans portions of both Euless and Bedford. Culture and recreation (CR) expenses rose approximately $1.2 million from FY2024 to FY2025. This is primarily due to the employee raise package mentioned previously along with associated benefits as well as the additional parks field tech. These changes account for approximately $627,000 of the total increase. Other CR expenses increased by about $521,000 due in large part to the addition of playground canopies at McCormick, J.A. Carr, and Wilshire parks. Additionally, funds were allocated to facilitate the early redemption of the outstanding Golf Course Debt. In the current fiscal year, development services realized an increase of $600,000 overall most of which is attributable to commercial plan review. Salaries and related benefits account for the majority of the remaining increase. General and administrative (G&A) service costs realized an increase of more than $768,000 predominantly driven by salary and benefit increases approved by Council. Contingencies increased by $250,000 due to the purchase of new rifles for the police department and 11 plumbing repairs at Texas Star Golf Course. As mentioned before, revenue sharing and rebates also contributed to the overall increase in G&A. Public safety realized the largest increase, $5.4 million, in expenses. Nearly all of this is attributable to salary and benefit increase from the raise package and the addition of the ESRO program. The use of the Hurst jail facility during construction of Euless' court and police building remodel increased costs by $86,000. Euless' portion of the upgrade to the NETCO radio system totaled $137,000, while the ESRO non -salary and benefit costs were more than $193,000. The net position of general governmental operations accounts for 68% of total net position. • Business -type activities. Business -type activities increased the City's net position by $10,532,061. The change in net position before transfers is $8,649,989. Charges for services program revenues for the business -type activities dropped from the previous year by $92,000 due primarily to the closure of the golf course throughout the summer months for renovation which resulted in a decline in revenues of over $1M. This, combined with increased Water and Wastewater ("W&WW") revenues and drainage revenues of $500,000 and $310,000, respectively resulted in the net decrease. Water rates increased 320 per thousand gallons on the volumetric rate to cover the Trinity River Authority (TRA) cost increases. Volumetric rates for wastewater increased 360 per thousand gallons to cover the pass -through increase from TRA for wastewater treatment. The City received almost $341,000 from TRA for the annual water and wastewater cost true -up calculations. Capital grants and contributions increased by more than $2.2 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 declined by just over $200,000 due to a downturn in market rates as well as a reduction in funds available to invest. Overall, total business -type expenses realized a net increase for the year of $2.2 million combined. Water purchases dropped by $285,000 due to a decline in sales volume coupled with TRA rate increases; while wastewater treatment costs climbed by $740,000 from the prior year predominantly as a result of increased TRA rates. Increased costs of $360,000 at the golf course resulted mostly from higher costs for salaries, benefits, and equipment replacement as well as adjustments for pension and OPEB. Implementation of the new GASB standard for compensated absences increased business -type activities expenses by $698,000. Net pension, net OPEB, and related deferral entries combined decreased expenses by almost $350,000 in the business -type activities this year compared to an increase of approximately $300,000 in the prior year. Net position for business -type activities represents 32% 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 $105,268,296, which represents a decrease of $11,370,761 in comparison with the prior year. Approximately 28% or $29.3 million constitutes unassigned fund balance in the general fund that is available for spending at the City's discretion. Another $231,179 in non -spendable fund balance 12 represents amounts invested in inventories and prepayments. Another portion is restricted to indicate that it is not available for new spending because it has already been committed 1) to pay debt service ($4,368,968); 2) to pay for specific capital improvements per developer agreements ($2,912,798); 3) restricted by bond covenants for specific capital projects ($10,820,938); and 4) for a variety of other restricted purposes ($1,171,245). 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 $56,448,263 and includes assigned fund balance in the general fund of $210,748 and $56,237,515 represents positive residual balances in other governmental funds. The Midtown PID special revenue fund carries a negative fund balance of $28,721. 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 $6,875,217 which was revised to a decrease of $7,444,792. Due to a positive budget variance in overall revenues and expenditures, the General Fund ended the year with an increase in fund balance of $6,632,634. This figure represents a positive budget variance of $14,077,426 resulting primarily from sales tax collections, municipal court fines, 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 as well as inflationary pressures driving consumer costs higher. 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 budgetary projections were based on anticipated FY2024 end -of -year collections which approximated about half of year-end actual results. As such, the budget for FY2025 was far lower than end -of -year actual results. General Fund budgetary expenditure savings total $4.7 million before transfers. General and administrative ("G&A") expenditures account for approximately $2.8 million of the savings. New positions and the raise package previously mentioned account for increases of $754,000 in this expense category. Capital purchases realized budgetary savings of $1.4 million; all of which was rolled to FY2026 for continuing projects at fiscal year-end. Subscription -based information technology arrangement expenditures attained budgetary savings of $371,000 which included funding for financial and human resource system software which was not yet implemented. Budgetary overages were experienced in revenue sharing and rebates due in large part to higher than anticipated sales tax collections. Public safety expenditures recognized budgetary savings of $1 6 million of which 94% is related to salaries and benefits. A variety of open positions in the police department throughout the year is primarily responsible for this variance. 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 building permits. Taxable property values increased over the prior year values by 7.3%, while the tax rate dropped from 45.75¢ to 44.67¢ per $100 of taxable property valuation resulting in increased property tax collections of more than $1.9 million. Sales tax collections exceeded those of the prior year by close to $1.7 million due in large part to additional sales at existing businesses, continued consumer confidence, and inflationary pressures increasing prices. Fines and fees rose by over $1 million which includes an increase in jail income attributable to a full year of housing Hurst detainees, a rise in ambulance revenues, and growth in municipal court fines. Building permit revenues outpaced prior year collections by close to $3.9 million due predominantly to increased inspections performed and activity 13 in the Waterbend (formerly Watercolor) development as well as construction of the HEB grocery store and Trinity High School. The issuance of SBITA debt dropped by close to $925,000 from the prior year. Total revenues surpassed previous year levels by nearly $8.5 million. Expenditures increased by $3.3 million or 6.4% above the prior year resulting from a combination of increases and decreases across expenditure categories. Most of the increase is realized in development services, G&A, and public safety. Approximately 80% of the $450,000 increase in development services is due to third party plan review. G&A expenditures rose by $1 8 million primarily due to increases in SBITA costs (mostly Microsoft), ambulance billing and collections fees due to higher collections, and charges related to the new rifle program. One-time capital purchases climbed by more than $470,000 primarily due to a one-time increase in street funding of $1 M, replacement of the HVAC system in the finance building, and the upgrade of traffic signal equipment at a cost of $471,000 combined with reductions in equipment purchases and computer hardware of $426,000 and $872,000, respectively. Unspent funding for capital purchases was rolled into FY2026 for continuing projects. Public safety (PS) expenditures increased over prior year levels by $945,000 and is primarily attributable to salaries and benefits ($778,000) as previously described. Other PS expenditures rose by $167,000 due in large part to the payments to the City of Hurst for the use of their jail facility, training and state certifications for the fire department, SCBA maintenance, and equipment rental. Transfers out declined by $3.2 million because of a drop in funding for street CIP of $2.1 million and to general CIP of $1 million. 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 decreased $13,611. Compared to the prior year, revenues decreased by $427,000. Property taxes declined by $466,000 from the prior year due in large part to reduction in the property tax debt service rate as well as overpayments and frozen collections. Expenditures rose by $5.9 million due to scheduled payments exceeding those of the prior fiscal year plus the early redemption of most of the Glade Parks outstanding debt. Car rental tax fund. The Car Rental Tax fund balance was originally anticipated to decrease $5.2 million but the revised budget showed a projected decrease of $6.5 million. This fund ended the year with a fund balance decrease of $3,948,641 which is a positive variance of $2.6 million. Car rental tax revenues were relatively flat with those of the prior year. Investment income decreased by $355,000 due to lower market rates and a decline in debt funds available for investing. Per contractual agreement, the car rental revenues are shared with the cities of Dallas and Fort Worth. Since the revenue collections were relatively flat with the prior year, the same can be said about the revenue sharing amount. However, one-time capital rose by $152,000 due mainly to the construction of a monument sign for city hall and one-time special legal fees. The return of the $750,000 in seed money for the start-up of the Glade Parks PID was recorded in the current fiscal year. Operating transfers to other funds increased over the prior year by $1.9 million primarily due to funding of the golf course renovation project. General CIP fund. The General CIP fund balance decreased by $2.5 million due predominantly to capital expenditures on projects exceeding new project funding from transfers. Transfers in for project funding declined by $6.8 million predominantly due to the funding of the animal shelter expansion in the prior year. Investment income declined by more than $300,000 because of lower market rates and less funds available for investment. Most of the capital expenditures were incurred for the animal shelter expansion ($5 million) and fire station #2 remodel project ($1.6 million). 14 Police CIP fund. Investment income totaled $990,000 for the current year due to a reduction in the amount available for investment as well as declining market rates. Professional and construction service costs totaling $11.8 million were incurred on this project. This fund realized a decrease in fund balance of $10.8 million. Non -major governmental funds. The non -major governmental funds realized a combined decrease in fund balance of $733,866; special revenue funds drew down fund balance by $7,515,557, while the capital projects funds contributed $6,781,691 to the balance. The Crime Control and Prevention District, Grant, Juvenile Case, Midtown PID, TIRZ #4 Midtown, Half -Penny Sales Tax CIP, Developers' Contribution, Redevelopment, and Car Rental CIP funds increased total fund balances by $11.9 million. The remaining non -major governmental funds recognized a drawdown of fund balances of more than $12.6 million. Current year project funding for all CIP funds from transfers totaled $13 million while project expenditures totaled $7 million. Hotel/motel experienced a negative change in fund balance of $353,000 due to approved one-time capital funding. Half -penny sales tax transferred funding to CIP of $5.4 million which caused the fund balance to decrease $2.4 million. The Glade Parks PID fund transferred the start-up seed money back to the car rental tax fund which resulted in a $750,000 reduction of fund balance. The early redemption of debt caused a decline of fund balance in the TIRZ #3 Glade Parks Fund. The CCPD contributed $576,000 to total fund balances as a result of increased sales tax collections. The half -penny sales tax CIP fund added $4.5 million to fund balance due to project funding outpacing expenditures. The street CIP fund drew down fund balance by more than $4.4 million primarily due to project expenditures for West Pipeline Road, while the car rental CIP fund added $5.7 million to fund balance as a result of current year funding for future projects. 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 was short of that of a "normal" year by more than 21/2 inches and was also lower than prior year levels by more than 5 inches. However, it should be noted that nearly 5 inches of rainfall was recorded for August which is generally a high -volume sales month. The W&WW fund realized a decline in operating income of $844,000 resulting principally from increased operating revenues of more than $500,000 combined with an increase in expenses of $1.4 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. Water purchases and wastewater treatment costs grew by $455,000 combined. Salary and benefit expenses increased by almost $630,000 resulting from the raises previously mentioned as well as the addition of a public works field tech. Franchise and administrative fees increased by $60,000 each from the prior year primarily as a result of increased rates and software subscriptions rose by $24,000. Capital contributions which includes ARPA funding, impact fees and developer dedications, grew by more than $1.8 million resulting from project expenses and recent development including Waterbend. Investment income declined due to falling market rates and smaller balances available for investing. Including nonoperating and other revenues and expenses, an increase of more than $7.7 million was realized in the W&WW fund for FY2025. Texas Star Golf Course closed for approximately four months during the summer for renovations including resurfacing the greens, leveling and expansion of various tee boxes, capping sand in bunkers, and cart path and parking improvements. The course realized total revenues of close to $3.9 million and expenses of $6.2 million leading to an operating loss of $2.4 million. Operating revenues which are directly linked to the number of paid rounds dropped by $702,000. Operating expenses increased by $500,000 including depreciation and amortization resulting predominantly from higher costs for salaries 15 including upgrading one position, benefits, and equipment replacement as well as adjustments for pension and OPEB. Implementation of the new GASB standard for compensated absences increased business -type activities expenses by around $150,000. Transfers in to cover operating costs during the closure and to provide project funding totaled $3.5 million. Net position for the golf course rose by $962,164 for FY2025. The increase in net position of the drainage utility fund results largely from developer contribution of capital assets. Operating revenues increased by $310,000 due in large part to the increase in the monthly drainage fee of 25% and operating costs climbed by $83,000. The drainage utility fund recorded a gain in net position of $1.2 million. Other recreation enterprises operating revenues increased by $123,000, while operating expenses grew by $286,000. Salaries and related benefits rose by about $65,000 due to the raise package mentioned previously. Other cost increases include instructor fees, baseball umpire payments, athletic field maintenance, and costs associated with the Arbor Daze festival. User fees paid to the equipment replacement fund increased slightly. The net result of the other recreational activity was net income of $67,000. Capital Asset and Debt Administration Capital assets. The City's investment in capital assets for its governmental and business -type activities as of September 30, 2025, totaled $321,530,020 (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 $36,030,400 or about 13%. Major capital asset activity that occurred during the current fiscal year included the following: • Capital asset contributions totaled $16,493,898 during the fiscal year. Of this amount, $12,191,431 related to improvements within the Waterbend development and included streets and sidewalks, water and wastewater infrastructure, drainage structures, and land. Community Development Block Grant (CDBG) funding contributed $70,994 for wastewater line replacements. Additionally, developer asset dedications totaled $1,125,551 and consisted of streets and sidewalks, water and wastewater infrastructure, drainage structures, and land. ARPA capital grant funding for the current year totaled more than $3.1 million. • Capital asset additions for governmental activities include, but are not limited to, a fire truck; traffic signal equipment upgrades; recreation and playground equipment; Lifepak defibrillators; public safety radios; HVAC replacements; and drones supporting the Drone as a First Responder program. Projects completed during the year included Fire Station #2; portions of the city-wide fiber optic project; installation of playground shade canopies at Wilshire, J.A. Carr, and McCormick parks; construction of the PATS North entryway sign; installation of synthetic turf at Fenway, Shea, and Jacobs baseball fields; and the FY2025 street improvements project. • Construction -in -progress related to general government activity of $25,894,626 at year-end primarily consisted of the following projects: West Pipeline Road reconstruction ($5.7M), police and court remodel ($14.7M), and animal shelter remodel ($5.3M). • Capital asset additions for business -type activities include, but are not limited to, installation of a split -rail concrete fence at PATS North; renovation of the greens and other enhancements at Texas 16 Star Golf Course; and FY2025 curb and gutter improvements. Water line replacements were completed during the fiscal year at Midway Park 1st Addition, Oakwood Terrace, and along South Main Street. • Construction -in -progress related to business -type operations of $3,814,979 principally consists of wastewater line replacements at Cedar Hills Estates South Phases I & II ($834K), Trailwood Addition ($2.5M), and along South Main ($227K). Capital Assets (Net of Accumulated Depreciation) Amounts shown in 000s Governmental activities Business -type activities Total 2025 2024 2025 2024 2025 2024 Land $ 47,603 $ 44,105 $ 5,719 $ 5,719 $ 53,322 $ 49,824 Buildings 46,845 39,730 3,840 4,061 50,685 43,791 Other improvements 17,579 17,636 7,273 7,132 24,852 24,768 M&E 19,150 15,278 778 908 19,928 16,186 Infrastructure 62,786 59,883 79,476 72,020 142,262 131,903 Right -to -use equipment 10 73 37 93 47 166 Right -to -use software 724 942 - 5 724 233 Construction in Progress 25,895 13,171 3,815 4,744 29,710 17,915 Total $ 220,592 $ 190,818 $ 100,938 $ 94,682 $ 321,530 $ 284,786 Additional information on the City's capital assets can be found in Note 3 on pages 59-61 of this report. Long-term debt. At fiscal year-end, the City's outstanding debt totaled $80,865,996. Of this amount, $62,434,378 comprises debt backed by the full faith and credit of the government and $18,431,618 represents debt secured solely by specific revenue sources (i.e. revenue bonds). Amounts shown in 000s Governmental activities Business -type activities Total 2025 2024 2025 2024 2025 2024 GO Bonds $ - $ 685 $ - $ 1,705 $ - $ 2,390 COs 57,175 67,465 - 57,175 67,465 Premiums/discounts 2,900 3,391 (11) 45 2,889 3,436 Leases 10 73 37 93 47 166 Subscriptions 724 942 5 724 947 Tax notes 4,525 5,575 - 4,525 5,575 Revenue bonds 4,325 4,570 14,070 14,910 18,395 19,480 Deferred charges - (10) (139) - (149) Totals $ 69,659 $ 82,691 $ 14,096 $ 16,619 $ 83,755 $ 99,310 17 Outstanding Debt In fiscal year 2025, the City did not issue any new general bonded debt and no new bonded debt was issued for the City's enterprise operations. One new governmental SBITA was implemented at a cost of $121,954 during the year. The City's total debt decreased $15,007,966 or 15.7% during fiscal year 2025. This decrease was primarily attributable to scheduled principal payments and the early redemption of a large portion of the Glade Parks Debt and the Texas Star Golf Course 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. Additional information on the City's long-term debt can be found in Note 4 on pages 61-68. Economic Factors and Next Year's Budgets and Rates In the FY2025-26 budget, General Fund revenues and transfers in are budgeted to increase 7% compared to the FY2024-25 original budget. Property taxes account for approximately 42% of total budgeted revenues, while sales taxes comprise approximately 31 %. Certified assessed taxable valuations as of July 25, 2025 increased 0.1% over the prior year. The property tax rate increased from 44.670 to 47.64660 per $100 of taxable assessed valuation for FY2025-26. Sales tax revenues are projected to increase by approximately $1.8 million over the FY2024-25 original projections, while car rental tax receipts are expected to increase by $1.3 million. Baseline General Fund expenditures, excluding capital programs, are projected to increase approximately 6.7% compared to the FY2024-25 original budget. The proposed employee pay plan includes step increases where applicable, a 3% baseline salary adjustment, and a one-time lump sum performance payment averaging 2% for non -step employees. The City elected to use excess reserves to fund capital needs. For the Water and Wastewater Fund, the FY2025-26 budget continues the tiered rate structure for residential and irrigation water volume billing. Under this structure, customers pay graduated rates based on monthly consumption levels. Residential water volume rates range from $6.14 to $8.77 per thousand gallons. Single-family residential customers will continue to receive a rebate of 75¢ per 1,000 gallons for up to 15,000 gallons per month. A wastewater volume charge of $5.89 per thousand gallons applies to all customer classes, with residential wastewater charges capped at 12,000 gallons per month. Monthly base rates for residential water and wastewater service each increased by $1 compared to the prior year. Annual funding for pay-as-you-go capital expenses increased by $25,000, bringing the total to $1,150,000. Planned capital items include water line replacement for Oakwood Terrace North Phases I and II, Vine Street engineering, and continued funding associated with the 52nd year of the Community Development Block Grant program. 18 The Texas Star Golf Course and Conference Centre remains a vibrant and valued community asset. Known for its championship -level course nestled within the DFW Metroplex, the facility has earned recognition as a premier municipal golf destination. It has been named among the "Top 10 Best Golf Courses to Tee Off at in & Around Fort Worth, Texas," described by Golf Digest as a "Great public course near DFW Airport," and ranked among the top 50 in "The Best Texas Golf Courses" by texasgolf.com. Raven's Grille and the Conference Centre continue to receive strong community support and positive reviews. The Conference Centre offers 7,000 square feet of divisible event space and hosts business conferences, weddings, concerts, and other events. During FY2024-25, the course was closed for several months to complete green replacement. The improvements have significantly enhanced playing conditions, and the course has reopened in excellent condition. The adopted FY2025-26 budget includes revenue projections of $6,179,205 and budgeted operating expenses of $5,977,960. 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. 19 CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF NET POSITION SEPTEMBER 30, 2025 ASSETS Deposits and investments Receivables, net of allowances Lease receivables Internal balances Inventories, at cost Prepaid items Restricted assets Deposits and investments Capital assets Land and construction in progress Other capital assets, net of accumulated depreciation Intangible right -to -use assets, net of accumulated amortization Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension Deferred outflows related to OPEB Total deferred outflows of resources LIABILITIES Accounts payable Contracts payable Accrued liabilities Accrued interest payable Unearned revenue Money held in escrow Noncurrent liabilities Due within one year Due in more than one year Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pension Deferred inflows related to OPEB Deferred inflows related to leases Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for Debt service Impact fees Developer agreements Court technology/building security Juvenile cases Cable PEG fees Historical preservation Opioid remediation Unrestricted Total net position Governmental Activities $ 140,009,213 13,325,498 4,795,692 (7,237,450) 9,895 1,229,411 13,315,148 73,497,706 146,360,139 734,378 386,039,630 7,486,833 1,013,202 8,500,035 17,786,146 2,494,210 2,323,138 288,119 7,858,412 83,358,247 114,108,272 3,219,643 3,793,293 4,795,692 11,808,628 167,340,305 4,368,968 2,912,798 162,433 292,813 652,693 843 62,463 92,829,449 $ 268,622,765 Primary Government Business -type Activities $ 31,384,774 5,289,743 279,366 7,237,450 295,083 36,675 5,192,951 9,533,524 91,367,655 36,618 150,653,839 1,432,043 196,096 1,628,139 2,788,448 364,547 46,709 947,115 2,497,950 1,412,363 16,665,765 24,722,897 619,041 735,036 279,366 1,633,443 86,841,468 1,311,479 3,881,472 33,891,219 $ 125,925,638 Total $ 171,393,987 18,615,241 5,075,058 304,978 1,266,086 18,508,099 83,031,230 237,727,794 770,996 536,693,469 8,918,876 1,209,298 10,128,174 20,574,594 2,494,210 2,687,685 334,828 947,115 2,497,950 9,270,775 100,024,012 138,831,169 3,838,684 4,528,329 5,075,058 13,442,071 254,181,773 5,680,447 3,881,472 2,912,798 162,433 292,813 652,693 843 62,463 126,720,668 $ 394,548,403 The Notes to the Basic Financial Statements are an integral part of these statements. 20 Program Activities Primary government Governmental activities Culture and recreation Development services General and administrative Highways and streets Public safety Interest Total governmental activities Business -type activities Water and wastewater Drainage utility Golf course Other recreation enterprises Total business -type activities Total primary government CITY OF EULESS, TEXAS GOVERNMENT -WIDE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2025 Expenses Charges for Services Program Revenues Operating Grants and Contributions Net (Expense) Revenue and Changes in Net Position Capital Grants and Governmental Contributions Activities Primary Government Business - Type Activities Total $ 9,713,145 1,886,805 29,657,656 5,037,137 39,199,884 2,732,355 88,226,982 33,065,992 1,678,417 6,100,845 2,461,108 43,306,362 $ 282,656 $ 954 $ 6,333,849 - 797,603 5,574 134,381 - 4,631,736 540,677 12,180,225 33,758,452 1,255,830 3,530,639 2,281,292 40,826,213 547,205 7,248,688 174,449 $ (9,429,535) $ 4,447,044 (28,854,479) 2,345,932 (33,853,022) (2,732,355) 7,423,137 (68,076,415) 7,947,491 1,676,294 9,623,785 $ 131,533,344 $ 53,006,438 $ 547,205 $ 17,046,922 (68,076,415) General Revenues Taxes Property taxes Sales taxes Car rental taxes Mixed beverage taxes Hotel/motel occupancy taxes Gross receipts taxes Investment income Rents and royalties Miscellaneous Transfers Total general revenues and transfers Change in net position NET POSITION, beginning of year NET POSITION, end of year The Notes to the Basic Financial Statements are an integral part of these statements. 31,876,634 32,032,179 20,255,173 258,974 1,698,065 4,700,183 7,610,517 1,423,846 2,156,954 (1,882,072) 100,130,453 8,639,951 1,253,707 (2,570,206) (179,816) 7,143,636 $ (9,429,535) 4,447,044 (28,854,479) 2,345,932 (33,853,022) (2,732,355) (68,076,415) 8,639,951 1,253,707 (2,570,206) (179,816) 7,143,636 7,143,636 (60,932,779) 1,506,353 1,882,072 31,876,634 32,032,179 20,255,173 258,974 1,698,065 4,700,183 9,116,870 1,423,846 2,156,954 3,388,425 103, 518, 878 32,054,038 236,568,727 10,532,061 115,393,577 42,586,099 351,962,304 $ 268,622,765 $ 125,925,638 $ 394,548,403 21 CITY OF EULESS, TEXAS BALANCE SHEET — GOVERNMENTAL FUNDS SEPTEMBER 30, 2025 Debt Car General Service Rental Tax Fund Fund Fund ASSETS Deposits and investments $ 28,275,895 $ 2,780,127 $ 15,798,914 Receivables Property taxes 424,486 106,653 - Accounts receivable 1,755,299 155,846 - Accrued interest receivable 189,573 - 83,342 Due from other governments 3,324,748 - 3,475,997 Lease receivable 734,991 - - Prepaids and deposits 152,543 - - Inventories, at cost 9,895 - - Restricted deposits and investments - - Total assets $ 34,867,430 $ 3,042,626 $ 19,358,253 LIABILITIES Accounts payable Contracts payable Accrued liabilities $ 2,389,149 $ 500 $ 12,229,845 1,226,697 Total liabilities 3,615,846 500 12,229,845 DEFERRED INFLOWS OF RESOURCES Unavailable revenue - property taxes Unavailable revenue - other Deferred inflow related to leases 424,486 103,679 150,399 - 734,991 - Total deferred inflows of resources 1,309,876 FUND BALANCES 103,679 Nonspendable Prepaids, deposits, and inventories 162,438 - - Restricted for Debt service 2,938,447 - Capital projects - - Developer agreements - - Court technology/building security 162,433 - - Juvenile case management - - Cable PEG fees - - Historical preservation - - Opioid remediation 62,463 - - Assigned 210,748 - 7,128,408 Unassigned 29,343,626 - - Total fund balances 29,941,708 2,938,447 7,128,408 Total liabilities, deferred inflows of resources, and fund balances $ 34,867,430 $ 3,042,626 $ 19,358,253 The Notes to the Basic Financial Statements are an integral part of these statements. 22 General CIP Fund Police CIP Fund $ 14,380,892 $ 10,000 29,004 Non -major Governmental Funds Total Governmental Funds 3,067,163 $ 37,012,658 13,257,123 142,756 610,091 80,079 2,087,317 4,060,701 68,741 58,025 $ 14,419,896 $ 16,324,286 $ 44,120.368 $ 1,006,176 $ 19,376 $ 1,775,325 2,494,210 1,006,176 2,513,586 13,413,720 10,762,913 3,047,787 13,413,720 13,810,700 214,705 1,990,030 $ 101,315,649 673,895 2,531,236 381,998 8,888,062 4,795,692 221,284 9,895 13,315,148 $ 132,132,859 $ 17,420,371 2,494,210 1,441,402 21,355,983 34,324 4,060,701 4,095,025 528,165 184,723 4,795,692 5,508,580 68,741 231,179 1,430,521 4,368,968 58,025 10,820,938 2,912,798 2,912,798 - 162,433 292,813 292,813 652,693 652,693 843 843 - 62,463 32,647,600 56,448,263 (28,721) 29,314,905 38,035,313 105,268,296 $ 14,419,896 $ 16,324,286 $ 44,120,368 $ 132,132,859 THE CITY OF EULESS CITY OF EULESS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Total fund balances - governmental funds $ 105,268,296 Amounts reported for governmental activities in the statement of net position are different because: Capital and intangible assets of governmental funds are not current financial resources, therefore, assets are not reported in the governmental funds balance sheet. Amount shown is net of accumulated depreciation and accumulated amortization. Interest payable on long-term debt does not require current financial resources, therefore, interest payable is not reported as a liability in the governmental funds balance sheet. Internal service funds are used by management to charge the cost of certain activities, such as insurance and equipment replacement, to individual funds. The assets and liabilities of the internal service funds are net of the amount allocated to business -type activities. 210,349,430 (288,119) 42,293,524 Revenues earned but not available within sixty days of the year end are not recognized as revenue on the fund financial statements. 712,888 Funds comprising the net OPEB liability ($2,670,152), deferred inflows ($3,793,293), and deferred outflows $1,013,202 of resources related to OPEB are not current financial resources, therefore, they are not reported in the governmental funds balance sheet. Funds comprising the net pension liability ($13,105,374), deferred inflows ($3,219,643), and deferred outflows $7,486,833 of resources related to the pension are not current financial resources, therefore, they are not reported in the governmental funds balance sheet. Long-term liabilities, including bonds payable and compensated absences (excluding those of internal service funds), are not due and payable in the current period, therefore, they are not reported in the fund financial statements. (5,450,243) (8,838,184) (75,424,827) Net position of governmental activities $ 268,622,765 The Notes to the Basic Financial Statements are an integral part of these statements. 25 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES — GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2025 Debt Car General Service Rental Tax Fund Fund Fund Revenues Property tax $ 23,228,682 $ 5,556,456 $ Gross receipts tax 4,652,664 - Mixed beverage tax 258,974 - Sales tax 19,514,896 - Car rental tax 20,255,173 Fines and fees 5,150,784 Licenses and permits 6,295,717 Investment income 1,325,689 391,728 947,391 Intergovernmental 540,676 - Rents and royalties 720,727 481,327 Other revenues 484,646 - Total revenues 62,173,455 6,429,511 21,202,564 Expenditures Current Culture and recreation 4,117,975 Development services 1,526,434 General and administrative 12,560,852 - 13,564,649 Highways and streets 1,852,663 Public safety 32,439,450 Debt service Principal 171,724 12,214,017 Interest and fiscal charges 3,043 2,629,588 Capital outlay 2,244,243 - 151,816 Total expenditures 54,916,384 14,843,605 13,716,465 Excess (deficiency) of revenues over (under) expenditures 7,257,071 (8,414,094) 7,486,099 Other financing sources (uses) Issuance of subscription debt 121,954 Proceeds from sale of assets 11,350 Transfers in 3,916,314 8,597,988 750,000 Transfers out (4,674,055) (197,505) (12,184,740) Total other financing sources (uses), net (624,437) 8,400,483 (11,434,740) Net change in fund balances 6,632,634 (13,611) (3,948,641) Fund balances, beginning of year 23,309,074 2,952,058 11,077,049 Fund balances, end of year $ 29,941,708 $ 2,938,447 $ 7,128,408 The Notes to the Basic Financial Statements are an integral part of these statements. 26 General Police Non -major Total CIP CIP Governmental Governmental Fund Fund Funds Funds $ - $ - $ 2,901,673 $ 31,686,811 - - 1,745,584 6,398,248 - - - 258,974 - - 12,517,283 32,032,179 - - - 20,255,173 - - - 5,150,784 - - - 6,295,717 697,915 990,459 1,587,683 5,940,865 - 810,336 1,351,012 45,240 - 84,567 1,331,861 - - 213,798 698,444 743,155 990,459 19,860,924 111,400,068 4,290,483 8,408,458 273,521 1,799,955 11,574 - 935,589 27,072,664 - - 3,850 1,856,513 - - 4,178,018 36,617,468 - - 275,837 12,661,578 - - 157,211 2,789,842 6,611,661 11,765,161 7,476,598 28,249,479 6,623,235 11,765,161 17,591,107 119,455,957 (5,880,080) (10,774,702) 2,269,817 (8,055,889) - - 121,954 - - 11,350 3,347,505 - 13,021,659 29,633,466 - (16,025,342) (33,081,642) 3,347,505 - (3,003,683) (3,314,872) (2,532,575) (10,774,702) (733,866) (11,370,761) 15,946,295 24,585,402 38,769,179 116,639,057 $ 13,413,720 $ 13,810,700 $ 38,035,313 $ 105,268,296 27 T H E C I T Y O F EULESS Change in net position of governmental activities 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, 2025 Net change in fund balances - total governmental funds $ (11,370,761) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over the estimated useful lives and reported as depreciation expense. This is the amount of capital expenditures recorded in the current period. 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. 28,234,126 7,079,248 Depreciation and amortization expense on capital and intangible assets is reported in the statement of activities but does not require the use of current financial resources. Therefore, depreciation and amortization expenses are not reported as expenditures in the governmental funds. (8,049,056) The issuance of long-term debt provides current financial resources to governmental funds, but has no effect on net position. (121,954) The repayment of the principal of long-term debt consumes current financial resources of governmental funds, but has no effect on net position. 12,672,513 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. 481,972 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. (3,361,382) 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. 52,217 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. 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. 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. 1,818,099 12,021 4,519,926 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. 87,069 $ 32,054,038 The Notes to the Basic Financial Statements are an integral part of these statements. 29 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION - PROPRIETARY FUNDS SEPTEMBER 30, 2025 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service ASSETS Wastewater Utility Course Enterprises Funds Funds Current assets Deposits and investments $ 24,831,327 $ 1,340,751 $ 2,416,058 $ 2,796,638 $ 31,384,774 $ 38,693,564 Accounts receivable and unbilled revenue less allowance for uncollectibles of $26,159 for water and wastewater and $363 for drainage utility 4,918,384 149,548 94,349 20,478 5,182,759 586,070 Accrued interest receivable 106,984 - - - 106,984 264,237 Lease receivable - - 39,386 39,386 - Prepaids and deposits 26,244 10,431 - 36,675 1,008,127 Inventory 122,955 149,173 22,955 295,083 - Total unrestricted current assets Restricted deposits and investments W&WW impact fees Revenue bond reserve for debt service Total restricted assets Total current assets 30,005,894 1,490,299 2,670,011 2,879,457 37,045,661 40,551,998 3,881,472 3,881,472 1,311,479 1,311,479 5,192,951 - 5,192,951 35,198,845 1,490,299 2,670,011 2,879,457 42,238,612 40,551,998 Non -current assets Lease receivable - 239,980 239,980 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 1,192,544 114,380 558,062 1,662,732 3,527,718 24,245,095 Improvements 1,097,773 1,346,583 9,370,315 10,089,466 21,904,137 - Construction in progress 3,814,979 - 3,814,979 Utility system 122,102,351 34,863,695 - 156,966,046 - Total property, plant, and equipment in service Less accumulated depreciation 135,209,210 36,884,484 14,447,563 12,825,005 199,366,262 24,245,095 59,605,299 20,633,719 10,011,994 8,214,071 98,465,083 14,002,302 Net property, plant, and equipment in service 75,603,911 16,250,765 4,435,569 4,610,934 100,901,179 10,242,793 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 Less accumulated amortization 38,471 157,878 45,014 241,363 37,492 124,058 43,195 204,745 Net intangible assets 979 33,820 1,819 36,618 Total non -current assets 75,604,890 16,250,765 4,469,389 4,852,733 101,177,777 10,242,793 Total assets 110,803,735 17,741,064 7,139,400 7,732,190 143,416,389 50,794,791 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows related to pension 1,066,827 119,909 209,638 35,669 1,432,043 Deferred outflows related to OPEB 144,096 17,120 30,043 4,837 196,096 Total deferred outflows of resources $ 1,210,923 $ 137,029 $ 239,681 $ 40,506 $ 1,628,139 $ The Notes to the Basic Financial Statements are an integral part of these statements. 30 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION - PROPRIETARY FUNDS - CONTINUED SEPTEMBER 30, 2025 LIABILITIES Current liabilities Payable from current assets Accounts payable Accrued salaries and wages Current portion of bonds payable Current portion of compensated absences Current portion of lease liability Accrued insurance claims Unearned revenue Accrued interest Total current liabilities Non -current liabilities Customer and escrow deposits Net pension liability Net OPEB liability Bonds payable Compensated absences Total non -current liabilities Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions Deferred inflows related to OPEB Deferred inflows related to leases Total deferred inflows of resources NET POSITION Net investment in capital assets Restricted for Impact fees Debt service Unrestricted Total net position Business -Type Activities - Enterprise Funds Water and Wastewater $ 2,522,926 199,904 845,000 361,748 979 873,636 46,709 Drainage Utility $ 54,607 25,733 38,284 Golf Course Other Recreation Enterprises Total Enterprise Funds $ 129,969 $ 80,946 $ 117,130 21,780 112,707 18,006 33,820 1,819 73,479 4,850,902 118,624 467,105 2,377,623 120,327 1,929,055 183,359 233,487 343,833 32,069 66,848 13,214,711 - - 403,308 49,647 120,756 18,268,530 265,075 541,418 23,119,432 383,699 1,008,523 415,470 539,973 955,443 37,881 63,976 101,857 150,337 112,974 263,311 122,551 2,788,448 364,547 845,000 530,745 36,618 947,115 46,709 5,559,182 2,497,950 56,699 2,402,600 12,502 455,252 13,214,711 19,491 593,202 88,692 19,163,715 211,243 24,722,897 15,353 18,113 279,366 312,832 619,041 735,036 279,366 1,633,443 Governmental Activities - Internal Service Funds $ 365,775 11,736 7,631 870,000 1,255,142 8,675 8,675 1,263,817 61,544,200 16,250,765 4,435,569 4,610,934 86,841,468 10,242,793 3,881,472 3,881,472 - 1,311,479 1,311,479 21,202,632 1,141,772 1,671,678 2,637,687 26,653,769 39,288,181 $ 87,939,783 $ 17,392,537 $ 6,107,247 $ 7,248,621 118,688,188 $ 49,530,974 Reconciliation to govei,n lent -wide statement of net position Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds Net position of business -type activities 7,237,450 $ 125,925,638 The Notes to the Basic Financial Statements are an integral part of these statements. 31 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2025 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Operating revenues Water service $ 18,900,713 $ $ - $ - $ 18,900,713 $ - Reclaimed water service 789,249 - - 789,249 - Wastewater service 12,471,285 - - 12,471,285 - Drainage fees - 1,255,830 - - 1,255,830 - Recreation fees - - 706,315 706,315 - Insurance premiums - - - - 8,213,450 Service fees and miscellaneous 1,597,205 3,856,165 1,574,977 7,028,347 6,323,072 Total operating revenues 33,758,452 1,255,830 3,856,165 2,281,292 41,151,739 14,536,522 Operating expenses General and administrative 615,374 615,374 2,978,273 Water production 11,490,753 11,490,753 - Water distribution 1,846,484 1,846,484 Utility engineering 535,914 535,914 Wastewater collection and treatment 7,425,014 - - 7,425,014 - Nondepartmental 5,702,384 - - 5,702,384 - Geographic information systems 786,120 - - 786,120 - Service center 1,499,323 - - 1,499,323 - Drainage - 838,986 - - 838,986 Recreation classes - 544,378 544,378 Golf course 2,404,485 - 2,404,485 Pro shop 432,168 - 432,168 Food and beverage - 1,619,615 - 1,619,615 - Conference center 967,028 967,028 Cart operations - 273,776 - 273,776 - Parks at Texas Star - - 1,295,492 1,295,492 - Arbor Daze - - 201,608 201,608 - Insurance costs - - - - 8,364,028 Depreciation 2,804,938 838,965 402,840 457,403 4,504,146 2,266,774 Amortization 11,888 122,094 10,879 144,861 - Total operating expenses 32,718,192 1,677,951 6,222,006 2,509,760 43,127,909 13,609,075 Operatingincome(loss) 1,040,260 (422,121) (2,365,841) (228,468) (1,976,170) 927,447 The Notes to the Basic Financial Statements are an integral part of these statements. 32 CITY OF EULESS, TEXAS STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION - PROPRIETARY FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2025 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Nonoperating revenues (expenses) Gain (loss) on sale of capital assets $ - $ - $ (325,526) $ $ (325,526) $ 443,691 Investment income 1,146,285 49,957 197,948 112,163 1,506,353 1,669,654 Interest expense (234,572) (30,810) (41) (265,423) - Total nonoperatingrevenues, net 911,713 49,957 (158,388) 112,122 915,404 2,113,345 Income (loss) before contributions and transfers 1,951,973 (372,164) (2,524,229) (116,346) (1,060,766) 3,040,792 Capital contributions 7,947,491 1,676,294 - 9,623,785 - Transfers in - - 3,486,393 183,357 3,669,750 2,016,104 Transfers out (2,175,708) (61,970) - (2,237,678) - Net income (loss) 7,723,756 1,242,160 962,164 67,011 9,995,091 5,056,896 Total net position - beginning 80,216,027 16,150,377 5,145,083 7,181,610 108,693,097 44,474,078 Total net position- ending $ 87,939,783 $ 17,392,537 $ 6,107,247 $ 7,248,621 $ 118,688,188 $ 49,530,974 Reconciliation to government -wide statement of net position Adjustment to reflect the consolidation of internal service funds' activities related to enterprise funds 536,970 Change in net position of business -type activities $ 10,532,061 The Notes to the Basic Financial Statements are an integral part of these statements. 33 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS YEAR ENDED SEPTEMBER 30, 2025 Business -Type Activities - Enterprise Funds Governmental Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds OPERATING ACTIVITIES Cash received from customers $ 30,949,862 $ 1,216,019 $ 3,939,187 $ 2,308,116 $ 38,413,184 $ 14,659,172 Cash payments to suppliers for goods and services (26,610,197) (306,405) (3,070,439) (1,546,142) (31,533,183) (11,526,514) Cash payments to employees for services (4,257,431) (440,275) (2,526,617) (496,539) (7,720,862) (186,073) Net cash provided by (used in) operating activities 82,234 469,339 (1,657,869) 265,435 (840,861) 2,946,585 NONCAPITAL FINANCING ACTIVITIES Transfer in Transfer out Net cash provided by (used in) noncapital financing activities 3,486,393 183,357 3,669,750 2,016,104 (2,175,708) (61,970) - (2,237,678) (2,175,708) (61,970) 3,486,393 183,357 1,432,072 2,016,104 CAPITAL AND RELATED FINANCING ACTIVITIES Impact fees 343,127 - 343,127 Acquisition/construction of capital/intangible assets (3,539,689) (304,839) (1,010,429) (117,077) (4,972,034) (4,812,546) Interest paid on capital debt (236,542) (36,143) (41) (272,726) Principal paid on capital debt (840,000) (1,705,000) - (2,545,000) Principal paid on leases (5,858) (39,657) (10,879) (56,394) Principal paid on subscriptions (4,743) - (4,743) Capital contributions - cash and cash equivalents 3,105,922 3,105,922 Proceeds from sale of capital assets - - 479,338 Net cash used in capital and related financing activities (1,177,783) (304,839) (2,791,229) (127,997) (4,401,848) (4,333,208) INVESTING ACTIVITIES Interest received on investments Net cash provided by investing activities Net change in cash and cash equivalents Cash and cash equivalents, beginning of year 1,168,545 49,957 197,948 112,163 1,528,613 1,710,607 1,168,545 49,957 197,948 112,163 1,528,613 1,710,607 (2,102,712) 152,487 (764,757) 432,958 (2,282,024) 2,340,088 32,126,990 1,188,264 3,180,815 2,363,680 38,859,749 36,353,476 Cash and cash equivalents, end of year $ 30,024,278 $ 1,340,751 $ 2,416,058 $ 2,796,638 $ 36,577,725 $ 38,693,564 The Notes to the Basic Financial Statements are an integral part of these statements. 34 CITY OF EULESS, TEXAS STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2025 Business -Type Activities - Governmental Enterprise Funds Activities - Other Total Internal Water and Drainage Golf Recreation Enterprise Service Wastewater Utility Course Enterprises Funds Funds Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ 1,040,260 $ (422,121) $ (2,365,841) $ (228,468) $ (1,976,170) S 927,447 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 2,816,826 838,965 524,934 468,282 4,649,007 2,266,774 Changes in assets and liabilities: Accounts receivable and unbilledrevenue 227,207 (39,811) 91,357 26,824 305,577 122,650 Prepaids and deposits (6,928) - 11,214 4,286 (229,056) Inventory 5,765 - (25,857) 1,529 (18,563) Net OPEB liability (216,082) (23,805) (49,442) (7,324) (296,653) Net pension liability (733,808) (80,844) (167,905) (24,875) (1,007,432) Deferred outflows 579,103 73,098 51,464 17,737 721,402 Deferred inflows 131,798 4,045 91,056 (33,120) 193,779 - Accounts payable (1,210,068) 54,607 30,468 19,034 (1,105,959) (393,192) Accrued salaries and wages 20,692 5,388 7,456 2,150 35,686 14,963 Accrued insurance claims - - - 236,999 Compensated absences 463,266 59,817 151,562 23,666 698,311 - Customer and escrow deposits 70,125 (3,008) 67,117 Unearned revenue (3,105,922) (5,327) (3,111,249) Net cash provided by (used in) operating activities $ 82,234 $ 469,339 $ (1,657,869) $ 265.435 S (840,861) $ 2,946,585 Noncash financing activities Developer contributed assets $ 7,604,364 $ 1,676,294 $ - $ - $ 9,280,658 $ Reconciliation of cash to balance sheet: Cash -current $ 24,831,327 $ 1,340,751 $ 2,416,058 $ 2,796,638 $ 31,384,774 $ 38,693,564 Cash -restricted 5,192,951 - - - 5,192,951 Cash and cash equivalents $ 30,024,278 $ 1,340,751 $ 2,416,058 $ 2,796,638 $ 36,577,725 $ 38,693,564 The Notes to the Basic Financial Statements are an integral part of these statements. 35 CITY OF EULESS, TEXAS STATEMENT OF NET POSITION — FIDUCIARY FUNDS SEPTEMBER 30, 2025 ASSETS Investments at fair value Investment pool Money market account Fixed income funds Equity funds Total assets Star Center Escrow OPEB Custodial Fund Trust Fund $ 1,436,017 $ 391,655 6,477,898 10,460,297 1,436,017 17,329,850 LIABILITIES Refunds payable 15,470 Total liabilities 15,470 NET POSITION Restricted for Debt service Other post -employment benefits 1,420,547 - 17,329,850 Total net position $ 1,420,547 $ 17,329,850 The Notes to the Basic Financial Statements are an integral part of these statements. 36 CITY OF EULESS, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION YEAR ENDED SEPTEMBER 30, 2025 Star Center Escrow OPEB Custodial Fund Trust Fund ADDITIONS Employer contributions $ - $ 2,019,008 Other contributions - 300,233 Investment income Investment income 63,210 1,548,284 Less: investment expense - (85,655) Net investment income Total additions 63,210 1,462,629 63,210 3,781,870 DEDUCTIONS Payments to beneficiaries 63,210 Insurance claims - 1,309,524 Administrative expenses - 224,115 Total deductions 63,210 1,533,639 Change in net position - 2,248,231 Net position - beginning of year 1,420,547 15,081,619 Net position - ending $ 1,420,547 $ 17,329,850 The Notes to the Basic Financial Statements are an integral part of these statements. 37 T H E C I T Y O F EULESS CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Statement The City of Euless (the City) was incorporated on February 24, 1953. The City operates under a Council -Manager form of government and provides the following services as authorized by its charter: general government, police and fire protection, emergency ambulance service, road and traffic signal maintenance, water and wastewater operations, drainage system, parks and recreational facilities, courts, library services, planning land use, building inspection, and traffic control. The accounting and reporting policies of the City relating to the funds included in the accompanying basic financial statements conform to accounting principles generally accepted in the United States of America (GAAP) applicable to state and local governments. GAAP for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The more significant accounting policies of the City are described as follows: Financial Reporting Entity As required by GAAP, these basic financial statements present the primary government and its component units, entities for which the government is considered to be financially accountable. The blended component units, although legally separate entities, are, in substance, part of the primary government's operations. As such, data from these units is combined with data of the primary government. Blended Component Units The City includes four component units in the financial statements. The Euless Development Corporation (Corporation) is used to account for the accumulation of half -cent sales tax proceeds dedicated to building and improving City parks and facilities, enhancing library services, and stimulating economic development activities within the City. The Euless Crime Control and Prevention District (District) is used to account for the accumulation and use of quarter -cent sales tax proceeds dedicated for crime reduction programs. The Corporation and the District are reported as special revenue funds of the primary government. The Boards of Directors of both component units are substantively the same as the City Council. There are seven directors on each board, four of whom are council members which constitutes a voting majority of the City Council. The remaining three board members are residents of the City. Upon dissolution of the Corporation or the District, the entity's assets will be distributed to the City. Each component unit provides all of its services to the City. The financial statements for the units were obtained from the respective Boards of Directors. Financial information for both entities may be obtained from the City. 39 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Financial Reporting Entity — Continued Blended Component Units — Continued The Tax Increment Reinvestment Zone #3 — Glade Parks (TIRZ #3) is also a blended component unit of the City and is reflected in the financial statements as a special revenue fund. TIRZ #3 was created to stimulate development and enhance the value of taxable real property within the boundaries of the zone. Tarrant County and Tarrant County College District are taxing entities participating in TIRZ #3. The Board of Directors of TIRZ #3 is substantially the same as the City Council and management of the City has operational responsibility for TIRZ #3. The Board is comprised of seven directors, four of whom are council members which constitutes a voting majority of the Board. The remaining three board members are representatives selected by the other participating taxing entities and the Tarrant County Hospital District Financial information for TIRZ #3 may be obtained from the City. The Tax Increment Reinvestment Zone #4 — Midtown (TIRZ #4) is also a blended component unit of the City and is reflected in the financial statements as a special revenue fund. The Midtown CIP Fund is also part of TIRZ#4. TIRZ #4 was created to stimulate development and enhance the value of taxable real property within the boundaries of the zone. Tarrant County, Tarrant County Hospital District, and Tarrant County College District are taxing entities participating in TIRZ #4. The Board of Directors of TIRZ #4 is substantially the same as the City Council and management of the City has operational responsibility for TIRZ #4. The Board is comprised of seven directors, four of whom are council members which constitutes a voting majority of the Board. The remaining three board members are representatives selected by the other participating taxing entities. Financial information for TIRZ #4 may be obtained from the City. Basis of Presentation The government -wide financial statements (the statement of net position and the statement of activities) report information on all of the activities of the City, except fiduciary funds. The effect of interfund activity, with the exception of interfund services provided or used, within the governmental and business -type activities columns, has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on user fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific program. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given program and 2) operating or capital grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Taxes and other items not properly included among program revenues are reported instead as general revenues. 40 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued Fund Financial Statements The City segregates transactions related to certain functions or activities in separate funds in order to aid financial management and to demonstrate compliance with various legal provisions. Separate statements are presented for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. These statements present each major fund as a separate column on the fund financial statements; all non -major funds are aggregated and presented in a single column. Governmental funds are those funds through which most governmental functions are typically financed. The measurement focus of governmental funds is on the sources, uses, and balances of current financial resources. The City has presented the following major governmental funds: General Fund The General Fund is the main operating fund of the City. This fund is used to account for all financial resources not accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed charges, and capital improvement costs that are not paid through other funds are paid from the General Fund. Debt Service Fund The Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal, interest, and related costs on general long-term debt paid primarily from property taxes levied by the City. The fund balance of the Debt Service Fund is restricted for debt service expenditures. Car Rental Tax Fund The Car Rental Tax Fund is used to account for revenues received from the collection of short-term motor vehicle rental taxes and the expenditures thereof. Per contractual agreement, revenues are shared with the cities of Dallas and Fort Worth. The City's portion of the revenue is used primarily for debt reduction, one-time capital projects, and to maintain the property tax rate. General CIP Fund The General CIP Fund is used to account for various general construction projects within the City. 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. 41 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Basis of Presentation — Continued 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 proprietary funds: Water and Wastewater Fund Water and Wastewater Fund is used to account for the acquisition, operation and maintenance of a municipal water and wastewater utility, supported primarily by user charges. Drainage Utility Fund Drainage Utility Fund is used to account for the acquisition, operation, and maintenance of a municipal drainage utility, supported primarily by user charges. Golf Course Fund Golf Course Fund is used to account for operation and maintenance of the City's golf course, supported primarily by user charges. Other Recreation Enterprises Fund Other Recreation Enterprises Fund is used to account for operations and maintenance of recreation programming, Arbor Daze, and the Parks at Texas Star, supported 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. 42 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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. 43 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Measurement Focus and Basis of Accounting — Continued The significant revenues susceptible to accrual are property taxes, franchise fees, licenses, charges for service, interest income, and intergovernmental revenues. Sales taxes and short-term motor vehicle rental taxes collected and held by the state at year end on behalf of the City are also recognized as revenue. All other governmental fund revenues are recognized when received. Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." Deposits and Investments Substantially all operating cash, deposits, and short-term investments are maintained in consolidated cash accounts or individual fund investment accounts. Related interest income is allocated to the various funds based primarily on ownership by each fund of specific investments. Cash equivalents consist of highly -liquid investments with original maturities of three months or less. For purposes of the statement of cash flows, the City considers all highly liquid investments to be cash equivalents. Investments in U.S. Treasury and agency obligations with maturities of one year or less when purchased are reported at amortized cost. All other investments are reported at fair value. State statutes authorize the City to invest in obligations of the U.S. Government or its agencies; obligations of the State of Texas or its agencies; and certain other obligations, repurchase agreements, money market mutual funds, and certificates of deposits within established criterion. Property Taxes Property taxes are levied for appropriation for the fiscal year beginning on October 1, are due October 1, attach as an enforceable lien on property as of January 1, and become delinquent on February 1. Property taxes are accrued based on the period for which they are levied and available. Delinquent taxes estimated not to be available are treated as deferred inflows of resources. Property taxes for cities, including those applicable to debt service, are limited by the Texas Constitution to $2.50 per $100 of assessed valuation. The City's current tax rate is $0.4467 per $100 of assessed valuation ($0.4575 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. 44 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Inventories — Continued Inventories consist primarily of expendable supplies for the General Fund and Internal Service funds and merchandise for resale for the Enterprise Funds. Prepaid Items Prepaid balances are for payments made by the City in the current year to provide services occurring in the subsequent fiscal year, and are recognized as expenditures utilizing the consumption method. Transactions Between Funds Interfund services provided and used are accounted for as revenues and expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures or expenses initially made from it that are properly applicable to another fund, are recorded as expenditures or expenses in the reimbursing fund and as a reduction of expenditures or expenses in the fund reimbursed. All other interfund transactions are recorded as transfers. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the fund financial statements for proprietary funds. All capital assets are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated assets are recorded at acquisition value on the date donated. Repairs and maintenance are recorded as expenses. Renewals and betterments are capitalized. 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 45 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Leases - Lessee The City is a lessee for noncancellable leases of property and equipment. The City recognizes a lease liability, reported 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. 46 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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 and sick leave 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). GASB Statement No. 101, Compensated Absences, was implemented during year ending September 30, 2025 and improves the information provided to financial statements users by updating the recognition and measurement requirements for compensated absences under a unified model and amending certain previously required disclosures. 47 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Compensated Absences - Continued Upon implementation, the City recognized a liability for compensated absences for leave time that (1) has been earned for services previously rendered by employees, (2) accumulates and is allowed to be carried over to subsequent years, and (3) is more likely than not to be used as time off or settled (for example paid in cash to the employee or payment to an employee benefit account) during or upon separation from employment. The liability for compensated absences is reported as incurred in the government -wide and proprietary fund financial statements. Fund Balance Classifications Fund balances are classified as follows on the governmental fund financial statements: Reported in Nonspendable Restricted for Debt service Capital projects Developer agreements Court tech/building security Juvenile case management Cable PEG fees Historical preservation Opioid remediation Assigned Capital projects Betterments Emergency/radio systems Tourism and conference facilities Parks, library, and economic development Police department Other Unassigned Debt Service Car Rental Tax General Fund Fund Fund $ 162,438 162,433 62,463 99,255 47,230 64,263 29,343,626 $ - $ 2,938,447 7,128,408 General CIP Fund Nonmajor Governmental Police CIP Fund Funds Total Governmental Funds $ $ 68,741 $ 231,179 1,430,521 4,368,968 10,762,913 58,025 10,820,938 2,912,798 2,912,798 162,433 292,813 292,813 652,693 652,693 843 843 62,463 13,413,720 3,047,787 20,107,711 36,569,218 99,255 47,230 2,238,089 2,238,089 Total $ 29,941,708 S 2,938,447 S 7,128,408 S 13,413,720 S 13,810,700 4,849,682 4,849,682 2,796,416 2,796,416 2,655,702 9,848,373 (28,721) 29,314,905 $ 38,035,313 $ 105,268,296 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. 48 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Fund Balance Classifications — Continued 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. 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/building security represents funds collected from court fees that must be used to upgrade court systems or building security. 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. 49 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Fund Balance Classifications — Continued d. Assigned for tourism and conference facilities represents funds to promote the City through tourism, conference booking, and historical preservation. e. Assigned for parks, libraries, and economic development represents funds from sales taxes that are to be used for park improvements, library activities, and economic development throughout the City. f. Assigned for the police department are funds from the Crime Control and Prevention District and police drug arrests and asset seizures to be used for police department expenditures. 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. 50 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED 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. 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: • Pension contributions subsequent to the measurement date — these contributions are deferred and recognized in the following fiscal year (deferred outflow of resources). 51 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Deferred Outflows/Inflows of Resources — Continued • Difference in 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). • 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, 2025, 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. 52 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED Tax Abatements - Continued 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 2025. 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 2025, the City rebated $1,194,992 in sales taxes, or 3.73% of the total sales tax revenues and $16,572 in property tax revenue, or less than 0.05% 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. 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. 53 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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, 2025. At year-end, the carrying amount of the City's deposits was $6,773,077, with a bank balance of $7,063,764. The total bank balance is covered by Federal Depository Insurance Corporation (FDIC) insurance or by collateral for balances in excess of FDIC coverage. Collateral is held by Bank of NY Mellon in the City's name under a joint safekeeping agreement with Frost National Bank for City deposits at Frost Bank. The market value of the collateral provided by Frost Bank at the close of the fiscal year was $7,314,988 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, 2025, the City did not own any types of securities other than those permitted by statute. 54 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued Fair Value Level % of Rating Investment Type Book Value 2 Portfolio WAM Rating Agency Investments measured at amortized cost: Investment Pools: TexasClass $ 41,345,093 22% 17 AAAm S&P TexPool 41,548,201 23% 44 AAAm S&P TexSTAR 41,446,655 22% 50 AAAm S&P Investments measured at fair value: Certificates of Deposit 6,238,000 6,269,727 4% 9 Not rated U.S. Government Agency Securities: FNMA 1,000,000 1,001,530 1% 5 AA+/Aa1 S&P/Moody's FFCB 22,980,134 23,076,950 12% 39 AA+/Aa1 S&P/Moody's FHLB 24,490,040 24,538,345 13% 72 AA+/Aa1 S&P/Moody's FAMCA 5,998,500 6,034,450 3% 19 Not rated Totals $ 185,046,623 $ 60,921,002 100% 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, and FAMCA — Federal Agricultural Mortgage Corporation. The rating agency acronyms are defined as follows: S&P — Standard and Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. and Moody's — Moody's Investor Service, Inc. Additional information about the rating agency or the significance of the ratings provided may be obtained from each agency's web site. Fair Value The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application provides a framework for measuring fair value which establishes a three -level fair value hierarchy that describes the inputs that are used to measure assets and liabilities. • Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date. • Level 2 inputs are inputs — other than quoted prices included within Level 1 that are observable for an asset or liability, either directly or indirectly. • Level 3 inputs are unobservable inputs for an asset or liability. 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. 55 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued Fair Value — Continued The City has recurring fair value measurements as presented in the previous table. The City's investment balances and weighted average maturity of such investments are as shown. Investment pools are measured at amortized cost and are exempt from fair value reporting. U.S Treasury and U.S. Government Agency Securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices. Certificates of Deposit classified in Level 2 of the fair value hierarchy are valued using inputs such as interest rates and yield curves that are observable at commonly quoted intervals. All of the public fund investment pools (pools) in which the City is a participant use amortized cost to value the portfolio. Amortized cost, in most cases, approximates the market value of the securities held. In order to meet the criteria to be recorded at amortized cost, investment pools must transact at a stable net asset value per share and maintain certain maturity, quality, liquidity and diversification requirements within the investment pool. The pools in which the City invests transact at a net asset value of $1.00 per share, have a weighted average maturity of 60 days or less and weighted average life of 120 days or less, hold investments that are highly rated by a nationally recognized statistical rating organization, have no more than 5% of the portfolio with one issuer (excluding U.S. government securities), and can meet reasonably foreseeable redemptions. The TexPool investment pool is an external investment pool 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. 56 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Investments — Continued Fair Value — Continued 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. 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, 2025, 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. 57 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS — CONTINUED Interest Rate Risk — Continued The following table details the maturity schedule for the City's investment portfolio as of September 30, 2025: Maturity Schedule Book Value Fair Value % of Portfolio Overnight $ 124,339,949 $ 124,339,949 67% Less than 1 month 240,000 240,000 0% 1 to 6 months 13,665,460 13,684,160 8% 6 to 9 months 7,914,624 7,942,024 4% 9 to 12 months 2,478,800 2,492,226 1% 12 to 18 months 17,717,000 17,779,187 10% 18 to 24 months 5,194,540 5,216,860 3% 24 to 36 months 13,496,250 13,566,545 7% Total $ 185,046,623 $ 185,260,951 100% Credit Risk In compliance with the City's Investment Policy, as of September 30, 2025, 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, 2025, 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. 58 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2025, was as follows: Governmental activities Capital assets - nondepreciable Land Construction in progress Total nondepreciable capital assets Capital assets - depreciable/amortizable Buildings Improvements other than buildings Infrastructure Machinery and equipment Intangible: Right -to -use equipment Right -to -use software Total depreciable/amortizable capital assets Less accumulated depreciation/amortization Buildings Improvements other than buildings Infrastructure Machinery and equipment Intangible: Right -to -use equipment Right -to -use software Total accumulated depreciation/amortization Net depreciable/amortizable capital assets Total governmental activities capital assets, net Balance Beginning of Year Increase Decrease $ 44,105,486 $ 3,497,594 $ 13,170,648 27,870,923 57,276,134 31,368,517 76,707,169 25,645,773 118,490,480 39,792,970 259,697 1,384,586 262,280,675 (36,977,307) (8,009,431) (58,607,581) (24,515,363) 3,715,646 5,243,524 121,954 Adjustment/ Transfer Balance End of Year $ $ 47,603,080 (15,146,945) 25,894,626 (15,146,945) 73,497,706 (185,635) 9,470,814 (21,125) 785,398 2,438,015 (1,780,376) 2,452,718 9,081,124 (1,987,136) (2,193,597) 22,943 (842,613) 21,125 (3,250,235) - (3,626,872) 1,583,699 (186,438) (62,766) (442,907) (339,748) (128,739,027) (10,315,831) 1,627,767 133,541,648 $ 190,817,782 85,992,348 26,410,046 124,644,141 45,708, 836 259,697 1,506,540 15,146,945 284,521,608 (39,147,961) (8,830,919) (61,857,816) (26,558,536) (249,204) (782,655) (137,427,091) (1,234,707) (359,369) 15,146,945 147,094,517 $ 30,133,810 $ (359,369) $ $ 220,592,223 59 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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 4,744,539 4,868,025 (5,797,585) 3,814,979 Total nondepreciable capital assets 10,463,084 4,868,025 (5,797,585) 9,533,524 Capital assets - depreciable/amortizable Buildings 7,434,837 - 7,434,837 Equipment 3,449,030 75,502 (24,858) 28,044 3,527,718 Improvements 21,397,788 99,498 (581,298) 988,149 21,904,137 Utility system 146,080,912 6,103,742 4,781,392 156,966,046 Intangible: Right -to -use equipment 227,130 - 227,130 Right -to -use software 14,233 14,233 Total depreicable/amortizable capital assets 178,603,930 6,278,742 (606,156) 5,797,585 190,074,101 Less accumulated depreciation/amortization Buildings (3,373,522) (221,051) (3,594,573) Equipment (2,541,208) (233,496) 24,858 (2,749,846) Improvements (14,265,452) (620,982) 255,772 (14,630,662) Utility system (74,061,386) (3,428,616) (77,490,002) Intangible: Right -to -use equipment (134,118) (56,394) (190,512) Right -to -use software (9,490) (4,743) (14,233) Total accumulated depreciation/amortization (94,385,176) (4,565,282) 280,630 (98,669,828) Net depreciable/amortizable capital assets 84,218,754 1,713,460 (325,526) 5,797,585 91,404,273 Total business -type activities capital and intangible assets, net $ 94,681,838 $ 6,581,485 $ (325,526) $ $ 100,937,797 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 $ 1,127,560 Development 32,244 General administrative 5,104,050 Highways and streets 3,204,635 Public safety 847,342 Total capital asset depreciation and amortization expense - governmental activities $10,315,831 Business -type activities Water and wastewater $ 2,815,539 Drainage utility 838,965 Golf course 442,497 Other recreation enterprises 468,281 Total capital asset depreciation and amortization expense - business -type activities $ 4,565,282 60 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 3. CAPITAL ASSETS — CONTINUED Outstanding commitments at September 30, 2025, under authorized construction contracts, were $10,099,736. 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, 2025: Governmental activities General obligation bonds Certificates of obligation Sales tax revenue bonds Tax notes Premium on debt Discount on debt Lease liability Subscription liability Net pension liability Net OPEB liability Compensated absences * Total governmental activities Business -type activities Water and sewer revenue bonds General obligation refunding bonds Premiums on debt Discounts on debt Lease liability Subscription liability Net pension liability Net OPEB liability Compensated absences * Total business -type activities Total primary government Balance Beginning of Year Increases $ 685,000 $ 67,465,000 4,570,000 5,575,000 3,431,016 (39,924) 73,259 941,678 18,316,651 4,204, 697 2,407,091 3,375,128 107,629,468 3,497,082 14,910,000 1,705,000 59,761 (14,626) 93,012 4,743 3,410,032 751,905 425,636 698,311 21,345,463 Decreases Balance End of Year $ (685,000) $ (10,290,000) (245,000) (1,050,000) (531,480) 39,924 (62,766) 121,954 (339,747) (5,211,277) (1,534,545) 57,175,000 4,325,000 4,525,000 2,899,536 10,493 723,885 13,105,374 2,670,152 5,782,219 (19,909,891) 91,216,659 (840,000) 14,070,000 (1,705,000) - (57,049) 2,712 1,625 (13,001) (56,394) 36,618 (4,743) - (1,007,432) 2,402,600 (296,653) 455,252 1,123,947 698,311 (3,965,646) 18,078,128 $ 128,974,931 $ 4,195,393 $ (23,875,537) * The change in compensated absences above reflects the net increases and decreases. Due within One Year 3,340,000 250,000 1,085,000 215,889 10,493 227,319 2,729,711 7,858,412 845,000 36,618 530,745 1,412,363 $ 109,294,787 $ 9,270,775 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. 61 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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, 2025, there are no general obligation bonds currently outstanding. The business -type activities general obligation refunding bonds outstanding were issued to refund previously issued golf course debt. The City paid the last two installments in advance and fulfilled their debt obligation. As such, the debt is no longer reflected in the financial statements. 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: Certificates of Obligation: Series 2016 Series 2018 Series 2019 Series 2020 Series 2021 Series 2023 Interest Rate % 3%-3.25% 3%-4% 3.25% — 5% 2%-3% 1.625% — 4% 4% — 5% Maturity Principal Dated Date Outstanding 01/12/2016 03/01/2018 01/15/2019 01 / 14/2020 04/08/2021 09/07/2023 02/15/2041 $12,170,000 02/15/2038 6,755,000 02/15/2039 9,340,000 02/15/2040 5,690,000 02/15/2041 4,525,000 02/15/2038 18, 695, 000 Total $57,175,000 62 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Annual debt service requirements to maturity for the certificates of obligation are as follows: Fiscal Year Governmental Activities Principal 2026 $3,340,000 2027 3,370,000 2028 3,355,000 2029 3,500,000 2030 3,655,000 2031-2035 20,540,000 2036-2040 18,505,000 2041 910,000 Total $57,175,000 Revenue Bonds Interest $2,068,632 1,937,098 1,803,576 1,662,350 1,514,301 5,300,054 1,432,654 12,725 $15,731,390 Total $5,408,632 5,307,098 5,158,576 5,162,350 5,169,301 25,840,054 19,937,654 922,725 $72,906,390 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 1/2¢ 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. 63 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Revenue Bonds — Continued The City currently has the following revenue bonds outstanding at the end of the fiscal year: Revenue Bonds: W&WW Improvement, Series 2013 W&WW Improvement, Series 2015A W&WW Improvement, Series 2015B W&WW Improvement, Series 2018 W&WW Improvement, Series 2019 STRB, Series 2018 STRB, Series 2019 Interest Rate % Dated Maturity Date Principal Outstanding 4% — 5% 1.39% — 1.98% 1.09% — 1.68% 0.81%-1.49% 0.56% — 1.66% 4% 2.5%-4% 06/25/2013 06/15/2015 06/15/2015 04/12/2018 04/25/2019 10/15/2018 12/12/2019 07/15/2033 07/15/2035 07/15/2035 07/15/2038 07/15/2049 09/15/2038 09/15/2039 Total Annual debt service requirements to maturity for revenue bonds are as follows: Fiscal Year 2026 2027 2028 2029 2030 2031-2035 2036-2040 2041-2045 2046-2049 Total Governmental Activities Principal Interest $250,000 $146,975 260,000 136,975 270,000 126,575 280,000 115,775 295,000 104,575 1,600,000 380,025 1,370,000 105,850 Business -Type Activities $ 780,000 2,475,000 1,300,000 1,870,000 7,645,000 1,180,000 3,145,000 $ 18,395,000 Principal Interest Total $845,000 $224,201 $1,466,176 860,000 213,835 1,470,810 870,000 201,924 1,468,499 885,000 189,096 1,469,871 900,000 175,181 1,474,756 4,505,000 630,314 7,115,339 2,040,000 340,157 3,856,007 1,700,000 203,135 1,903,135 1,465,000 60,974 1,525,974 $4,325,000 $1,116,750 $14,070,000 $2,238,817 $21,750,567 The gross %2¢ sales tax revenues of the EDC recognized in the year ending September 30, 2025 totaled $8,011,985. The principal, interest and fiscal charges on the EDC debt including SBITA payments for the same period totaled $406,930 which equates to approximately 5.1% of the gross 1/20 sales tax revenues. The recognized net revenues of the water and wastewater fund totaled $2,186,545 for the year ending September 30, 2025. Principal, interest and fiscal charges on the water and sewer revenue bonds totaled $1,073,658 which equates to approximately 49.1% of net system revenues. 64 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Revenue Bonds — Continued 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. 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, 2025. 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, 2025, 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: Tax Notes: Series 2022 Interest Rate % Dated 2.89% 09/20/2022 Maturity Date 02/15/2029 Principal Outstanding $4,525,000 $4,525,000 65 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Tax Notes — Continued Annual debt service requirements to maturity for the tax notes are as follows: Fiscal Year Lease Liability Governmental Activities Principal Interest Total 2026 $1,085,000 $115,094 $1,200,094 2027 1,115,000 83,304 1,198,304 2028 1,145,000 50,647 1,195,647 2029 1,180,000 17,051 1,197,051 Total $4,525,000 $266,096 $4,791,096 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, 2025, the value of the lease liability was $13,991. 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, 2025 was $346,263 with accumulated amortization of $332,272. 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, 2025, the value of the lease liability was $33,120. 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, 2025 was $140,564 with accumulated amortization of $107,444. The future principal and interest lease payments as of September 30, 2025 were as follows: Fiscal Governmental Activities Business -Type Activities Year Principal Interest Principal Interest Total 2026 $10,493 $7 $36,618 $322 $47,440 Total $10,493 $7 $36,618 $322 $47,440 66 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS 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, 2025, the value of the subscription liability was $0. 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, 2025 was $35,130 with accumulated amortization of $35,130. 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, 2025, the value of the subscription liability was $0. 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, 2025 was $237,215 with accumulated amortization of $237,215. 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, 2025, the value of the subscription liability was $0. 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, 2025 was $79,682 with accumulated amortization of $79,682. 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, 2025, the value of the subscription liability was $628,024. 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, 2025 was $1,046,792 with accumulated amortization of $418,768. In February 2025, 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 $121,954. As of September 30, 2025, the value of the subscription liability was $95,860. The City is required to make annual principal and interest payments of $26,118. The implicit interest rate is 3.54%. The value of the right -to -use asset as of September 30, 2025 was $121,954 with accumulated amortization of $26,094. 67 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 4. LONG-TERM DEBT — CONTINUED Subscription -based IT Arrangements The future principal and interest lease payments as of September 30, 2025 were as follows: Fiscal Governmental Activities Year Principal Interest Total 2026 $ 227,319 $ 17,691 $ 245,010 2027 232,834 12,175 245,009 2028 238,507 6,503 245,010 2029 25,225 893 26,118 Total $ 723,885 $ 37,262 $ 761,147 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, 2025 totaled $16,833,016 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 $442,330 in the year ended September 30, 2025 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. 68 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS All interfund transfers between the various funds are approved supplements to the operations of those funds. Transfers out Transfers in Non -major Subtotal General Debt Service Car Rental Tax General CIP Governmental Governmental General $ $ - $ - $ 3,000,000 $ 1,208,459 $ 4,208,459 Debt service - - 197,505 - 197,505 Car rental tax 2,128,636 150,000 6,600,000 8,878,636 Water and wastewater 1,725,708 - - - - 1,725,708 Drainage utility 61,970 - 61,970 Nonmajor governmental - 8,597,988 750,000 - 5,213,200 14,561,188 Total transfers in $ 3,916,314 $ 8,597,988 $ 750,000 $ 3,347,505 $ 13,021,659 $ 29,633,466 Transfers in Internal Other Recreation Subtotal Total Service Golf Course Enterprises Enterprise Transfers Out Transfers out General $ 450,000 $ 15,596 $ $ 15,596 $ 4,674,055 Debt service - - - 197,505 Car rental tax 1,116,104 2,190,000 - 2,190,000 12,184,740 Water and wastewater 450,000 - - - 2,175,708 Drainage utility - - - 61,970 Nonmajor governmental 1,280,797 183,357 1,464,154 16,025,342 Total transfers in $ 2,016,104 $ 3,486,393 $ 183,357 $ 3,669,750 $ 35,319,320 Transfers are primarily used to move funds from: The general fund to the general CIP fund and non -major governmental funds to satisfy grant matching requirements and to provide capital project funding per the approved budget and to the golf course fund for sales tax rebates. The car rental tax fund, the water and wastewater fund, and the drainage utility fund to the general fund for general and administrative charges. The car rental tax fund to the nonmajor governmental funds to provide funding for approved capital projects. Car rental tax fund to the nonmajor governmental, general CIP and golf funds to provide financing for approved capital projects. The car rental tax fund to the internal service funds for the replacement of capital assets. The nonmajor governmental fund to the car rental fund for the return of start up cash. The non -major governmental funds to nonmajor governmental funds to provide task force and project funding. 69 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 7. INTERFUND TRANSFERS — CONTINUED The non -major governmental funds to other recreation enterprises fund to provide festival funding. The non -major governmental funds to the debt service fund for debt payments on previously issued debt. The general fund and water and wastewater fund to the internal service funds for workers' compensation and general liability insurance claims. The debt service fund to the general capital projects funds to transfer residual balance for project funding. The nonmajor governmental funds to the golf course and to cover a portion of the operating and debt costs associated with the conference center and for 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 $8,253,901. During fiscal year 2025, the City and the City's employees contributed approximately $6,020,505 and $1,668,340 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. 70 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 8. RISK MANAGEMENT — CONTINUED Changes in the balances of health, dental, and prescription claims liabilities for the years ended September 30, 2025 and 2024 are as follows: 2025 2024 Unpaid claims, beginning of year $ 633,001 $ 986,000 Incurred claims 5,377,136 4,743,399 Paid claims (5,140,137) (5,096,398) Unpaid claims, end of year $ 870,000 $ 633,001 Settlement amounts have not exceeded stop loss insurance coverage for the year ended September 30, 2025 or any of the three preceding years ended September 30. NOTE 9. DEFINED BENEFIT PENSION PLAN Plan Description The City participates as one of 938 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. 71 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Benefits Provided — Continued Plan provisions for the City are as follows: Employee deposit rate Matching ratio (City to employee) A member is vested after Service retirement eligibility Updated service credit Annuity increase (to retirees) Employees Covered By Benefit Terms 7% 2 to 1 5 years 20 years at any age, 5 years at 60 and above 100% Repeating, Transfers 70% of CPI At the December 31, 2024 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 324 Inactive employees entitled to, but not yet receiving benefits 218 Active employees 398 Total 940 Contributions Member contribution rates in TMRS are either 5%, 6%, or 7% of the Member's total compensation, and the city matching percentages are either 1:1 (1 to 1), 1.5:1 (1 1/2 to 1), or 2:1 (2 to 1), both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The city's contribution rate is based on the liabilities created from the benefit plan options selected by the City and any changes in benefits or actual experience over time. Employees for the City were required to contribute 7% of their annual gross earnings during the year ended September 30, 2025. The contribution rates for the City were 18.66% and 18.63% in calendar years 2024 and 2025, respectively. The City's contributions to TMRS for the year ended September 30, 2025 totaled $6,837,457 and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2024, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. 72 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Actuarial Assumptions The TPL in the December 31, 2024 actuarial valuation was determined using the following actuarial assumptions: Inflation Overall payroll growth Investment rate of return 2.5% per year 2.75% per year, adjusted down for population declines, if any 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. 73 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Actuarial Assumptions — Continued The target allocation and best estimates of real rates of return for each major asset class for the year ended December 31, 2024 are summarized in the following table: Asset Class Target Allocation Long -Term Expected Real Rate of Return (Arithmetic) Global Equity 35.0% 7.10% Core Fixed Income 6.0% 5.00% Non -Core Fixed Income 6.0% 6.80% Hedge Funds 5.0% 6.40% Private Equity 13.0% 8.50% Private Debt 13.0% 8.20% Real Estate 12.0% 6.70% Infrastructure 6.0% 6.00% Other Private Markets 4.0% 7.30% 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. 74 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Changes in the Net Pension Liability Increase (Decrease) Total Pension Liability (a) Balance at 12/31/2023 $ 275,530,673 Changes for the year: Service cost 7,118,643 Interest 18,425,883 Change in benefit terms - Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes 3,915,554 (12,227,906) Balance at 12/31/2024 $ Plan Fiduciary Net Position (b) $ 253,803,990 6,911,223 2,592,638 26,348,013 (12,227,906) (169,130) (3,955) 17,232,174 23,450,883 292,762,847 $ 277,254,873 There were no changes in benefit terms during the year. Sensitivity of the Net Pension Liability to Changes in the Discount Rate Net Pension Liability (a) - (b) $ 21,726,683 7,118,643 18,425,883 3,915,554 (6,911,223) (2,592,638) (26,348,013) 169,130 3,955 (6,218,709) $ 15,507,974 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 $ 54,673,023 $ 15,507,974 $ (16,914,495) 75 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 9. DEFINED BENEFIT PENSION PLAN — CONTINUED Pension Plan Fiduciary Net Position Detailed information about the pension plan's Fiduciary Net Position is available in the Schedule of Changes in Fiduciary Net Position, by Participating City. That report may be obtained at tmrs.com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the valuation date of December 31, 2024, the City recognized pension expense of $6,948,476. At September 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual experience $ 3,987,442 $ (228,345) Changes in actuarial assumptions - (889,510) Difference between projected and actual investment earnings - (2,720,829) Contributions subsequent to the measurement date 4,931,434 - Totals $ 8,918,876 $ (3,838,684) $4,931,434 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 2025 $ 1,402,920 2026 3,760,740 2027 (3,453,279) 2028 (1,561,623) Total $ 148,758 76 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS Postemployment Healthcare Plan Plan Description The City adopted the City of Euless Post -Employment Benefits Trust (OPEB Trust) by passage of Resolution No. 09-1319 on September 8, 2009 which authorized participation in the PARS Public Agencies Post -Retirement Health Care Plan Trust, including the City of Euless Public Agencies Post -Retirement Health Care Plan (the Plan), as part of the City's Retirement Program. Article III of the Public Agencies Post -Retirement Health Care Plan Master Plan Document as adopted provides for the determination of eligibility under the plan to each participating Employer to the extent provided in the Employer's applicable policies. The City's policies with regard to post -employment healthcare coverage are governed by the City of Euless Medical and Dental Plan, the City's group health insurance plan, the benefits of which are established by management. Benefits provided. The City provides post -employment medical, dental, life, and vision benefits under the Plan to eligible retirees and dependents qualifying as one of the eligible classes of dependents as described in the Plan. To be eligible for coverage under the Plan, an employee must retire with the City of Euless and be eligible for retirement through TMRS. TMRS retirement eligibility requirements are described in detail in Note 9. Additionally, written application to enroll himself/herself and all eligible dependents (for which coverage is elected) in the Plan must be made by the employee prior to or on the retirement date. The Plan provides lifetime benefits or until Medicare eligibility is attained. Regardless of Medicare enrollment status, the Plan will base payment of benefits as though Medicare were responsible for primary payment of benefits insomuch as allowed by Federal law. The Plan is a single -employer defined benefit healthcare plan administered by the City Manager, his/her successor, or his/her designee. Separate financial statements for the Plan are not issued, but rather are included in the financial statements of the City which are available on-line at http s://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. 77 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Funding Policy A Participant in the OPEB Trust is required from time to time to contribute to its Agency Account an amount determined by such Participant at its sole discretion. Such amount may, but need not, equal such Participant's actuarially determined contribution (ADC) as determined in accordance with GASB 74. However, it is currently the intent of the Plan Administrator to annually fund an amount equal to, or in excess of, the ADC. This intent is subject to change and is subject to annual appropriation. Contribution requirements of Plan members and the City are determined by the Plan Administrator and may be amended by same from time to time. For the year ending September 30, 2025, plan members contributed monthly premiums of: Medical Plan Dental Vision Retiree Only $ 933.84 $ 39.82 $ 7.58 Retiree plus Children 1,734.28 75.64 12.38 Retiree plus Spouse 1,147.81 91.57 14.68 Retiree plus Family 2,708.10 115.47 20.79 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: Discounts on Premiums Hired Pre-10/2006 Hired Post-10/2006 Hired Post-10/2014 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 78 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Funding Policy — Continued Retirees are permitted to participate with active employees in the healthcare plan but retirees must pay all premiums (less applicable discounts) assigned to them. The City will continue to apply the applicable discount to surviving spouse/dependents based upon a deceased employee's years of service. Employees hired on or after October 1, 2014 will not be eligible for premium discounts regardless of years of service. Per the requirements of GASB 74 and GASB 75, the following data is presented. Plan Membership At the October 1, 2023 actuarial valuation date and September 30, 2025 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 Target 9/30/2025 Range Allocation Allocation Equity 50-70% 60% 60% Fixed income 30-50% 38% 37% Cash 0-20% 2% 3% 100% 100% Rate of return. For the year ended September 30, 2025, the annual money -weighted rate of return on investments, net of investment expense, was 9.96%. The money -weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. 79 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Investments — Continued Concentrations. The following investments comprised 5% or more of the OPEB plan's fiduciary net position as of September 30, 2025: % of Asset Class Investment Vehicle Portfolio Equity Schwab US Large -Cap ETF 23.72% Fixed Income Baird Aggregate Bond Inst 10.06% Fixed Income iShares Core US Aggregate Bond ETF 8.31% Equity Columbia Contrarian Core Inst3 7.67% Equity Fidelity International Index Fund Stock Price 7.28% Fixed Income Dodge & Cox Income 6.36% Fixed Income PGIM Total Return Bond R6 6.34% Equity Fidelity Emerging Markets Index Fund 5.60% Net OPEB Liability of the City The components of the net OPEB liability of the City at September 30 were as follows: 2025 2024 Total OPEB liability Plan fiduciary net position $ 20,455,254 $ 20,038,221 (17,329,850) (15,081,619) City's net OPEB liability $ 3,125,404 $ 4,956,602 Plan fiduciary net position as a percent of the total OPEB liability Actuarial Methods and Assumptions 84.72% 75.26% 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. 80 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Actuarial Methods and Assumptions — Continued An actuarial valuation was performed as of October 1, 2023 using the entry age normal actuarial cost method. The liability was then rolled forward to the measurement date of September 30, 2025. 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 6.21% 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 6.7% 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 $ 6,677,580 $ 3,125,404 $ 309,087 81 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED Actuarial Methods and Assumptions — Continued Sensitivity of the OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current healthcare cost trend rates: 1% Decrease Net OPEB liability Net OPEB Liability Balance at 9/30/2024 Changes for the year: Service cost Interest Difference between expected and actual experience Changes of assumptions Difference in expected and actual net investment income Contributions - employer Contributions - other Net investment income Benefit payments, including refunds of employee contributions Administrative expense Net changes Balance at 9/30/2025 Current Trend Rates (6.21%) 1% Increase $ 47,075 $ 3,125,404 $ 7,039,035 Total OPEB Liability (a) $ 20,038,221 180,302 1,470,137 300,233 (1,309,524) (224,115) 417,033 Increase (Decrease) Plan Fiduciary Net Position (b) Net OPEB Liability (a) - (b) $ 15,081,619 $ 4,956,602 302,047 2,019,008 300,233 1,160,582 (1,309,524) (224,115) 180,302 1,470,137 (302,047) (2,019,008) (1,160,582) 2,248,231 (1,831,198) $ 20,455,254 $ 17,329,850 $ 3,125,404 82 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 10. OTHER POSTEMPLOYMENT BENEFITS — CONTINUED OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended September 30, 2025, the City recognized OPEB expense of $(147,880). At September 30, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Difference between expected and actual experience $ - $ (2,845,835) Changes in actuarial assumptions 1,209,298 (781,892) Difference between projected and actual investment earnings - (900,602) Total $ 1,209,298 $ (4,528,329) 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 NOTE 11. FUND DEFICIT 2026 $ (447,720) 2027 (1,101,625) 2028 (1,049,201) 2029 (390,447) 2030 (330,038) Total $ (3,319,031) As of September 30, 2025, the Midtown PID fund had a deficit fund balance of $28,721. 83 CITY OF EULESS, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS NOTE 12. LEASE RECEIVABLES The City leases various property and buildings to other entities. The initial lease terms ranged from five to 23 years in length. The City received annual payments from these leases of $796,177. The City recognized $689,840 in lease revenue and $106,337 in interest revenue during the current fiscal year related to these leases. As of September 30, 2025, the City's receivable and deferred inflows of resources for leases was $4,795,692 for governmental activities and $279,366 for business -type activities. The deferred inflow of resources associated with these leases will be recognized as revenue over the lease terms. 84 REQUIRED SUPPLEMENTARY INFORMATION THE CITY OF EULESS CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET) AND RELATED RATIOS FOR THE MEASUREMENT YEAR ENDED DECEMBER 31 Total pension liability Service cost Interest (on the total pension liability) Difference in expected and actual experience Change in assumptions Benefit payments, including refunds Net change in total pension liability Total pension liability, beginning of year Total pension liability, ending of year Plan fiduciary net position Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds Administrative expense Other Net change in plan fiduciary net position Plan fiduciary net position - beginning Plan fiduciary net position - ending 2024 2023 $ 7,118,643 $ 6,375,962 18,425,883 17,715,585 3,915,554 (396,247) (1,543,563) (12,227,906) (11,772,376) 17,232,174 10,379,361 275,530,673 265,151,312 $ 292,762,847 $ 275,530,673 $ 6,911,223 $ 6,044,874 2,592,638 2,389,279 26,348,013 26,680,738 (12,227,906) (11,772,376) (169,130) (169,815) (3,955) (1,186) 23,450,883 23,171,514 2022 2021 2020 2019 2018 2017 2016 2015 $ 5,966,121 $ 5,642,742 $ 5,645,675 $ 5,375,963 $ 5,253,722 $ 5,149,378 $ 4,868,631 $ 4,539,237 16,821,152 15,918,254 15,244,423 14,557,634 13,864,487 13,129,452 12,462,429 12,302,430 1,567,444 2,211,218 (728,824) (171,396) (206,128) 169,296 (361,966) (579,992) 145,747 (595,757) (10,845,200) (10,270,056) (10,084,210) (9,652,090) (7,756,635) (7,465,146) (6,990,135) (6,911,946) 13,509,517 13,502,158 10,077,064 10,255,858 11,155,446 10,982,980 9,978,959 8,753,972 251,641,795 238,139,637 228,062,573 217,806,715 206,651,269 195,668,289 185,689,330 176,935,358 $ 265,151,312 $ 251,641,795 S 238,139,637 $ 228,062,573 $ 217,806,715 $ 206,651,269 S 195,668,289 $ 185,689,330 $ 5,713,524 2,267,255 (18,380,677) (10,845,200) (159,083) 189,833 (21,214,348) $ 5,511,185 2,140,878 29,364,122 (10,270,056) (135,860) 930 26,611,199 $ 5,419,109 2,144,052 16,076,966 (10,084,210) (104,023) (4,058) 13,447,836 $ 5,192,816 2,077,001 28,704,340 (9,652,090) (162,161) (4,871) 26,155,035 $ 5,146,736 2,023,998 (5,754,957) (7,756,635) (111,206) (5,810) (6,457,874) $ 5,027,855 1,981,736 23,456,668 (7,465,146) (121,542) (6,160) 22,873,411 $ 4,691,585 1,877,709 10,748,002 (6,990,135) (121,371) (6,539) 10,199,251 $ 4,644,735 1,801,285 235,212 (6,911,946) (143,262) (7,076) (381,052) 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 $ 277,254,873 $ 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 Net pension liability (asset) - ending $ 15,507,974 $ 21,726,683 Plan fiduciary net position as a % of TPL 94.70% 92.11% Covered payroll $ 37,037,682 $ 34,132,558 Net pension liability (asset) as a % of covered payroll 41.87% 63.65% $ 34,518,836 86.98% $ 32,389,362 106.57% $ (205,029) 100.08% $ 30,583,969 (0.67%) 87 $ 12,904,012 94.58% $ 30,616,434 42.15% $ 16,274,784 92.86% $ 29,619,629 54.95% $ 32,173,961 $ 14,560,641 85.23% 92.95% $ 28,914,263 $ 28,308,838 111.27% 51.44% $ 26,451,072 86.48% $ 26,824,411 98.61% $ 26,671,364 85.64% $ 25,732,638 103.65% CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS - PENSION FOR THE FISCAL YEAR ENDED SEPTEMBER 30 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 Actuarially determined contributions $ 6,837,457 $ 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 Actual contributions (6,837,457) (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) Contributions deficiency (excess) $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll $ 36,686,000 $ 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 Ratio of actual contributions to covered payroll amount 18.64% 18.43% 17.49% 17.55% 17.94% 17.65% 17.59% 17.79% 17.69% 17.65% Notes to Schedule Valuation Date Actuarially determined contribution rates are calculated as of December 31st each year and become effective in January, 13 months later. Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 20 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 Retum 6.75% Retirement Age 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. Mortality Post -retirement: 2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates are projected on a filly 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). Other information Notes: There were no benefit changes during the year. 88 CITY OF EULESS, TEXAS SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS FOR THE FISCAL YEAR ENDED SEPTEMBER 30 2025* 2024* 2023* 2022* 2021* 2020* 2019* 2018* 2017* Total OPEB liability Service cost $ 180,302 $ 175,050 $ 306,311 $ 331,127 $ 287,730 $ 267,668 $ 435,930 $ 447,155 $ 75,083 Interest on total OPEB liability 1,470,137 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 300,233 263,735 252,575 246,671 281,524 276,885 270,205 - Effect of changes of assumptions 1,428,452 (1,824,415) 1,322,815 (798,143) 5,480,748 Administrative expense (224,115) (171,718) (171,897) (144,973) (140,970) (131,481) (135,119) Benefit payments (1,309,524) (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 Beginning balance 417,033 (1,340,413) 691,749 (1,040,983) 1,012,403 1,589,178 911,633 1,150,202 5,480,748 20,038,221 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 $ 20,455,254 $ 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 $ 2,019,008 $ 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 300,233 263,735 252,575 246,671 281,524 276,885 270,205 320,471 Net investment income (loss) 1,160,582 887,464 754,490 (1,928,493) 668,472 577,387 502,656 381,824 559,716 Difference in expected and actual net investment income 302,047 1,847,733 262,122 - 950,076 11,026 (226,279) - Benefit payments (1,309,524) (604,237) (1,226,752) (1,053,109) (955,297) (898,811) (1,019,931) (1,230,281) (1,332,839) Administrative expense (224,115) (171,718) (171,897) (144,973) (140,970) (131,481) (135,119) (147,597) (13,525) Net change in plan fiduciary net position 2,248,231 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 15,081,619 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 $ 17,329,850 $ 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 $ 3,125,404 $ 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 84.72% 75.26% 54.18% 47.40% 50.73% 42.01% 38.76% 35.35% 31.41% Covered employee payroll $ 36,686,000 $ 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 8.52% 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 trend is available, the schedule will present the information that is available. 89 Actuarially determined contribution Contributed in relation to the actuarially determined contribution Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered employee payroll 2025* CITY OF EULESS, TEXAS SCHEDULE OF CONTRIBUTIONS - OPEB TRUST FOR THE FISCAL YEAR ENDED SEPTEMBER 30 2024* 2023* $ 660,671 $ 748,653 $ 1,297,029 2,019,008 1,275,600 1,906,655 $ (1,358,337) $ (526,947) $ (609,6261 $ 36,686,000 $ 35,591,209 $ 33,832,208 5.5% 3.6% 5.6% 2022* 2021* 2020* 2019* 2018* 2017* $ 1,300,719 $ 1,421,454 $ 1,388,216 $ 1,486,177 $ 1,492,738 $ 1,226,144 1,663,312 1,515,094 1,455,171 1,583,715 1,754,093 1,832,839 $ (362,593) $ (93,640) $ (66,955) $ (97,5381 $ (261,3551 $ (606,695) $ 31,442,237 $ 30,853,753 $ 31,348,108 $ 29,411,252 $ 28,640,420 $ 25,944,080 5.3% 4.9% 4.6% 5.4% * This schedule is presented to illustrate the requirement to show ten years of information. However, until a full ten-year trend is available, the schedule will present the information that is available. Notes to Schedule Significant assumptions used in preparation of actuarial valuation Valuation date Actuarial cost method Amortization method Remaining amortization period Amortization period for new losses Asset valuation method Discount rate Inflation Healthcare cost trend rates Dental cost trend rates Payroll growth rate Long-term investment rate of return, net of investment expense Retirement age Mortality 10/1/2023 Entry Age Normal Level Dollar Method 22 years - closed period 25 years - closed period Market value 7.5% 2.5% per annum 6.21% increasing/decreasing annually to 4.2% in 2048+ 3.0% per annum 3.0% per annum 90 7.5% Varies with age and service level Sex distinct PUB 2010 general employee retiree headcount weighted mortality table with mortality improvement scale MP-2021. 6.1% 7.1% CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2025 Revenues General property tax Current and delinquent taxes Penalty and interest Total property tax Gross receipts tax Telephone line access fee Electric company Gas company Cable TV City garbage service Water and wastewater system Others Total gross receipts tax General sales tax Fines and fees Municipal court fines Jail income Dog licenses and pound fees Ambulance fees Library fees Zoning fees Deferred adjudication fee Total fines and fees Licenses and permits Building permits Miscellaneous permits Minimum housing Total licenses and permits Investment income Intergovernmental Other revenues Rental income Swimming pools Miscellaneous income Total other revenues Total revenues Budgeted Amounts Original Final $ 23,459,205 75,000 $ 23,459,205 75,000 Actual GAAP Basis $ 23,136,618 92,064 Variance with Final Budget Positive (Negative) $ (322,587) 17,064 23,534,205 71,550 1,692,266 606,269 133,644 368,000 1,747,990 250,296 23,534,205 71,550 1,692,266 606,269 133,644 368,000 1,747,990 250,296 23,228,682 61,150 1,667,492 613,608 154,486 395,384 1,725,708 293,810 (305,523) (10,400) (24,774) 7,339 20,842 27,384 (22,282) 43,514 4,870,015 17,770,019 1,698,903 1,390,316 7,500 1,090,475 5,873 14,500 64,880 4,870,015 17,770,019 1,698,903 1,390,316 7,500 1,090,475 5,873 14,500 64,880 4,911,638 19,514,896 2,142,735 1,390,316 8,008 1,515,765 7,712 17,961 68,287 41,623 1,744,877 443,832 508 425,290 1,839 3,461 3,407 4,272,447 4,272,447 300,000 300,000 234,307 234,307 56,245 56,245 5,150,784 5,829,270 357,981 108,466 878,337 5,529,270 123,674 52,221 590,552 590,552 341,793 341,793 585,917 585,917 500,420 500,420 280,476 280,476 192,318 192,318 6,295,717 1,325,689 540,676 720,727 243,578 241,068 5,705,165 983,896 (45,241) 220,307 (36,898) 48,750 973,214 973,214 1,205,373 232,159 52,938,162 52,938,162 62,173,455 9,235,293 91 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE GENERAL FUND YEAR ENDED SEPTEMBER 30, 2025 Expenditures Current Culture and recreation Development services General and administrative Highways and streets Public safety Debt service Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Issuance of subscription debt Proceeds from sale of assets Transfers in Transfers out Total other financing sources (uses), net Net change in fund balance Fund balance, beginning of year Budgeted Amounts Original Final $ 4,270,810 1,201,166 17,475,122 2,120,829 34,062,652 $ 4,270,810 1,562,515 17,639,396 2,120,829 34,062,652 Actual GAAP Basis $ 4,117,975 1,526,434 14,805,095 1,852,663 32,439,450 (Continued) Variance with Final Budget Positive (Negative) $ 152,835 36,081 2,834,301 268,166 1,623,202 171,724 (171,724) 3,043 (3,043) 59,130,579 59,656,202 54,916,384 4,739,818 (6,192,417) (6,718,040) 7,257,071 13,975,111 - 121,954 5,000 5,000 11,350 3,939,358 3,939,358 3,916,314 (4,627,158) (4,671,110) (4,674,055) (682,800) (726,752) (624,437) (6,875,217) (7,444,792) 6,632,634 23,309,074 23,309,074 23,309,074 121,954 6,350 (23,044) (2,945) 102,315 14,077,426 Fund balance, end of year $ 16,433,857 $ 15,864,282 $ 29,941,708 $ 14,077,426 92 CITY OF EULESS, TEXAS BUDGETARY COMPARISON SCHEDULE CAR RENTAL SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Car rental tax $ 19,157,728 $ 19,157,728 $ 20,255,173 $ 1,097,445 Investment income 570,462 570,462 947,391 376,929 Total revenues 19,728,190 19,728,190 21,202,564 1,474,374 Expenditures General and administrative 12,871,819 14,115,089 13,564,649 550,440 Capital outlay 722,972 722,972 151,816 571,156 Total expenditures Excess of revenues over expenditures 13,594,791 14,838,061 13,716,465 1,121,596 6,133,399 4,890,129 7,486,099 2,595,970 Other financing sources (uses) Transfers in 750,000 750,000 750,000 Transfers out (12,034,740) (12,184,740) (12,184,740) Net other financing sources (uses) (11,284,740) (11,434,740) (11,434,740) Net change in fund balance (5,151,341) (6,544,611) (3,948,641) 2,595,970 Fund balance, beginning of year 11,077,049 11,077,049 11,077,049 Fund balance, end of year $ 5,925,708 $ 4,532,438 $ 7,128,408 $ 2,595,970 93 CITY OF EULESS, TEXAS NOTES TO REQUIRED SUPPLEMENTARY INFORMATION NOTE 1. BUDGET BASIS OF ACCOUNTING The City Council adheres to the following procedures in establishing budgetary data reflected in the financial statements: 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. 94 COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES 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. Stars Building Fund — to account for lease revenue related to the Stars Center. 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. Elementary School Resource Officer Fund (ESRO) — to account for HEB ISD funding for elementary school resource officers subject to continued approval of an interlocal agreement between HEB ISD and cities located within HEB ISD jurisdiction. 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. 96 NON -MAJOR GOVERNMENTAL FUNDS — Continued 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. 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. 97 CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2025 Special Revenue Funds Police Crime Drug Control and Hotel/ Stars Half -Penny Enforce- Prevention Motel Building ESRO Sales Tax ment District Grant Fund Fund hind Fund Fund Fund Fund ASSETS Deposits and investments $ 2,140,705 $ $ - $ 4,212,311 $ 904,185 $ 1,345,034 $ 63,616 Accounts receivable 374,105 124,704 1,500 1,737 12,234 Property taxes receivable - - Accrued interest receivable 17,480 6,055 Due from other governments - 1,389,984 697,333 Lease receivable 2,541,881 1,518,820 - Prepaids and deposits 750 - 7,749 56,567 Restricted deposits and investments Total assets S 2,515,560 $ 2,541,881 S 124,704 $ 7,147,844 $ 905,922 S 2,104,989 $ 75,850 LIABILITIES Accounts payable $ 275,878 $ $ 97,692 $ 253,393 $ 228,132 $ 11,111 $ Accrued salaries and wages 27,012 87,404 - 97,792 1,648 Total liabilities 275,878 - 124,704 340,797 228,132 108,903 1,648 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 Restricted, developer agreements Restricted, juvenile case management Restricted, cable PEG fees Restricted, historical preservation Assigned Unassigned 750 843 2,541,881 1,518,820 2,541,881 1,518,820 7,749 430,796 56,567 2,238,089 4,849,682 677,790 1,939,519 74,202 Total fund balances 2,239,682 5,288,227 677,790 1,996,086 74,202 Total liabilities, deferred inflows of resources, and fund balances $ 2,515,560 $ 2,541,881 $ 124,704 $ 7,147,844 $ 905,922 S 2.104,989 $ 75,850 98 Special Revenue Funds Police Cable Special Seized Juvenile Glade Parks TIRZ#3 Midtown TIRZ#4 PEG Revenue Assets Case PID Glade Parks PID Midtown Fees Funds Fund Fund Fund Fund Fund Fund Fund Totals $ 179,107 $ 293,788 $ $ 1,217,779 $ 6,822 $ 1,137,154 $ 641,793 $ 12,142,294 82,000 - 1,811 12,000 610,091 124,065 18,691 - 142,756 23,535 2,087,317 - 4,060,701 3,675 68,741 $ 179,107 $ 293,788 $ - $ 1,423,844 $ 6,822 $ 1,157,656 $ 657,468 $ 19,135,435 $ $ 126 $ $ $ 1,219 $ $ 1,100 $ 868,651 849 - - 214,705 975 1,219 1,100 1,083,356 34,324 34,324 4,060,701 34,324 4,095,025 3,675 68,741 - 430,796 292,813 - 292,813 652,693 652,693 - - 843 179,107 1,423,844 1,157,656 12,539,889 - (28,721) (28,721) 179,107 292,813 1,423,844 (28,721) 1,157,656 656,368 13,957,054 $ 179,107 $ 293,788 $ $ 1,423,844 $ 6,822 $ 1,157,656 $ 657,468 $ 19,135,435 CITY OF EULESS, TEXAS COMBINING BALANCE SHEET NON -MAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2025 Capital Project Funds Half -Penny Sales Tax Developers' Street Redevelopment CIP Contribution CIP CIP Fund Fund Fund Fund ASSETS Deposits and investments $ 7,366,671 $ 3,020,822 $ 5,511,352 $ 2,076,156 Accounts receivable - - Property taxes receivable - - Accrued interest receivable 5,250 16,272 Due from other governments - - Lease receivable Prepaids and deposits Restricted deposits and investments Total assets $ 7,371,921 $ 3,020,822 $ 5,527,624 $ 2,076,156 LIABILITIES Accounts payable $ - $ 108,024 $ 678,697 $ 22,770 Accrued salaries and wages Total liabilities DEFERRED INFLOWS OF RESOURCES Unavailable revenue - other Deferred inflows related to leases Total deferred inflows of resources 108,024 678,697 22,770 FUND BALANCES Nonspendable - - - Restricted, debt service - - - Restricted, capital projects - Restricted, developer agreements 2,912,798 - Restricted, juvenile case management - - Restricted, cable PEG fees - Restricted, historical preservation - - Assigned 7,371,921 4,848,927 2,053,386 Unassigned - - Total fund balances 7,371,921 2,912,798 4,848,927 2,053,386 Total liabilities, deferred inflows of resources, and fund balances $ 7,371,921 $ 3,020,822 $ 5,527,624 $ 2,076,156 100 Capital Project Funds TIRZ #4 Car Capital Total Midtown Midtown Rental Project Non -major Reserve CLP CLP Funds Governmental Fund Fund Fund Totals Funds $ 999,725 $ - $ 5,895,638 $ 24,870,364 $ 37,012,658 - 610,091 - - 142,756 35,022 56,544 80,079 - - 2,087,317 - - 4,060,701 - - 68,741 58,025 58,025 58,025 $ 999,725 $ 58,025 $ 5,930,660 $ 24,984,933 $ 44,120,368 $ 999,725 $ - $ 97,183 $ 906,674 $ 1,775,325 214,705 97,183 906,674 1,990,030 34,324 - - 4,060,701 4,095,025 - - 68,741 - 999,725 1,430,521 58,025 58,025 58,025 - 2,912,798 2,912,798 - 292,813 - - 652,693 - - 843 5,833,477 20,107,711 32,647,600 - - (28,721) 999,725 58,025 5,833,477 24,078,259 38,035,313 $ 999,725 $ 58,025 $ 5,930,660 $ 24,984,933 $ 44,120,368 101 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NON -MAJOR GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2025 Special Revenue Funds Police Crime Drug Control and Hotell Stars Half -Penny Enforce- Prevention Motel Building ESRO Sales Tax ment District Grant Fund Fund Fund Fund Fund Fund Fund Revenues General property tax $ - $ Gross receipts tax 1,698,065 General sales tax Investment income 99,717 Intergovernmental Rents and royalties Other revenues Total revenues $ 8,011,985 3,990,233 - 212,077 24,875 49,858 620,887 - 15,000 174,449 - 84,567 15,833 1,797,782 620,887 8,308,629 39,875 4,055,924 174,449 Expenditures Culture and recreation 4,184,492 Development services - 273,521 General and administrative 412,005 362,622 Highways and streets - - - Public safety 494,109 30,697 3,474,748 158,706 Debt service Principal 26,094 249,743 Interest and fiscal charges - 24 157,187 Capital outlay 275,142 100,660 9,778 17,721 Total expenditures 687,147 620,887 5,237,343 48,418 3,474,748 158,706 Excess (deficiency) of revenues over(under) expenditures 1,110,635 3,071,286 (8,543) 581,176 15,743 Other financing sources (uses) Transfers in 5,000 58,459 Transfers out (1,464,154) (5,428,840) (5,000) Total other financing sources (uses), net (1,464,154) (5,428,840) 5,000 (5,000) 58,459 Net change in fund balances Fund balance, beginning of year Fund balance, end of year (353,519) (2,357,554) (3,543) 576,176 74,202 2,593,201 $ 2,239,682 $ 7,645,781 681,333 1,419,910 $ $ 5,288,227 $ 677,790 $ 1,996,086 $ 74,202 102 Special Revenue Funds Police Cable Special Seized Juvenile Glade Parks TIRZ#3 Midtown TIRZ#4 PEG Revenue Asset Case PID Glade Parks PID Midtown Fees Funds Fund Fund Fund Fund Fund Fund Fund Totals $ $ $ - $ 1,950,497 $ $ 951,176 $ $ 2,901,673 - - 47,519 1,745,584 504,190 - 10,875 - 12,517,283 7,902 11,383 118,400 830 - 27,847 552,889 - - 810,336 - - 84,567 56,834 - 134,381 207,048 7,902 68,217 2,573,087 135,211 962,051 75,366 18,819,380 4,184,492 273,521 27,534 10,442 54,272 866,875 19,758 4,178,018 - - 275,837 - - 157,211 33,799 437,100 19,758 27,534 - 10,442 - 88,071 10,373,054 (11,856) 40,683 - 2,573,087 124,769 962,051 (12,705) 8,446,326 63,459 (750,000) (7,313,326) (121,518) (942,504) (16,025,342) (750,000) (7,313,326) (121,518) (942,504) (15,961,883) (11,856) 40,683 (750,000) (4,740,239) 3,251 19,547 (12,705) (7,515,557) 190,963 252,130 750,000 6,164,083 (31,972) 1,138,109 669,073 21,472,611 $ 179,107 $ 292,813 $ $ 1,423,844 $ (28,721) $ 1,157,656 $ 656,368 $ 13,957,054 103 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NON -MAJOR GOVERNMENTAL FUNDS - CONTINUED YEAR ENDED SEPTEMBER 30, 2025 Capital Project Funds Half -Penny Sales Tax Developers' Street Redevelopment CIP Contribution CIP CIP Fund Fund Fund Fund Revenues General property tax $ $ - $ - $ - Gross receipts tax General sales tax - - - Investment income 262,319 130,238 385,920 92,059 Intergovernmental - - - Rents and royalties - - - Other revenues 6,750 Total revenues 262,319 136,988 385,920 92,059 Expenditures Culture and recreation 105,013 978 Development services - - - General and administrative - - 65,748 Highways and streets - 3,850 - Public safety - - - Debt service Principal - - - Interest and fiscal charges - - - Capital outlay 886,960 5,935,138 120,300 Total expenditures 991,973 978 5,938,988 186,048 Excess (deficiency) of revenues over (under) expenditures (729,654) 136,010 (5,553,068) (93,989) Other financing sources (uses) Transfers in 5,208,200 - 1,150,000 1,000,000 Transfers out Total other financing sources (uses), net 5,208,200 1,150,000 1,000,000 Net change in fund balances 4,478,546 136,010 (4,403,068) 906,011 Fund balance, beginning of year 2,893,375 2,776,788 9,251,995 1,147,375 Fund balance, end of year $ 7,371,921 $ 2,912,798 $ 4,848,927 $ 2,053,386 104 Capital Project Funds TIRZ #4 Car Capital Total Midtown Midtown Rental Project Non -major Reserve CIP CIP Funds Governmental Fund Fund Fund Totals Funds $ $ - $ - $ - $ 2,901,673 1,745,584 - - 12,517,283 164,258 1,034,794 1,587,683 - - 810,336 - 84,567 6,750 213,798 164,258 1,041,544 19,860,924 105,991 4,290,483 - - 273,521 2,966 - 68,714 935,589 - - 3,850 3,850 - - - 4,178,018 275,837 157,211 97,100 7,039,498 7,476,598 2,966 97,100 7,218,053 17,591,107 (2,966) 67,158 (6,176,509) 2,269,817 5,600,000 12,95 8,200 13,021,659 - (16,025,342) 5,600,000 12,958,200 (3,003,683) (2,966) 5,667,158 6,781,691 (733,866) 999,725 60,991 166,319 17,296,568 38,769,179 $ 999,725 $ 58,025 $ 5,833,477 $ 24,078,259 $ 38,035,313 105 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenue s Gross receipts tax $ 1,431,275 $ 1,431,275 $ 1,698,065 $ 266,790 Investment income 89,180 89,180 99,717 10,537 Total revenues 1,520,455 1,520,455 1,797,782 277,327 Expenditures General and administrative Total expenditures Excess of revenues over expenditures Other financing uses Transfers out Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year 458,238 736,630 687,147 49,483 458,238 736,630 687,147 1,062,217 783,825 1,110,635 (1,480,797) (1,480,797) (1,464,154) (1,480,797) (1,480,797) (418,580) (696,972) 2,593,201 49,483 326,810 16,643 (1,464,154) 16,643 (353,519) 343,453 2,593,201 2,593,201 $ 2,174,621 $ 1,896,229 $ 2,239,682 $ 343,453 106 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues General sales tax $ 7,304,483 $ 7,304,483 $ 8,011,985 $ 707,502 Investment income 88,180 88,180 212,077 123,897 Rents and royalties 115,267 115,267 84,567 (30,700) Total revenues 7,507,930 7,507,930 8,308,629 800,699 Expenditures Culture and recreation 4,459,637 4,459,637 4,194,270 265,367 Development services 1,157,525 1,157,525 273,521 884,004 General and administrative 549,109 549,109 362,622 186,487 Debt service Principal 245,000 245,000 249,743 (4,743) Interest and fiscal charges 157,075 157,075 157,187 (112) Total expenditures Excess of revenues over expenditures Other financing uses Transfers out 6,568,346 6,568,346 5,237,343 1,331,003 939,584 939,584 3,071,286 2,131,702 (5,428,840) (5,428,840) (5,428,840) - Total other financing uses (5,428,840) (5,428,840) (5,428,840) Net change in fund balance (4,489,256) (4,489,256) (2,357,554) 2,131,702 Ftmd balance, beginning of year 7,645,781 7,645,781 7,645,781 Fund balance, end of year $ 3,156,525 $ 3,156,525 $ 5,288,227 $ 2,131,702 107 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Investment income $ 31,606 $ 31,606 $ 24,875 $ (6,731) Intergovernmental 15,000 _ 15,000 15,000 - Total revenues 46,606 46,606 39,875 (6,731) Expenditures Public safety 220,000 220,000 48,418 171,582 Total expenditures Excess (deficiency) of revenues over (under) expenditures 220,000 220,000 48,418 171,582 (173,394) (173,394) (8,543) 164,851 Other fmancing sources Transfers in 5,000 5,000 5,000 Total other financing sources 5,000 5,000 5,000 Net change in fund balance (168,394) (168,394) (3,543) 164,851 Fund balance, beginning of year 681,333 681,333 681,333 Fund balance, end of year $ 512,939 $ 512,939 $ 677,790 $ 164,851 108 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues General sales tax $ 3,458,132 $ 3,458,132 $ 3,990,233 $ 532,101 Other revenue 15,833 15,833 15,833 - Investment income 7,588 7,588 49,858 42,270 Total revenues Expenditures Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures 3,481,553 3,481,553 4,055,924 3,653,736 3,692,903 3,474,748 3,653,736 3,692,903 (172,183) (211,350) 574,371 218,155 3,474,748 218,155 581,176 792,526 Other financing uses Transfers out (5,000) (5,000) (5,000) Total other financing uses (5,000) (5,000) (5,000) Net change in fund balance (177,183) (216,350) 576,176 792,526 Fund balance, beginning of year 1,419,910 1,419,910 1,419,910 Fund balance, end of year $ 1,242,727 $ 1,203,560 $ 1,996,086 $ 792,526 109 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL ESRO SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Intergovernmental $ 2,310,000 $ 2,310,000 $ 620,887 $ (1,689,113) Total revenues 2,310,000 2,310,000 620,887 (1,689,113) Expenditures Public safety 2,223,289 2,223,289 594,769 1,628,520 Debt service Principal 45,791 45,791 26,094 19,697 Interest and fiscal charges - - 24 (24) Total expenditures 2,269,080 2,269,080 620,887 1,648,193 Net change in fund balance 40,920 40,920 (40,920) Fund balance, beginning of year - - - Fund balance, end of year $ 40,920 $ 40,920 $ - $ (40,920) 110 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL GRANT SPECIAL REVENUE FUND YEAR ENDED SEPTEMBER 30, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Intergovernmental $ 1,040,036 $ 1,094,582 $ 174,449 $ (920,133) Total revenues Expenditures Public safety 1,040,036 1,094,582 174,449 (920,133) 1,235,291 1,295,688 158,706 1,136,982 Total expenditures 1,235,291 1,295,688 158,706 1,136,982 Excess (deficiency) of revenues over (under) expenditures (195,255) (201,106) 15,743 216,849 Other financing sources Transfers in 195,255 201,106 58,459 (142,647) Total other financing sources 195,255 201,106 58,459 (142,647) Net change in fund balance - 74,202 74,202 Fund balance, beginning of year - - - Fund balance, end of year $ - $ $ 74,202 $ 74,202 111 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, 2025 Revenues Investment income Total revenues Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) $ 5,873 $ 5,873 $ 7,902 $ 2,029 5,873 5,873 7,902 2,029 Expenditures Public safety 51,020 51,020 19,758 31,262 Total expenditures 51,020 51,020 19,758 31,262 Net change in fund balance (45,147) (45,147) (11,856) 33,291 Fund balance, beginning of year 190,963 190,963 190,963 Fund balance, end of year $ 145,816 $ 145,816 $ 179,107 $ 33,291 112 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Investment income $ 8,406 $ 8,406 $ 11,383 $ 2,977 Other revenues 44,225 44,225 56,834 12,609 Total revenues Expenditures General and administrative 52,631 52,631 68,217 15,586 39,860 39,860 27,534 12,326 Total expenditures 39,860 39,860 27,534 12,326 Net change in fund balance 12,771 12,771 40,683 27,912 Fund balance, beginning of year 252,130 252,130 252,130 Fund balance, end of year $ 264,901 $ 264,901 $ 292,813 $ 27,912 113 CITY OF EULESS, TEXAS SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES — BUDGET AND ACTUAL GLADE PARKS PID FUND YEAR ENDED SEPTEMBER 30, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Other financing uses Transfers out $ (750,000) $ (750,000) _ $ (750,000) $ Total other financing uses (750,000) (750,000) (750,000) - Net change in fund balance (750,000) (750,000) (750,000) Fund balance, beginning of year 750,000 750,000 750,000 Fund balance, end of year 114 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues General property tax $ 2,063,275 $ 2,063,275 $ 1,950,497 $ (112,778) General sales tax 479,664 479,664 504,190 24,526 Investment income 196,089 196,089 118,400 (77,689) Total revenues 2,739,028 2,739,028 2,573,087 (165,941) Other financing uses Transfers out (7,454,308) (7,559,308) (7,313,326) 245,982 Total other financing uses (7,454,308) (7,559,308) (7,313,326) 245,982 Net change in fund balance (4,715,280) (4,820,280) (4,740,239) 80,041 Fund balance, beginning of year 6,164,083 6,164,083 6,164,083 Fund balance, end of year $ 1,448,803 $ 1,343,803 $ 1,423,844 $ 80,041 115 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Other revenues $ 158,518 $ 158,518 $ 134,381 $ (24,137) Investment income 2,304 2,304 830 (1,474) Total revenues 160,822 160,822 135,211 (25,611) Expenditures General and administrative 37,000 37,000 10,442 26,558 Total expenditures 37,000 37,000 10,442 26,558 Excess of revenues over expenditures 123,822 123,822 124,769 947 Other financing uses Transfers out (121,518) (121,518) (121,518) Total other financing uses (121,518) (121,518) (121,518) Net change in fund balance 2,304 2,304 3,251 947 Fund balance, beginning of year (31,972) (31,972) (31,972) - Fund balance, end of year S (29,668) $ (29,668) $ (28,721) $ 947 116 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Property tax revenues $ 985,360 $ 985,360 $ 951,176 $ (34,184) General sales tax 11,525 11,525 10,875 (650) Total revenues 996,885 996,885 962,051 (34,834) Other financing uses Transfers out (942,504) (942,504) (942,504) Total other financing uses (942,504) (942,504) (942,504) Net change in fund balance 54,381 54,381 19,547 (34,834) Fund balance, beginning of year 1,138,109 1,138,109 1,138,109 Fund balance, end of year $ 1,192,490 $ 1,192,490 $ 1,157,656 $ (34,834) 117 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, 2025 Variance with Actual Final Budget Budgeted Amounts GAAP Positive Original Final Basis (Negative) Revenues Gross receipts tax $ 56,585 $ 56,585 $ 47,519 $ (9,066) Investment income 20,343 20,343 27,847 7,504 Total revenues Expenditures General and administrative Capital outlay Total expenditures Net change in fund balance Fund balance, beginning of year Fund balance, end of year 76,928 76,928 75,366 (1,562) - 54,272 (54,272) 99,600 99,600 33,799 65,801 99,600 99,600 88,071 11,529 (22,672) (22,672) 669,073 (12,705) 9,967 669,073 669,073 $ 646,401 $ 646,401 $ 656,368 $ 9,967 118 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. 119 CITY OF EULESS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2025 ASSETS Current Assets Deposits and investments Accounts receivable Prepaid expenses Accrued interest receivable Total current assets Non -current Assets Property, plant, and equipment, at cost Equipment Less accumulated depreciation Net property, plant, and equipment Total assets LIABILITIES Current Liabilities Accounts payable Accrued salary and wages Current portion of compensated absences Accrued insurance claims Equipment Replace me nt Fund Insurance Fund Risk/WC Fund Total $ 26,752,745 5,000 1,004,989 218,251 $ 8,495,398 $ 3,445,421 478,793 102,277 3,138 42,958 3,028 $ 38,693,564 586,070 1,008,127 264,237 27,980,985 9,020,287 3,550,726 40,551,998 24,137,527 13,928,648 107,568 24,245,095 73,654 14,002,302 10,208,879 33,914 10,242,793 38,189,864 9,020,287 45,751 34,804 5,166 3,227 870,000 3,584,640 50,794,791 285,220 6,570 4,404 365,775 11,736 7,631 870,000 Total current liabilities 45,751 913,197 Non -current Liabilities Compensated absences 3,070 Total non -current liabilities - 3,070 Total liabilities 45,751 916,267 NET POSITION Net investment in capital assets Unrestricted 10,208,879 27,935,234 296,194 5,605 5,605 301,799 - 33,914 8,104,020 3,248,927 1,255,142 8,675 8,675 1,263,817 10,242,793 39,288,181 Total net position $ 38,144,113 $ 8,104,020 $ 3,282,841 $ 49,530,974 120 CITY OF EULESS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2025 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total Operating revenues Insurance premiums $ - $ 7,688,845 $ 524,605 $ 8,213,450 Service fees and miscellaneous 4,851,058 1,472,014 - 6,323,072 Total operating revenues 4,851,058 9,160,859 524,605 14,536,522 Operating expenses General and administrative 573,652 2,285,523 119,098 2,978,273 Insurance costs - 7,120,140 1,243,888 8,364,028 Depreciation 2,256,780 - 9,994 2,266,774 Total operating expenses 2,830,432 9,405,663 1,372,980 13,609,075 Operating income (loss) 2,020,626 (244,804) (848,375) 927,447 Nonoperating revenues Gain on sale of capital assets 443,691 - - 443,691 Investment income 1,179,131 363,562 126,961 1,669,654 Total nonoperatingrevenues 1,622,822 363,562 126,961 2,113,345 Income (loss) before transfers 3,643,448 118,758 (721,414) 3,040,792 Transfers Transfers in 1,116,104 - 900,000 2,016,104 Total transfers 1,116,104 900,000 2,016,104 Change in net position 4,759,552 118,758 178,586 5,056,896 Net position, beginning of year 33,384,561 7,985,262 _ 3,104,255 44,474,078 Net position, end of year $ 38,144,113 $ 8,104,020 $ 3,282,841 $ 49,530,974 121 CITY OF EULESS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS YEAR ENDED SEPTEMBER 30, 2025 Equipment Replacement Insurance Risk/WC Fund Fund Fund Total OPERATING ACTIVITIES Cash received from customers $ 4,846,058 $ 9,217,551 $ 595,563 $ 14,659,172 Cash payments to suppliers for goods and services (1,098,653) (9,160,656) (1,267,205) (11,526,514) Cash payments to employees for services (101,175) (84,898) (186,073) Net cash provided by (used in) operating activities 3,747,405 (44,280) (756,540) 2,946,585 NONCAPITAL FINANCING ACTIVITIES Transfers in 1,116,104 900,000 2,016,104 Net cash provided by noncapital financing activities 1,116,104 900,000 2,016,104 CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition/construction of capital assets (4,812,546) (4,812,546) Proceeds from sale of capital assets 479,338 479,338 Net cash used in capital and related financing activities INVESTING ACTIVITIES Interest received on investments (4,333,208) (4,333,208) 1,191,066 386,302 133,239 1,710,607 Net cash provided by investing activities 1,191,066 386,302 133,239 1,710,607 Net change in cash and cash equivalents 1,721,367 342,022 276,699 2,340,088 Cash and cash equivalents, beginning of year 25,031,378 8,153,376 3,168,722 36,353,476 Cash and cash equivalents, end of year $ 26,752,745 $ 8,495,398 $ 3,445,421 $ 38,693,564 Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) $ 2,020,626 $ (244,804) $ (848,375) $ 927,447 Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities Depreciation expense 2,256,780 9,994 2,266,774 Changes in assets and liabilities Receivables (5,000) 56,692 70,958 122,650 Prepaids (225,918) (3,138) - (229,056) Accounts payable (299,083) (97,038) 2,929 (393,192) Accrued salaries and wages 7,009 7,954 14,963 Accrued insurance claims 236,999 236,999 Net cash provided by (used in) operating activities $ 3,747,405 $ (44,280) $ (756,540) $ 2,946,585 Reconciliation of cash to balance sheet: Cash- current $ 26,752,745 $ 8,495,398 $ 3,445,421 $ 38,693,564 Cash and cash equivalents $ 26,752,745 $ 8,495,398 $ 3,445,421 $ 38,693,564 122 STATISTICAL SECTION (Unaudited) 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 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 The revenue capacity schedules contain information to help the reader assess the City's most significant local revenue source, the property tax. Debt Capacity 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 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 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. 1-4 5-8 9-12 13-14 15-17 124 Governmental activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business -type activities Net investment in capital assets Restricted for debt service Restricted for capital projects Restricted for impact fees Unrestricted Total business -type activities net position Primary govemment Net investment in capital assets Restricted Unrestricted Total primary government net position CITY OF EULESS, TEXAS NET POSITION BY COMPONENT — LAST TEN FISCAL YEARS (Accrual Basis of Accounting — Unaudited) Table 1 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 $ 108,135,655 $ 113,509,089 $ 112,710,338 $ 99,744,023 $ 104,018,729 $ 130,459,839 $ 123,862,163 $ 130,728,192 17,508,943 10,293,057 13,620,993 26,158,342 30,103,225 7,441,090 7,579,559 8,185,722 3,610,521 12,466,943 10,698,663 18,071,669 25,147,659 37,117,415 60,034,944 70,572,250 $ 129,255,119 $ 136,269,089 $ 137,029,994 $ 143,974,034 $ 159,269,613 $ 175,018,344 $ 191,476,666 $ 209,486,164 $ 133,199,143 $167,340,305 9,032,712 8,453,011 94,336,872 92,829,449 $ 236,568,727 $ 268,622,765 $ 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 $86,841,468 733,164 733,264 1,018,037 1,426,830 1,425,701 1,426,103 1,348,929 1,348,271 1,331,015 1,311,479 4,265,268 1,166,442 3,962,644 10,646,450 4,256,167 - - - - - 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 3,881,472 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 33,891,219 $ 77,285,439 $ 81,316,882 $ 83,445,731 S 87,873,198 S 89,975,384 S 93,066,084 S 104,785,940 S 106,933,720 $ 115,393,577 S 125,925,638 $ 167,319,911 $ 175,930,373 $ 175,993,392 $ 165,365,720 $ 170,573,427 $ 195,410,709 $ 197,169,040 $ 203,492,391 24,487,525 14,659,858 21,497,351 41,279,564 38,795,780 12,115,090 12,162,933 12,844,640 14,733,122 26,995,740 22,984,982 25,201,948 39,875,790 60,558,629 86,930,633 100,082,853 $ 206,540,558 $ 217,585,971 $ 220,475,725 $ 231,847,232 $ 249,244,997 $ 268,084,428 $ 296,262,606 $ 316,419,884 Source: Annual Comprehensive Financial Reports 125 $ 211,262,237 13,907,316 126,792,751 $ 351,962,304 $ 254,181,773 13,645,962 126,720,668 $ 394,548,403 CITY OF EULESS, TEXAS CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (Accrual Basis of Accounting - Unaudited) Table 2 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Expenses Governmental activities: Culture and recreation $ 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 $ 9,713,145 Development services 918,214 999,153 1,038,328 1,057,414 1,062,784 903,633 934,100 1,304,416 1,283,753 1,886,805 General and administrative 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 29,657,656 Highways and streets 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 5,037,137 Public safety 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 39,199,884 Interest on long-term debt 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 2,732,355 Total governmental activities expenses 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 88,226,982 Business -type activities: Water and wastewater 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 33,065,992 Drainage utility 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 1,678,417 Golf 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 6,100,845 Other recreation enterprises 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 2,461,108 Total business -type activities expenses 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 43,306,362 Total primary government expenses 89,873,527 93,100,201 94,230,446 101,115,906 93,271,468 94,465,259 101,754,513 120,046,229 121,319,300 131,533,344 Program Revenues Governmental activities: Fees, fines, and charges for services Culture and recreation 291,349 264,307 252,000 266,091 10,124 295,097 319,544 293,667 305,064 282,656 Development services 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 6,333,849 General and administrative 1,285,797 1,156,745 1,066,075 861,929 1,067,485 687,136 787,552 62,769 713,362 797,603 Highways and streets 350,920 607,588 988,302 1,114,507 1,075,865 982,070 717,124 287,767 261,316 134,381 Public safety 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 4,631,736 Operating grants and contributions 578,007 592,870 740,969 622,061 3,594,939 810,821 1,054,703 1,163,344 578,988 547,205 Capital grants and contributions 3,375,733 2,356,556 2,354,450 1,304,420 2,190,770 396,317 550,799 530,101 850,710 7,423,137 Total governmental activities program revenues 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 20,150,567 Business -type activities: Charges for services Water and wastewater 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 33,758,452 Drainage utility 725,152 730,202 818,622 826,711 833,890 842,003 1,193,159 958,637 945,588 1,255,830 Golf 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 3,530,639 Other recreation enterprises 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 2,281,292 Operating grants and contributions - - - - - - 949,068 - - - Capital grants and contributions 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 9,623,785 Total business -type activities program revenues 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 50,449,998 Total primary government program revenues 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 70,600,565 (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) (Continued) 126 CITY OF EULESS, TEXAS CHANGES IN NET POSITION - LAST TEN FISCAL YEARS (Accrual Basis of Accounting - Unaudited) - Continued Table 2 Net (Expense) Revenue Governmental activities $ (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) $ (68,076,415) Business -type activities 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 7,143,636 Total primary government net expense (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) (60,932,779) General Revenues and Other Changes in Net Position Goveuni ntal activities: Taxes Property taxes 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 31,876,634 Sales taxes 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 32,032,179 Car rental taxes 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 20,255,173 Mixed beverage taxes 101,503 128,250 154,035 138,219 146,188 171,687 201,348 215,340 213,322 258,974 Hotel/motel occupancy taxes 696,805 798,905 864,829 841,588 924,551 1,182,845 1,736,088 1,829,672 1,655,528 1,698,065 Gross receipts taxes 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 4,700,183 Investment income 271,786 451,406 963,670 1,882,696 1,054,661 123,646 804,074 5,180,191 8,706,659 7,610,517 Rents and royalties 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 1,423,846 Gain on sale of assets - 124,792 - - - - - Miscellaneous 692,939 755,996 772,773 930,764 971,040 1,081,893 1,304,396 1,354,694 1,768,534 2,156,954 Transfers (703,751) (233,569) 760,590 820,663 551,974 986,638 (6,698,492) 695,251 485,425 (1,882,072) Total governmental activities 56,591,677 59,940,733 63,685,881 67,157,393 64,317,605 70,973,871 75,433,497 91,312,610 98,319,373 100,130,453 Business -type activities: Investment income 104,618 158,805 385,513 746,865 368,999 42,346 174,403 1,097,357 1,707,873 1,506,353 Gain on disposal of assets 13,185 57,466 2,873 9,500 (84,752) - - - Transfers 703,751 233,569 (760,590) (820,663) (551,974) (986,638) 6,698,492 (695,251) (485,425) 1,882,072 Total business -type activities 821,554 449,840 (372,204) (64,298) (267,727) (944,292) 6,872,895 402,106 1,222,448 3,388,425 Total primary goveum,ent 57,413,231 60,390,573 63,313,677 67,093,095 64,049,878 70,029,579 82,306,392 91,714,716 99,541,821 103,518,878 Change in Net Position Governmental activities 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 32,054,038 Business -type activities 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 10,532,061 Total primary government $ 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 $ 42,586,099 (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) (concluded) Source: Annual Comprehensive Financial Reports 127 CITY OF EULESS, TEXAS FUND BALANCES, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting - Unaudited) Table 3 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 General Fund Nonspendable $ 35,250 $ 52,050 $ 51,409 $ 74,835 $ 158,975 $ 223,609 $ 113,090 $ 257,194 $ 178,415 $ 162,438 Restricted 121,041 104,340 125,753 132,954 123,748 117,674 108,919 111,942 151,992 224,896 Assigned 113,655 107,657 121,708 135,720 145,057 164,801 187,649 203,295 207,125 210,748 Unreserved/Unassigned 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 29,343,626 Total general fund $ 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 $ 29,941,708 All Other Governmental Funds Nonspendable $ 7,738 $ 22,028 $ 12,427 $ $ 24,873 $ 1,086 $ 15,655 $ 12,219 $ 83,672 $ 68,741 Restricted for: Debt service 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 4,368,968 Capital projects 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 10,820,938 Other 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 3,859,147 Assigned 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 56,237,515 Unassigned (31,972) (28,721) Total all other governmental funds $ 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 $ 75,326,588 Source: Annual Comprehensive Financial Reports 128 CITY OF EULESS, TEXAS CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting - Unaudited) Table 4 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Revenues: Property tax $ 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 $ 31,686,811 Gross receipts tax 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 6,657,222 Sales tax 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 32,032,179 Car rental tax 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 20,255,173 Fines and fees 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 5,150,784 Licenses and permits 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 6,295,717 Investment income 237,949 385,769 821,642 1,623,907 869,827 103,170 711,952 4,174,317 7,048,574 5,940,865 Drug enforcement revenues 18,274 9,994 2,656 18,353 13,678 117,144 42,175 35,377 156,853 - Intergovernmental 507,966 1,490,142 813,633 629,332 3,738,184 793,091 1,039,952 3,107,263 801,557 1,351,012 Rents and royalties 612,365 628,486 668,036 635,553 635,464 711,814 620,575 577,890 578,153 1,331,861 Other revenues 1,943,007 1,996,374 2,217,797 2,362,730 2,387,958 2,125,528 2,574,468 1,589,138 2,165,024 698,444 Total Revenues 64,707,893 68,180,435 70,165,440 72,843,214 72,330,256 75,261,205 88,487,633 96,884,139 103,580,720 111,400,068 Expenditures: Culture and recreation 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 8,408,458 Development services 862,571 931,119 1,036,278 1,001,587 1,065,028 924,919 993,827 1,187,377 1,311,747 1,799,955 General and administrative 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 27,072,664 Highways and streets 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 1,856,513 Public safety 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 36,617,468 Debt Service: Principal 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 12,661,578 Interest and fiscal charges 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 2,789,842 Issuance costs - - - - Capital outlay 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 28,249,479 Total expenditures 72,393,082 69,893,143 68,663,061 74,343,943 80,295,005 78,619,414 86,053,491 89,923,455 98,967,427 119,455,957 Excess (deficiency) of revenues over (under) expenditures (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 (8,055,889) Other Financing Sources (Uses): Issuance of lease 249,370 259,697 - - - Issuance ofsubscription debt - - 337,794 1,046,792 121,954 Issuance of debt 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 - - - Premiums onissuance of debt 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 11,350 Transfers in 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 29,633,466 Transfers out (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) (33,081,642) Total other financing sources 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 (3,314,872) Net change in fund balances Debt service as a percentage ofnoncapital expenditures $ 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 $ (11,370,761) Source: Annual Comprehensive Financial Reports 9.2% 9.0% 10.4% 10.4% 11.4% 11.1% 10.0% 10.7% 11.8% 16.9% 129 Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 CITY OF EULESS, TEXAS ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY — LAST TEN FISCAL YEARS (Unaudited) Estimated Value Real Property $ 3,352,029,682 3,470,371,005 3,922,338,493 4,353,413,236 4,877,396,769 5,160,656,914 5,445,666,114 6,024,406,774 6,651,035,261 7,103,090,364 Source: Tarrant Appraisal District Personal Property $ 513,118,652 531,751,946 564,286,167 576,907,417 628,387,146 666,521,372 637,973,264 734,267,287 872,086,428 1 ,044,939,782 Total Value Less: Tax -Exempt Property $ 3,865,148,334 $ 410,557,810 4,002,122,951 450,853,105 4,486,624,660 492,318,425 4,930,320,653 549,709,999 5,505,783,915 599,654,547 5,827,178,286 631,904,229 6,083,639,378 768,537,626 6,758,674,061 810, 917, 542 7,523,121,689 868,672,694 8,148,030,146 1,009,121,470 130 Total Taxable Value $ 3,454,590,524 3,551,269,846 3,994,306,235 4,380,610,654 4,906,129,368 5,195,274,057 5,315,101,752 5,947,756,519 6,654,448,995 7,1 38,908,676 Table 5 Total Direct Tax Rate 0.467500 0.462500 0.462500 0.462500 0.462500 0.462500 0.475000 0.460000 0.457500 0.446700 CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES (per $100 of Assessed Value) - LAST TEN FISCAL YEARS (Unaudited) City Direct Rates Overlapping Rates Table 6 General Grapevine- Tarrant County Tarrant County Fiscal Operating / Obligation Debt Hurst -Euless- Colleyville Hospital College Year General Rate Service Total Direct Rate Bedford ISD ISD Tarrant County District District 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 2025 0.365289 0.081411 0.446700 1.0289 0.8686 0.1875 0.1875 0.1123 Sources: City of Euless Budget Office, Tarrant Appraisal District * Corrected in FY2024 131 CITY OF EULESS, TEXAS PRINCIPAL PROPERTY TAXPAYERS Current Year and Nine Years Ago (Unaudited) Fiscal Year 2025 Taxpayer EAN Holdings LLC Westdale Hills 2013 LP Stoneleigh at Bear Creek Apts/Fountain Wood Apts LLC Star Monticello LLC/Star Kensington LLC Avis Budget Car Rental, LLC 1045 Edge LLC BVA Glade SPE J 1.0 Creekwood Trinity Union T 1.0 CH RealtyIX-Knightvest MF Dallas Mandolin Owner LP Oakmont of Bear Creek LLC/Parkside on the Creek LLC Total Source: Tarrant County Tax Office Taxable Assessed Value $174,056,333 143,814,131 136,300,000 127,900,000 124,414,719 118,300,000 114,030,843 110,800,000 109,000,000 105,800,000 $ 1,264,416,026 Percentage of Total City Taxable Assessed Value (1) Table 7 Fiscal Year 2016 Taxpayer 2.38 % EAN Holdings, LLC 1.97 CH Realty VI/MF Colleyville 280 LP 1.86 Westdale Hills 2013 LP 1.75 UDR The Mandolin, LLC 1.70 LSREF3 Bravo (Dallas) LLC 1.62 Stoneligh at Bear Creek Apts. 1.56 AT&T Mobility, LLC 1.52 AP WP Vineyard Reit, LLC 1.49 AP WP Seramont Reit, LLC 1.45 CMF 15 Portfolio LLC 17.30 % Total Notes: (1) Total Taxable Value including real and personal property for tax year 2024 (fiscal year 2025) is $7,309,358,692. (2) Total Taxable Value including real and personal property for tax year 2015 (fiscal year 2016) is $3,454,590,524. 132 Taxable Assessed Value $80,436,972 70,000,000 56,777,649 55,219,730 52,560,000 49,747,562 45,106,267 45,070,127 44,435,528 42,295,050 $ 541,648,885 Percentage of Total City Taxable Assessed Value (2) 2.33 % 2.03 1.64 1.60 1.52 1.44 1.31 1.30 1.29 1.22 15.68 % CITY OF EULESS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS — LAST TEN FISCAL YEARS (Unaudited) Taxes Levied Adjustments Adjusted Within the to Levy in Taxes Levied Fiscal Fiscal Year Subsequent for the Year of the Levy Years Fiscal Year Collected within the Fiscal Year of the Levy Amount Collections Percentage in Subsequent of Levy Years Table 8 Total Collection Delinquent Taxes Amount Percentage of Levy Amount Percentage of Levy 2016 $ 13,671,980 $ 870,928 $ 14,542,908 $ 14,481,033 99.57% $ 47,343 $ 14,528,376 99.90% $ 14,532 0.10% 2017 15,828,162 378,113 16,206,275 16,191,555 99.91% 1,087 16,192,642 99.92% 13,633 0.08% 2018 18,199,497 (43,030) 18,156,467 18,131,429 99.86% 11,511 18,142,940 99.93% 13,527 0.07% 2019 19,850,820 (62,056) 19,788,764 19,769,021 99.90% (222) 19,768,799 99.90% 19,965 0.10% 2020 22,134,132 (149,576) 21,984,556 21,970,578 99.94% (18,676) 21,951,902 99.85% 32,654 0.15% 2021 23,340,538 (187,331) 23,153,207 23,180,576 100.12% (58,366) 23,122,210 99.87% 30,997 0.13% 2022 24,283,254 (172,093) 24,111,161 24,176,819 100.27% (100,838) 24,075,981 99.85% 35,180 0.15% 2023 26,481,396 (211,533) 26,269,863 26,384,135 100.43% (185,319) 26,198,816 99.73% 71,047 0.27% 2024 29,363,359 (67,249) 29,296,110 29,327,018 100.11% (134,814) 29,192,204 99.65% 103,906 0.36% 2025 30,649,147 30,649,147 30,520,511 99.58% - 30,520,511 99.58% 128,636 0.42% Source: Tarrant County Tax Office and Tarrant Appraisal District 133 CITY OF EULESS, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE - LAST TEN FISCAL YEARS (Unaudited) Table 9 Governmental Activities Business -Type Activities General General Certificates 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 (I) Bonds Bonds Leases Subscriptions on Debt Issue 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 2025 57,175,000 4,525,000 4,325,000 10,493 723,885 2,899,536 14,070,000 36,618 (10,289) 83,755,245 3.30% 1,360 Note: Details regarding the City's outstanding debt can be found in the notes to the Financial Statements. (D 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. 134 CITY OF EULESS, TEXAS RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA AS OF SEPTEMBER 30, 2025 — (Unaudited) Table 10 General Bonded Debt Outstanding Premiums/ Discounts Restated (4) General Certificates on Debt Issues Less: Debt Net O/S Net General Debt Net General Fiscal Obligation of and Losses on Service Debt Estimated Taxable to Taxable Debt Per Year Bonds Obligation Refundings (1) Reserves Total (5) Population (2) Value (3) Value Capita 2016 $ 23,120,000 $ 27,710,000 $ 1,446,619 $ 2,055,746 $ 50,220,873 54,250 $ 3,454,590,524 1.45% $ 926 2017 19,730,000 27,350,000 1,288,664 2,398,220 45,970,444 54,870 3,551,269,846 1.29% 838 2018 16,230,000 35,660,000 1,381,631 2,913,866 50,357,765 55,170 3,994,306,235 1.26% 913 2019 13,100,000 46,200,000 2,038,856 3,415,104 57,923,752 56,160 4,380,610,654 1.32% 1,031 2020 9,845,000 51,710,000 2,066,094 3,676,024 59,945,070 57,550 4,906,129,368 1.22% 1,042 2021 7,410,000 54,930,000 2,546,006 4,153,924 60,732,082 58,260 5,195,274,057 1.17% 1,042 2022 5,785,000 52,560,000 2,105,638 3,242,540 57,208,098 61,480 5,315,101,752 1.08% 931 2023 4,115,000 70,675,000 3,543,290 3,715,908 74,617,382 61,544 5,947,756,519 1.25% 1,212 2024 2,390,000 67,465,000 3,447,799 3,951,783 69,351,016 61,555 6,654,448,995 1.04% 1,127 2025 57,175,000 2,899,536 3,938,172 56,136,366 61,601 7,138,908,676 0.79% 911 Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial Statements. Total does not include revenue bonds. Source: (I) 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) Tax notes, leases, and subscriptions are excluded as these debt instruments are considered bonded debt. (5) Amounts restated to include Midtown Debt Reserves. 135 CITY OF EULESS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2025 (Unaudited) Governmental Unit Table 11 Estimated Estimated Share of Debt Percentage Overlapping Outstanding Applicable Debt Debt repaid with property taxes Grapevine-Colleyville Independent School District $ 302,425,000 10.90% $ 32,964,325 Hurst -Euless -Bedford Independent School District 813,765,000 21.80% 177,400,770 Tarrant County 314,050,000 2.49% 7,819,845 Tarrant County Hospital District 431,255,000 2.49% 10,738,250 Tarrant County College District 547,535,000 2.49% 13,633,622 Subtotal, overlapping debt 242,556,812 Debt repaid with property taxes and sales taxes City of Euless (direct debt) 69,658,915 100.00% 69,658,915 Total direct and overlapping debt repaid with property taxes and EDC sales taxes $ 312,215,727 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 premiums. Source: Debt outstanding data provided by Municipal Advisory Council of Texas and City records. 136 CITY OF EULESS, TEXAS SCHEDULE OF REVENUE BOND COVERAGE WATER AND WASTEWATER BONDS — LAST TEN FISCAL YEARS (Unaudited) Interest Less Net and Fiscal Total Operating Revenue Fiscal Year Revenues (1) Expenses (2) Available Principal Charges Total Table 12 Coverage Ratio 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 2025 38,353,786 29,901,366 8,452,420 840,000 233,658 1,073,658 7.87 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 137 CITY OF EULESS, TEXAS DEMOGRAPHIC STATISTICS — LAST TEN FISCAL YEARS (Unaudited) Table 13 Personal Per Income Fiscal Estimated Capita (thousands Median School Unemployment Year Population (1) Income (2) of dollars) Age (2) Enrollment (3) Rate (4) 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% 2025 61,601 $ 41,178 $ 2,536,606 34.8 23,183 4.1% Notes: (1) Estimates by North Central Texas Council of Governments (2) US Census Bureau (3) Hurst -Euless -Bedford Independent School District (4) Texas Workforce Commission; Bureau of Labor Statistics (5) Updated from projected to actual 138 CITY OF EULESS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (Unaudited) 2025* Employer HEB ISD LSG Sky Chefs, Inc. City of Euless Target Lowe's Life Outreach International Smyrna Concrete Dave and Buster's QuikTrip Flynn BEC, LP Thirsty Lion Total Employees 1,210 663 415 250 225 186 185 150 130 120 120 Percentage of Estimated Total City Employment 4.34% 2.38% 1.49% 0.90% 0.81% 0.67% 0.66% 0.54% 0.47% 0.43% 0.43% 3,654 13.12% Source: City of Euless Planning and Development Department * Prior year data used if updated information was unavailable. 139 Table 14 2016 Employer HEB ISD LSG Sky Chefs, Inc. Autogrill Group, Inc. City of Euless Lazy Dog Life Outreach International Lowe's Dave & Busters Legend Oaks Healthcare Redi-Mix Concrete Percentage of Estimated Total Employees City Employment 808 3.77% 600 2.80% 450 2.10% 453 2.02% 215 1.00% 186 0.87% 150 0.70% 150 0.70% 134 0.63% 132 0.62% 3,278 15.21% CITY OF EULESS, TEXAS FULL-TIME CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Table 15 Function/Program 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 General Government and Administration 49.50 50.00 51.00 50.50 50.50 49.00 49.50 49.50 49.50 49.50 Public Safety 136.00 136.00 137.00 137.00 139.00 139.00 142.00 142.00 144.00 149.00 Fire Safety 72.00 75.00 75.00 75.00 75.00 75.00 78.00 78.00 78.00 78.00 Development Services 7.50 8.00 7.50 7.50 7.50 7.50 7.50 8.50 8.50 8.50 Culture and Recreational 34.25 35.25 35.25 35.25 34.25 34.25 34.25 35.25 35.00 36.00 Water and Wastewater 42.50 42.50 43.50 43.00 44.00 43.50 45.00 45.00 45.00 46.00 Golf Course 11.75 11.75 11.75 11.75 11.75 11.75 11.75 11.75 13.00 13.00 Public Works 20.00 21.00 22.50 23.50 23.50 23.50 23.50 26.50 28.50 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 380.00 386.00 390.00 390.00 392.00 390.00 398.00 403.00 408.00 415.00 Source: City Budget Office 140 Function/Program CITY OF EULESS, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Table 16 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Public Safety Police Number of Certified Officers 92 87 91 91 86 85 93 85 87 85 Number of Citations Issued 18,483 25,061 19,100 16,552 11,154 9,283 17,224 12,993 13,242 11,724 Fire Number of Certified Firefighters 70 72 73 74 72 75 74 76 76 76 Number of Alarms 4,770 4,678 3,758 4,324 4,735 4,827 6,245 6,179 6,523 6,100 Number of EMS Calls 3,431 3,772 3,468 2,958 3,256 3,204 3,910 4,202 4,525 4,208 Municipal Court Cases Filed 25,957 25,061 25,101 22,472 15,400 12,751 17,224 14,236 15,956 16,382 Development Number Residential Permits - New 186 176 214 93 3 0 0 3 19 14 Number Commercial Permits - New 15 36 32 18 12 13 7 12 9 31 Number Multifamily Permits - New 0 0 1 6 0 0 0 0 0 5 Public Works Street Overlay (Square Footage) 1,156,833 1,549,065 1,063,046 1,289,759 1,010,016 421,848 483,310 344,965 650,288 609,411 Cultural and Recreational Parks and Recreation Recreation Center Memberships 6,975 6,528 7,183 7,125 2,820 3,886 5,008 5,321 5,209 6,354 Water and Wastewater Number of Water Consumers 25,812 25,970 26,200 26,659 27,467 27,855 27,942 28,249 28,006 28,004 Water Produced (In Gallons x 1000) 540,921 439,255 580,337 569,697 8,520 (2) 0 (3) 0 (3) 211,138 (4) 366,619 (4) 338,854 Water Purchased - TRA (In Gallons x 1000) 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 2,019,001 Water Supplied (In Gallons x 1000) 2,328,468 2,205,947 2,348,014 2,156,364 2,258,870 2,187,563 2,586,490 2,632,292 2,631,792 2,357,855 Annual Rainfall (In Inches) 53.16 34.96 42.39 48.20 45.27 33.41 29.92 28.88 47.59 34.56 Golf Course Number of Paid Rounds Played Source: City Departments Annual Comprehensive Financial Report City Budget Office Notes: (4) 32,852 33,237 32,557 32,016 30,860 42,429 41,645 41,727 32,729 24,402 (5) (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. (4) Restated (5) Course closed for approximately four months for renovation. 141 Function/Program CITY OF EULESS, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM - LAST TEN FISCAL YEARS (Unaudited) Table 17 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Public Safety Police Stations 1 1 1 1 1 1 1 1 1 1 Fire Stations 3 3 3 3 3 3 3 3 3 3 Public Works Streets - Paved (I) 344.77 350.12 350.12 351.74 351.74 352.60 352.60 352.40 352.40 357.53 Cultural and Recreational Aquatic Facilities 3 3 3 3 2 2 2 1 1 1 Parks (2) 16 16 16 16 16 16 16 16 16 18 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) 1 1 1 1 1 - - - - AthleticFields 30 30 30 30 30 31 31 31 31 31 Library Holdings 101,160 85,123 80,241 81,353 82,501 85,010 88,577 91,560 93,590 93,393 Water and Wastewater Water Mains - Potable (5) 235.50 236.30 239.10 241.93 242.28 243.00 244.50 248.74 248.80 251.80 Water Mains - Reclaimed (5) 3.82 3.96 4.12 7.15 11.65 11.65 11.65 11.65 11.65 12.94 Fire Hydrants 1,674 1,719 1,798 1,805 1,836 1,845 1,886 1,903 1,901 1,953 Wastewater Mains (5) 193.2 195.2 197.0 198.4 201.0 202.1 203.0 203.0 203.3 205.8 Source: City Depai t'lents (I) 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. 142