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2019 Comprehensive Annual Financial ReportCITY OF 7 TEXAS lG 44f ra A5 T E X A S BVw,Skie5: CTortwlle ; Comprehensive Annual Financial Report Year Ended September 30, 2019 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2019 ISSUED BY: DEPARTMENT OF FINANCE CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letterof Transmittal................................................................................................................................ i-xi GFOA Certificate of Achievement........................................................................................................... xii Organizationalart............................................................................................................................... xiii Listof Principal Officials.......................................................................................................................... xiv FINANCIAL SECTION Independent Auditor's Report................................................................................................................. 1-2 Management's Discussion and Analysis (Required Supplementary Information) .................................. 3-14 BASIC FINANCIAL STATEMENTS: Statement of Net Position...............................................................................................................A-1 15 Statement of Activities....................................................................................................................A-2 16 Balance Sheet - Governmental Funds...........................................................................................A-3 17 Reconciliation of the Governmental Funds Balance Sheet to the Statement ofNet Position..............................................................................................................................A-4 18 Statement of Revenues, Expenditures and Changes in Fund Balances - GovernmentalFunds....................................................................................................................A-5 19 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities............................................A-6 20-21 Statement of Net Position - Proprietary Funds...............................................................................A-7 22-23 Statement of Revenues, Expenses and Changes in Net Position - ProprietaryFunds.........................................................................................................................A-8 24 Statement of Cash Flows - Proprietary Funds................................................................................A-9 25-26 Statement of Fiduciary Assets and Liabilities................................................................................A-10 27 Notes to the Financial Statements..................................................................................................... 28-67 REQUIRED SUPPLEMENTARY INFORMATION: Budgetary Comparison Schedule - General Fund.......................................................................... B-1 68 Schedule of Changes in Net Pension Liability and Related Ratios — Texas Municipal Retirement System............................................................................................ B-2 69 Schedule of Contributions — Texas Municipal Retirement System ................................................. B-3 70 Schedule of Changes in Net Pension Liability and Related Ratios — Wichita Falls Firemen's Relief and Retirement Fund................................................................... B-4 71 Schedule of Contributions — Wichita Falls Firemen's Relief and RetirementFund...........................................................................................................................B-5 72-73 Schedule of Changes in Net OPEB Liability and Related Ratios — City of Wichita Falls Retiree Health Care Plan............................................................................. B-6 74 Schedule of Contributions — City of Wichita Falls Retiree HealthCare Plan.......................................................................................................................... B-7 75 Notes to the Required Supplementary Information........................................................................... 76-77 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS (CONT'D. Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: CombiningBalance Sheet.........................................................................................................C-1 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances.................C-2 79 Budgetary Comparison Schedule — Community Development Block Grant Fund ....................C-3 80 Budgetary Comparison Schedule — Section 8 Housing Fund...................................................C-4 81 Budgetary Comparison Schedule — Home Investment Partnership Agreement Fund ..............C-5 82 Budgetary Comparison Schedule — Hotel/Motel Tax Fund.......................................................C-6 83 Budgetary Comparison Schedule — Golf Fund..........................................................................C-7 84 Budgetary Comparison Schedule — MPEC Fund......................................................................C-8 85 Budgetary Comparison Schedule — Debt Service Fund............................................................C-9 86 Nonmajor Enterprise Funds: Combining Statement of Net Position........................................................................................D-1 87 Combining Statement of Revenues, Expenses and Changes in Fund Net Position .................D-2 88 Combining Statement of Cash Flows........................................................................................ D-3 89-90 Internal Service Funds: Combining Statement of Net Position........................................................................................ E-1 91 Combining Statement of Revenues, Expenses and Changes in Fund Net Position ................. E-2 92 Combining Statement of Cash Flows........................................................................................ E-3 93 Agency Fund: Statement of Changes in Assets and Liabilities........................................................................ F-1 94 Component Units: Combining Statement of Net Position........................................................................................G-1 95 Combining Statement of Activities.............................................................................................G-2 96 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities.........................................................H-1 97 Combined Schedule of Bonds Payable..........................................................................................H-2 98-102 Debt Service Coverage — Revenue Bonds.....................................................................................H-3 103 Capital Assets Used in the Operation of Governmental Funds - Schedule By Function and Activity...............................................................................................H-4 104 Capital Assets Used in the Operation of Governmental Funds - Schedule of Changes By Function and Activity............................................................................H-5 105 Regional Airport Fund — Capital Assets and Accumulated Depreciation........................................H-6 106 Kickapoo Airport Fund — Capital Assets and Accumulated Depreciation.......................................H-7 107 Transit Fund — Capital Assets and Accumulated Depreciation......................................................H-8 108 Stormwater Drainage Fund - Capital Assets and Accumulated Depreciation................................H-9 109 Sanitation Fund — Capital Assets and Accumulated Depreciation ................................................ H-10 110 CITY OF WICHITA FALLS, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2019 TABLE OF CONTENTS (CONT'D Exhibit Page Water and Sewer Fund — Capital Assets and Accumulated Depreciation ..................................... H-11 111 Waterpark Fund — Capital Assets and Accumulated Depreciation ................................................ H-12 112 Fleet Maintenance Fund — Capital Assets and Accumulated Depreciation ................................... H-13 113 Duplicating Services Fund — Capital Assets and Accumulated Depreciation ................................ H-14 114 Information Technology Fund — Capital Assets and Accumulated Depreciation ...........................H-15 115 Wichita Falls Economic Development Corporation — Capital Assets and Accumulated Depreciation...........................................................................................................H-16 116 STATISTICAL SECTION (UNAUDI Net Position By Component — Last Ten Fiscal Years..................................................................... 1-1 117 Changes in Net Position — Last Ten Fiscal Years.......................................................................... 1-2 118-119 Fund Balances, Governmental Funds — Last Ten Fiscal Years ..................................................... 1-3 120 Changes in Fund Balances, Governmental Funds — Last Ten Fiscal Years .................................. 1-4 121 Tax Revenues By Source, Governmental Funds — Last Ten Fiscal Years .................................... 1-5 122 Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years .................... 1-6 123 Direct and Overlapping Property Tax Rates — Last Ten Fiscal Years ............................................ 1-7 124 Principal Property Taxpayers — Current Year and Nine Years Ago ................................................ 1-8 125 Property Tax Levies and Collections — Last Ten Fiscal Years ....................................................... 1-9 126 Ratios of Outstanding Debt by Type — Last Ten Fiscal Years ....................................................... 1-10 127 Ratios of General Bonded Debt Outstanding — Last Ten Fiscal Years ......................................... 1-11 128 Direct and Overlapping Governmental Activities Debt................................................................. 1-12 129 Computation of Legal Debt Margin — Last Ten Fiscal Years......................................................... 1-13 130 Pledged Revenue Coverage — Water and Sewer Revenue Bonds — LastTen Fiscal Years.................................................................................................................. 1-14 131 Demographic Statistics — Last Ten Fiscal Years........................................................................... 1-15 132 Principal Employers — Current Year and Ten Years Ago.............................................................. 1-16 133 Full -Time Equivalent City Government Employees by Function/Program — LastTen Fiscal Years.................................................................................................................. 1-17 134 Operating Indicators by Function/Program — Last Ten Fiscal Years ............................................. 1-18 135 Capital Asset Statistics by Function/Program — Last Ten Fiscal Years ......................................... 1-19 136 Graphics: Cashand Investments............................................................................................................... J-1 137 TotalBonds Payable................................................................................................................. J-2 138 General Obligation Bonds Payable........................................................................................... J-3 139 Revenue Bonds Payable...........................................................................................................J-4 140 GeneralFund Equity................................................................................................................. J-5 141 Comparison of Tax Levy and Collections................................................................................. J-6 142 Revenues by Source — FYE 9/30/19......................................................................................... J-7 143 Expenditures by Function — FYE 9/30/19.................................................................................. J-8 144 General Governmental Revenues (General Fund Only)........................................................... J-9 145 General Governmental Expenditures (General Fund Only) .................................................... J-10 146 INTRODUCTORY SECTION FINANCE DEPARTMENT T E X A S March 30, 2020 The Honorable Mayor, Members of the City Council, City Manager and Citizens of Wichita Falls, Texas We are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Wichita Falls, Texas for the fiscal year ended September 30, 2019, together with the opinion of our independent certified public accountants, Edgin, Parkman, Fleming & Fleming, PC, whose report is included. The Finance Department prepared this report to present the financial position of the City. The financial statements and supporting schedules have been prepared in accordance with generally accepted accounting principles and meet the requirements of the State of Texas and the City Charter. Management assumes full responsibility for the completeness, fairness and reliability of the information contained in this report, based on a comprehensive framework of internal controls established for this purpose. We believe the data presented here is accurate in all material aspects; it is presented to fairly set forth the financial position and results of operation of the City, as measured by the financial activity of its various funds; and that all disclosures necessary to enable the reader to gain understanding of the City's financial activities have been included. Edgin, Parkman, Fleming & Fleming, PC, issued an unmodified opinion on the City's financial statements for the year ended September 30, 2019. The Independent Auditor's Report may be found on page 1 of this document. Management's Discussion and Analysis (MD&A) immediately follows the Independent Auditor's Report in this document. The MD&A provides additional detail and a narrative overview and analysis of the financial statements. It should be read in conjunction with the Basic Financial Statements and the Notes to the Basic Financial Statements. CITY OF WICHTA FALLS PROFILE The City of Wichita Falls is located in the south-central United States in north -central Texas. The City was incorporated in 1889, and now encompasses 70.1 square miles. The 2019 population for Wichita Falls, as estimated by the City, is 104,576, an increase of 0.02% from the 2010 Census estimates, and an increase of 0.36% over the 2000 population. Wichita Falls is linked to major southwestern, western, and mid -western cities by Interstate 44, U.S. Highways 82, 281, 277, 287, and Texas State Route 79. The city is approximately 130 miles northwest of the Dallas/Fort Worth Metroplex, 15 miles from the Red River that marks the Texas/Oklahoma border, and 125 miles south of Oklahoma City. The city is located in the cross - timbers area of the gently rolling north -central plains and is dissected by the Wichita River. Due to the city's geographic location, Wichita Falls serves as a regional economic hub for north Texas and south central Oklahoma. Wichita Falls is the county seat of Wichita County and the major population center in North Texas. The economy is based on mineral production, retail trade, manufacturing, agribusiness, and government installations. Principal sources of agricultural income include cattle, cotton and wheat. Wichita Falls is home to Sheppard Air Force Base (SAFB), which operates the Euro-NATO jet pilot training program. Through Sheppard's Euro-NATO Joint Jet Pilot Training program, Wichita Falls has a significant international flavor. The program is utilized by seventeen different NATO countries for the finest fighter pilot training in the world. Ei (Bike race) The city's major university is Midwestern State University (MSU). The city is also home to a branch of Vernon College, a fully accredited community college. Principal manufacturers within the area include metal fabrication, industrial and commercial equipment, engine components, flexible packaging, and assorted plastic, glass and fiberglass. North Texas State Hospital -Wichita Falls Branch, Midwestern State University, James V. Allred Prison and Sheppard Air Force Base are also large employers located within the city. The City operates a Multi -Purpose Events Center (MPEC), which includes a coliseum, exhibit hall, and an agricultural arena/show barn. CITY SERVICES AND ORGANIZATION OF THE GOVERNMENT The City of Wichita Falls is a Council -Manager form of government, organized under the Constitution and Laws of the State of Texas. The City Council is comprised of five members elected from separate districts, one member at large and an elected Mayor. The City Council appoints the City Manager, City Attorney, Municipal Court Judge and City Clerk. All other staff members work under the direction of the City Manager. ii The City provides a full range of municipal services to the community. These services include public safety, fire protection, public works, health and welfare, parks and recreation, cemeteries, library, public improvement, engineering, planning and zoning, and general administrative services. As part of public works services, the City provides water, sewer, and sanitation for its citizens. The City also provides a full range of transportation options, including bus service, a regional airport, and a trolley. All funds included within the Financial Section of this report are considered to be financially accountable by the City and its elected and appointed officials. The financial statements of the City include all governmental activities, business -type activities, organizations, and functions as required by generally accepted accounting principles. The criteria considered in determining which activities are reported include: the organization's legal status, appointment of the organization's boards, the City's ability to impose its will on the organization, the ability to impose a financial benefit/burden on the City, and fiscal dependency by the organization on the City. The criteria used by the City for including activities in preparing its financial statements are in conformity with Governmental Accounting Standards Board (GASB) Statement 14, "The Financial Reporting Entity," as amended by Statement 61. ECONOMIC CONDITION AND ACTIVITY Over the past few decades, Wichita Falls has successfully diversified its economy to include new manufacturing, government, medical services, retail and service related commerce. This diversification is in addition to the more typical North Texas industries of agriculture, and oil and gas production. The Wichita Falls Metropolitan Statistical Area (MSA) houses a robust manufacturing sector, with many companies having employment in excess of 100 persons. The MSA is a metropolitan area in North Texas, which covers three counties, Archer, Clay and Wichita. The 2017- estimated population of the area is 151,230 according to the Texas Comptroller. The Gross Domestic Product of the Wichita Falls, TX MSA expanded 4.6% in 2018 to a total of $5,818,084,000. Of the sectors in the area, manufacturing contributed the largest portion of GDP in 2017 to total $713,729,000. The next largest contributors to GDP were healthcare and social assistance at $698,783,000, retail trade at $541,523,000 and unclassified at $491,077,000. The City of Wichita Falls acts as the economic hub for the MSA and an additional area covering 60 square miles. As such, the City's manufacturing, healthcare, and retail opportunities play a large role in this area of North Texas. (United Healthcare Facility) 111 In 1998, voters in Wichita Falls approved a %-cent economic development sales tax. Since that time, the Wichita Falls Economic Development Corporation (WFEDC) has approved $69 million for 81 projects in the community. Some of these projects, which occurred in the current or prior year, are discussed in detail later in this letter. For more information about these projects, the reader is encouraged to visit the City of Wichita Falls Chamber of Commerce website at https:Hfallsfuture.com/, where you will also find the Wichita Falls, Texas, Community Profile. a` (Chamber of Commerce, Community Profile) The passage of the sales tax for economic development created two separate corporations, the WFEDC, referred to as a 4A Corporation and the 4B Sales Tax Corporation. The 4A Corporation was created to fund industrial development projects, manufacturing, research, and development. These funds may be used to fund military base realignment, job training classes and public transportation. The 4B Corporation may fund all projects the 4A Corporation may fund, in addition to parks, museums, sports facilities, conference facilities and affordable housing opportunities. Sales tax collected in accordance with the voter approved %-cent economic development sales tax totaled $8,303,958, and is divided evenly between the two separate sales and economic development corporations for a total of $4,151,979 each. These corporations are discretely presented component units of the City. A further discussion of component units may be found in the Notes to the Basic Financial Statements, beginning on page 28 of this document. Revenue for operations comes from many sources, the largest of which are property and sales taxes. The City's property tax rate during the 2018-19 fiscal year was 0.72998 cents per $100 of assessed value. This property tax rate generated approximately $37.9 million in revenues for the general operation of the City. The City receives 2.0% of the sales tax collected within City limits. During the 2018-19 fiscal year, the City collected $24.9 million in sales taxes for general operations. As mentioned previously, these collections do not include the sales tax which is collected, and directed, to the City's discretely presented component units as those funds are voter approved for a specific and dedicated purpose, outside of general city use. FINANCIAL INFORMATION & FINANCIAL POLICY A further discussion of the City's Financial Policies may be found in the Notes to the Basic Financial Statements included in this document beginning on page 28. The City's primary financial direction begins with the City's Charter, which is then used as the basis for all financial policies the City implements. The City maintains financial policies for general operations which include policies for iv financial management and fund balances, budget compliance, debt issuance and management, accounts payable, water service, and purchasing among others. In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal control as deemed appropriate by the City Manager. Internal control is designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition; and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a control should not exceed the benefits likely to be derived and the evaluation of costs and benefits requires estimates and judgments by the City Manager. All internal control evaluations occur within the above framework. The City believes that its internal control adequately safeguards assets and provides reasonable assurance of proper recording of financial transactions. The Annual Operating Budget is proposed by the City Manager and approved by the City Council following public discussion. Budgetary control is maintained at the department and fund level by the Finance Department through use of an integrated financial technology solution. Purchase orders which result in an overrun of class level balances are not released until additional appropriations are made available. In instances when budgetary transfers are necessary, management control of the operating budget is maintained at the fund and department level. Transfers within a department of the same fund must be approved by the City Manager. Transfers across departments or funds must be approved by the City Council. Unencumbered appropriation balances lapse at year-end and are not carried forward to new budget periods. Open encumbrances are reported as reservations of fund balance at September 30, 2019, and related appropriations are carried forward to the new fiscal year through a supplemental budgetary allocation. In September 2012, the City adopted a fund balance policy for the General Fund, Water/Sewer Fund, and the Sanitation Fund. The policy requires the City to maintain at least 20% of expenditures in unassigned fund balance in the General Fund, 17% of expenditures (less debt service expenses) in the Water/Sewer Fund, and 15% of expenditures in the Sanitation Fund. If funds fall below these percentages, plans are to be put into place to replenish fund balance. These financial statements reflect that the policy has been followed in the General Fund, Water/Sewer Fund, and the Sanitation Fund. The City also maintains an informal policy to limit tax supported debt to no more than 5% of total assessed property value or $1,500 per capita. As of September 30, 2019, the City's tax supported debt, funded with ad valorem taxes, was approximately $53.5 million, which is 1.09% of the taxable value of property. As of August 2018, the City's tax supported debt was $954 per capita, as reported by the Texas Bond Review Board. v The table below, provided by the Texas State Comptroller, compares the total per capita tax supported debt of the City of Wichita Falls to other similarly sized cities as of August, 2018 (the most recent reporting available). Tax Supported Debt Tax Supported Debt City Name Outstanding Outstanding Per Capita Population College Station 322,495,000.00 2,775.00 116,218.00 League City 218,570,000.00 2,057.00 106,244.00 Beaumont 208,180,000.00 1,758.00 118,428.00 San Angelo 173,890,000.00 1,735.00 100,215.00 Wichita Falls 99,720,000.00 954.00 104,576.00 Allen 87,420,000.00 846.00 103,383.00 Lewisville 80,545,000.00 756.00 106,586.00 Edinburg 49,605,000.00 503.00 98,665.00 The Woodlands Township 34,440,000.00 294.00 117,305.00 Tyler - - 105,729.00 (Source: DAAG, Texas State Comptroller, City of Wichita Falls. https:HcomptroIIer.texas.gov/transparency) GENERAL GOVERNMENTAL FUNCTIONS All eligible property within the City is subject to assessment, levy and collections of a continuing, direct ad valorem tax. The City may levy taxes only in accordance with the budget. The tax rate consists of two components, the amount of taxes to pay maintenance and operation expenditures, and the amount of taxes to pay debt service. During the 86t" Texas State legislative session, Senate Bill 2 passed. It makes numerous changes to the process for adopting property tax rates and limits increases in the operations and maintenance property rates. Senate Bill 2 also includes provisions, which require a local government, when adopting a tax rate over the "voter approval tax rate", to give notice of, and to hold, a mandatory election. Notice must be given, at minimum, 78 days prior to the November election. These changes have affected local government budget creation and reporting in Texas. A comparison of property tax rates over the past five years follows: Component 2019-20 2018-19 2017-18 2016-17 2015-16 Maintenance & 0.72157 0.6871 0.69077 0.69024 0.63952 Operations Debt Service 0.04175 0.04278 0.01522 0.01575 0.01575 Total Property Tax Rate Per $100 of Assessed 0.76332 0.72988 0.70598 0.70598 0.65526 Value vi MAJOR INITIATIVES PAST YEAR: In October 2017, the City Council continued to address a strategic goal to "Redevelop Downtown" by hiring a professional services firm to evaluate the needs for revitalization of the area and to make recommendations for improvements. In January of 2019, the City Council updated the strategic plan and revised the strategy map. The five strategic goals identified are to Accelerate Economic Growth, Provide Adequate Infrastructure, Redevelop Downtown, Efficiently Deliver City Services, and Actively Engage and Inform the Public. Each of these goals have multiple objectives to assist city staff with the overall strategy to meet the vision, mission, and values of the City of Wichita Falls. Falls is a vibrant, growing, family -oriented communlity of unlimited opportunity Enhance our quality of life through responsive service delivery, %ound financial manavamant. and nartnprchinc cnannina tha nuhlir nrivatn and i�itcinrtc ,Prtnrc Accelerate Economic Growth rw lJ pasn �, Mplegnentalenn tlf U!e p ly ..,P1 a ihr Econanwc uv, twr sheppa tt Air Wx[P r, ,t. �tw, �t l.r CkWi0 n"I PLO lxnNKrW] d I I �.YP,*„T:�.ly n Hr trr •Iw n. ar vi{?In[e1war 0 rpr M1"IYk111i 11M1•(f, u,,.t t[X.il �y (hamb" dry} 1 W +al tJ Rii.J•i1• I.. t . M 0 Provide Adequate InfrastructureRedevelop Downtown t durate tltltensi� • naturr Inhastl[rfYr rn V�II€ c � i i• i n N"Ch nn meme [s L k hah l l 'I.• Ell rwa h•wv U 4 Efficiently Deliver City Services Actively 'Engage and Inform the Public � I Live ou venues Excellence +F Integrity + Accountability + Transpar,,r [ i * Ir•I c .anon (City of Wichita Falls, Strategy Map. Available at wichitafallstx.gov) During the 2018-19 fiscal year, the City's efforts toward these goals included the following. In support of the goal, Accelerate Economic Growth, the City partnered with the Economic Development Corporation to work on a "Falls Future Strategy" which included implementation of a talent partnership, increased marketing of the City, and providing support to align the priorities of the City, Chamber of Commerce and Economic Development Corporation. In support of the goal, "Provide Adequate Infrastructure", the City issued $17.3 million in voter approved General Obligation Bonds in 2018. This issue is designated for the extension of Maplewood Avenue from Lawrence Road to McNeil Avenue (estimated at $1.6 million), the widening of Taft Boulevard from FM 369 to FM 2380 (estimated at $4.7 million), and routine capital street repairs throughout the city limits (estimated at $11 million). vii During the 2018-19 fiscal year, the City Council awarded a contract for Phase II of the Kemp/Monroe Drainage Project. This project is a continuation from Phase I, and is generally described as the construction of an underground drainage system, inlets, street rehabilitation, utility relocations, and associated work improving the storm water drainage in the area. The overall project will eliminate the nuisance flooding of Kemp Street at Avenue M and will further protect 35 homes from a 100- year rain event. It will also reduce the flood water depth in Monroe Street from approximately 4 feet to 1.3 feet during a 100-year event, allowing for access of emergency vehicles. The total cost for this contract is $4,112,000 and is also being financed from available cash in the Stormwater Drainage Improvement Fund. In support of the goal, "Redevelop Downtown", the City began working through implementation of the Downtown Master Plan, which was approved in September of 2018. The plan outlines the long- term vision of the City for the revitalization of the downtown area. (Wichita Theatre Performing Arts Center) In support of the goal, "Efficiently Deliver City Services", in fiscal year 2017-18, the Information Technology Department, Finance Department, and Human Resources Department began implementation of new Finance and Human Resources software applications with technology that integrates with the Utility Billing and Collections and Municipal Court systems. This project was anticipated to continue actively over 18 months and has done so. While work is continuing, great strides have been made and the organization is adapting to these changes. The 2018-19 fiscal year was the first year this software was used for budget creation. When this project is complete, Finance, Budgeting, Payroll, Human Resources, Utility Billing and Collections, and the Municipal Court Systems will be provided through a fully -integrated product supplied by one vendor. The cost of the new systems was approximately $840,000 for the Finance and HR applications and is being paid for with funds earmarked for the project in the Information Technology Fund. The major components of this project are complete. Staff will continue working to integrate smaller modules within the system and fine tune their knowledge of reporting options. In support of the goal, "Actively Engage and Inform the Public", the City actively engaged to adopt best practices for social media, hiring a director of Marketing and Communications to bring together the City's media message, website and other improvements. MOVING FORWARD: During the budget process for the 2019-20 fiscal year, the City Council approved a major maintenance project for repairs at the Lake Kickapoo Dam. The total cost for this project will not exceed $4,000,000 and it is being funded through available surplus fund balance in the Water & Sewer Fund. These surplus funds were saved over time, and were not the result of an increase in the City's water rates. Water rates have not increased since the needed increases due to drought in 2014. The City is also making investments in capital equipment with the purchase of a scraper machine for the landfill. This machine is needed to move dirt over the garbage in the landfill, keeping the proper and required cover on the materials. The total cost of this equipment is budgeted at $890,000 and is being funded from available revenues in the Sanitation Fund. The purchase of this equipment was not the result of rate increases, rather it was the result of saving over time for the purchase. The City staff also continues to work with the architectural firm of Bundy, Young, Sims and Potter on a Restoration and Feasibility Evaluation of the City Hall/Memorial Auditorium. This project was separated into two phases: 1) Feasibility Study; and 2) West Wing Stabilization. The Feasibility Study included a comprehensive evaluation of the facility conditions of the City Hall/Memorial Auditorium Building, a current and projected needs assessment of the existing City Hall offices, and conceptual design options for the renovations, restoration, and/or additions to the existing building. The West Wing Stabilization effort was an analysis of the structural stabilization of the West Wing of the building and basic architectural and engineering services for the design and construction contract administration for the project selected to stabilize that portion of the building. This study has been completed and it is anticipated that approximately $500,000 will be needed to stabilize the West Wing and it identified two options for complete renovation of the facility and one option to build a new facility. All three of these options are in excess of $30 million to complete. The funds for the stabilization work were moved into the City's operating budget in the 2019-20 fiscal year. Work on the stabilization of the west wing will begin in fiscal year 2019-20. The 2019-20 budget includes $3.5 million for Phase I of the Quail Creek Drainage Project, $150,000 to replace the Lincoln Street pump, and $500,000 for the purchase of right-of-way needed for the expansion of the transfer station detention pond. The Quail Creek Project will be funded with transfers from fund balance, and the Lincoln Street pump, and required right-of-way will be funded with available revenues. The Quail Creek Drainage Project will be completed in phases, as funding is available. In total it is estimated to cost $8 to $10 million. These projects are needed to control flooding and improve system function. Recently, the City in conjunction with Rolling Plains Management Corporation, applied for, and received nearly $10 million in a grant award from the Federal Transit Administration (FTA) Section 5339 Buses and Bus Infrastructure Investment Grant Program to design and construct a bus maintenance and repair facility. The current facility was completed in 1984, and is located in the Central Services Complex. Given the expansion of route services over the years and an increase in the number of buses owned by the City, the Public Transportation Division has outgrown its current location. Additionally, Rolling Plains Management Corporation has a need for these services and ix desires to enter into a joint venture agreement to construct this facility to accommodate both organizations. The location for this facility is 2004 Old Windthorst Road, which previously housed an old fire station used by the City's Radio staff, as well as 7 acres to the south and west of this building. To move the project forward, the old fire station was decommissioned and demolished. The project began construction in early 2020. The completed facility will include the following: • Wichita Falls Transit System administrative offices • Rolling Plains Management Corporation administrative offices (funding secured by their staff through TxDOT) • Shared -use facilities to include dispatch, restrooms, locker room, break room, conference room, and wellness room to be built as part of this grant application • Administrative space to accommodate social service organizations • Repair/Maintenance facility with seven pull -through bays • Bus Wash facility • Fueling facilities to accommodate both diesel and unleaded • Covered parking for buses • Parking to accommodate 60 buses The City's Lake Wichita Revitalization Committee and City staff have raised approximately $400,000 of private funds for the professional design and construction oversight services for three shoreline improvement projects at Lake Wichita. The plan for revitalization of Lake Wichita includes the development of a Boardwalk/Pavilion and a Veteran's Memorial Plaza. Due to financial strains, the original plans, which included a boat ramp and sea wall have been changed to only include the boardwalk and Veteran's plaza. Construction is underway with plans to complete the project in the coming months. The City received a grant from the Texas Parks & Wildlife in the amount of $499,536 which was designated for the Boardwalk/Pavilion Project, with a project cost estimate of $1,890,000. In addition, Texas Parks & Wildlife approved another grant for $499,680 for the Kemp Street Boat Ramp and Seawall. However, before acceptance of this grant, the project managers chose to remove the boat ramp and seawall components of the project due to budget constraints. Private pledges have been received for the Veteran's Memorial Plaza totaling $725,000. The total project cost for the Veteran's Memorial Plaza is estimated to be $2.4 million. Private funds are continuing to be actively sought out. In October 2018, the City Council awarded a project to TriTech Software Systems in the amount of $1,350,000 to provide installation services and software necessary to implement the City's Computer Aided Dispatch, Police Records Management, and Police/Fire Mobile System. This integrated system of applications are the primary applications used for public safety departments. The prior system was reaching its end of life and that vendor did not have a clear path forward for upgrading to their product. The cost of this project was planned for in the budget and will be paid for with funds available within the Information Technology Service Fund. Work on the project has begun with the majority of that work occurring in the 2019-20 fiscal year. OTHER INFORMATION Independent Audit The City Charter requires an annual audit of the books of account, financial records, and transactions of all administrative departments of the City by Certified Public Accountants. The accounting firm of x Edgin, Parkman, Fleming & Fleming, PC was selected by the Mayor and City Council to satisfy this charter requirement. The auditors' report on the basic financial statements and combining fund statements and schedules is included in the financial section of this report. In addition to meeting the requirements set forth in the City Charter, the audit also was designed to meet the requirements of the federal Single Audit Act Amendments of 1996 and related Uniform Guidance, and the State Single Audit Act. These reports are issued under separate cover. Awards The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Wichita Falls for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2018. This was the 241" consecutive year that the City of Wichita Falls has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program's requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. Acknowledgments My appreciation and thanks are extended to the personnel of the Finance Department who made this report possible, with special thanks to Senior Accountant David Johnston and Assistant Finance Director Susan White. I would also extend my appreciation to the City Councilors, City Manager and City Department Directors for their contributions to the sound financial management of the City. Respectfully submitted, Jessica Williams, MPA, CPFO Chief Financial Officer & Director of Finance xi 1,0 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Wichita Falls Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2018 Executive Director CEO Xll � o U ° on -o d � d � o N x � c ca O G � i U J E ° z = Li o U cc� a c � cU� W Li u ca • � � G C.i O sU. 3 � a ° c on O cttc U ai = o o W U L Ln a 3 � a L cd � C- c0i P. CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30, 2019 Title Name Mayor Stephen Santellana Mayor Pro-Tem Deandra Chenault City Council Member Eric West City Council Member Jeff Browning City Council Member Tim Brewer City Council Member Steve Jackson City Council Member Bobby Whiteley City Manager Darron Leiker City Attorney Kinley Hegglund Municipal Court Judge Larry Gillen City Clerk Marie Balthrop Assistant City Manager Paul Menzies Assistant City Manager Blake Jurecek Director of Aviation, Traffic and Transportation John Burrus Finance Director / CFO Jessica Williams Director of Public Health Lou Kreidler Police Chief Manuel Borrego Fire Chief Ken Prillaman Director of Public Works and Public Utilities Russell Schreiber xiv FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT EDGIN, PARKMAN, FLEMING & FLEMING, PC CERTIFIED PUBLIC ACCOUNTANTS 4110 KELL BLVD., SECOND FLOOR P.O. Box 750 MICHAEL D. EDGIN, CPA WICHITA FALLS, TEXAS 76307-0750 DAVID L. PARKMAN, CPA PH. (940) 766-5550 • FAx (940) 766-5778 A. PAUL FLEMING, CPA Independent Auditor's Report on Financial Statements The Honorable Mayor and Members of the City Council City of Wichita Falls, Texas We have audited the accompanying financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Wichita Falls, Texas (the City) as of and for the year ended September 30, 2019, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City as of September 30, 2019, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, the Budgetary Comparison Schedule — General Fund, the schedules on the Texas Municipal Retirement System, the Wichita Falls Firemen's Relief and Retirement Fund, and the Wichita Falls Retiree Health Care Plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, supporting schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements and supporting schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and supporting schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued under separate cover our report dated March 27, 2020, 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, 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 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. Respectfully submitted, Edgin, Parkman, Fleming & Fleming, PC March 27, 2020 MANAGEMENT'S DISCUSSION & ANALYSIS CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2019 Management's discussion and analysis provides a narrative overview of the financial activities and changes in the financial position of the City of Wichita Falls, Texas, for the fiscal year ended September 30, 2019. It is offered here by the management of the City to the readers of its financial statements. Readers should use the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found in the Introductory Section of this Comprehensive Annual Financial Report. Financial Highlights The assets and deferred outflows of the City of Wichita Falls exceeded its liabilities and deferred inflows at September 30, 2019, by $387,740,425 (net position). The net position for the City increased by $11,739,918 over the prior year. This increase is a result of an increase in net position of $13,068,222 from the current fiscal year business -type activities offset by a decrease in net position of $1,328,304 from the current fiscal year governmental activities. The unrestricted net position for Governmental Activities was ($85,423,347), while the Business - type Activities had an unrestricted net position of $37,715,916, for an overall unrestricted net position of ($47,707,431). Governmental Activities decreased by $3,667,681 in unrestricted net position from the prior year, while Business -type Activities increased by $2,478,498 in unrestricted net position from the prior year. The reduction in unrestricted net position in the Governmental Activities is due to an increase in the City's total assets and deferred outflows of $11.3 million offset by an increase in total liabilities of $12.6 million. The City's total assets benefited from increases in fund balance in the City's General Fund of $4,177,009. Other increases were seen in the CDBG and HOME funds. These changes were further offset by an increase in net investment in capital assets of $1.9 million and an increase in restricted net position of $348 thousand. This resulted in a total decrease in unrestricted net position of $3.6 million. Increases in the City's total assets and deferred outflows of resources resulted primarily due to increased tax collections and increases in deferred outflows of resources for pension and other post -employment benefit (OPEB) increases. Liabilities increased by $13.4 million due to pension and OPEB cost increases. Pension and OPEB increases were the result of decreased investment returns in the 2018 calendar year. Deferred Inflows of Resources decreased by $2.5 million due to decreases in pension and OPEB related outflows. Restricted Net Position increased primarily due to an increase in net investment in capital assets. Contributing to the positive change in the Business -type Activities were increases in Assets, primarily due to increased net position in the Water & Sewer Fund of $8.2 million over the prior year. Additional increases were seen in the Kickapoo Airport fund which increased net position by $1.5 million. These increases were due to increases in investment earnings and operating grants. The Stormwater Drainage Fund experienced an increase in net position of $2.6 million due to a reduction in transfer out for capital assets. At September 30, 2019, the City's governmental funds reported combined ending fund balances of $42,445,918. Of this amount, $17,316,040, or 40.80%, is available for spending at the government's discretion, (unassigned fund balance). At the end of the current fiscal year, unassigned fund balance for the General Fund was $18,310,378 or 23.30% of total General Fund expenditures. 3 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 During the 2018-19 fiscal year, the City's total debt decreased by $16,052,177. This decrease is the result the City retiring $2,215,000 in outstanding General Obligation Bonds, $6,915,000 in Utility System Revenue Bonds, $3,290,000 in Combination Tax and Revenue Bonds, $1,322,534 in Capital Leases, $40,234 in Notes Payable and $2,269,409 in Bond Premiums. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The reporting focus is on the City as a whole and on individual major funds. It is intended to present a comprehensive view of the City's financial activities. The basic financial statements are comprised of three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report contains other supplementary information in addition to the basic financial statements. Government -wide Financial Statements The government -wide financial statements, which can be found on pages 15-16 of this report, include the Statement of Net Position (Exhibit A-1) and the Statement of Activities (Exhibit A-2). These statements are designed to provide readers with a broad overview of the City's finances in a manner similar to a private -sector business. Both are prepared using the economic resources focus and the accrual basis of accounting; meaning that all current year's revenues and expenses are included regardless of when cash is received or paid. Thus, revenues and expenses are reported in these statements for some items that will result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but not used vacation leave). The Statement of Net Position presents information on all of the City's assets and liabilities, including capital assets and long-term obligations. The difference between the City's assets and deferred outflows and liabilities and deferred inflows is reported as net position. Over time, the increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. Other indicators of the City's financial position should be taken into consideration, such as the change in the City's property tax base and condition of the City's infrastructure (e.g., roads, traffic signals, water and sewer lines, etc.), in order to more accurately assess the overall financial condition of the City. The Statement of Activities presents information showing how the City's net position changed during the most recent fiscal year. It focuses on both the gross and net costs of the government services. This statement includes all current year revenues and expenses. The Statement of Net Position and the Statement of Activities divide the City's activities into three types: Governmental activities— Most of the City's basic services are reported here, including police, fire, parks and recreation, public works, health, traffic and transportation, community development and planning, duplicating services, information technology, health insurance claims, and general administration and finance. The Multi -Purpose Events Center and Champions Golf Course are also reported as governmental activities. Property taxes, sales taxes, franchise fees, and various grant funds provide the majority of financing for these activities. 4 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 Business -type activities — Activities for which the City charges fees to customers to pay most or all of the cost of a service it provides are reported as business -type activities. The City's business - type activities include water and wastewater treatment and distribution, solid waste collection and disposal, regional and municipal airports, transit system, storm water drainage improvements, fleet maintenance services and water park operations. Component Units — Five legally separate organizations, for which the City is financially accountable, are included in these statements as discretely presented component units. These organizations include the Wichita Falls Economic Development Corporation, Wichita Falls 4B Sales Tax Corporation, Wichita Falls Reinvestment Zone #2, Wichita Falls Reinvestment Zone #3, and the Wichita Falls Reinvestment Zone #4. Fund Financial Statements The City of Wichita Falls, like other state and local governments, uses fund accounting to provide more detailed information about the City's most significant funds, not the City as a whole. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental Funds — These funds are used to account for the majority of the City's activities, which are essentially the same functions reported as governmental funds in the government -wide statements. However, unlike the government -wide financial statements, governmental fund financial statements are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements focus on near -term inflows and outflows of expendable resources, as well as expendable resources available at the end of the fiscal year for future spending. Such information may be useful in evaluating a government's near -term financing requirements. The focus of the governmental funds financial statements is narrower than that of the government -wide financial statements. Therefore, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government -wide statements. By doing so, readers may better understand the long-term impact of the government's short 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. The reconciliation explains the differences between the government's activities reported in the government -wide statements and the information presented in the governmental funds financial statements. The City of Wichita Falls maintains 15 individual governmental funds. Information for the General Fund is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances because it is considered a major fund of the City. Data for the other governmental funds are combined into a single, CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 aggregated presentation. Individual fund data for each of the non -major governmental funds are provided in the Combining Financial Statement Section of this report. The Basic Governmental Funds Financial Statements can be found on pages 17-21 of this report. Proprietary Funds — When the City charges customers for services it provides, whether to outside customers or to other units within the City, the activities are generally reported in proprietary funds. The City of Wichita Falls maintains two different types of proprietary funds: enterprise funds and internal service 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 sewer operations, sanitation collection and disposal services, regional and municipal airports, transit operations, storm water drainage improvements, and water park operations. • Internal service funds are an accounting device used to report activities that provide supplies and services to other City programs, such as fleet maintenance, print shop services, information technology, and employee benefit trust. Because these services benefit both governmental and business -type functions, they have been allocated between governmental and business -type activities in the government -wide financial statements. Proprietary fund financial statements provide the same type of information as the business -type activities shown in the government -wide financial statements, only in more detail and include some of the internal service fund -type activities. The proprietary fund financial statements provide separate information for the Water and Sewer Fund, the Sanitation Fund, and the Regional Airport Fund since they are considered major funds of the City. The non -major proprietary funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for each of the non -major proprietary funds are provided in the Combining Financial Statement Section 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 method used for fiduciary funds is much like that used for proprietary funds. Agency funds are a component of fiduciary funds and are used to account for situations where the City's role is purely custodial, such as receipt, temporary investment and remittance of fiduciary funds to individuals, private organizations or other governments. The City maintains one fiduciary fund. This fund is an agency fund used to account for property that has been abandoned or unclaimed pending escheatment to the State of Texas. C: CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 Notes to the Financial Statements The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. These notes can be found on pages 28-67 of this report. Government -Wide Financial Analysis The City's combined net position was $387,740,425 as of September 30, 2019, an increase of $11,739,918 or 3.12%from the prior year. Using the Tables below, an analysis of the net position of the City can be made. The largest portion of the City's net position, $417,693,193, or 107.72%, is reflected in capital assets (land and improvements, buildings, infrastructure, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City reports its capital assets net of related debt, 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, $17,754,663, or 4.58%, represents resources that are subject to external restrictions on how they may be used. CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 Net Position (in thousands) Governmental Business -type Activities Activities Total 2019 2018 2019 2018 2019 2018 Current and Other Assets $ 52,553 $ 50,252 $ 76,626 $ 71,124 $ 129,179 $ 121,376 Capital Assets 178,294 177,655 387,908 390,028 566,202 567,683 Total Assets 230,847 227,907 464,534 461,152 695,381 689,059 Deferred Outflows of Resources 56,574 48,153 10,856 7,016 67,430 55,169 Long Term Liabilities 191,436 178,002 152,277 157,238 343,713 335,240 Other Liabilities 11,438 9,631 5,971 5,968 17,409 15,599 Total Liabilities 202,874 187,633 158,248 163,206 361,122 350,839 Deferred Inflows of Resources 11,171 13,723 2,777 3,666 13,948 17,389 Net Position: Net Investment in Capital Assets 152,825 150,834 264,869 254,488 417,694 405,322 Restricted 5,974 5,626 11,780 11,571 17,754 17,197 Unrestricted (85,423) (81,756) 37,716 35,237 (47,707) (46,519) Total Net Position &Z2 376 124 704 &IL4 365 &aLl 296 &IE 741 LaM MOP 8 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 CHANGES IN NET POSITION (in thousands) Governmental Business -type Activities Activities Total 2019 2018 2019 2018 2019 2018 Revenues: Program Revenues: Charges For Services $ 8,061 $ 7,760 $ 67,006 $ 67,691 $ 75,067 $ 75,451 Operating Grants and Contributions 12,908 12,437 4,858 3,938 17,766 16,375 Capital Grants and 60 4,296 90 876 150 5,172 Contributions General Revenues: Property Taxes 37,898 35,842 - - 37,898 35,842 Sales Taxes 24,895 23,861 - - 24,895 23,861 Other Taxes/Fees 7,719 7,590 - - 7,719 7,590 Investment Earnings 1,375 625 1,005 748 2,380 1,373 Miscellaneous 341 497 10 89 351 586 Total Revenue 93,257 92,908 72,969 73,342 166,226 166,250 Expenses: Administrative Services 15,853 16,029 - - 15,853 16,029 Police 27,736 25,046 - - 27,736 25,046 Fire 21,059 24,206 - - 21,059 24,206 Parks and Recreation 5,995 5,485 - - 5,995 5,485 Accounting/Finance 786 664 - - 786 664 Community Development 7,253 6,580 - - 7,253 6,580 Public Works 8,534 8,563 - - 8,534 8,563 Health 5,964 5,799 - - 5,964 5,799 Traffic and Transportation 2,951 2,384 - - 2,951 2,384 MPEC 3,127 3,251 - - 3,127 3,251 Interest and Fees on Long- term Debt 1,781 1,556 - - 1,781 1,556 Regional Airport - - 2,014 1,908 2,014 1,908 Kickapoo Airport - - 1,452 1,259 1,452 1,259 Transit - - 2,623 2,377 2,623 2,377 Sanitation - - 11,408 10,301 11,408 10,301 Water and Sewer - - 33,564 33,427 33,564 33,427 Stormwater Drainage - - 786 797 786 797 Waterpark - - 1,600 1,591 1,600 1,591 Total Expenses 101,039 99,563 53,447 51,660 154,486 151,223 Increase (Decrease) in Net Position Before Transfers (7,782) (6,655) 19,522 21,682 11,740 15,027 Transfers 6,454 4,612 (6,454) (4,612) - - Increase (Decrease) in Net (1,328) (2,043) 13,068 17,070 11,740 15,027 Position Net Position - Beginning of Year 74,704 88,023 301,296 288,775 376,000 376,798 Prior Period Adjustment - (11,276) - (4,549) - (15,825) Net Position - End of Year SR 004 11K 440 S376 000 1 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 Governmental Activities — Governmental Activities decreased the City's net position by $1,328,304. The reduction in net position in the Governmental Activities is due to an increase in the City's Total Assets and Deferred Outflows of Resources of $11.4 million, which resulted primarily due to increased tax collections and increases in Deferred Outflows of Resources for Pension and Other Post -Employment Benefits (OPEB). These increases were offset by increases in liabilities of $12.7 million due to Pension and OPEB cost increases. Pension and OPEB increases were the result of decreased investment returns in the 2018 calendar year. Business -Type Activities — Business -type Activities increased the City's net position by $13,068,222. Contributing to the positive change in the Business -type Activities in net position is the Water/Sewer Fund as it reflected a net change of $8,232,015. Much of this change in the Water/Sewer Fund is due to lower than anticipated expenditures and higher than anticipated investment returns. Financial Analysis of the City's Funds Governmental Funds — The focus of the governmental funds is to provide information on near - term inflows, outflows and balances of expendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of September 30, 2019, the City's governmental funds reported combined fund balances of $42,445,918, which is a decrease of $236,616 from the prior year. This decrease is a combination of the factors already discussed. In addition, the City expended almost $3 million in capital lease proceeds that had been issued in the prior year. The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $18,310,378, an increase of $4,177,009 from the prior year. As a measure of the General Fund's liquidity, it may be useful to compare both the unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 23.30% of total General Fund expenditures, while the total fund balance represents 23.75% of total General Fund expenditures. Proprietary Funds —The financial statements of the proprietary funds provide information for two types of funds: the business type (enterprise) funds and the internal service funds. The accounting principles applied to proprietary funds are similar to that of the private sector. Consequently, with the exception of the allocation of internal service fund net income or loss, the net position and changes in net position of the enterprise funds in these financial statements are identical with the net position and changes in net position reflected in the business type activities in the city- wide presentation. The City's internal service funds include the Fleet Maintenance Fund, Employee Benefit Trust Fund, Duplicating Services Fund and the Information Technology Fund. At the close of September 30, 2019, the net position for the City's internal service funds was $32,288,979, an increase of $3,089,375. This change is due primarily to increased transfers in for the purchase of several large sanitation trucks and transit buses and decreased operating costs resulting in an increase in net 10 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 position of $2,075,987. The Information Technology Fund increased net position by $711,956 due to decreased cost resulting from completion of several capital projects in the prior year. General Fund Budgetary Highlights The final amended expenditure budget for the General Fund, including transfers out, was increased by $4,007,898 from the original adopted budget. The reason for this increase in appropriations can be briefly summarized as follows: • Approximately $3,631,511 of prior year encumbrances were carried forward into the 2018-19 amended budget. These encumbrances were used for on -going projects, which included $2,895,784 for the LED Street Light Project, $108,845 for traffic signal infrastructure, $414,436.70 for street maintenance and $337,652 for City Hall stabilization work and structural engineering fees and repairs. • Other amendments to the General Fund budget were needed for increases in worker's compensation insurance and fire equipment purchased during the year using funds transferred in from the special revenue fund, received as reimbursement for fire deployment. Actual revenues in the General Fund for the 2018-19 fiscal year were $76,118,174, which was $1,750,614 over final budgeted revenues. Sales tax collections and municipal court fines performed better than budgeted levels. Interest earnings on the City's idle cash generated $262,158 more than budgeted amounts due to financial market improvements and higher interest rates on investments. Actual expenditures in the General Fund for the 2018-19 fiscal year were $78,596,273, which was $2,579,221 below budgeted expenditures. A large part of this variance was due to funds carried forward for construction projects in progress. These carried forward funds decreased the current year expenditures because the projects had existing encumbrances that were liquidated and then added in an adjustment to the new year. This allowed the City to make payments for work which crossed the fiscal year, in the proper fiscal year. These adjustments account for $1.4 million of this amount. Additional savings in the General Fund are the result of vacant positions which incurred savings while they were unfilled and actively being recruited for. 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, 2019 amounts to $566,202,765 (net of accumulated depreciation). This investment in capital assets includes land, buildings, equipment, infrastructure and construction in progress. Major capital asset events during this fiscal year included the following: • Construction in progress of Phase II of the Kemp -Monroe Drainage Improvements Project • Construction in progress of Lake Arrowhead Variable Frequency Drive Upgrade Project • Completion of the Wastewater Collections Office and Equipment Storage Facility Project 11 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 • Construction in progress of the Denver Water Tower Rehabilitation Project • Street Rehabilitation and Utility Improvement Projects Capital Assets, net of Accumulated Depreciation (in thousands) Governmental Business -type Activities Activities Total 2019 2018 2019 2018 2019 2018 Land $ 10,737 $ 10,683 $ 10,835 $ 10,835 $ 21,572 $ 21,518 Land Betterments 15,206 15,698 38,079 36,965 53,285 52,663 Buildings, Systems and Improvements 45,966 47,666 310,051 318,589 356,017 366,255 Infrastructure 93,813 90,535 - - 93,813 90,535 Machinery and Equip 7,780 9,251 2,147 2,175 9,927 11,426 Furniture and Fixtures - - 4 6 4 6 Motor Vehicles - - 18,180 16,588 18,180 16,588 Construction in Progress 4,792 3,822 8,613 4,870 13,405 8,692 Totals 13K 009 JIM 884 566 203 567 683 Additional information on the City's capital assets can be found in Note 7 on pages 44-45 of this report. Long Term Debt - At the end of the current fiscal year, the City had a total bonded debt, notes and capital leases outstanding of $184,815,901. During the 2018-19 fiscal year, the City's total debt decreased by $16,052,177. As of September 30, 2019, Moody's Investor's Service had assigned a credit rating of Aa2 for the City's General Obligation Bonds and a rating of A3 for the City's Water and Sewer System Revenue Bonds. Standard & Poor's had assigned a credit rating of AA for the City's General Obligation Bonds and a rating of A+ for its Water and Sewer System Revenue Bonds. The rating for the Water and Sewer System Revenue Bonds was increased in November of 2019 due to the system's strengthened finances. 12 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 Outstanding Debt at Year -End (in thousands) Governmental Business -type Activities Activities Total 2019 2018 2019 2018 2019 2018 General Obligation Bonds $ 31,785 $ 34,000 $ - $ - $ 31,785 $ 34,000 Combination Tax and Revenue Bonds 19,370 21,155 39,665 41,170 59,035 62,325 Utility System Revenue Bonds - - 61,570 68,485 61,570 68,485 Premiums on Bonds 2,102 2,393 7,687 9,666 9,789 12,059 Capital Lease Payable 5,069 5,468 17,288 18,210 22,357 23,678 Notes Payable - - 280 321 280 321 Total $ 58,326 $ 63,016 $ 126,490 $ 137,852 $ 184,816 $ 200,868 The City is permitted by its Home Rule Charter to levy taxes up to $2.25 per $100 of assessed valuation for general governmental services, including the payment of principal and interest on long-term debt. The combined tax rate to finance general governmental services for the year ended September 30, 2019, was $.72988 per $100, which means that the City has a tax margin of $1.52012 per $100, and could generate up to $77,139,687 additional tax revenue a year from the present assessed valuation of $5,074,578,796 before the limit is reached. The current ratio of general bonded debt outstanding to the assessed value of all taxable property is 1.05%. Additional information about the City's long-term debt can be found in Note 14 on pages 60-64 of this report. Economic Factors and Next Year's Budget and Rates Total revenues for the 2019-20 budget are projected at $194,090,313, which is an increase of $14,556,071, or 8.11% from the 2018-19 adopted budget. Taxes make up the largest portion of this increase because of growth in the property tax base, increased property tax rate, and increasing sales tax receipts. The property tax rate was increased to $0.76322, which is an increase by 4.38 cents per $100 of taxable property value and the revenue generated from this tax increase is used to address employee pay raises, and to create consistency and parity among all city staff who participate in the Texas Municipal Retirement System. Sales tax revenues for the 2019-20 budget are projected to be $24,643,675, which is $1,122,920, or 4.77% above the prior year budget. This revenue forecasting methodology does not apply future growth because the average annual increase in sales tax receipts for the City of Wichita Falls over the last five years has approximately been 2%. 13 CITY OF WICHITA FALLS, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2019 The total expenditure budget for the 2019-20 fiscal year is $194,090,313, including a one-time increase of $8,720,500, which is an increase of $15,647,364, or 8.77% from the 2018-19 adopted budget. The primary cause for this change is due principally to address employee pay raises, and to create consistency and parity among all city staff who participate in the Texas Municipal Retirement System. The one-time cost includes projects being funded using existing fund balance. This is the stabilization work at Memorial Auditorium, the Kickapoo Dam Repair, the Quail Creek Drainage Project, and needed equipment purchases at the Landfill. The City maintains reserves in the General Fund to be used for major emergencies such as a widespread tornado, large legal liabilities or important one-time expenditures. The Government Finance Officers Association recommends maintaining a fund balance in the General Fund between 15 to 25% of the annual operational cost of the fund. The City's fund balance policy established a goal of maintaining 20% of expenditures in General Fund Reserves. The Unassigned General Fund Balance at the end of the 2019 fiscal year meets this policy. It is anticipated that the fund balances may fall below this level in the coming year due to market uncertainty and lost revenues caused by the outbreak of the COVID-19 virus. The outbreak of the virus has impacted all municipalities and the City of Wichita Falls will be monitoring and adjusting to this ongoing pandemic in the current and subsequent year. It is anticipated that all revenue sources will be impacted by this pandemic including the Water and Sewer Fund, which is temporarily waiving fees and cut-off charges to assist with the City's response. Requests for Information This financial report is designed to provide a general overview of the finances of the City of Wichita Falls for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, or request for additional financial information, should be addressed to the City Finance Department, 1300 Seventh Street, Wichita Falls, Texas 76301. 14 BASIC FINANCIAL STATEMENTS EXHIBITA-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2019 Primary Government Governmental Business -type Component Activities Activities Total Units Assets Cash and cash equivalents $ 42,459,542 $ 37,206,219 $ 79,665,761 $19,736,644 Receivables (net): Taxes and assessments 1,008,473 - 1,008,473 Customer and trade - 7,661,382 7,661,382 - Government agencies 8,572,008 1,358,120 9,930,128 2,628,191 Other 1,176,177 132,959 1,309,136 100,000 Internal balances (10,548,271) 10,548,271 - - Inventory 155,534 1,880,381 2,035,915 - Prepaid items 207,675 505,673 713,348 5,725 Other assets 720,241 - 720,241 - Restricted assets: Cash and cash equivalents 8,801,232 17,332,524 26,133,756 - Capital assets not being depreciated 15,528,231 19,447,792 34,976,023 1,469,797 Capital assets net of accumulated depreciation 162,766,049 368,460,693 531,226,742 663,021 Total assets 230,846,891 464,534,014 695,380,905 24,603,378 Deferred Outflows of Resources Pension -related 54,336,017 7,353,165 61,689,182 - OPEB-related 1,881,078 766,465 2,647,543 Deferred losses on bond refundings 356,369 2,736,365 3,092,734 Total deferred outflows of resources 56,573,464 10,855,995 67,429,459 Liabilities Accounts payable - trade 3,062,743 1,343,063 4,405,806 604,084 Accrued payroll 2,566,816 670,524 3,237,340 - Accrued interest payable 262,351 638,600 900,951 Payable to government agencies 393,036 84,272 477,308 Estimated health claims payable 491,647 - 491,647 - Other liabilities 4,623,980 55,108 4,679,088 936 Unearned revenue 37,236 - 37,236 - Customer deposits - 3,179,505 3,179,505 Long-term liabilities: Portion due or payable within one year 7,027,948 10,491,469 17,519,417 Portion due or payable after one year 61,545,670 122,012,486 183,558,156 Net pension liability 111,051,702 14,961,341 126,013,043 Net OPEB liability 11,810,401 4,812,261 16,622,662 - Totalliabilities 202,873,530 158,248,629 361,122,159 605,020 Deferred Inflows of Resources Pension -related 10,759,313 2,608,945 13,368,258 - OPEB-related 411,751 167,771 579,522 Total deferred inflows of resources 11,171,064 2,776,716 13,947,780 - Net Position Net investment in capital assets 152,824,700 264,868,493 417,693,193 2,132,818 Restricted for: Perpetual care(nonexpendable) 1,223,577 - 1,223,577 - Debt service (expendable) 1,905,594 11,780,255 13,685,849 Federal grant programs (expendable) 2,845,227 - 2,845,227 Tourism (expendable) 10 - 10 - Unrestricted (85,423,347) 37,715,916 (47,707,431) 21,865,540 Total net position $ 73,375,761 $ 314,364,664 $ 387,740,425 $ 23,998,358 See accompanying notes to the basic financial statements. 15 a s X N W M V1 � C6 w J w JFw F LLQw Hew UEW LL O w x H K U o rn r m r r co r � ro o Y rn ro o m y r r N rn E r ro o m o m O N N U m mN r u� u� o r v co 0 o rn u� m rn v m co v m v v u� ro o m rn o 0 fg � v rn ro o m rn co ro v r o o rn rn m r N m m v m o v O O O V v (O m of of O W O LL� m 0 0 Lc Lc W W m O m m m N IO I `� r N m o m o N `� m �_ N N •� •� •� •� •� of � � (O m N I� � r W fA v v m fA fl- m � m m rn u� rn o o o co v m N v co m ai rn u� m rn v m co co u� o m r m co v >- v m rn co ro v r o 0 0 u� m co rn o o m w w Lci Lc o v v o N m N +' m O N v W W m V v v �� m E D in co N rn 0N m rn ;9 o o m co V N o N N rn rn m m rn o c2 o r ro rn o co co rn u� rn m ai ro m r u� u� o r v co 0 0 o ro v e... +� > m N V O of O V c co v r co m m o o m m m o m m m v co m r m o a v v v ro ro m N r r r U � � 0 0 0 0 0 o� o o rn rn rn o o o m m m '0 m § o o w ww � �1 Q o o ro rov Uo o U U » » » 0 0 o rn m v rn o � o ro rn r m N r r o m m rn m N m y m a� 0 r N v N m N m o r rn rn ro m r. r v co m ro L o Lo c ro m Q N U U U » » » rn o r u� r m m o v m m m v r U V (2 O of O 7, W O m LL� O N E (O (O N C O W fA fA fA may; o ) A0 .y N o m> N lL m .->-. ''' o a m s o m y C A N y N N w A Q fl- N 'O O C > N Y 3- y N N N C o U N O E E -6 `O B a 0 0 a Q Q "6 y Y N r B N Y N oM C o o m 3 u a .. N n .' m n a> j .. n ai E m o c o o a O c E= E E s m r: d o o Y .. a`� E a� o an d m '0 0 °� d �_ n~ m o o E- °� F c m U m O m o m F y E a U ii S m E o_ o_ o 2, o Q a iLL d Q U d S F�- .N Of Y F (n (n 0 o m a U CD F U z z c E m E o O LL a F U EXHIBIT A-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET - GOVERNMENTAL FUNDS SEPTEMBER 30, 2019 Total Nonmajor Governmental General Governmental Funds Assets Cash and cash equivalents $ 15,740,445 $ 23,041,791 $ 38,782,236 Receivables (net): Taxes and assessments 817,726 190,747 1,008,473 Other City funds 5,814,255 - 5,814,255 Government agencies 4,683,642 3,888,366 8,572,008 Other 1,056,075 109,834 1,165,909 Inventory 155,326 - 155,326 Prepaid items 204,220 2,142 206,362 Other assets 1,000 719,241 720,241 Total assets $ 28,472,689 $ 27,952,121 $ 56,424,815 Liabilities Accounts payable $ 2,041,105 $ 955,162 $ 2,996,267 Accrued payroll 2,420,794 105,753 2,526,547 Payable to other City funds - 2,125,349 2,125,349 Payable to government agencies 298,274 94,762 393,036 Other liabilities 3,804,117 809,144 4,613,261 Claims and judgments payable 11,922 - 11,922 Unearned revenue - 37,236 37,236 Total liabilities 8,576,212 4,127,406 12,703,618 Deferred inflows of resources Unavailable revenues 1,226,653 48,621 1,275,274 Fund balances Nonspendable: Inventory and prepaid items 359,446 1,822 361,268 Restricted for: Perpetual care - 1,223,577 1,223,577 Debt service - 1,856,973 1,856,973 Capital projects - 15,977,534 15,977,534 Federal and state grant programs - 2,845,227 2,845,227 Tourism - 10 10 Committed for: Golf course - 40,583 40,583 Local projects - 2,824,706 2,824,706 Unassigned 18,310,378 (994,338) 17,316,040 Total fund balances 18,669,824 23,776,094 42,445,918 Total liabilities, deferred inflows of resources and fund balances $ 28,472,689 $ 27,952,121 $ 56,424,810 See accompanying notes to the basic financial statements. 17 EXHIBIT A-4 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2019 Total fund balances - governmental funds (Exhibit A-3) $ 42,445,918 Amounts reported for governmental activities in the Statement of Net Position (Exhibit A-1) are different because: Capital assets used in governmental activities are not financial resources and therefore not reported in the funds. Capital assets at year-end consist of: Gross capital assets $ 329,511,604 Related accumulated depreciation 154,807,130 174,704,474 Property taxes receivable and municipal court fines are not available to pay for current period expenditures and therefore are reported as deferred inflows of resources in the funds. 1,275,276 Long-term liabilities are not due and payable in the current period and therefore not reported as liabilities in the funds. Long-term liabilities at year-end consist of: Bonds payable 51,155,000 Premiums on bonds payable 2,102,269 Capital lease payable 5,068,472 Accrued vacation and sick leave 9,423,378 Claims and judgments payable 775,231 Accrued interest 262,351 (68,786,701) In the governmental funds financial statements, refunding losses are expended when incurred, whereas in the government -wide financial statements the losses are capitalized and amortized. 356,369 The City's net pension liability and related deferred outflows and inflows related to its participation in the Texas Municipal Retirement System and the Wichita Falls Firemen's Relief and Retirement Fund do not meet criteria to be reported in the governmental funds financial statements. These items consist of: Net pension liabilities 109,998,467 Deferred outflows - pension related items (53,818,376) Deferred inflows - pension related items 10,575,653 (66,755,744) The City's net OPEB liability and related deferred outflows and inflows related to the City of Wichita Falls Retiree Health Care Plan do not meet the criteria to be reported in the governmental funds financial statements. These items consist of: Net OPEB liabilities 11,529,477 Deferred outflows - OPEB related items (1,836,071) Deferred inflows - OPEB related items 401,899 (10,095,305) Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds. The assets and liabilities of these internal service funds are included with the governmental activities. 13,226,160 Internal service funds are used by management to charge the costs of central garage services to the individual funds. The assets and liabilities of this fund are included with the business -type activities. This amount represents the governmental activity portion of the central garage activity. (12,994,686) Total net position - governmental activities (Exhibit A-1) $ 73,375,761 See accompanying notes to the basic financial statements. 18 EXHIBIT A-5 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Revenues Taxes Charges for services Licenses and permits Fines and forfeitures Intergovernmental revenue Contributions Miscellaneous revenue Total revenues Expenditures Administrative services Police Fire Parks and recreation Accounting/finance Community development Public works Health Traffic and transportation Multi -Purpose Events Center Capital outlay Debt service - principal Debt service - interest and paying agent fees Total expenditures Excess of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balance Fund balances - beginning Fund balances - ending Total Nonmajor Governmental General Governmental Funds $ 66,269,245 $ 4,120,047 $ 70,389,292 2,921,429 504,793 3,426,222 2,080,203 - 2,080,203 2,694,497 139,288 2,833,785 - 8,738,383 8,738,383 182,294 3,987,349 4,169,643 1,970,506 1,304,410 3,274,916 76,118,174 18,794,270 94,912,444 13,870,220 1,365,519 15,235,739 24,843,626 221,324 25,064,950 16,613,849 277,970 16,891,819 5,395,478 27,670 5,423,148 753,748 - 753,748 2,181,446 4,938,104 7,119,550 5,232,422 70,270 5,302,692 3,415,416 2,230,185 5,645,601 1,749,298 612,791 2,362,089 - 2,286,621 2,286,621 4,540,770 3,348,194 7,888,964 - 4,000,000 4,000,000 - 1,912,443 1,912,443 78,596,273 21,291,091 99,887,364 (2,478,099) (2,496,821) (4,974,920) 3,689,770 4,344,116 8,033,886 (844,151) (2,451,443) (3,295,594) 2,845,619 1,892,673 4,738,292 367,520 (604,148) (236,628) 18,302,304 24,380,242 42,682,546 $ 18,669,824 $ 23,776,094 $ 42,445,918 See accompanying notes to the basic financial statements. 19 EXHIBIT A-6 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 Net change in fund balances - total governmental funds (Exhibit A-5) $ (236,628) Amounts reported for governmental activities in the Statement of Activities (Exhibit A-2) are different because: Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense. The net difference between the two is as follows: Capital outlay during the year $ 7,684,269 Depreciation expense for the year 6,834,483 849,786 Donated capital assets are not recorded as revenues in the governmental funds. In the Statement of Activities, the value of the assets are added to capital assets and the contribution is recorded as a capital contribution. 60,000 Proceeds from the sale of capital assets are recorded as revenues when received in the governmental funds. In the Statement of Activities, the difference between the proceeds and the book value of the capital asset is reported as a gain (loss) from sale. (16,255) The transfer of capital assets from enterprise funds are not reflected in the governmental funds as they do not represent current financial resources. Current year transfers from enterprise funds were: 77,137 Because property tax receivables and municipal court receivables will not be collected for several months after the City's fiscal year ends, they are not considered 'available' revenues and are deferred in the governmental funds. Deferred inflows decreased by this amount this year. (3,199) Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Bond and capital lease principal payments in 2018-19 were: 4,690,759 Included in long-term debt are obligations for accrued vacation and sick leave, and claims and judgments payable. The changes in these obligations are not included in the governmental fund financial statements, but are included in the government -wide financial statements. The changes in these long-term obligations were: Accrued vacation and sick leave (493,814) Claims and judgments payable 1,609 (492,205) Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. The decrease in accrued interest is as follows: Accrued interest at September 30, 2018 346,706 Accrued interest at September 30, 2019 262,351 84,355 Amortization of deferred losses on refundings is only reported in the government -wide financial statements. Current year amortization was: (53,728) The City participates in two defined benefit pension plans. Contributions to the plan are expenditures at the fund level when payments are due. At the government -wide level, pension expenses are recognized on an actuarial basis. Payments were less than the actuarial expense in the current year. (7,141,722) The City sponsors an OPEB plan for retiree health care. Contributions to the plan are expenditures at the fund level when payments are due. At the government -wide level, pension expenses are recognized on an actuarial basis. Payments were more than the actuarial expense in the current year. 545,706 See accompanying notes to the basic financial statements. 20 EXHIBIT A-6 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF THE GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 Internal service funds are used by management to charge the costs of duplicating services, information technology and health insurance claims to the individual funds. The net revenues of these internal service funds are included with the governmental activities. 846,159 Internal service funds are used by management to charge the costs of central garage services to the individual funds. The net revenue of this fund is included with the business -type activities. This amount represents the governmental activity portion of the central garage activity. (538,469) Change in net position of governmental activities (Exhibit A-2) $ (1,328,304) See accompanying notes to the basic financial statements. 21 EXHIBIT A-7 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2019 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Assets Current assets Cash and cash equivalents $ 22,449,530 $ 7,409,641 $ 1,000 $ 6,561,415 $ 36,421,586 $ 4,461,939 Restricted cash and cash equivalents 16,848,594 - 483,930 - 17,332,524 8,801,232 Receivables (net): Customer and trade 5,666,897 1,588,750 - 405,735 7,661,382 - Government agencies 71,859 - - 1,286,261 1,358,120 - Other 59,714 19,445 32,927 (3,312) 108,774 34,452 Inventory 1,126,056 - - 47,502 1,173,558 706,823 Prepaid items - - 30,852 6 30,858 476,336 Total current assets 46,222,650 9,017,836 548,709 8,297,607 64,086,802 14,480,782 Long-term assets: Capital assets, net of accumulated depreciation 261,057,234 8,946,081 46,727,964 50,446,106 367,177,385 24,320,906 Total long-term assets 261,057,234 8,946,081 46,727,964 50,446,106 367,177,385 24,320,906 Total assets 307,279,884 17,963,917 47,276,673 58,743,713 431,264,187 38,801,688 Deferred Outflows of Resources Pension -related 3,994,893 1,737,872 45,483 716,675 6,494,923 1,377,890 OPE13-related 423,077 192,212 3,707 66,189 685,185 126,023 Deferred losses on bond refundings 2,736,365 - - - 2,736,365 - Total deferred outflows of resources 7,154,335 1,930,084 49,190 782,864 9,916,473 1,503,913 See accompanying notes to the basic financial statements. 22 EXHIBIT A-7 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2019 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Liabilities Current liabilities: Accounts payable -trade 458,449 96,130 5,984 573,510 1,134,073 275,466 Accrued payroll 361,070 148,919 5,826 77,248 593,063 117,730 Accrued vacation and sick leave 418,382 177,238 6,012 41,302 642,934 139,367 Payable to other City funds - - 411,447 2,202,198 2,613,645 1,075,261 Payable to government agencies 79,669 4,543 60 84,272 - Estimated health claims payable - - - - 491,647 Other liabilities (292,759) 49,363 20,000 277,275 53,879 (220) Payable to U.S. Government - current maturity 42,892 - - - 42,892 - Capital leases - current maturities 544,577 544,577 439,000 Revenue bonds - current maturities 8,790,000 8,790,000 - Accrued interest - revenue bonds 638,600 - - - 638,600 - Total current liabilities 10,961,211 551,319 453,812 3,171,593 15,137,935 2,538,251 Long-term liabilities: Payable to U.S. Government, less current maturities 237,594 - - - 237,594 - Capital leases, less current maturities 14,934,161 14,934,161 1,369,846 Revenue bonds, less current maturities 100,132,090 - 100,132,090 - Estimated liability for landfill closure and post -closure care costs - 5,280,762 5,280,762 Customer deposits 3,179,505 - - - 3,179,505 - Net pension liability 8,128,330 3,536,015 92,544 1,458,205 13,215,094 2,799,482 Net OPEB liability 2,656,301 1,206,805 23,272 415,567 4,301,945 791,240 Total long-term liabilities 129,267,981 10,023,582 115,816 1,873,772 141,281,151 4,960,568 Total liabilities 140,229,192 10,574,901 569,628 5,045,365 156,419,086 7,498,819 Deferred Inflows of Resources Pension -related 1,417,410 616,607 16,138 254,281 2,304,436 490,218 OPE13-related 92,608 42,073 811 14,488 149,980 27,585 Total deferred inflows of resources 1,510,018 658,680 16,949 268,769 2,454,416 517,803 Net Position Net investment in capital assets 139,826,088 8,946,081 46,727,964 50,446,106 245,946,239 22,512,060 Restricted for debt service 11,780,255 - - - 11,780,255 - Unrestricted 21,088,666 (285,661) 11,322 3,766,337 24,580,664 9,776,919 Total net position $ 172,695,009 $ 8,660,420 $ 46,739,286 $ 54,212,443 282,307,158 $ 32,288,979 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 32,057,506 Net position of business type activities $ 314,364,664 See accompanying notes to the basic financial statements. 23 EXHIBIT A-8 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Operating revenues: Charges for services Rents, concessions and other Contributions Total operating revenues Operating expenses: Personnel services Supplies and materials Maintenance and repairs Utilities and other services Insurance and contract support Otherexpenses Depreciation and amortization Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Interest income Gain/(loss) on sale/abandonment of capital assets Interest expense and paying agent fees Intergovernmental operating grants Total nonoperating revenues (expenses) Income (loss) before contributions and transfers Capital contributions Transfers in Transfers out Change in net position Funds Nonmajor Water and Regional Enterprise Sewer Sanitation Airport Funds Total Internal Service Funds $ 44,295,271 $14,760,161 $ - $ 5,178,510 $ 64,233,942 $ 14,021,734 168,922 16,660 1,165,060 1,421,090 2,771,732 1,390,745 - - - - - 14,522,207 44,464,193 14,776,821 1,165,060 6,599,600 67,005,674 29,934,686 10,548,416 4,586,173 146,539 2,526,797 17,807,925 3,441,150 2,557,785 288,617 3,868 1,159,446 4,009,716 3,226,287 1,519,023 129,911 35,504 318,886 2,003,324 2,969,516 3,970,930 5,429,245 157,482 908,522 10,466,179 303,763 780,712 16,123 40,707 94,040 931,582 13,346,982 2,378,488 463,917 267,932 236,010 3,346,347 2,443,904 10,206,284 300,393 1,510,217 1,263,349 13,280,243 4,539,537 31,961,638 11,214,379 2,162,249 6,507,050 51,845,316 30,271,139 12,502,555 3,562,442 (997,189) 92,550 15,160,358 (336,453) 681,866 166,840 10,613 145,681 1,005,000 179,375 (66,483) (66,483) (130,920) (2,600,143) - (2,600,143) (44,339) - - 4,857,917 4,857,917 - (1,984,760) 166,840 10,613 5,003,598 3,196,291 4,116 10,517,795 3,729,282 (986,576) 5,096,148 18,356,649 (332,337) 89,890 - 89,890 - - 422,109 422,109 3,733,712 (2,375,670) (3,791,372) (668,829) (1,746,240) (8,582,111) (312,000) 8,232,015 (62,090) (1,655,405) 3,772,017 10,286,537 3,089,375 Net position - beginning 164,462,994 8,722,510 48,394,691 50,440,426 29,199,604 Net position - ending $ 172,695,009 $ 8,660,420 $ 46,739,286 $ 54,212,443 $ 32,288,979 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 2,781,685 Change in net position of business type activities $ 13,068,222 See accompanying notes to the basic financial statements. 24 EXHIBIT A-9 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Cash flows from operating activities: Received from customers and users Received from interfund charges Other operating receipts Payments to suppliers Payments for interfund charges Payments to employees Net cash provided by operating activities Cash flows from noncapital financing activities: Intergovernmental operating grants Interfund loans received (repaid) Transfers in from other funds Transfers out to other funds Net cash provided (used) by noncapital financing activities Cash flows from capital and related financing activities: Acquisition and construction of capital assets Proceeds from sale of capital assets Principal paid on long-term debt Interest and fees paid on long-term debt Net cash provided for capital and related financing activities Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds $ 44,437,351 $ 14,738,913 $ 1,166,330 $ 6,612,811 $ 66,955,405 $ 4,901,028 - - - - 24,152,013 939,217 (11,248,190) (2,269,419) (345,160) (2,148,685) (16,011,454) (22,737,170) (3,721,394) (5,013,292) (151,626) (1,196,750) (10,083,062) (623,554) (6,780,355) (3,001,213) (150,170) (1,711,563) (11,643,301) (2,498,939) 22,687,412 4,454,989 519,374 1,555,813 29,217,588 4,132,595 - - - 5,194,952 5,194,952 1,075,261 (76,603) 277,083 (361,681) (161,201) (124,601) - 422,109 422,109 3,733,712 (2,375,670) (3,791,372) (668,829) (1,746,240) (8,582,111) (312,000) (2,452,273) (3,791,372) (391,746) 3,509,140 (3,126,251) 4,372,372 (3,195,886) (447,228) (4,885,862) (8,528,976) (5,955,564) 28,560 28,560 159,026 (8,953,403) (8,953,403) (430,477) (4,819,232) (4,819,232) (44,339) (16,939,961) (447,228) (4,885,862) (22,273,051) (6,271,354) Cash flows from investing activities: Interest on investments 681,866 166,840 10,613 145,681 1,005,000 179,375 Net cash provided by investing activities 681,866 166,840 10,613 145,681 1,005,000 179,375 Net Increase in Cash and Cash Equivalents 3,977,044 383,229 138,241 324,772 4,823,286 2,412,988 Cash and Cash Equivalents - Beginning 35,321,080 7,026,412 346,689 6,236,643 48,930,824 10,850,183 Cash and Cash Equivalents - Ending $ 39,298,124 $ 7,409,641 $ 484,930 $ 6,561,415 $ 53,754,110 $ 13,263,171 Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents $ 22,449,530 $ 7,409,641 $ 1,000 $ 6,561,415 $ 36,421,586 $ 4,461,939 Restricted assets - cash and cash equivalents 16,848,594 - 483,930 17,332,524 8,801,232 Total cash and cash equivalents at end of year $ 39,298,124 $ 7,409,641 $ 484,930 $ 6,561,415 $ 53,754,110 $ 13,263,171 See accompanying notes to the basic financial statements. 25 EXHIBIT A-9 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation and amortization Customer deposits received (refunded) (Increase) decrease in assets and deferred outflows: Receivables: Customer and trade Other Inventory Prepaid items Deferred outflows - pension -related Deferred outflows - OPEB-related Increase (decrease) in liabilities and deferred inflows: Accounts payable - trade Accrued payroll Accrued vacation and sick leave Estimated health claims payable Payable to government agencies Other liabilities Estimated liability for landfill closure Net pension liability Net OPEB liability Deferred inflows - pension -related Deferred inflows - OPEB-related Total adjustments Net cash provided by operating activities Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds $ 12,502,555 $ 3,562,442 $ (997,189) $ 92,550 $ 15,160,358 $ (336,453) 10,206,284 300,393 1,510,217 1,263,349 13,280,243 4,539,537 (14,530) - - - (14,530) - (1,759) (37,908) - 7,847 (31,820) - (10,553) 1,270 5,364 (3,919) 58,530 (26,079) - 11,352 (14,727) 7,696 211 3,810 6,720 10,741 (942) (2,084,667) (909,954) (22,604) (406,294) (3,423,519) (691,907) (185,933) (83,141) (1,612) (29,832) (300,518) (54,206) (28,339) 7,448 425 (90,422) (110,888) (165,159) 36,340 7,737 (1,458) 13,881 56,500 6,434 24,095 (14,844) (3,785) (1,072) 4,394 (34,215) - - - - (33,279) 5,090 3,252 (2,706) 5,636 - (498,751) 42,747 - 65,944 (390,060) (958) - 372,891 - - 372,891 - 3,214,495 1,406,292 33,691 659,783 5,314,261 1,034,871 49,292 7,745 245 15,880 73,162 1,735 (530,610) (227,692) (7,193) (62,243) (827,738) (209,337) 35,361 15,743 305 5,712 57,121 10,248 10,184,857 892,547 1,516,563 1,463,263 14,057,230 4,469,048 $ 22,687,412 $ 4,454,989 $ 519,374 $ 1,555,813 $ 29,217,588 $ 4,132,595 Noncash capital and financing activities: Capital assets received from developers $ 89,890 $ - $ - $ - $ 89,890 $ - See accompanying notes to the basic financial statements. 26 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES Assets Cash and cash equivalents Liabilities Other liabilities SEPTEMBER 30, 2019 See accompanying notes to the basic financial statements. Agency Fund $ 182,046 $ 182,046 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies of the City of Wichita Falls, Texas (City) conform to accounting principles generally accepted in the United States of America (GAAP) applicable to state and local governments. GAAP for local governments includes those principles prescribed by the Governmental Accounting Standards Board (GASB), which includes all statements and interpretations of the National Council on Governmental Accounting (NCGA) unless modified by the GASB, and those principles prescribed by the American Institute of Certified Public Accountants in the publication entitled Audits of State and Local Governmental Units. The following is a summary of the more significant policies and practices used by the City. A. Reporting Entity The City is a municipal corporation governed by an elected Mayor and six -member City Council. As required by Governmental Accounting Standards Board (GASB) Statement No. 61, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are in substance, part of the City's operations and data from these units are combined with data presented by the City. A discretely presented component unit, on the other hand, is reported in a separate column in the basic financial statements to emphasize it is legally separate from the City. Each blended and discretely presented component unit has a September 30th year end. Blended Component Unit Employee Benefit Trust Fund. On October 1, 1983, an "Agreement and Declaration of Trust" was made and entered into between the City and the Employee Benefit Trust Committee, acting as Trustee to administer the Employee Benefit Trust (Trust). The Trust Committee consists of four Trustees selected by the City, who may, but need not be, beneficiaries of the health and welfare program funded by the Trust, and/or officers or employees of the City. The purpose of the Trust is to provide health and welfare benefits, which may include life, accidental death and dismemberment, disability, medical and dental insurance, and any other benefits as determined by the Trustee Committee. The Trust is funded through contributions by the City and employees who choose to participate. It may be terminated in writing, at any time, by either party. The Employee Benefit Trust Fund is presented in the accompanying financial statements as an internal service fund. Discretely Presented Component Units The Wichita Falls Economic Development Corporation. The Wichita Falls Economic Development Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualifying enterprises with funds provided by a portion of the local sales tax. Assistance may be in the form of incentive grants, loans or leases which call for discounted rates or rebates for job development. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls Economic Development Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls Economic Development Corporation utilizes full accrual accounting. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The Wichita Falls 4B Sales Tax Corporation. The Wichita Falls 4B Sales Tax Corporation is a non-profit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities, and the related maintenance and operating costs of such projects. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Since the City Council appoints its Board of Directors, approves its budgets, and exercises final authority over its operations, the Wichita Falls 4B Sales Tax Corporation is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Wichita Falls 4B Sales Tax Corporation utilizes full accrual accounting. Wichita Falls Reinvestment Zone #2. On August 16, 2005, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone #2 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 236 acres and includes the Lawrence Road area of the City. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2004, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2025, or when all debt has been paid if later. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #2 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. Wichita Falls Reinvestment Zone #3. On September 1, 2009, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone #3 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 630 acres and includes a significant portion of the Eastside Neighborhood. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2009, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2029. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #3 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Wichita Falls Reinvestment Zone #4. On March 17, 2015, the City of Wichita Falls, Texas, with the advice and consent of the Wichita Falls Independent School District and Wichita County, approved the creation of the Wichita Falls Reinvestment Zone #4 (Zone). This Zone is permitted by Article 1066e of the State of Texas Tax Increment Financing Act passed in 1981. The area of the Zone is approximately 246 acres and includes a significant portion of the downtown area. The purpose of the Zone is to capture increments of growth in real property values in the Zone from base values established on January 1, 2015, and use the ad valorem taxes derived from these increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the Zone or for the payment of debt service on bonds issued to provide funds for public improvements. The Zone terminates on December 31, 2035. After all costs have been paid at the end of the tax increment financing period, any money remaining is to be remitted to the taxing entities. Since the City Council appoints a majority of its Board, approves its budget, and exercises final authority over its operations, the Wichita Falls Reinvestment Zone #4 is considered to be part of the City's reporting entity and presented in the accompanying basic financial statements as a discretely presented component unit. The Zone utilizes full accrual accounting. No separate audited financial statements are available for the City's blended and discretely presented component units. Complete financial statements for the individual component units may be obtained from the City's Director of Finance/CFO at 1300 7th Street, Wichita Falls, Texas. Excluded From the Reporting Entity Wichita Falls Firemen's Relief and Retirement Fund. The Wichita Falls Firemen's Relief and Retirement Fund was established and is controlled through various State of Texas legislative enactments. This Fund is administered locally by a seven -member board, independent of the City Council. City management and the City Council do not influence or control the administrative and financial affairs of the Fund, and the assets of the Fund are not the property of the City. The seven -member Board of Trustees, composed of the Mayor, the Director of Finance from the City's Finance Department, three firefighters elected by a majority vote of the firefighters and two citizens, who are not employees or officers of the City and are chosen by the unanimous vote of the first five Trustees, are subject to the administrative supervision of and report to the State Firemen's Pension Board. The activities of the Firemen's Relief and Retirement Fund, in the City's judgment, are not a part of the City and thus are excluded from the accompanying financial statements. B. Basis of Presentation Government -wide financial statements The basic financial statements include both government -wide (based on the City as a whole) and fund financial statements. The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on all non -fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. However, interfund services provided and used are not eliminated in the process of consolidation. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The government -wide statement of activities demonstrates the degree to which the direct expenses of a functional category (police, public works, etc.) or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment, 2) grants and contributions that are restricted to meeting operational requirements of a particular function or segment, and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. Fund financial statements Separate fund -based financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum criteria (percentage of assets (combined with deferred outflows of resources), liabilities (combined with deferred inflows of resources), revenues or expenditures/expenses of either fund category for governmental and enterprise) for the determination of major funds. The major governmental fund is the General Fund. The major enterprise funds are the Water and Sewer Fund, the Sanitation Fund and the Regional Airport Fund. Non -major funds are combined in a column in the fund financial statements. Non -major funds are detailed in the combining section of the statements. Internal service funds, which traditionally provide services primarily to other funds of the government, are presented in the summary form as part of the proprietary fund financial statements. Because the principal users of internal services are the City's governmental and business -type activities, financial statements of internal service funds are allocated (based on the percentage of goods or services provided) between the governmental and business -type activities when presented at the government -wide level. The government -wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business -type categories. Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. C. Measurement focus, basis of accounting and financial statement presentation The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year in which they are levied. Grants and similar items are recognized as soon as all eligibility requirements imposed by the provider have been met. 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Government fund -level financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property tax, franchise fees, and sales tax associated with the current fiscal period are all susceptible to accrual and have been recognized as revenues of the current fiscal period. All of the revenue items are considered to be measurable and available only when cash is received. The City reports the following major governmental funds: The General Fund is the City's primary operating fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid general operating costs, fixed charges, and capital improvement costs that are not paid through other funds. Other governmental funds are a summarization of all the non -major governmental funds. The City reports the following major proprietary funds: The Water and Sewer Fund accounts for the water and sewer utility services provided to residents of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The Sanitation Fund accounts for refuse collection services to the residents of the City as well as the operations of the City's landfill. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations and maintenance. The Regional Airport Fund accounts for the operations of the Wichita Falls Regional Airport. Operational activities, including administration, operations and maintenance, of the airport are accounted for in this fund. Other enterprise funds are a summarization of all of the non -major proprietary funds. The City additionally reports the following fund types: Internal service funds are used to account for the financing of materials and services provided by one department of the City to other departments of the City on a cost -reimbursement basis. The City uses internal service funds to report the activities of fleet maintenance, duplicating services, employee health and life insurance, and information technology. 32 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) An agency fund is used to account for any unclaimed vendor or payroll checks that will be escheated to the State if they remain unclaimed. These funds are held on a purely custodial basis. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's water and sewer, sanitation, transit, and airport funds are charges to customers for services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestricted resources as they are needed. Capital improvement assessments are recorded as revenues in the fiscal period when the assessment becomes both measurable and available to finance expenditures of the fiscal period. Assessment revenues are considered measurable and available when collected by the City and recognized as revenue at that time. Payments for capital improvement assessments received in advance of the levy are reflected as deferred revenue. D. Nonexchange Transactions In a nonexchange transaction, a government gives (or receives) value without directly receiving (or giving) equal value in return. The statement defines when the City should recognize revenue or expense for nonexchange transactions involving financial or capital resources and how to account for timing and purpose restrictions. The timing of recognition depends on whether a nonexchange transaction is (a) a derived tax revenue (b) an imposed nonexchange revenue transaction or (c) a government -mandated or voluntary nonexchange transaction. Under this standard, revenue transactions with purpose restrictions are recorded as restricted resources until the purpose restrictions are met. Nonexchange transactions include the following classifications: • Derived tax revenues result from assessments imposed by governments on exchange transactions. • Imposed nonexchange revenues result from assessments by governments on nongovernmental entities, other than assessments on exchange transactions. • Government -mandated nonexchange transactions occur when a government at one level provides resources to a government at another level and require that government to use them for a specific purpose or purposes established in the provider's enabling legislation. • Voluntary nonexchange transactions result from legislative or contractual agreements, other than exchanges, entered into willingly by two or more parties. Examples of the City's voluntary nonexchange transactions include capital grants, state shared revenue and private donations. 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Providers of government -mandated nonexchange transactions and voluntary nonexchange transactions should recognize liabilities and expenses/expenditures and recipients should recognize receivables (or decrease in liabilities) and revenue when all applicable eligibility requirements, including time requirements are met. All nonexchange transactions occurring in governmental fund types are also subject to the modified accrual revenue recognition criteria. Accordingly, assets and revenue should not be recognized unless measurable and available. E. Assets, liabilities and net position or fund balances 1. Cash, cash equivalents and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are carried at fair value. Fair value is determined as the price at which two willing parties would complete an exchange. Interest earned on investments is recorded in the funds in which the investments are recorded. 2. Inventory and Prepaid Items Inventories of the general and proprietary funds consist of supplies and various materials used for the maintenance of capital assets. The consumption method is used to account for these inventories. Under this method, inventory acquisitions are recorded in inventory accounts initially and charged as expenditures when used. Inventories are stated at average cost. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements via the purchases method. 3. Capital Assets Capital assets, which include property, plant and equipment, and infrastructure assets (e.g. roads, bridges, sidewalks and similar items), are reported in the applicable governmental or business -like activities columns in the government -wide financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the time received. Capital assets are depreciated using the straight line method over the following useful lives: 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Assets Years Buildings, systems and improvements 20-59 years Infrastructure 8-100 years Machinery, vehicles and other equipment 3 - 25 years Furniture and equipment 3 - 10 years Contributions of funds from federal, state, or local grants restricted for the purpose of purchasing plant and equipment are recorded as revenue when received. The cost of water and sewer lines installed by developers is valued by the contractor and recorded as nonoperating revenue in the Water and Sewer Fund. 4. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. Certain amounts related to the City's participation in pension plans (See Note 8) and OPEB plan (Note 9) are reported in this category, along with deferred losses on bond refunding. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only two types of items that qualify for reporting in this category. Property taxes receivable ($905,131) and municipal court fines receivable ($370,143) are unavailable and therefore cannot be recognized as revenue in the governmental funds until they are received. There are also certain items related to the City's participation in pension plans (See Note 8) and OPEB plan (See Note 9) that are reported in this category. 5. Long -Term Obligations Long-term debt and other obligations for general government purposes are recorded in the government -wide statement of net position. Long-term debt and other obligations financed by proprietary funds are reported as liabilities in the appropriate funds. For the government -wide financial statements and proprietary fund types, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method in the government -wide financial statements. Bonds payable are reported net of the applicable bond premium or discount. Issuance costs are reported as deferred bond issue costs and amortized over the term of the related debt. In addition, gains or losses on proprietary fund bond refunding are amortized over the term of the lesser of the new bonds or the refunded bonds' life using the effective interest method. In the governmental fund financials, bond proceeds are reported as another financing source. Bond premiums and discounts in governmental funds are also recognized currently as other financing sources or uses. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) 6. Fund Balances — Governmental Funds Fund balances of the governmental funds are classified as follows Nonspendable Fund Balance — represents amounts that cannot be spent because they are either not in spendable form (such as inventory or prepaid insurance) or legally required to remain intact (such as notes receivable or principal of a permanent fund). Restricted Fund Balance — represents amounts that are constrained by external parties, constitutional provisions or enabling legislation. Committed Fund Balance — represents amounts that can only be used for a specific purpose by adoption of an ordinance by the City Council. Committed amounts cannot be used for any other purpose unless the governing board removes those constraints through the adoption of another ordinance. Committed fund balance amounts differ from restricted balances in that the constraints on their use do not come from outside parties, constitutional provisions, or enabling legislation, but rather from inside the City. Assigned Fund Balance — represents amounts which the City intends to use for a specific purpose, but that do not meet the criteria to be classified as restricted or committed. The City Council has by resolution authorized the Director of Finance/CFO to assign fund balance. Specific amounts that are not restricted or committed in a special revenue, capital projects, debt service or permanent fund are assigned for purposes in accordance with the nature of their fund type or the fund's primary purpose. Assignments within the General Fund convey that the intended use of those amounts is for a specific purpose that is narrower than the general purposes of the City itself. Unlike commitments, assignments only exist temporarily. Therefore additional action does not normally have to be taken for the removal of an assignment. Unassigned Fund Balance — represents amounts which are unconstrained in that they may be spent for any purpose. Only the General Fund reports a positive unassigned fund balance. Other governmental funds might report a negative balance in this classification because of overspending for specific purposes for which amounts had been restricted, committed or assigned. When an expenditure is incurred for a purpose for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. 7. Federal and State Grants Grants and shared revenues are generally accounted for within the appropriate fund of the City to be financed by such grants or shared revenues. Federal grants include Community Development Block Grant, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health -related grants. 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) Each Federal grant is accounted for in a separate special revenue fund. State grant revenues received for purposes normally financed through the general government are accounted for within the General Fund. 8. Transactions Between Funds Outstanding balances between funds are reported as "due to/from other City funds." Any residual balances between governmental activities and business -type activities are reported in the government -wide statements as "internal balances." Nonrecurring or non -routine transfers of equity between funds are accounted for as transfers. 9. Vacation and Sick Leave All full-time employees accumulate vacation benefits based on length of service up to 20 days per year. The maximum allowable accumulation is 35 days. Upon leaving the employment of the City, employees will be paid for unused vacation days which they have accrued. Sick leave is earned at the rate of 4.62 hours per pay period up to a maximum of ninety days. Additionally, police officers and firefighters may accumulate an unlimited number of sick leave days while employed with the City. Upon termination, police officers and firefighters are compensated for up to 720 hours and 1,080 hours, respectively. 10. Risk Management The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. For insured programs, there have been no significant reductions in insurance coverage. Settlement amounts have not exceeded insurance coverage for the current year or the three prior years. The City maintains a group health insurance plan for employees and dependents which is partially self -insured by the City. A group life insurance plan is maintained through an insurance company. Contributions to the plans are provided for by both the City and participating employees. These contributions are recognized as revenues in the internal service fund used to account for these plans. The contributions made by the City are recorded as expenditures or expenses of the various funds as appropriate. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. An excess coverage insurance policy covers individual claims in excess of $500,000. Liabilities include an amount for claims that have been incurred but not reported. Claim liabilities are calculated considering the effects of inflation, recent claim settlement trends including frequency and amount of pay -outs and other economic and social factors. 37 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.) The City is also self -insured up to $250,000 for workers' compensation claims. Such claims are processed by a third party administrator. The City's estimated liability for workers' compensation claims payable at September 30, 2019 is based on management's estimate of probable losses in the amount of $775,231. The payment dates of such claims cannot be precisely determined, but are expected to be paid on a periodic basis over the next few years. Accordingly, the long-term liability has been recorded in the government -wide financial statements. The following represents changes in the amount of claims liabilities for the City from October 1, 2017 to September 30, 2019: Health Workers' Care Compensation Liability balance, October 1, 2017 $ 468,000 $ 24,298 Incurred claims/adjustments 10,497,456 1,389,632 Claim payments ( 10,440,530) ( 637,090) Liability balance, September 30, 2018 524,926 776,840 Incurred claims/adjustments 12,671,940 1,068,701 Claim payments ( 12,705,219) (1,070,310) Liability balance, September 30, 2019 $ 491,647 $ 775,231 F. Pension Plan For purposes of measuring the net pension liability, deferred outflows of resources, and deferred inflows of resources related to pensions, and pension expense, information about the Fiduciary Net Position of the Texas Municipal Retirement System (TMRS) and the Wichita Falls Firemen's Relief and Retirement Fund (WFFRRF) and additions to/deductions from Fiduciary Net Position have been determined on the same basis as they are reported to TMRS and WFFRRF. 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. G. Other Post -Employment Benefits The fiduciary net position of the City of Wichita Falls Retiree Health Care Plan has been determined using the flow of economic resources measurement focus and full accrual basis of accounting. This includes for purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to other post -employment benefits, OPEB expense, and information about assets, liabilities and additions to/deductions from the Plan's fiduciary net position. Benefit payments are recognized when due and payable in accordance with the benefit terms. 38 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 2 - COMPLIANCE AND ACCOUNTABILITY Finance -Related Legal and Contractual Provisions The City had no violations of finance -related legal and contractual provisions for the year ended September 30, 2019. Deficit Fund Balances — Individual Funds The Airport Improvement Grant Fund, a special revenue fund, had a deficit fund balance of $994,338 as of September 30, 2019. The City plans for this deficit to be alleviated within a year. Note 3 - DEPOSITS AND INVESTMENTS Deposits All of the City's demand and time depository accounts are held in local banking institutions under the terms of written depository contracts. At September 30, 2019, the total amount of the City's demand and time deposits per the general ledger was $5,579,605, and the total amount per the City's September 30, 2019 bank statements was $6,535,131. The entire amount of the year-end bank statement balances was covered by federal depository insurance or by collateral held by the City's agent in the City's name. Imiactmantc The investment policies of the City and its discretely presented component units are governed by The Public Funds Investment Act. Authorized investments include obligations of the U.S. Treasury, agencies and instrumentalities, obligations of the State of Texas and related agencies, obligations of states, agencies, counties, cities and political subdivisions of any state rated A or above by a nationally recognized investment rating firm, repurchase agreements, public funds investment pools, and commercial paper. The investments of the City and its discretely presented component units at September 30, 2019 are as follows: Types of Investments Primary Government: TexPool LOGIC Money market accounts Total primary government investments Component Units: TexPool Total component unit investments Total investments Fair Value/ Carrying Amount Cost $ 31,124,604 $ 31,124,604 42,998,970 42,998,970 19, 285, 833 19, 285, 833 93,409,407 93,409,407 26,547,149 26,547,149 26,547,149 26,547,149 119, 956, 556 119.956.556 Average Weighted Average Credit Quality/ Months to Ratings Maturity Not rated 1.00 Not rated 1.00 Not rated 1.00 Not rated 1.00 39 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) TexPool is a local government investment pool organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and operates under the Public Funds Investment Act, Chapter 2256 of the Texas Government Code. The State Comptroller of Public Accounts is the sole officer, director, and shareholder of the Texas Treasury Safekeeping Trust Company, which is authorized to operate TexPool. Pursuant to the TexPool Participation Agreement, administrative and investment services to TexPool are provided by Federated Investors, Inc., under an agreement with the Comptroller, acting on behalf of the Trust Company. As required by the Public Funds Investment Act, the Advisory Board is composed equally of participants in TexPool and other persons who do not have a business relationship with TexPool who are qualified to advise TexPool. TexPool is comprised of two investment alternatives: TexPool (which the City is invested in) and TexPool Prime. Both funds seek to maintain a net asset value of $1.00 per unit and are rated AAAm by Standard and Poor's. Local Government Investment Cooperative (LOGIC) was organized in conformity with the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code, and operates as a public funds investment pool under the Public Funds Investment Act. LOGIC is organized and existing as a business trust under the laws of the State of Texas with all Participant funds and all investment assets held and managed in trust by a Board of Trustees for the benefit of the Participants. The Board of Trustees is LOGIC's governing body and is comprised of employees, officers or elected officials of Participant Government Entities or individuals who do not have a business relationship with the Pool and are qualified to advise it. A maximum of two advisory board members represent the Co -Administrators of the Pool. LOGIC seeks to maintain a net asset value of $1.00 per unit and are rated AAAm by Standard and Poor's. The City categorizes its fair value measurements with the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not classified in the fair value hierarchy below. In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The City's assessment of the significance of particular inputs to these fair value measurements requires judgement and considers factors specific to each asset or liability. The City values its money market accounts using Level 2 inputs, which are values provided by the City's depositories. TexPool and LOGIC are valued at net asset value per unit/share. GASB Statement No. 40 requires a determination as to whether the City was exposed to the following specific investment risks at year end and if so, the reporting of certain related disclosures: a. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The ratings of securities by nationally recognized rating agencies are designed to give an indication of credit risk. At year end, the City was not exposed to credit risk. 40 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 3 - DEPOSITS AND INVESTMENTS (CONTD.) b. Custodial Credit Risk Deposits are exposed to custodial credit risk if they are not covered by depository insurance and the deposits are uncollateralized, collateralized with securities held by the pledging financial institution, or collateralized with securities held by the pledging financial institution's trust department or agent but not in the City's name. Investment securities are exposed to custodial risk if the securities are uninsured, are not registered in the name of the government, and are held by either the counterparty or the counterparty's trust department or agent but not in the City's name. At year end, the City was not exposed to custodial credit risk. c. Concentration of Credit Risk This risk is the risk of loss attributed to the magnitude of a government's investment in a single issuer. At year end, the City was not exposed to concentration of credit risk. d. Interest Rate Risk This is the risk that changes in interest rates will adversely affect the fair value of an investment. In accordance with its investment policy, the City manages its exposure to interest rate risk by allowing no more than 20% of the City's portfolio to be invested for a period greater than one year. e. Foreign Currency Risk This is the risk that exchange rates will adversely affect the fair value of an investment. At year end, the City was not exposed to foreign currency risk. Note 4 - PROPERTY TAXES Property taxes attach as an enforceable lien on property as of the prior January 1. Taxes are levied on October 1, and become delinquent after January 31, unless the half -payment option is elected, in which case one-half of the tax is due November 30, and the balance the following June 30. The City is permitted by its Home Rule Charter to levy taxes up to $2.25 per $100 of assessed valuation for general governmental services including the payment of principal and interest on long-term debt. The combined tax rate to finance general governmental services for the year ended September 30, 2019 was $.72988 per $100 which means that the City has a tax margin of $1.52012 per $100, and could raise up to $77,139,687 additional tax revenue a year from the present assessed valuation of $5,074,578,796 before the limit is reached. 41 -71 N z Q 0 X W ~ z W J w N Q � 0 LL y M J w H a_ m U za W U) LL W O F— L� 0 r y U w F- 0 z co U a) U N N 0 — O rn m c o 0> p) OD L V 00 N M O V (-) N > N V 00 M M V 0 0_ `p W V y-+ .O. 00 ll M a1 C 0 W d 6% M O N Q U N N rn o o rn �+ 0 d O .. U U o tN_ ac 00 O 00 � y N c LQoN U Ui N N 0 (o co CO M W LO M 0 0 >N = 0) V 00 N 00 V Co y-+ i E y C cq 0 O)lO 00 00M (�0 i y-+ a o ui of O 'IT Lr U to N N O U i i i In In O �. c c U C d coM c c M 0 O U CoN d N N Q y O N N N N M N In N E O W M M O 0~ C N 3 (O N 00 N L O C co Z W (p y 0 O Co C i i i . N N � 0 o CJ 0 O) i NI N c U �= 0) Q M M 0 W co (o o V N �- � 2 c U) U) U) m X N c N N Q co 2 >N Q y+ In Q a)r— � �_ N O cu U) Lo (C W O Q co co •7D 0 0 � 7 co y ,� M (0 V (0 M W M d) (0 O N O C E 3 LL N 00 O 00 ON M 70 00 i O 0) Z N N co 0 vi M L 00 In N LOJ O N y-.i EJ) O (0 N (0 O (0 O) N a) M 00 In L oo ( o a1 O N ��-+ � U - LO 'IT � 0 O (» j O O O O_ y L 0 N E N U C y U O1 o m d d u Q O 0 m w n > C y+ E 0s "E U E O co m N o Q X O N x 3 O m O 0 N N U O L O 0- M U C9 o N 0 ' w (� J z (o >+ N CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 6 - RESTRICTED ASSETS Restricted assets in the Water and Sewer Fund, Regional Airport Fund, and Internal Service Funds, are held for specific purposes in accordance with bond ordinances or other legal restrictions. Water and Sewer restricted assets are comprised of the following: For Debt Service: Cash and cash equivalents $11,870,066 For Capital Improvements: Cash and cash equivalents 4,978,528 Total $16,848,594 Regional Airport restricted assets are comprised of the following: For Passenger Facility Charges: Cash and cash equivalents $ 26,494 For Customer Facility Charges: Cash and cash equivalents 457,436 Total 483 930 Internal Service Fund restricted assets are comprised of the following: For Employee Insurance: Cash and cash equivalents $8,801,232 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2019 was as follows: Balance Balance Governmental activities: October 1, September 30, 2018 Increases Decreases 2019 Capital assets not being depreciated: Land $ 10,682,820 $ 53,451 $ - $ 10,736,271 Construction in progress 3,822,292 4,162,085 3,192,417 4,791,960 Total capital assets not being depreciated 14,505,112 4,215,536 3,192,417 15,528,231 Capital assets being depreciated: Land betterments 23,425,044 - - 23,425,044 Buildings, systems and improvements 75,541,874 25,383 15,616 75,551,641 Infrastructure 188,461,128 6,751,615 807,897 194,404,846 Machinery and equipment 27,012,539 436,694 127,160 27,322,073 Furniture and fixtures 145,421 2,339 143,082 Total capital assets being depreciated 314,586,006 7,213,692 953,012 320,846,686 Less accumulated depreciation for: Land betterments 7,726,609 492,899 - 8,219,509 Buildings, systems and improvements 27,876,451 1,724,951 15,616 29,585,786 Infrastructure 97,926,761 3,458,665 793,309 100,592,117 Machinery and equipment 17,761,225 1,905,598 124,815 19,542,008 Furniture and fixtures 145,421 466 4,670 141,217 Total accumulated depreciation 151,436,467 7,582,579 938,410 158,080,637 Total capital assets being depreciated, net 163,149,539 ( 368,887) 14,602 162,766,049 Governmental activities capital assets, net L304WM 3.207.019 $178,294,280 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 1,318,122 Police 1,096,121 Fire 203,134 Parks and recreation 222,589 Accounting/finance 4,075 Community development 6,918 Public works 2,927,453 Health 167,378 Traffic and transportation 605,200 Multi -Purpose Events Center 1,031,589 Total governmental depreciation $ 7,582, 779 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 7 - CAPITAL ASSETS (CONTD.) Balance Balance Business -type activities: October 1, September 30, 2018 Increases Decreases 2019 Capital assets not being depreciated: Land $ 10,835,178 $ - $ - $ 10,835,178 Construction in progress 4,870,437 5,034,727 1,292,550 8,612,614 Total capital assets not being depreciated 15,705,615 5,034,727 1,292,550 19,447,792 Capital assets being depreciated Land betterments 56,399,711 2,714,149 19,616 59,094,244 Buildings, systems and improvements 459,421,678 2,933,977 220,520 462,135,135 Machinery and equipment 9,432,303 440,505 155,598 9,717,210 Furniture and fixtures 16,943 - - 16,943 Motor vehicles 60,713,903 5,465,885 3,226,236 62,953,552 Total capital assets being depreciated 585,984,538 11,554,516 3,621,970 593,917,084 Less accumulated depreciation for Land betterments 19,434,518 1,591,527 10,815 21,015,230 Buildings, systems and improvements 140,833,144 11,436,479 185,000 152,084,623 Machinery and equipment 7,257,703 458,831 146,495 7,570,039 Furniture and fixtures 10,529 2,566 - 13,095 Motor vehicles 44,125,758 3,584,615 2,936,969 44,773,404 Total accumulated depreciation 211,661,652 17,074,018 3,279,279 225,456,391 Total capital assets being depreciated, net 374,322,886 ( 5,519,502) 342,691 Business -type activities capital assets, net $390,028,501 ($ 484.7751 1.635.241 Depreciation expense was charged to programs as follows: Business -type activities Regional Airport $ 1,512,732 Kickapoo Airport 523,737 Transit 342,425 Sanitation 3,165,777 Water and sewer 10,829,427 Stormwater drainage 444,180 Waterpark 255,740 Total business -type depreciation $17,074, 118 368,460,693 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS Eligible City employees participate in one of two pension plans. Eligible firefighters participate in the Wichita Falls Firemen's Relief and Retirement Fund (WFFRRF). All other eligible employees participate in the Texas Municipal Retirement System (TMRS). The table below summarizes the amounts reported by the City for each plan as of September 30, 2019. Detailed information for each plan follows. Net pension liability Deferred outflows of resources Deferred inflows of resources Pension expense Texas Municipal Retirement System Plan Description TMRS WFFRRF Total $53,623,965 $72,389,078 $126,013,043 26,354,981 9,350,892 10,241,375 35,334,201 4,017,366 5,429,092 61,689,182 13,368,258 15,670,467 The City participates as one of 872 plans in the nontraditional, joint contributory, hybrid defined benefit plan administered by the TMRS. TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple -employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six -member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax -qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at.www.tmrs.com. All eligible employees of the City are required to participate in TMRS. Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the City Council, within the options available in the governing state statutes of TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the City -financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payment options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. 46 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Employees Covered by Benefit Terms At the December 31, 2018 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 661 Inactive employees entitled to but not yet receiving benefits 486 Active employees 968 Cnntrih itinns The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the participating city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the participating city. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees of the City were required to contribute 5% of their annual gross earnings during the fiscal year. The contribution rates for the City were 12.83% and 12.77% in calendar years 2018 and 2019, respectively. The City's contributions to TMRS for the year ended September 30, 2019, were $5,877,907, and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2018, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumptions The Total Pension Liability in the December 31, 2018 actuarial valuation was determined using the following actuarial assumptions: Inflation Overall payroll growth Investment rate of return 2.5% per year 3.0% per year 6.75%, net of pension inflation plan investment expense, including Salary increases were based on a service -related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender -distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. Based on the size of the City, rates are multiplied by a factor of 100.0%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender -distinct RP2000 Disabled Retiree Mortality Table is used, with slight adjustments. 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Actuarial assumptions used in the December 31, 2016, valuation were developed primarily from an actuarial investigation of the experience of TMRS over the four-year period from December 31, 2010 through December 31, 2014, first used in the December 31, 2015 valuation. The post -retirement mortality assumption for healthy annuitants and annuity purchase rates are based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. The long-term expected rate of return on pension plan investments is 6.75%. The pension plan's policy in regard to the allocation of invested assets is established and may be amended by the TMRS Board of Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long -Term Expected Real Asset Class Target Allocation Rate of Return (Arithmetic) Domestic Equity 17.5% 4.30% International Equity 17.5% 6.10% Core Fixed Income 10.0% 1.00% Non -Core Fixed Income 20.0% 3.39% Real Return 10.0% 3.78% Real Estate 10.0% 4.44% Absolute Return 10.0% 3.56% Private Equity 5.0% 7.75% Total Discount Rate 100.0% The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. 48 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Changes in Net Pension Liability Increase (Decrease) Total Pension Fiduciary Net Net Pension Liability Position Liability (a) (b) (a) — (b) Balances as of December 31, 2017 $261,956,513 $229,946,313 $32,010,200 Changes for the year: Service cost 4,990,566 - 4,990,566 Interest on total pension liability 17,400,438 - 17,400,438 Change of benefit terms - - - Difference between expected and actual experience 540,881 - 540,881 Change of assumptions - - - Contributions — employer - 5,783,625 ( 5,783,625) Contributions — employee - 2,558,451 ( 2,558,451) Net investment income - ( 6,883,878) 6,883,878 Benefit payments, including refunds of employee contributions ( 13,335,060) ( 13,335,060) - Administrative expense - ( 133,122) 133,122 Other changes - ( 6,956) 6,956 Balances as of December 31, 2018 $271,553,338 $217,929, 773 $53,623, 665 Sensitivity Analysis 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 / (asset) would be if it were calculated using a discount rate that is 1 percentage point lower (5.75%) or 1 percentage point higher (7.75%) than the current rate. Net pension liability 1 % Current 1 % Decrease Discount Rate Increase $89,336,035 $53,623,965 $24,157,162 Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2019, the City recognized pension expense of $10,241,375 related to its participation in TMRS. 49 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) At September 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to TMRS from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 1,425,348 $ 565,424 Net difference in assumptions 16,545 - Net difference between projected and actual earnings 20,680,990 8,785,468 Contributions made subsequent to measurement date 4,232,098 - Total $26,354, 881 $9,350, 992 $4,232,098 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the plan year ending December 31, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31 2019 $ 5,064,811 2020 1,564,159 2021 1,661,970 2022 4,481,050 Total $12,771, 990 Wichita Falls Firemen's Relief and Retirement Fund Plan Description The City provides pension benefits for all of its firefighters through a single -employer defined benefit pension plan. The Wichita Falls Firemen's Relief and Retirement Fund (Fund) operates under an act passed in 1937 by the Texas State Legislature and adopted by the City's firefighters. The stand-alone financial report for the Firemen's Relief and Retirement Fund can be obtained from the City's Director of Finance/CFO at 1300 7th Street, Wichita Falls, Texas. Benefits Provided Benefits are determined on a "formula" or a "final salary" plan. A firefighter who qualifies for a retirement benefit will receive monthly retirement equal to 2.55% (2.50% for those hired after April 20, 2016) of the firefighter's average salary, multiplied by the member's years of credited service. Benefits are calculated based upon a member's average salary for the 78 consecutive biweekly pay periods which produce the highest average. 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Members hired prior to April 21, 2016 can receive a service retirement at ages 50 and above with 20 or more years of service. Members hired after April 20, 2016 can receive a service retirement at ages 55 and above with 20 or more years of service. Members are eligible for actuarially reduced early retirement benefits before the applicable retirement age, provided the employee has accrued at least 20 years of service. The plan also provides death and disability benefits. Members who terminate their service and are nonvested are entitled to the excess of the member's contributions over any benefits previously received. The valuations used for this plan are based on a valuation performed as of January 1, 2018. Employees Covered by Benefit Terms At the January 1, 2018 measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 135 Inactive employees entitled to but not yet receiving benefits 1 Active employees 155 (.ontrihi itionc The contribution rate for the firefighters is 13% and the City contributes 12.77%. Both the firefighters and City make contributions bi-weekly. Contribution requirements are not actuarially determined, however, state law requires that each plan of benefits adopted by the Fund must be approved by a qualified actuary. The actuary certifies that the contribution commitments by the firefighters and the City provide an adequate financing arrangement. Using the individual entry age normal cost method, the plan's normal cost is determined as a percentage of payroll. The City's contributions to the Plan for the year ended September 30, 2019, were $1,455,950, and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of January 1, 2018, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumptions The Total Pension Liability in the January 1, 2018, actuarial valuation was determined using the following actuarial assumptions: Inflation 3.0% per year Salary increases Service -based Discount Rate 5.03% per year Investment rate of return 7.75%, net of pension plan investment expense, including inflation Mortality rates for employee and healthy annuitant combined rates were taken from RP2000 Mortality Table, projected to 2024 using Scale AA — Sex Distinct. 51 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Actuarial assumptions used in the valuation were based on the results of actuarial experience studies. The experience study was last performed October 6, 2017. The long-term expected rate of return on pension plan investments was determined using a method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. For 2018 the inflation rate assumption of the investment advisor was 2.50%. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of geometric real rates of return for each major class included in the Plan's target asset allocation as of December 31, 2018 are summarized in the following table: Long -Term Expected Real Asset Class Target Allocation Rate of Return (Arithmetic) Domestic Equity 40.00% 7.50% International Equity 15.00% 8.50% Domestic Fixed Income 20.00% 2.50% Global Fixed Income 5.00% 3.50% Real Estate 10.00% 4.50% GTAA 10.00% 3.50% Total 100.00% Discount Rate The projection of cash flows used to determine the discount rate assumed that current plan member and sponsor contributions will be made at the current contribution rate. Future member's contributions in excess of their normal cost were also included. Based on these assumptions, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments for 30 years. Future benefit payments beyond 30 years were discounted using a high quality municipal bond rate of 3.44%. The high quality municipal bond rate was based on the week closest to, but not later than, the measurement date of the Bond Buyer 20-Bond Index as published by the Bond Buyer. The single equivalent discount rate was 5.03%. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) Changes in Net Pension Liability Increase (Decrease) Total Pension Fiduciary Net Net Pension Liability Position Liability (a) (b) (a) — (b) Balances as of December 31, 2017 $121,865,514 $51,378,997 $70,486,517 Changes for the year: Service cost 3,073,858 - 3,073,858 Interest on total pension liability 5,899,445 - 5,899,445 Change of benefit terms ( 5,007,726) - ( 5,007,726) Difference between expected and actual experience - - - Change of assumptions ( 1,453,521) - ( 1,453,521) Contributions — employer - 1,455,950 ( 1,455,950) Contributions — employee - 1,475,242 ( 1,475,242) Net investment income - ( 2,225,595) 2,225,595 Benefit payments, including refunds of employee contributions ( 5,292,918) ( 5,292,918) - Administrative expense - ( 96,102) 96,102 Balances as of December 31, 2018 $119,084,652 $46,695,574 $72,389,078 Sensitivity Analysis The following presents the net pension liability of the City, calculated using the discount rate of 5.13%, as well as what the City's net pension liability / (asset) would be if it were calculated using a discount rate that is 1 percentage point lower (4.13%) or 1 percentage point higher (6.13%) than the current rate. Net pension liability 1 % Current 1 % Decrease Discount Rate Increase $84,246,365 $72,389,078 $55,847,224 Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2019, the City recognized pension expense of $5,429,092 related to the Wichita Falls Firemen's Relief and Retirement Fund. Pension Plan Fiduciary Net Position Detailed information about the pension Plan's Fiduciary Net Position is available in the separately issued Plan financial report. 53 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 8 - PENSION PLANS (CONTD.) At September 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to the WFFRRF from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience $ 4,125,877 $2,438,142 Difference due to changes in actuarial assumptions 27,631,778 1,579,224 Net difference between projected and actual earnings 2,527,817 - Contributions made subsequent to measurement date 1,048,729 - Total 135,334,201 $4,017,366 $1,048,729 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the plan year ending December 31, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31: 2019 $ 5,303,718 2020 4,640,023 2021 4,429,384 2022 5,214,608 2023 4,457,732 Thereafter 6,222,641 Total $30,268,106 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS Plan Description The City administers the City of Wichita Falls Retiree Health Care Plan for all permanent employees who retire after satisfying eligibility retirement requirements through a single -employer defined benefit plan. All employees who retire and are actively in one of the City's health plans can continue to receive health care benefits under the City's plan for themselves and any dependents for as long as the retiree and/or dependents live. The plan does not issue a stand- alone financial report. 54 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) Retiree Premiums Pre -Medicare: Retirees share in the cost of the Plan by paying premiums according to the following schedule: PPO PPO PPO Under 65 Core CAT HSA Retiree Only $ 406 $ 304 $ 288 Retiree/Spouse $1,630 $1,285 $1,229 Retiree/Child $1,273 $ 999 $ 954 Retiree/Family $2,344 $1,856 $1,778 Rates for pre -Medicare retirees over the age of 65 are $514 for retiree only and $1,028 for retiree/spouse. Post -Medicare: Eligible retirees and spouses on Medicare are eligible to participate in a Medicare supplement health care plan. Effective January 1, 2009, the following changes will be implemented to Medicare eligible retirees: For retirees and spouses who were on Medicare as of January 1, 2009, the City will provide $250 in premium assistance towards the full premium for a Medicare subsidy program. The $250 is expected to be a fixed amount. For retirees and spouses retired as of January 1, 2009 but not yet Medicare -eligible, the City will provide $100 in premium assistance towards the full premium for a Medicare subsidy program. The $100 is expected to be a fixed amount. For members who retire on or after January 1, 2009, the City will provide no premium assistance once Medicare -eligible. Benefits for Spouses of Retired Employees Spouses of retirees are eligible to participate in the retiree health care program. Spouses are eligible to continue with same coverage after the death of the retiree. Vision Coverage Vision coverage is offered through a separate, fully -insured plan. Retirees may participate but are 100% responsible for payment of the vision premiums. Dental Coverage Retirees and spouses, prior to qualifying for Medicare, are eligible to participate in the same dental care program as active employees. There is no dental coverage for retirees or spouses on the Medicare supplement. 55 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) Life Insurance Coverage General employees and Firefighters receive $7,500 of employer -paid life insurance which is included in the liabilities of the Plan. No life insurance coverage is provided for spouses of retirees. Employees Covered by Benefit Terms At the December 31, 2018 measurement date, the following employees were covered by the benefit terms: Inactive plan members or beneficiaries currently receiving benefits 693 Inactive plan members entitled to but not yet receiving benefits - Active plan members 1,158 Actuarial Assumptions The demographic assumptions are based on the assumptions that were developed for the defined benefit plans in which the City participates (TMRS and the Firemen's Pension Plan). The TMRS assumptions are based on the experience study covering the four-year period ending December 31, 2014 as conducted for the Texas Municipal Retirement System (TMRS). The firefighter assumptions are based on the January 1, 2017 Valuation for the Wichita Falls Firemen's Relief and Retirement Fund. Actuarial Methods and Assumptions: Valuation Date December 31, 2018 Actuarial Cost Method Individual Entry Age Normal Discount Rate 6.75% as of December 31, 2018 Inflation 2.50% Salary Increases 3.50% to 10.50% for TMRS and 3.50% to 12.00% for firemen, including inflation Demographic Assumptions TMRS: Based on the experience study covering the four-year period ending December 31, 2014 as conducted for TMRS. Based on the January 1, 2018 valuation for the Wichita Falls Firemen's Relief and Retirement Fund. Mortality TMRS: For healthy retirees, the gender -distinct RP-2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. WFRRF: The firefighters' mortality table was the RP-2000 Combined Healthy Mortality Table for males and females, projected to year 2024 using Scale AA. Participation Rates TMRS: 45% of employees retiring after the age of 49 or with disability at any age were assumed to elect retiree health care benefits through the City. 0% of TMRS employees retiring before the age of 49 were assumed to elect coverage. Fire: 70% of employees retiring at any age were assumed to elect retiree health care benefits through the City. 56 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) Healthcare Cost Trend Rates Initial rate of 7.10% declining to ultimate rates of 4.25% after 14 years. A single discount rate of 6.75% was used to measure the total OPEB liability. The asset portfolio of the OPEB trust largely consists of long-term growth stocks and can therefore support a 6.75% long-term rate of return. The City's current funding policy is to pay the recommended actuarially determined contribution, which is based on a closed amortization period. As a result, the OPEB plan's fiduciary net position is expected to be available to make all projected future benefit payments for 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. Changes in Net OPEB Liability Increase (Decrease) Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a) (b) (a) — (b) Balances as of December 31, 2017 $21,429,843 $4,981,836 $16,448,007 Changes for the year: Service cost 518,007 - 518,007 Interest on total OPEB liability 1,480,271 - 1,480,271 Change of benefit terms - - - Difference between expected and actual experience ( 705,047) - ( 705,047) Change of assumptions 765,976 - 765,976 Contributions — employer - 2,260,421 ( 2,260,421) Contributions — employee - - - Net investment income - ( 374,667) 374,667 Benefit payments, including refunds of employee contributions ( 1,679,932) ( 1,679,932) - Administrative expense - ( 1,202) 1,202 Other changes - - - Balances as of December 31, 2018 $21,809,118 $5,186,456 $16,622,662 Discount Rate Sensitivity Analysis The following schedule shows the impact of the net OPEB liability if the discount rate used was 1 % less than and 1 % greater than the discount rate that was used (6.75%) in measuring the net OPEB liability. Current 1 % Discount 1 % Decrease Rate Increase 5.75% 6.75% 7.75% $18,526,594 $16,622,662 $14,943, 007 57 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 9 - POST -EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (CONTD.) The following schedule presents the net OPEB liability of the plan using the assumed healthcare cost trend rate as well as what the net OPEB liability would be if it were calculated using a trend ratio that is 1 % less than and 1 % greater than the assumed healthcare cost trend rate: Current Healthcare 1 % Cost Trend 1 % Decrease Rate Increase $15,334,138 $16,622,662 $18,115,019 Pension Expense. Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2019, the City recognized OPEB expense of $1,695,544 related to the City of Wichita Falls Retiree Health Care Plan. At September 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to the City of Wichita Falls Retiree Health Care Plan from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual experience, liability $ - $579,522 Difference due to changes in actuarial assumptions 629,604 - Differences between expected and actual experience, assets 328,268 - Contributions made subsequent to measurement date 1,689,671 - Total $2,647, 443 1579 522 $1,689,671 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability for the plan year ending December 31, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in pension expense as follows: Year Ended December 31 2020 $ 70,339 2021 70,339 2022 70,341 2023 160,637 2024 6,694 Total 13T8 350 58 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 10 - DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death, or an unforeseen emergency. Note 11 - AIRPORT LEASE The Regional Airport facilities are located on land at Sheppard Air Force Base. The land is leased from the Department of the Air Force for a period of fifty years, beginning May 15, 2009 and expiring May 14, 2059. The City's expense for the year ended September 30, 2019 was $48,928. The lease payment increases by 3% per year with a final lease payment of $157,805 in 2059. Note 12 - DESCRIPTION OF LEASING ARRANGEMENTS The majority of the City's operating leases contain an option for annual renewal at the end of the initial lease term. In most cases, these leases will be canceled or replaced by other leases. The City leases certain equipment under operating leases expiring at various times through the year ending September 30, 2019. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of September 30, 2019: Year ending September 30: 2020 $ 139,735 2021 139,374 2022 124,473 2023 87,999 2024 60,776 2025-2029 316,010 2030-2034 366,186 2035-2039 424,510 2040-2044 492,123 2045-2049 570,505 2050-2054 661,372 2055-2059 604,173 Total minimum payments required $3,987,236 The total rental expenses for all operating leases for the year ended September 30, 2019 was $138,248. There were no contingent rentals during the year ended September 30, 2019. 59 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 13 - LANDFILL AND TRANSFER STATION CLOSURE AND POSTCLOSURE CARE COSTS State and federal laws and regulations require that the City place a final cover on its landfill when closed, and perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. In accordance with the Texas Administrative Code, Title 30, Part 1, Chapter 7, the City annually submits a financial assurance letter to the Texas Commission on Environmental Quality (TCEQ). In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and postclosure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and postclosure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and postclosure care costs has a balance of $5,209,540 as of September 30, 2019, which is based on 22% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $18,022,191 as the remaining estimated capacity is filled. The landfill is expected to be filled to capacity in 2153. Additionally, the City has recorded a liability of $71,722 for closure and postclosure care costs related to the City's transfer station. Actual costs may be higher due to inflation, change in technology, or changes in regulations. Note 14 - LONG-TERM LIABILITIES Long-term liabilities transactions for the year ended September 30, 2019 are summarized as follows: Governmental Activities: General obligation bonds Combination tax and revenue bonds Premiums on bonds Accrued vacation and sick leave payable Capital lease payable Claims and judgments payable Total governmental activities Business -type Activities: Utility system revenue bonds, net of premium (discount) Combination tax and revenue bonds Premiums on bonds Accrued vacation and sick leave payable Note payable Capital leases payable Landfill closure, post -closure costs Total business -type activities Total long-term liabilities Balance at Balance at October 1, Retired and September 30, Due Within 2018 Issued Transferred 2019 One Year $ 34,000,000 $ $ 2,215,000 $ 31,785,000 $ 2,715,000 21,155,000 1,785,000 19,370,000 1,330,000 2,392,826 290,557 2,102,269 - 8,986,701 2,846,690 2,360,745 9,472,646 2,400,000 5,468,665 - 400,193 5,068,472 512,795 776,840 1,068,701 1,070,310 775,231 70,153 72,780,032 3,915,391 8,121,805 68,573,618 7,027,948 68,485,000 - 6,915,000 61,570,000 7,265,000 41,170,000 1,505,000 39,665,000 1,525,000 9,665,943 - 1,978,852 7,687,091 - 754,985 710,374 732,326 733,033 675,000 320,719 - 40,234 280,485 42,892 18,209,925 - 922,341 17,287,584 983,577 4,907,871 372,891 5,280,762 143,514,443 1,083,265 12,093,753 $20 215 558 132,503,955 10,491,469 $216 294 475 14 998 656 $201 077 573 $17 519 417 For governmental activities, claims and judgments payable and compensated absences are generally liquidated by the General Fund. .el CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT'D.) SEPTEMBER 30, 2019 Note 14 - LONG-TERM LIABILITIES (CONTD.) Bonds Payable Bonds payable at September 30, 2019 are comprised of the following individual issues: Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized at 9/30/19 General Obligation Bonds: General Obligation Refunding 1.50% - 9/01 /21 $405,000 to $ 4,365,000 $ 955,000 Bonds, Series 2011 3.00% $485,000 General Obligation Refunding 2.00% - 9/01 /26 $200,000 to 9,650,000 6,940,000 Bonds, Series 2015A 5.00% $1,105,000 General Obligation Refunding 0.73% - 9/01 /26 $110,000 to 2,885,000 2,005,000 Bonds, Series 2015B 3.48% $310,000 General Obligation Bonds, 2.00% - 9/01 /38 $550,000 to 16,345,000 15,795,000 Series 2018A 5.00% $1,155,000 General Obligation Refunding 2.00% - 10/01/28 $80,000 to 6,170,000 6,090,000 Bonds, Series 2018B 4.00% $725,000 Total General Obligation Bonds Combination Tax and Revenue Bonds: Combination Tax and Revenue Certificates of Obligation, Series 2010 Combination Tax and Revenue Certificates of Obligation, Series 2011 Combination Tax and Revenue Certificates of Obligation, Series 2013 Combination Tax and Revenue Certificates of Obligation, Series 2013A Combination Tax and Revenue Certificates of Obligation, Series 2015 Total Combination Tax and Revenue Bonds Revenue Bonds: Water & Sewer System Revenue Refunding Bonds, Series 2016 Total All Bonds 31,785,000 5.60% 2/01 /25 $165,000 to 3,930,000 1,970,000 $375,000 2.00% - 9/01 /31 $135,000 to 3,200,000 2,200,000 4.00% $220,000 2.00% - 9/01 /33 $530,000 to 19,875,000 15,200,000 3.375% $1,315,000 2.00% - 9/01 /33 $505,000 to 13,000,000 9,890,000 4.625% $905,000 0.00% - 3/01 /45 $890,000 to 33,545,000 29,775,000 2.12% $1,425,000 59,035,000 2.00% - 8/01 /27 $2,635,000 to 74,005,000 61,570,000 5.00% $9,705,000 61 VI X LU F— J J Q LL F- 2 U_ LL O r U N H Z LU LU C r LU N �o y M J LU aw m ZW aF- Za �w U) LU 2 F- 0 U) LU F- O Z 01 V (O O 00 V I- N In O N O I� (O N O (M 0) r- I- d) 'OrI- O r O O_ r O O m N O (0 n In dN O NMMrVrN O1 O O (O In to V V In (M In N (O O In M O O (O N N O O (M DO m r- M O In N N r O O O O V I- to (O N M m (O O In .0 r p (M M O M cc m d) 00 r O d) m r O N r V V d In N � � N � N � In N N N � (0 V3 00 In N (`i (O N In ((0 (O O 01 In (M cc N ' 4 a) N 00 V O In O N N r (4 C (0 (0 (O In In (3 O rn m _ _ J N r (M M I- r- In O (O M O N N In In N r IsU(Om �N (O r- DO (M md) (M a - - - V (O N �s1 N (O (O o0 N (O N O o0 O 00 V (O N In r- N N M (O (4 a n N O N m 00 N " N 0 z _ 00 N I- N r (O ' ' ' 0 N V n r 00 0 N O 0 O N 0 r 0 N uOi N ' ' ' N O Itw O m r- (O f/1 N O (O (M DO Nt r- a C M N N o 0 _ (� m a) O O O O O O O O O O O O a) cz 0 0 0 0 0 0 " 0 O_ O_ N C N M (O O V M DO V N O c In N (O (O r In N O (O o0 V (M (O DO O I� o0 Nt to In O O r a N I- 00 V In M O I- M N a M In (0 m Nt (M M M N d) DO V In In O In NC O O V N m ER C N O � O p N O O O O O O O O O O O O O O O O O O O O N N O O O O O O O O O O E U In Do N m rn rn (O 0 It (O 'It O 'It (0 O O N r- c U .5 V3 N 01 O V 01 O O O d) O(M In ON1 O r O ' O V w (O O It m C N M O m 00 DO N It � � � N � (4 ER 0 _ O O O O O O O O m m o 0 0 0 0 0 0 0 ui o o ui o o O N I-mMNwN( o0 (7 d N N N N N m It It � o co rn It rn It p O O N O N O N O N C lL E O N M V In O N O to a) O O O O O O O O O O O N N N N N N N N N N } (n N 10 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 14 - LONG-TERM LIABILITIES (CONTD.) All of the General Obligation Bonds were issued on the full faith and credit of the City and are secured by ad valorem taxes levied against all taxable property. These bonds are serviced by the Debt Service Fund with an apportionment of the ad valorem tax levy. At September 30, 2019, this fund had a fund balance of $1,421,427. The Combination Tax and Revenue Bonds are secured by ad valorem taxes levied against all taxable property as well as a pledge of surplus net revenues of the City's combined waterworks and sewer system. The Series 2010 and 2011 Certificates will be serviced by the Debt Service Fund by contributions from the Wichita Falls 4B Economic Development Corporation. The Series 2016 Certificates will be serviced by the net revenues of the Water and Sewer Fund, as well as the Series 2010 Combination Tax and Revenue Refunding Certificates. A portion of the Series 2013 General Obligation Refunding Bonds will also be serviced by these net revenues. All of the Water and Sewer Revenue Bonds were issued for purposes of improving the City's water and sewer systems and are serviced by the net revenues of the Water and Sewer Fund. Notes Payable The City of Wichita Falls and Wichita County Water Improvement District Number 2, upon the completion of the Lake Kemp reconstruction project in January 1976 by the U.S. Government, are required to reimburse the U.S. Government 22.7% of its reported total cost of $8,774,705, or $1,991,858. The City's share of this amount is 66.11 %, or $1,316,817, payable in forty-nine annual installments through January 2025 of $51,974, which includes interest at the rate of 3.253%. The City's share of the total costs ($5,800,957) as well as the U.S. Government funded portion ($4,484,140) is reflected as capital assets in the Water and Sewer Enterprise Fund. This contractual arrangement is strictly a cost -sharing agreement and is not considered a joint venture as defined in Section J50 of the Codification of Governmental Accounting and Financial Reporting Standards. The remaining debt payable to the U.S. Government at September 30, 2019 is classified as follows: Long-term $ 237,594 Current portion 42,892 Total 12aQ 486 Capital Leases Payable The City entered into a capital lease agreement in 2012 to finance a portion of an energy efficiency project that includes several City facilities. The capital lease financed $4,419,310 of the total project. The assets are listed under "Buildings, systems and improvements" in both Governmental Activities and Business -type Activities. The lease carries an interest rate of 2.54% and is for a period of 12 years, with final payment due in fiscal year 2024. The City also entered into a capital lease agreement in 2015 to finance equipment purchased for the golf course. This capital lease totaled $48,990. The assets are listed under "Machinery and equipment" in Governmental Activities. The lease carries an interest rate of 5.89% and is for a period of 4 years, with final payment due in fiscal year 2019. 63 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 14 - LONG-TERM LIABILITIES (CONTD.) The City entered into a capital lease agreement in 2016 to finance the replacement of all of the City's water meters. The total amount of the capital lease was $16,506,103. These assets are listed under "Buildings, systems and improvements" in Business -type Activities. The lease carries an interest rate of 3.23% and is for a period of 20 years, with final payment due in fiscal year 2036. The City issued a capital lease in 2017 for the purchase of fire department equipment in the amount of $2,682,710. These assets are listed under "Motor vehicles" in Business -type Activities. This capital lease carries an interest rate of 1.98% and is for a period of 6 years with final payment due in fiscal year 2023. The City entered into a capital lease agreement in 2018 to finance the conversion of the City's street lights to more energy -efficient LED lights. These assets are listed under "Infrastructure" in Governmental Activities. This lease carries an interest rate of 3.45% and is for a period of 15 years, with final payment due in fiscal year 2034. The City also issued a capital lease in 2018 for the purchase of new traffic signal communication equipment in the amount of $414,225. These assets are listed under "Infrastructure" under Governmental Activities. This lease carries an interest rate of 3.03% for a period of 5 years with final payment due in fiscal year 2023. Note 15 - INTERFUND BALANCES Transfers to and from other funds during the year ended September 30, 2019 were as follows: Transfers From General Fund General Fund General Fund General Fund Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Nonmajor Governmental Funds Water and Sewer Fund Water and Sewer Fund Water and Sewer Fund Sanitation Fund Sanitation Fund Regional Airport Fund Nonmajor Enterprise Funds Nonmajor Enterprise Funds Internal Service Funds Transfers To Nonmajor Government Nonmajor Government Nonmajor Enterprise F Internal Service Funds General Fund Nonmajor Government Nonmajor Government Nonmajor Enterprise F Internal Service Funds General Fund Nonmajor Government Internal Service Funds General Fund Internal Service Funds Nonmajor Government Nonmajor Government Internal Service Funds General Fund Amount al Funds $ 94,729 al Funds 413,200 unds 322,108 14,115 33,000 al Funds 346,163 al Funds 1,941,232 unds 100,000 31,048 1,741,119 al Funds 474,777 159,774 1,603,651 2,187,721 al Funds 668,829 al Funds 405,186 1,341,054 312,000 Total $12,189,706 Reason Supplement operating grants Supplement operating deficits Supplement operating deficits Supplement operating deficits Fund capital projects Fund debt service payment Fund operating deficits Fund capital projects Fund capital projects Administrative overhead Fund debt service payment Purchase capital assets Administrative overhead Purchase capital assets Fund debt service payment Fund debt service payment Purchase capital assets Administrative overhead Additionally, Water and Sewer Fund transferred $77,137 in capital assets to Governmental Activities. These transfers are not reported on the Governmental Funds financial statements as the capital assets do not represent current financial resources. 64 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 15 - INTERFUND BALANCES (CONTD.) Balances due to and from other funds as of September 30, 2019 were as follows: Due To Fund Due From Fund Amount Purpose General Fund Nonmajor Governmental Funds $ 2,125,349 Short-term loan General Fund Regional Airport Fund 411,447 Short-term loan General Fund Nonmajor Enterprise Funds 2,202,198 Short-term loan General Fund Internal Service Funds 1.075.261 Short-term loan Total All amounts due are scheduled to be repaid within one year. Note 16 - COMMITMENTS AND CONTINGENCIES Litigation The City is a defendant in numerous lawsuits. In the opinion of the City's management, any unrecorded liabilities resulting from such suits will not materially affect the financial position of the City. Contract Commitment With West Texas Utilities Company In 1977, the City and Wichita County Water Improvement District Number 2 entered into a sixty - year contract with the West Texas Utilities Company (the Company) and agreed to provide an adequate water supply for the Company's use in generating power upon completion of the Company's construction of a power plant adjacent to the Lake Kemp -Lake Diversion System. The significant terms of the contract provide for standby charges to be paid to the City and the Wichita County Water Improvement District Number 2 in equal amounts. Minimum charges for the calendar year 1997 and all years thereafter until the end of contract will be $500,000 per year. For water actually consumed, the Company shall pay the City and Wichita County Water Improvement District Number 2 equally, at the base rate of $0.23 per one thousand gallons, which is adjusted annually. The rate for the year ended September 30, 2019 was $.404046 per one thousand gallons. This contract can be terminated at any time by the Company. If the contract is terminated, the Company is required to make a maximum termination payment equal to the minimum charges which would have become due and payable during the following twenty-four month period. Contract Commitments At September 30, 2019, the City was committed to various contracts. The amounts for which the various funds are committed to complete these contracts are as follows: 65 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 16 - COMMITMENTS AND CONTINGENCIES (CONTD.) General Fund $2,566,774 Nonmajor Governmental Funds 357,500 Water and Sewer Fund 1,826,293 Sanitation Fund 56,113 Nonmajor Enterprise Funds 590,990 Internal Service Funds 1,115,976 Total contract commitments - City $6,513,646 Federal and State Grants - Compliance Audits The City participates in numerous Federal and State grants, on both a direct and state pass - through basis, as well as on a service -provider basis. Principal among these are Community Development Block Grants, Section 8 Housing Assistance, Home Investment Partnership Agreement Program, and numerous health -related grants. In connection with these grants, the City is required to comply with specific terms and agreements as well as applicable Federal and State laws and regulations. Such compliance is subject to review and audit by the grantors and their representatives. In the opinion of management, the City has complied with all requirements. However, since such programs are subject to future audit or review, the possibility of disallowed expenditures exists. In the event of any disallowance of claimed expenditures, the City expects the resulting liability to be immaterial. Note 17 - TAX ABATEMENT AGREEMENTS The City has approved value limitation agreements with companies for a limitation on the appraised value of properties within the City pursuant to Chapter 312 of the Texas Tax Code, as amended, i.e., the Property Tax Abatement Act. Under these agreements, the City has agreed to abate varying amounts of property taxes levied on qualified improvements during the abatement period. These abatements may be granted to businesses that construct improvements within certain areas designated by the Mayor and City Council. For the fiscal year ended September 30, 2019, the City abated property taxes totaling $1,439,264 under this program and received payments in lieu of taxes totaling $1,283,672. CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS (CONT-D.) SEPTEMBER 30, 2019 Note 18 - CONDENSED FINANCIAL INFORMATION FOR DISCRETELY PRESENTED COMPONENT UNITS The City has five component units that are discretely presented in the City's basic financial statements. Condensed financial information for the year ended September 30, 2019 is as follows: Wichita Falls Wichita Falls Economic 4B Sales Development Tax Wichita Falls Reinvestment Corporation Corporation Zone #2 Zone #3 Zone #4 Totals Condensed statement of net position: Cash, investments and other current assets $ 13,170,317 $ 6,778,414 $1,617,492 $665,637 $238,700 $ 22,470,560 Capital assets, net of accumulated depreciation 2,132,818 - - - 2,132,818 Total assets 15,303,135 6,778,414 1,617,492 665,637 238,700 24,603,378 Accounts payable and other current liabilities 212,441 392,579 605,020 Total liabilities 212,441 392,579 605,020 Net position $15 090 694 $6 385 835 51 617 492 $665 637 $238 700 $23 998 358 Condensed statement of activities: Expenses: Community development $ 5,463,303 $3,102,301 $358,832 $- $34,158 $8,958,594 Program revenues: Operating grants and contributions 1,500,000 358,832 1,858,832 Net program expense ( 3,963,303) ( 2,743,469) ( 358,832) 3( 4.158) (7,099,762) General revenues: Tax revenues 4,151,979 4,151,979 1,096,562 89,811 101,570 9,591,901 Non -tax general revenues 413,278 144,796 12,682 11,492 2,792 585,040 Total general revenues 4,565,257 4,296,775 1,109,244 101,303 104,362 10,176,941 Change in net position 601,954 1,553,306 750,412 101,303 70,204 3,077,179 Beginning net position 14,488,740 4,832,529 867,080 564,334 168,496 20,921,179 Ending net position 67 REQUIRED SUPPLEMENTARY INFORMATION EXHIBIT B-1 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Revenues: Taxes Charges for services Licenses and permits Fines and forfeitures Intergovernmental revenue Contributions Miscellaneous revenue Total revenues Expenditures: Current: Administrative services Police Fire Parks and recreation Accounting/finance Community development Public works Health Traffic and transportation Capital outlay Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses): Transfers in Transfers out Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - beginning Fund balance - ending Budgeted Amounts Original Final Actual $ 65,232,446 $ 65,232,446 $ 66,269,245 2,946,300 2,946,300 2,921,429 1,950,613 1,950,613 2,080,203 2,700,000 2,700,000 2,694,497 1,200 1,200 - 180, 937 180,937 182,294 1,356,064 1,356,064 1,970,506 74,367,560 74,367,560 76,118,174 13,431,446 13,926,524 13,870,220 25,279,872 25,279,872 24,843,626 16, 325, 026 16, 362, 871 16, 613, 849 5,856,810 5,863,344 5,395,478 754,183 754,183 753,748 2,302,200 2,307,709 2,181,446 5,311,018 5,310,778 5,232,422 3,485,624 3,467,054 3,415,416 1,640,223 1,650,652 1,749,298 2,781,194 6,252,507 4,540,770 77,167,596 81,175,494 78,596,273 Variance With Final Budget - Positive (Negative) $ 1,036,799 (24,871) 129,590 (5,503) (1,200) 1,357 614,442 1,750,614 56,304 436,246 (250,978) 467,866 435 126,263 78,356 51,638 (98,646) 1,711,737 2,579,221 (2,800,036) (6,807,934) (2,478,099) 4,329,835 3,656,770 3,656,770 3,689,770 33,000 (856,740) (856,740) (844,151) 12,589 2,800,030 2,800,030 2,845,619 45,589 (6) (4,007,904) 367,520 4,375,424 18,302,304 18,302,304 18,302,304 - $ 18,302,298 $ 14,294,400 $ 18,669,824 $ 4,375,424 a x W C LL J a U_ LL O } H U - M O M LO CO Cl) O O O Ln W O V V V o N o M N I� O V CO V T M V y LO O) M M I� o V O M O V V M o) M O LO N O N I� CO o) O V CO LO N V CO , o) M o) V CO O) M O M CO CO CO CO o) CO V O O CO O I� o) ' O) CO LO O O V " N M LO co co r- - o) N M V CO M LO I� N V LO N LO I� M LO N V (D V N Efl Efl Efl Efl Efl Efl o) CO CO V Ln O CO CO M V LO Ln M V o CO o M V O CO M N V N LO O LO O M LO LO CO o) N CO M V M O o) I� O r o) O) N M I� N o) V I� M LO I M M O M N o) I (D M O Soo M V CO O CO M d) o) O V O CO O N M I� O O N O) LO LO CO M o) o) I� W" N LO N CO zr N O CO M N LO CO M O O N V CO N O M M LO N N V M I� O LO fA Efl N N Efl N Efl Efl Efl Efl O F O CO CO CO LO W O CO V N M N Y U M N O LO O CO M N M o o O O W W 0 w LO r Ln CO CO CO o o) N LO V N V V LO V CO CO - 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T N O C j a 0 0 C C y C C E T O C QQ O O Z 0 O N N '�'� �9 9( Q O M C C C C > 9 E Q Q R .0 O C C E u C C �.. o E L_ CLj U U O O N N 0 0 'OOO°QO �aa H H LL Z LL LL EXHIBIT B-5 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS WICHITA FALLS FIREMEN'S RELIEF AND RETIREMENT FUND 2019 2018 2017 2016 2015 Actuarial determined contribution $ 1,455,581 $ 1,411,351 $ 1,283,410 $ 1,273,913 $ 1,232,957 Contributions in relation to the actuarially determined contribution (1,455,581) (1,411,351) (1,283,410) (1,273,913) (1,232,957) Contribution deficiency $ - $ - $ - $ - $ - Covered payroll $11,500,098 $11,214,407 $10,929,570 $11,088,538 $10,179,831 Contributions as a percentage of covered payroll 12.66% 12.59% 11.74% 11.49% 12.11 % Valuation Date: 1/1/2018 Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Compensation Remaining Amortization Period Infinite (as of 1/1/2018 valuation) Mortality RP-2000 Mortality Table, projected to 2024 using Scale AA - Sex Distinct. Retirement Age Based upon tables dependent upon hire date, in conjunction with an actuarial study dated October 2017. Retirement Election Members eligible for the DROP are assumed to elect either straight service retirement benefits or the DROP, whichever is more valuable. Other members are assumed to receive straight service retirement benefits. Termination Rates Based upon service table, in conjunction with an actuarial experience study dated October 2017. Disability Rates Based upon member age, in conjunction with an actuarial experience study dated October 2017. Interest Rate: 7.75% per year, compounded annually, net of expenses. This is supported by the asset allocation of the trust and the long-term expected return by asset class. Salary Increases Based upon service table, in conjunction with an actuarial experience study dated October 2017. 72 EXHIBIT B-5 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS WICHITA FALLS FIREMEN'S RELIEF AND RETIREMENT FUND Payroll Growth 4.00% per year for amortization of the Unfunded Actuarial Accrued Liability. The assumed payroll growth was approved in conjunction with an actuarial study dated October 2017. Marital Status: 100% of actives are assumed to be married at time of benefit commence- ment. Males are assumed to be two years older than their spouses. Dependent Children: Each member is assumed to have two children. The first child is assumed to have been born when the member was 25. The second child is assumed to be two years younger. It is also assumed that benefits will be paid until each child reaches the age of 20. Contribution Rates: Members - 13.00% City - 12.00% (12.83% in 2018, 12.77% in 2019) Actuarial Asset Method: Fair Market Value 73 EXHIBIT B-6 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS CITY OF WICHITA FALLS RETIREE HEALTH CARE PLAN Total OPEB Liability Service cost Interest on total pension liability Changes of benefit terms Difference between expected and actual experience Changes of assumptions Benefit payments/refunds of contributions Net change in total OPEB liability Total OPEB liability, beginning Total OPEB liability, ending (a) Fiduciary Net Position Contributions - employer Contributions - employee Net investment income Benefit payments/refunds of contributions Administrative expenses Other Net change in fiduciary net position Fiduciary net position, beginning Fiduciary net position, ending (b) Net OPEB liability / (asset), ending = (a) - (b) Fiduciary net position as a % of total OPEB liability Covered payroll 2018 2017 $ 518,007 $ 505,385 1,480,271 1,456,410 (705,047) - 765,976 - (1,679,932) (1,584,144) 379,275 377,651 21,429,843 21,052,192 $ 21,809,118 $ 21,429,843 $ 2,260,421 (374,667) (1,679,932) (1,202) 204,620 4,981,836 $ 5,186,456 $ 2,029,653 737,181 (1,584,144) (4,171) 1,178,519 3,803,317 $ 4,981,836 $ 16,622,662 $ 16,448,007 23.78% 23.25% $ 57,044,011 $ 55,647,372 Net OPEB liability (asset) as a % of covered payroll 29.14% 29.56% This schedule is presented to illustrate the requirement to show information for 10 years. However, recalculations of prior years are not required, and if prior years are not reported in accordance with the standards of GASB 74/75, they should not be shown here. Therefore, we have shown only years for which the new GASB statements have been prepared. 74 EXHIBIT B-7 CITY OF WICHITA FALLS, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SCHEDULE OF CONTRIBUTIONS CITY OF WICHITA FALLS RETIREE HEALTH CARE PLAN 2019 2018 Actuarial determined contribution $ 2,134,381 $ 2,072,215 Contributions in relation to the actuarially determined contribution (2,453,913) (2,072,215) Contribution deficiency (excess) $ (319,532) $ - Covered payroll $ 58,359,009 $ 55,042,215 Contributions as a percentage of covered payroll 4.20% 3.76% Valuation Date: December 31, 2018 Methods and Assumptions Used to Determine Contribution Rates: Actuarial Cost Method Individual Entry Age Normal Amortization Method Level Percentage of Pay Remaining Amortization Period 14 years; closed Asset Valuation Market Value Investment Rate of Return 7.10%, net of investment expenses, including inflation Inflation 2.50% Salary Increases 3.50% to 10.50% for TMRS and 0.40% to 4.30% for Fire, including inflation Payroll Growth 3.00% Demographic Assumptions TMRS: Based on the experience study covering the four-year period ending December 31, 2014 as conducted for the TMRS. Fire: Based on the January 1, 2017 valuation for the Wichita Falls Firemen's Relief and Retirement Fund. Mortality TMRS: For healthy retirees, the gender -distinct RP-2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. Fire: The firefighters' mortality table was the RP-2000 Combined Healthy Mortality Table for males and females, projected to year 2024 using Scale AA. Participation Rates TMRS: 50% of employees retiring after the age of 49 or with disability at any age were assumed to elect retiree health care benefits through the City. 0% of TMRS employees retiring before the age of 49 were assumed to elect coverage. Fire: 100% of employees retiring at any age were assumed to elect retiree health care benefits through the City. Healthcare Cost Trend Rates Initial rate of 7.30% declining to ultimate rates of 4.25% after 14 years. Other Information: There were no benefit changes during the year. 75 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2019 Budgetary Information Demonstrating compliance with the adopted budget is an important component of a government's accountability to the public. Many citizens participate in the process of establishing the annual operating budgets of state and local governments, and have a keen interest in following the actual financial progress of their governments over the course of the year. The City and many other governments revise their original budgets over the course of the year for a variety of reasons. Under the new reporting model, governments will continue to provide budgetary comparison information in their annual reports. An important change, however, is a requirement to add the government's original budget to the current comparison of final budget and actual results. The City adheres to the following procedures in establishing the operating budget reflected in the basic financial statements: On or before August 15 of each year, the City Manager submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted. The budget is legally enacted by the City Council through passage of appropriation and tax levying ordinances prior to September 30 and is published under a separate cover. An annual budget, including debt service requirements, is legally adopted for the General Fund, the Community Development Block Grant Fund, the Section 8 Housing Fund, the HOME Investment Partnership Agreement Fund, the Hotel/Motel Tax Fund, the Golf Fund, the MPEC Fund and the Debt Service Fund, on a basis which is consistent with generally accepted accounting principles. The City Council must approve any transfer of appropriation balances or portions thereof from one department to another. The City Manager has the authority, without City Council approval, to transfer appropriation balances from one expenditure account to another within a single department of the City. Supplemental appropriations of $4,007,898 were approved by the City Council. The reported budgetary data includes amendments made during the year. At the close of each fiscal year, any unencumbered appropriated balance lapses to the unreserved fund balance. The unencumbered appropriation balances in the Capital Projects Funds do not lapse at year end. Wichita Falls Firemen's Relief and Retirement Fund Changes of benefit terms: For measurement date 12/31/2018, amounts reported as changes of benefit terms resulted from the following benefit amendments that were implemented into the Fund for all active participants: - A maximum accrued benefit cap of $100,000 per year - The average final compensation period was increased from 3 years to 5 years - The normal form of annuity payments was amended from a 66 2/3% Joint & Survivor Annuity to a Life Annuity 76 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (CONT'D.) SEPTEMBER 30, 2019 Effective April 20, 2016, there have been multiple changes in benefits, as - The member contribution rate was increased from 12% to 13% of salary for all members. - All future new entrants will accrue benefits under a "Tier 2" benefit structure. Changes of assumptions: For purposes of determining the GASB discount rate at the 12/31/18 measurement date, a depletion date projection as of that date was performed. The results of this projection showed a single discount rate of 5.13%. The discount rate was increased from 5.03% to 5.13%. For purposes of determining the GASB discount rate at the 12/31/17 measurement date, a depletion date projection as of that date was performed. The results of this projection showed a single discount rate of 5.03%. The discount rate was decreased from 5.81 % to 5.03%. As a result of an actuarial experience study dated October 6, 2017, the following assumption changes were approved by the Board of Trustees: - The investment return assumption was lowered from 8.00% to 7.75% per year, net of all expenses. - The assumed rates of salary increases were amended. - The assumed rates of retirement were amended. - The assumed rates of withdrawal were amended. - The assumed rates of disablement were amended. For purposes of determining the GASB discount rate at the 12/31/2016 measurement date, a depletion date projection as of that date was performed. The results of this projection showed a single discount rate of 5.81 %. The discount rate was decreased from 8.00% to 5.81 %. 77 COMBINING FINANCIAL STATEMENTS Nonmajor Governmental Funds Special Revenue Funds The special revenue funds are used to account for the proceeds from specific revenue sources (other than for major capital projects or proprietary funds) that are either legally restricted to be expended for specified purposes or have revenue sources committed for specific purposes. Community Development Block Grant Fund The Community Development Block Grant Fund accounts for federal block grant revenues and related expenditures. Section 8 Housing Fund The Section 8 Housing Fund accounts for federal funds received to subsidize rents and housing payments for lower income families within the City. Home Investment Partnership Aareement Fund The Home Investment Partnership Agreement Fund accounts for federal funds received to provide home ownership opportunities to low income, first-time homebuyers through the acquisition, rehabilitation and resale of single-family dwellings that are currently owned by governmental agencies. Hotel/Motel Tax Fund The Hotel/Motel Tax Fund accounts for revenues derived from an occupancy tax which is expended on programs promoting the growth of the City of Wichita Falls. Airport Improvement Grant Fund The Airport Improvement Grant Fund is used to account for improvements made to the City's Regional Airport that are funded by state and federal grants. Golf Fund The Golf Fund accounts for the activities at the Weeks Park Golf Course. MPEC Fund The MPEC Fund is used to account for the operations of the City's Multi -Purpose Events Center. Miscellaneous Special Revenue Fund The Miscellaneous Special Revenue Fund accounts for various revenues generated in the form of contributions, fees, concessions, rents and other charges and their related expenditures. This fund also includes revenues derived from various grants for health and police programs. The revenues in this fund are expended to support the activity generating the revenue or as designated by the contributor. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Debt Service Funds Debt Service Fund The Debt Service Fund is established by ordinances authorizing the issuance of general obligation bonds to provide for the payment of bond principal and interest. An ad valorem tax rate and tax levy are required to be computed and levied which will be sufficient to produce the funds required to pay principal and interest as they come due. This fund is also used to provide for the payment of paying agent fees. Excess Sales Tax Fund The Excess Sales Tax Fund is used to account for and administer the excess sales tax collected related to the property reduction tax. This fund is not required to have a legally adopted budget; therefore no budgetary comparison schedule is presented. Capital Projects Funds The capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities, other than those financed by federal grants or proprietary funds. 4B Sales Tax Projects This fund was established to account for projects financed by the Wichita Falls 4B Sales Tax Corporation. Significant projects accounted for in this fund included the construction of three fire stations and the renovation of the second floor of the Wichita Falls Public Library building for recreational purposes. 2018-A Bond Projects This fund was established to account for the proceeds of the Series 2018-A General Obligation Bonds that were issued for the purpose of street improvements within the City. Miscellaneous Capital Projects Funds This fund is an accumulation of several projects that have been undertaken over the years including library renovations, street improvements and drainage improvements. Permanent Fund The permanent fund is used to account for principal trust amounts received and related interest income. The interest earnings of this fund may be used for maintenance of the City's cemeteries. \ ` { :�)/\.) - ,)) r: ; \ \\\\{}\ \ )) )\})ƒk/}j)\\j\` \\ \\\MMMM )/ a;j ) | - - - - }), )/{ - - - !!! : ! �f/§ _±){±«« _ _ _- :- §««; | - - (/){\)` z:=:=:e /_�_ ;;) EXHIBIT C-3 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ - $ - $ 1,831 $ 1,831 Intergovernmental revenue 1,233,898 1,233,898 1,233,898 - Miscellaneous revenue - - 586 586 Total revenues 1,233,898 1,233,898 1,236,315 2,417 Expenditures Administrative services 155,839 155,839 155,839 - Parks and recreation 214,916 214,916 7,500 207,416 Community development 1,003,142 1,020,430 834,314 186,116 Public works 100,000 100,000 58,346 41,654 Total expenditures 1,473,897 1,491,185 1,055,999 435,186 Excess of revenues over (under) expenditures (239,999) (257,287) 180,316 437,603 Fund balance - beginning 587,539 587,539 587,539 - Fund balance - ending $ 347,540 $ 330,252 $ 767,855 $ 437,603 EXHIBIT C-4 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - SECTION 8 HOUSING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Revenues: Intergovernmental revenue Miscellaneous revenue Total revenues Expenditures: Community development Total expenditures Excess of revenues over (under) expenditures Fund balance - beginning Fund balance - ending Budgeted Amounts Original Final Actual Variance With Final Budget - Positive (Negative) $ 3,801,060 $ 3,801,060 $ 3,817,705 $ 16,645 - - 36,981 36,981 3,801,060 3,801,060 3,854,686 53,626 3,814,649 3,814,649 3,849,739 (35,090) 3,814,649 3,814,649 3,849,739 (35,090) (13,589) (13,589) 4,947 18,536 1,318,139 1,318,139 1,318,139 - $ 1,304,550 $ 1,304,550 $ 1,323,086 $ 18,536 81 EXHIBIT C-5 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - HOME INVESTMENT PARTNERSHIP AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 398,264 $ 398,264 $ 398,264 $ - Miscellaneous revenue - - 2,700 2,700 Total revenues 398,264 398,264 400,964 2,700 Expenditures: Community development 398,264 795,121 254,051 541,070 Total expenditures 398,264 795,121 254,051 541,070 Excess of revenues over (under) expenditures - (396,857) 146,913 543,770 Fund balance - beginning 607,373 607,373 607,373 - Fund balance - ending $ 607,373 $ 210,516 $ 754,286 $ 543,770 82 EXHIBIT C-6 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - HOTEUMOTEL TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Revenues: Taxes Total revenues Expenditures: Administrative services Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses): Transfers out Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - beginning Fund balance - ending Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) - $ 1,880,000 $ 1,880,000 $ 2,038,732 $ 158,732 1,880,000 1,880,000 2,038,732 158,732 97,500 97,500 97,500 - 97,500 97,500 97,500 - 1,782,500 1,782,500 1,941,232 158,732 (1,782,510) (1,782,510) (1,941,232) (158,722) (1,782,510) (1,782,510) (1,941,232) (158,722) (10) (10) - 10 10 10 10 - 83 EXHIBIT C-7 Revenues: Charges for services Miscellaneous revenue Total revenues CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - GOLF FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) $ 800,000 $ 800,000 $ 427,312 $ (372,688) - - 390,955 390,955 800,000 800,000 818,267 18,267 Expenditures: Administrative services 910,000 910,000 891,684 18,316 Total expenditures 910,000 910,000 891,684 18,316 Excess of revenues over (under) expenditures (110,000) (110,000) (73,417) 36,583 Other financing sources (uses) Transfers in 110,000 110,000 70,216 (39,784) Total otherfinancing sources (uses) 110,000 110,000 70,216 (39,784) Excess of revenues and other sources over (under) expenditures and other uses - - (3,201) (3,201) Fund balance - beginning 43,784 43,784 43,784 - Fund balance - ending $ 43,784 $ 43,784 $ 40,583 $ (3,201) 84 EXHIBIT C-8 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - MPEC FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Revenues: Contributions Miscellaneous revenue Total revenues Expenditures: MPEC Total expenditures Excess of revenues over (under) expenditures Other financing sources (uses): Transfers in Total other financing sources (uses) Excess of revenues and other sources over (under) expenditures and other uses Fund balance - beginning Fund balance - ending Variance With Final Budget - Budgeted Amounts Positive Original Final Actual (Negative) - $ 85,000 $ 85,000 $ - $ (85,000) 1,197,577 1,197,577 2,405 (1,195,172) 1,503,577 1,282,577 2,405 (1,280,172) 3,437,434 3,437,434 2,286,621 1,150,813 3,437,434 3,437,434 2,286,621 1,150,813 (1,933,857) (2,154,857) (2,284,216) (129,359) 2,154, 857 2,154, 857 2,284,216 129,359 2,154, 857 2,154, 857 2,284,216 129,359 221,000 - - - $ 221,000 $ 85 EXHIBIT C-9 Revenues: Taxes Contributions Miscellaneous revenue Total revenues CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE - DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2019 Budgeted Amounts Original Final Actual Variance With Final Budget - Positive (Negative) $ 2,137,408 $ 2,137,408 $ 2,081,315 $ (56,093) 1,881,331 1,881,331 1,881,331 - - - 31,873 31,873 4,018,739 4,018,739 3,994,519 (24,220) Expenditures: Debt service - principal 3,961,660 3,961,660 4,000,000 (38,340) Debt service - interest and paying agent fees 1,952,034 1,952,034 1,912,443 39,591 Total expenditures 5,913,694 5,913,694 5,912,443 1,251 Excess of revenues over (under) expenditures (1,894,955) (1,894,955) (1,917,924) (22,969) Other financing sources (uses): Transfers in 1,894,955 1,894,955 1,894,955 - Total other financing sources (uses) 1,894,955 1,894,955 1,894,955 - Excess of revenues and other sources over (under) expenditures and other uses Fund balance - beginning Fund balance - ending - - (22,969) (22,969) 1,444,396 1,444,396 1,444,396 - $ 1,444,396 $ 1,444,396 $ 1,421,427 $ (22,969) Nonmajor Enterprise Funds Nonmajor enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises. The intent of the governing body is that the cost of providing the service to the general public on a continuing basis be recovered primarily through user charges. Kickapoo Airport Fund During the year ended September 30, 2000, private airport. The Kickapoo Airport Fund revenues and expenses of the airport. Transit Fund the City acquired Kickapoo Downtown Airport, a was established to account for the operating The Transit Fund accounts for the operation of the Wichita Falls transit system. This system is supported from passenger fees, subsidies from the General Fund and subsidies from the Federal Transit Administration. Stormwater Drainage Fund The Stormwater Drainage Fund was established to account for operating revenues and expenses associated with the Storm Water Drainage Utility System (System). The System was established effective May 1, 2001 and provides a funding mechanism for drainage improvements in the City. 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(6 O E 0 0 p (6 T U O N = Lp O O _ C E O O Q O C a N N a)O O N O- Q j p a O m .E .E !6 C) N C C '0 N !6 O `p a N N C. . O M C LU N N 0 0 Z O U N 3 E (6 V O L a) Q N N O E E (6 N O- O N N H � � o (� p> o 0 o C0i c0i c0i m L o 0 0 0 a�i�QQQaOzz0n O Q C) 0) Internal Service Funds Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the City on a cost -reimbursement basis. Fleet Maintenance Fund The Fleet Maintenance Fund accounts for the costs associated with the operation, maintenance and replacement of the City's vehicle and equipment fleet. City departments which use the vehicles and equipment are charged a monthly rental fee based upon actual operating costs associated with each class of vehicle or equipment. Duplicating Services Fund The Duplicating Services Fund accounts for the costs associated with the operation and maintenance of the City's duplicating equipment. City departments which use the duplicating services are charged a fee based upon actual usage. Employee Benefit Trust Fund The Employee Benefit Trust Fund is used to account for and administer group health insurance, which is self -insured by the City, and life insurance for employees and covered dependents. Information Technology Fund The Information Technology Fund accounts for the costs associated with the operation and maintenance of the City's Information Technology assets. City departments which use information technology are charged a fee based on usage. EXHIBIT E-1 Assets Current assets: Cash and cash equivalents Restricted cash and cash equivalents Receivables: Other Inventory Prepaid items Total current assets CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2019 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals $ 784,633 $ 46,926 $ 100 $ 3,630,280 $ 4,461,939 - - 8,801,232 - 8,801,232 24,185 10,267 34,452 706,823 - - - 706,823 474,815 208 - 1,313 476,336 1,990,456 47,134 8,811,599 3,631,593 14,480,782 Capital assets, net of accumulated depreciation 20,731,100 - - 3,589,806 24,320,906 Total assets 22,721,556 47,134 8,811,599 7,221,399 38,801,688 Deferred outflows of resources Pension -related 858,242 9,385 40,493 469,770 1,377,890 OPEB-related 81,280 1,853 4,501 38,389 126,023 Total deferred outflows of resources 939,522 11,238 44,994 508,159 1,503,913 Liabilities Current liabilities: Accounts payable - trade 208,990 3,862 15,101 47,513 275,466 Accrued payroll 77,461 754 4,024 35,491 117,730 Accrued vacation and sick leave 90,099 - - 49,268 139,367 Payable to other City funds - 1,075,261 - 1,075,261 Estimated health claims payable - 491,647 491,647 Other liabilities 1,229 (1,449) (220) Capital leases - current maturities 439,000 - - - 439,000 Total current liabilities 816,779 4,616 1,584,584 132,272 2,538,251 Long-term liabilities: Capital leases, less current maturities 1,369,846 - - - 1,369,846 Net pension liability 1,746,247 15,011 82,391 955,833 2,799,482 Net OPEB liability 510,316 11,636 28,259 241,029 791,240 Total long-term liabilities 3,626,409 26,647 110,650 1,196,862 4,960,568 Total liabilities 4,443,188 31,263 1,695,234 1,329,134 7,498,819 Deferred inflows of resources Pension -related 304,509 4,665 14,367 166,677 490,218 OPEB-related 17,791 406 985 8,403 27,585 Total deferred inflows of resources 322,300 5,071 15,352 175,080 517,803 Net position Net investment in capital assets 18,922,254 - - 3,589,806 22,512,060 Unrestricted (26,664) 22,038 7,146,007 2,635,538 9,776,919 Total net position $ 18,895,590 $ 22,038 $ 7,146,007 $ 6,225,344 $ 32,288,979 5 EXHIBIT E-2 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Operating revenues: Charges for services Rents, concessions and other Contributions Total operating revenues Operating expenses: Personnel services Supplies and materials Maintenance and repairs Utilities and other services Insurance and contract support Other expenses Depreciation and amortization Total operating expenses Operating income (loss) Nonoperating revenues (expenses): Interest income Gain (loss) on sale of capital assets Interest expense Total nonoperating revenues (expenses) Income (loss) before transfers Transfers in Transfers out Change in net position Net position - beginning Net position - endinc Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals $ 10,194,007 $ 156,579 $ - $ 3,671,148 $ 14,021,734 25,548 - 1,365,197 - 1,390,745 - - 14,522,207 - 14,522,207 10,219,555 156,579 15,887,404 3,671,148 29,934,686 2,163,511 17,909 110,330 1,149,400 3,441,150 3,003,791 2,494 159 219,843 3,226,287 2,105,807 - 153 863,556 2,969,516 68,101 741 66,818 168,103 303,763 50,984 20 13,295,963 15 13,346,982 204,734 83,327 2,344,012 (188,169) 2,443,904 3,793,772 - - 745,765 4,539,537 11,390,700 104,491 15,817,435 2,958,513 30,271,139 (1,171,145) 52,088 69,969 712,635 (336,453) - 179,375 - 179,375 (130,241) - (679) (130,920) (44,339) - - (44,339) (174,580) - 179,375 (679) 4,116 (1,345,725) 52,088 249,344 711,956 (332,337) 3,733,712 - - - 3,733,712 (312,000) - - - (312,000) 2,075,987 52,088 249,344 711,956 3,089,375 16,819,603 (30,050) 6,896,663 5,513,388 29,199,604 $ 18,895,590 $ 22,038 $ 7,146,007 $ 6,225,344 $ 32,288,979 EXHIBIT E-3 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Cash flows from operating activities: Received from customers and users $ 318,237 $ - $ 4,582,791 $ - $ 4,901,028 Received from interfund charges 9,959,974 156,579 10,364,312 3,671,148 24,152,013 Other operating receipts - - 939,217 - 939,217 Payments to suppliers (5,685,040) (76,941) (15,769,573) (1,205,616) (22,737,170) Payments for interfund services (454,421) (14,302) (16,680) (138,151) (623,554) Payments to employees (1,530,756) (19,272) (61,799) (887,112) (2,498,939) Net cash provided by operating activities 2,607,994 46,064 38,268 1,440,269 4,132,595 Cash flows from noncapital financing activities: Interfund loans received - - 1,075,261 - 1,075,261 Interfund loans repaid - (124,601) (124,601) Transfers in from other funds 3,733,712 3,733,712 Transfers out to other funds (312,000) - (312,000) Net cash provided by noncapital financing activities 3,421,712 950,660 4,372,372 Cash flows from capital and related financing activities: Acquisition of capital assets Proceeds from sale of capital assets Principal paid on long-term debt Interest and fees paid on long-term debt Net cash used for capital and related financing activities Cash flows from investing activities: Interest on investments Net cash provided by investing activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning Cash and Cash Equivalents - Ending Cash flows from operating activities: Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation and amortization (Increase) decrease in assets and deferred outflows: Receivables: Other Inventory Prepaid items Deferred outflows - pension -related Deferred outflows - OPEB-related Increase (decrease) in liabilities and deferred inflows: Accounts payable - trade Accrued payroll Accrued vacation and sick leave Estimated health claims payable Other liabilities Net pension liability Net OPEB liability Deferred inflows - pension -related Deferred inflows - OPEB-related Total adjustments Net cash provided by operating activities (5,540,159) (415,405) (5,955,564) 159,026 159,026 (430,477) (430,477) (44,339) (44,339) (5,855,949) - (415,405) (6,271,354) 179,375 179,375 - - 179,375 - 179,375 173,757 46,064 1,168,303 1,024,864 2,412,988 610,876 862 7,633,029 2,605,416 10,850,183 $ 784,633 $ 46,926 $ 8,801,332 $ 3,630,280 $ 13,263,171 $ (1,171,145) $ 52,088 $ 69,969 $ 712,635 $ (336,453) 3,793,772 745,765 4,539,537 57,427 1,103 58,530 7,696 - - 7,696 - 371 (1,313) (942) (436,412) (3,894) (22,266) (229,335) (691,907) (35,048) (806) (1,957) (16,395) (54,206) (135,734) (2,061) (7,193) (20,171) (165,159) 8,381 138 2,125 (4,210) 6,434 (26,346) - - (7,869) (34,215) - (33,279) (33,279) 1,229 - (2,187) - (958) 661,138 887 35,505 337,341 1,034,871 2,073 122 297 (757) 1,735 (125,667) (934) (4,220) (78,516) (209,337) 6,630 153 371 3,094 10,248 3,779,139 (6,024) (31,701) 727,634 4,469,048 $ 2,607,994 $ 46,064 $ 38,268 $ 1,440,269 $ 4,132,595 0191 Agency Fund Escheatment Fund - The agency fund is used to account for assets held by the City of Wichita Falls in a custodial capacity. The assets in this fund have been abandoned or remain unclaimed pending escheatment to the State of Texas. EXHIBIT F-1 CITY OF WICHITA FALLS, TEXAS AGENCYFUND STATEMENT OF CHANGES IN ASSETS AND LIABILITIES FOR THE YEAR ENDED SEPTEMBER 30, 2019 Balance 10/1 /2018 ESCHEATMENT FUND Assets Cash and cash equivalents $ 177,550 Liabilities Other liabilities $ 177,550 Additions $ 9,753 $ 9,753 Deductions Balance 9/30/2019 $ 5,257 $ 182,046 $ 5,257 $ 182,046 94 Component Units Discretely Presented Component Units of the City of Wichita Falls are legally separate entities; however, the City is considered to be financially accountable for their operations. The five discretely presented component units are as follows: Wichita Falls Economic Development Corporation The Wichita Falls Economic Development Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities, primarily through assisting qualified enterprises with funds provided by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4A. Wichita Falls 4B Sales Tax Corporation The Wichita Falls 4B Sales Tax Corporation is a nonprofit corporation formed in May 1997 for the purpose of increasing employment opportunities and for public improvement projects such as parks, auditoriums, learning centers, open space improvements, athletic and exhibition facilities and the related maintenance and operating costs of such projects. These projects are funded by a portion of the local sales tax. The Corporation operates under the authority of Vernon's Civil Statutes, Article 5190.6, Section 4B. Wichita Falls Reinvestment Zone #2 The Wichita Falls Reinvestment Zone #2 was created in August 2005 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone #2 is to capture increments of growth in real property values in the designated zone area from base values established in January 2004 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. Wichita Falls Reinvestment Zone #3 The Wichita Falls Reinvestment Zone #3 was created in September 2009 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone #3 is to capture increments of growth in real property values in the designated zone area from base values established in January 2009 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. Wichita Falls Reinvestment Zone #4 The Wichita Falls Reinvestment Zone #4 was created in March 2015 by the City, with the advice and consent of the Wichita Falls Independent School District and Wichita County. The purpose of the Wichita Falls Reinvestment Zone #4 is to capture increments of growth in real property values in the designated zone area from base values established in January 2015 and use the ad valorem taxes derived from the increments to contribute to the zoned area. Tax funds derived from the increment can only be spent for public improvements in the zoned area or for payment of debt service on bonds issued to provide funds for public improvements. EXHIBIT G-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30, 2019 Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Wichita Falls Development 413 Sales Tax Reinvestment Reinvestment Reinvestment Corporation Corporation Zone #2 Zone #3 Zone #4 Totals Assets Cash and cash equivalents $ 11,677,525 $ 6,061,326 $ 1,228,841 $ 578,374 $ 190,578 $ 19,736,644 Receivables: Government agencies 1,387,067 717,088 388,651 87,263 48,122 2,628,191 Other 100,000 - - - - 100,000 Prepaid items 5,725 5,725 Capital assets, net of accumulated depreciation 2,132,818 - - - - 2,132,818 Total assets 15,303,135 6,778,414 1,617,492 665,637 238,700 24,603,378 Liabilities Accounts payable - trade 211,505 392,579 - - - 604,084 Other liabilities 936 - 936 Total liabilities 212,441 392,579 605,020 Net position Net investment in capital assets 2,132,818 - - - - 2,132,818 Unrestricted 12,957,876 6,385,835 1,617,492 665,637 238,700 21,865,540 Total net position $ 15,090,694 $ 6,385,835 $ 1,617,492 $ 665,637 $ 238,700 $ 23,998,358 95 N 0 H 0] X W X W N `u ~ M r ~ W J LL~w Q OZ~ LL z=w Q W Z N W13 Z W IL z ~E W Z U W LL Z >- O m = } 0 ~ U O U LL 0 O F m O N of m v m � ri ri ro v O V LL� m rn r m �- m N `� fA N m of O � r rn rn rn o w r ri r r co I of o m V N m u� O O rn � r � r r N o rn N W m ro O rn N fA W W O N N V (O O u - N "o om c LL E� o� . . . . rn ro v ro o o m m m m o o coo m co c"'o w s> o u o � Z N C O_ 0I � j LL E of of LL� O N V O V U Z > - N , » » y x LL F O rn rn rn o in V m I co rn r m in M t0 A Q (n 0 m U r v r N V v N LL� W V V (O o u m o LL E E O O Q N o `o 2 o 0_ m m O m m rn N o m M r O LL7 m V m m in m v N rn r m O of co v v v co O o 0 W 0 U 0 v O N in N � m > 0 n m O O U o m o m o ro m m ro 01 m O U CO m x W 0 o m u� m N of V v i m u m U3 rn of rn ro U3 O O 2- 0 U aJ N ik ik E `o m m m n o d o N N N N x > O F oE oE oE E E E A m sm E o m o o O x E o E m m C O>>> O E N N N aw10v��.-_• O - - - - - o a� O > . 2 o m F W LL LL LL LL LL C x D..... C o N F E om O O Eo O U z z E fg O O U H 0) SUPPORTING SCHEDULES m w o o—— m T ' O a � o 3 U) (n W a x a W a � a cli J Z o Q m N LL LL M 0 a WW J m = 0 w W U_ IL �w LL o O z_ � m H 0 U v - v v v v v v v v v v N m m m m m m . N N N N N N N N M M LL�o 0 0 0 of o o o m m m o� m o 0 0 o mN aoo� o� o — — cD cD cD cD a x W uS J J a LL 2 U_ LL O H U o' 0 m I I 0 0 I N I p" M coW 5 is W iN LL�o 0 of o 0 �o 0 m 0 m o o m� mm oco o � U) (D 0) a x W uS J J a LL U_ LL O H U o' 0 m I I 0 M M 0 I N I p" coW 5 W is UO) W iN LL�o 0 0 of o o � o x o x o x o 0 E E aYi U) D Uo co)U U E o U O a x W uS J J a LL U_ LL O r U o' ° m v r� 0 m I 0 0 I N I p" co W I� inrmmmmmmm in in in in in in in in in co co co �orrrrmmm W iN �o oo xo `o o o oo o xo `o Q o m E o o U D o U fD O 0 F U) z a X U LJ w H m ui J do J N N LL Z M 0w LL m m _ 0 m U Wa 13w oN w LL m O N 0 r Z U m 0 U `o m m m m m m m m T E C, O 1 �I II III O EXHIBIT H-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE - REVENUE BONDS SEPTEMBER 30, 2019 Water and Sewer Revenue Bonds Change in net position (Exhibit A-8) $ 8,232,015 Add: Depreciation and amortization $ 10,206,284 Interest expense and paying agent fees 2,600,143 Transfers out 2,375,670 15,182,097 Subtract: West Texas Utilities water revenues 474,777 Gain (loss) on sale/abandonment of capital assets (66,483) Capital contributions from developers 89,890 Transfers in - (498,184) Net earnings for determining debt service coverage $ 22,915,928 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $ 22,915,928 Principal and interest requirements to maturity $ 74,742,750 $ - Number of years remaining to pay bonds 8 N/A Average annual principal and interest requirement 9,342,844 N/A Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 11,678,555 $ - 11,678,555 Excess over debt service coverage requirements $ 11,237,373 103 n ll I I I II I II �I'�' �YI 1mm 11 11°I I II °II II 1=1 11 111`I II 11 II °ml I`I II I I ICI . . .°' i °I'I 1 1I 11 II I I it I I 1'I LU °`'11. I" "�l'I �I sll I II o o Pu s �2 ` �I LL 'R mq I Wl In 1. 1. I�III fl 11 f11111 E — E- m c 4 `vc E N E o E ' -n m� ` 0. o ' 0 E m o om .—E q 9 `r— r2 9 D--= 0 1cO =_m i U F `m Zgw 7 o mr ry E 0- a s v Q m Q U EXHIBIT H-5 CITY OF WICHITA FALLS, TEXAS CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY FOR THE YEAR ENDED SEPTEMBER 30, 2019 Beginning Ending Balance Balance 10/1/2018 Additions Deletions 9/30/2019 Administrative services: Mayor and City Council $ 5,218 $ $ $ 5,218 City Manager 281,562 281,562 Personnel/Risk Management 9,318 1,695 7,623 Martin Luther King Center 749,447 - 749,447 Library 5,688,441 - 39,568 5,648,873 General Public Information 770,165 5,087 - 775,252 Building Maintenance 2,907,123 - 2,907,123 Nondepartmental 512,598 512,598 Municipal Court 607,833 - 607,833 Legal 3,005 1,487 1,518 City Clerk 1,411 1,411 - Homeland security 648,406 43,582 604,824 Training center 2,271 - 2,271 Golf course 4,717,515 - 4,717,515 Total administrative services 16,904,313 5,087 87,743 16,821,657 Police 26,430,463 113,745 5,395 26,538,813 Fire 8,028,746 - - 8,028,746 Parks and recreation: Recreation 2,688,788 10,811 2,677,977 Park maintenance 5,240,707 1,494 5,239,213 Cemetery 148,133 - 148,133 Total parks and recreation 8,077,628 12,305 8,065,323 Accounting/finance: Information Systems 7,756,728 415,405 3,397 8,168,736 Total accounting/finance 7,756,728 415,405 3,397 8,168,736 Community development: Planning 31,458 - - 31,458 Inspection 3,610 3,610 Property management 10,767,100 10,767,100 Weed and Seed program 7,504 7,504 Hazard Mitigation Grant 170,800 170,800 Total community development 10,980,472 - 10,980,472 Public works: Engineering 168,813 7,909 1,084 175,638 Street maintenance 140,861 - - 140,861 Lake Wichita Revitalizatior 424,175 278,700 702,875 SAFB Gate Perimeter Project - - - - Infrastructure 180,491,320 4,257,060 732,537 184,015,843 Total public works 181,225,169 4,543,669 733,621 185,035,217 Health: Administration 3,263,258 17,848 30,115 3,250,991 General city nursing 87,642 - - 87,642 Environmental health 60,811 6,880 1,302 66,389 Lab water pollution 42,623 - - 42,623 Animal reclaim center 4,268,837 25,383 1,861 4,292,359 Total health 7,723,171 50,111 33,278 7,740,004 Traffic and transportation 12,625,585 3,108,796 77,274 15,657,107 Multi -Purpose Events Center 48,239,335 - - 48,239,335 Wichita Falls Business Park 1,099,507 - 1,099,507 Total capital assets $ 329,091,117 $ 8,236,813 $ 953,013 $ 336,374,917 105 EXHIBIT H-6 CITY OF WICHITA FALLS, TEXAS REGIONAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Balance Balance 10/1/2018 Additions Deletions 9/30/2019 Capital Assets Land and betterments $ 20,384,952 $ - $ - $20,384,952 Buildings and improvements 34,086,309 - - 34,086,309 Machinery and equipment 127,836 - - 127,836 Furniture and fixtures 12,829 - - 12,829 Total capital assets 54,611,926 - - 54,611,926 Accumulated Depreciation Land and betterments 3,595,469 815,398 - 4,410,867 Buildings and improvements 2,720,510 676,665 - 3,397,175 Machinery and equipment 51,351 15,588 - 66,939 Furniture and fixtures 6,415 2,566 - 8,981 Total accumulated depreciation 6,373,745 1,510,217 - 7,883,962 Net capital assets $ 48,238,181 $ (1,510,217) $ - $46,727,964 106 EXHIBIT H-7 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assets Balance Balance $11,266,980 $ 2,376,375 $ - $ 13,643,355 3,264,730 - - 3,264,730 583,215 - - 583,215 317,627 - 282,380 35,247 15,432,552 2,376,375 282,380 17,526,547 2,825,175 353,636 - 3,178,811 1,197,264 107,432 - 1,304,696 407,039 30,918 - 437,957 4,429,478 491,986 - 4,921,464 $11,003,074 $ 1,884,389 $ 282,380 $ 12,605,083 107 EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assets Balance Balance $2,001,247 $ - $ - $ 2,001,247 6,049,557 - - 6,049,557 530,568 - 9,122 521,446 - 118,387 - 118,387 8,581,372 118,387 9,122 8,690,637 58,019 10,549 - 68,568 727,917 123,084 - 851,001 319,160 29,392 9,122 339,430 1,105,096 163,025 9,122 1,258,999 $7,476,276 $ (44,638) $ - $ 7,431,638 108 EXHIBIT H-9 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Drainage Land and betterments Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Drainage Land betterments Machinery and equipment Total accumulated depreciation Net capital assets Balance $ 25,705,086 $ 153,898 439,213 10,050 94,980 - 383,205 3,128,655 26,622,484 3,292,603 Balance $ - $25,858,984 449,263 94,980 3,511,860 29,915,087 2,153,959 343,761 - 2,497,720 27,435 6,103 - 33,538 85,701 2,732 - 88,433 2,267,095 352,596 - 2,619,691 $ 24,355,389 $ 2,940,007 $ - $27,295,396 109 EXHIBIT H-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Construction in progress Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Total accumulated depreciation Net capital assets Balance Balance $ 7,966,376 $ 327,724 $ - $ 8,294,100 3,561,115 - - 3,561,115 663,733 18,545 1,310 680,968 - 100,959 - 100,959 12,191,224 447,228 1,310 12,637,142 1,398,526 162,249 - 1,560,775 1,643,002 93,414 - 1,736,416 350,449 44,731 1,310 393,870 3,391,977 300,394 1,310 3,691,061 $ 8,799,247 $ 146,834 $ - $ 8,946,081 110 EXHIBIT H-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Land and betterments Buildings, systems and improvements Machinery and equipment Furniture and fixtures Construction in progress Total capital assets Accumulated Depreciatior: Land and betterments Buildings, systems and improvements Machinery and equipment Furniture and fixtures Total accumulated depreciation Net capital assets Balance Balance 10/1/2018 Additions Deletions 9/30/2019 $ 24,349,959 $ - $ 19,616 $ 24,330,343 377,395,234 2,761,609 220,520 379,936,323 5,660,877 317,393 145,169 5,833,101 1,164 - - 1,164 4,169,605 1,686,726 1,010,170 4,846,161 411,576,839 4,765,728 1,395,475 414,947,092 11,527,283 243,592 10,815 11,760,060 127,907,263 9,742,219 185,000 137,464,482 4,579,742 220,473 136,063 4,664,152 1,164 - - 1,164 144,015,452 10,206,284 331,878 153,889,858 $ 267,561,387 $ (5,440,556) $ 1,063,597 $ 261,057,234 111 EXHIBIT H-12 CITY OF WICHITA FALLS, TEXAS WATERPARK FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Balance Balance 10/1/2018 Additions Deletions 9/30/2019 Capital Assets: Land and betterments $ 389,894 $ - $ - $ 389,894 Buildings and improvements 4,601,487 13,280 - 4,614,767 Machinery and equipment 230,711 35,483 - 266,194 Total capital assets 5,222,092 48,763 - 5,270,855 Accumulated Depreciatior Buildings and improvements 1,723,915 230,406 - 1,954,321 Machinery and equipment 177,210 25,334 - 202,544 Total accumulated depreciation 1,901,125 255,740 - 2,156,865 Net capital assets $ 3,320,967 $ (206,977) $ - $ 3,113,990 112 EXHIBIT H-13 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Land and betterments Buildings and improvements Machinery and equipment Furniture and fixtures Motor vehicles Total capital assets Accumulated Depreciation: Land and betterments Buildings and improvements Machinery and equipment Furniture and fixtures Motor vehicles Total accumulated depreciation Net capital assets Balance Balance $ 436,269 $ - $ - $ 436,269 4,758,160 5,190 - 4,763,350 1,540,383 69,084 - 1,609,467 2,950 - - 2,950 60,713,903 5,465,885 3,226,236 62,953,552 67,451,665 5,540,159 3,226,236 69,765,588 2,611 - - 2,611 2,759,314 119,496 - 2,878,810 1,287,051 89,663 - 1,376,714 2,950 - - 2,950 44,125,758 3,584,613 2,936,969 44,773,402 48,177,684 3,793,772 2,936,969 49,034,487 $19,273,981 $ 1,746,387 $ 289,267 $ 20,731,101 113 EXHIBIT H-14 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Capital Assets: Machinery and equipment Accumulated Depreciation: Machinery and equipment Net capital assets Balance Balance $ 9,117 $ - $ - $ 9,117 9,117 - - 9,117 114 EXHIBIT H-15 CITY OF WICHITA FALLS, TEXAS INFORMATION TECHNOLOGY FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Balance Balance Capital Assets Machinery and equipment $ 6,442,187 $ 279,131 $ 3,397 $ 6,717,921 Construction in progress - 136,274 - 136,274 Total capital assets 6,442,187 415,405 3,397 6,854,195 Accumulated Depreciation: Machinery and equipment 2,521,342 745,765 2,718 3,264,389 Net capital assets $ 3,920,845 $ (330,360) $ 679 $ 3,589,806 115 EXHIBIT H-16 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2019 Balance 10/1/2018 Additions Deletions Capital Assets: Land and betterments Buildings and improvements Total capital assets Accumulated Depreciation: Buildings and improvements Net capital assets $ 1,434,069 $ - 957,191 - 2,391,260 - Balance 9/30/2019 $ 1,434,069 957,191 2,391,260 239,298 19,144 - 258,442 $ 2,151,962 $ (19,144) $ - $ 2,132,818 116 STATISTICAL SECTION (UNAUDITED) This part of the City of Wichita Falls, Texas' comprehensive annual 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 government's overall financial health. Contents Page Financial Trends 117 These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time. Revenue Capacity 123 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 127 These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information 132 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. 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LL a Q C� a S��C�� X x LaC�a�� o (r W W O Z 0 EXHIBIT 1-5 CITY OF WICHITA FALLS, TEXAS TAX REVENUES BY SOURCE, GOVERNMENTAL FUNDS - LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Hotel Year Property Sales Franchise Occupancy Beverage Bingo Total 2009-2010 $ 27,501,412 $ 20,033,820 $ 5,593,573 $ 1,513,484 $ 246,541 $ 77,883 $ 54,966,713 2010-2011 28,554,029 21,082,994 5,593,781 1,572,105 248,350 70,747 57,122,006 2011-2012 28,679,076 21,406,823 5,574,882 1,677,100 207,735 61,696 57,607,312 2012-2013 29,277,956 22,062,365 5,423,680 1,578,764 230,728 40,122 58,613,615 2013-2014 29,780,795 22,397,536 5,558,599 1,684,329 281,598 36,688 59,739,545 2014-2015 31,090,472 22,403,406 5,414,414 1,775,372 291,091 32,764 61,007,519 2015-2016 34,567,763 22,373,768 5,035,947 1,910,477 286,986 26,736 64,201,677 2016-2017 35,110,173 22,413,397 5,193,721 1,878,061 281,687 9,098 64,886,137 2017-2018 35,804,507 23,861,013 5,326,402 1,952,011 308,333 2,626 67,254,892 2018-2019 37,775,703 24,894,930 5,314,591 2,075,905 328,163 - 70,389,292 122 EXHIBIT 1-6 CITY OF WICHITA FALLS, TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY - LAST TEN FISCAL YEARS (UNAUDITED) Real Property Fiscal Assessed Year Value 2009-2010 $3,622,501,148 2010-2011 3,693,399,778 2011-2012 3,714,449,662 2012-2013 3,749,608,055 2013-2014 3,777,010,620 2014-2015 3,859,560,337 2015-2016 3,944,783,610 2016-2017 4,031,689,962 2017-2018 4,123,022,727 2018-2019 4.230.948.499 Personal Property Assessed Value $ 803,697,677 728,642,824 716,365,316 715,113,536 771,002,233 765,251,406 820,827,696 817,687,012 818, 629,114 843,630,297 Total Assessed Value $ 4, 426,198,825 4,422,042,602 4,430,814,978 4,464,721,591 4,548,012,853 4,624,811,743 4,765,611,306 4,849,376,974 4,941,651,841 5,074,578,796 Total Direct Estimated Tax Rate Actual Value $0.60526 $ 4,426,198,825 0.62526 4,422,042,602 0.62526 4,430,814,978 0.63526 4,464,721,591 0.63526 4,548,012,853 0.65526 4,624,811,743 0.70598 4,765,611,306 0.70598 4,849,376,974 0.70598 4,941,651,841 0.72988 5,074,578,796 Ratio of Total Assessed to Total Estimated Actual Value 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 123 EXHIBIT 1-7 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES - LAST TEN FISCAL YEARS (UNAUDITED) Tax Rates Per $100 Valuation Fiscal City of Wichita Falls Wichita County Burkburnett ISD (1) Year M&O AS Total M&O AS Total M&O AS Total 2009-2010 $ 0.59 $ 0.02 $ 0.61 $ 0.48 $ - $ 0.48 $ 1.17 $ 0.14 $ 1.31 2010-2011 0.61 0.01 0.62 0.52 - 0.52 1.17 0.14 1.31 2011-2012 0.61 0.01 0.62 0.53 - 0.53 1.17 0.14 1.31 2012-2013 0.62 0.01 0.63 0.52 - 0.52 1.17 0.13 1.30 2013-2014 0.62 0.01 0.63 0.51 - 0.51 1.17 0.12 1.29 2014-2015 0.64 0.02 0.66 0.51 - 0.51 1.17 0.14 1.31 2015-2016 0.69 0.02 0.71 0.55 - 0.55 1.17 0.14 1.31 2016-2017 0.69 0.02 0.71 0.58 0.03 0.61 1.17 0.37 1.54 2017-2018 0.69 0.02 0.71 0.58 0.08 0.66 1.17 0.37 1.54 2018-2019 0.69 0.04 0.73 0.59 0.07 0.66 1.17 0.37 1.54 City View ISD (2) Iowa Park CISD (3) Wichita Falls ISD (4) Grand M&O AS Total M&O AS Total M&O AS Total Total 2009-2010 $ 1.17 $ 0.25 $ 1.42 $ 1.04 $ 0.10 $ 1.14 $ 1.04 $ 0.16 $ 1.20 $ 6.16 2010-2011 1.17 0.25 1.42 1.04 0.09 1.13 1.04 0.17 1.21 6.21 2011-2012 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.37 2012-2013 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.36 2013-2014 1.17 0.25 1.42 1.04 0.24 1.28 1.04 0.17 1.21 6.34 2014-2015 1.17 0.25 1.42 1.04 0.23 1.27 1.04 0.10 1.14 6.31 2015-2016 1.17 0.25 1.42 1.17 0.16 1.33 1.04 0.19 1.23 6.55 2016-2017 1.17 0.25 1.42 1.17 0.16 1.33 1.04 0.19 1.23 6.84 2017-2018 1.17 0.25 1.42 1.17 0.16 1.33 1.04 0.19 1.23 6.89 2018-2019 1.17 0.25 1.42 1.17 0.16 1.33 1.04 0.18 1.22 6.90 Notes: (1) Burkburnett Independent School District - 25% in Wichita Falls city limits (2) City View Independent School District - 90% in Wichita Falls city limits (3) Iowa Park Consolidated Independent School District - 2% in Wichita Falls city limits (4) Wichita Falls Independent School District - 99% in Wichita Falls city limits 124 EXHIBIT 1-8 Taxpayer GGP - Sikes Senter LLC Oncor Electric Delivery Co North American Pipe Corp Atmos Energy / Mid -Tex Division Wal-Mart Stores East Inc Wal-Mart Stores Texas LP Quail Creek Crossing Ltd Kell West Regional Hospital Lowe's Home Centers Inc. BNSF Railroad Co Southwestern Bell Clinics of North Texas Wal-Mart Real Estate Business Trust Totals Source: Wichita Appraisal District CITY OF WICHITA FALLS, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO SEPTEMBER 30, 2019 Taxable Assessed $ 64,600,000 42,214,340 27, 392, 664 24,157,300 20,645,100 18,811,499 15,987,000 15,650,977 12,303,765 11,957,145 $ 253,719,790 2018-2019 Rank 1 2 3 4 5 6 7 8 9 10 N/A N/A N/A 2009-2010 Percentage of Total Taxable Assessed Assessed Valuation Value 1.27% $ 52,964,416 0.83% 39,368,627 0.54% - 0.48% 18,854,411 0.41% 11,960,975 0.37% 25,904,572 0.32% 13,672,000 0.31 % - 0.24% - 0.24% 12,306,384 0.00% 25,520,925 0.00% 11,352,391 0.00% 11,429,636 5.00% $ 223,334,337 Rank 1 2 N/A 5 8 3 6 N/A N/A 7 4 9 10 Percentage of Total Assessed Valuation 1.20% 0.89% 0.00% 0.43% 0.27% 0.58% 0.31 % 0.00% 0.00% 0.28% 0.58% 0.26% 0.26% 5.06% 125 EXHIBIT 1-9 CITY OF WICHITA FALLS, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS - LAST TEN FISCAL YEARS (UNAUDITED) Collected within the Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date Fiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount of Levy Years Amount of Levy 2009-2010 $ 26, 752, 242 $ 26,166, 043 97.81 % $ 396,603 $ 26, 562, 646 99.29% 2010-2011 27,649,264 27,179,642 98.30% 320,976 27,500,618 99.46% 2011-2012 27, 704,114 27, 306, 706 98.57% 307,286 27, 613, 992 99.67% 2012-2013 28, 362, 591 27, 906, 520 98.39% 283,009 28,189, 529 99.39% 2013-2014 28, 876, 552 28, 375, 563 98.27% 276,277 28, 651, 840 99.22% 2014-2015 30, 270, 748 29, 809, 308 98.48% 304,614 30,113, 922 99.48% 2015-2016 33,644,264 33,124,968 98.46% 357,020 33,481,988 99.52% 2016-2017 34,228,872 33,694,059 98.44% 312,498 34,006,557 99.35% 2017-2018 34, 887, 074 34, 298, 367 98.31 % 228,692 34, 527, 059 98.97% 2018-2019 37, 037, 918 36, 347, 721 98.14% - 36, 347, 721 98.14% 126 O O O W LO M V V CEO N a) .Q d a) U O CO Efl CO O M N M CO m a) CO O 0 0 0 0 0 0 0 0 0 0 a) C t/) E a) o M O co O (d I� O V r I� V co M O co V co M c0 r Ln 1) o d C a) w a o C T a) Lp Lp E V M O V N V O (D ;T O V CO co O co r O LO o) O O V V LO M M o) N LO I� O CO c0 LO E c a o o� CO (COo CO co) O) ooi W o O a O rn o w o O (D � Efl N N N Ul a) .Q N co- o) (D o) O � V M V M co co (D O (D O) r M r N M N LO IL LO (D N o V N CO o) LO O) - a) T a) a) LO m M O I� O N o) O) N I� O) o) V O CO m N N O J a- 69 a) a) 9 y0 a) V M N D) o) I� O r I� r co M co o) LO D) O O N V N Lo (D LO o) D) Ln o) O O) LO CO I� V O O Z m O coLo r V Lo O LO I� V M V o) M (DN M CO M N a- Ul 69 0 > C O O O W Q a 6 a Wap �F Q°)�mo Y00 o) o) o) H r0 . � m� o J m Z o a o v o) o M 0 o) o cD 0 J W0 7 Q V% o m:= a o C m o) M c0 w - o) V o) LO o) N o c0 o CD O LO LL Z 4� C_ a) 9 (x6 C V (D o) o) CO CO c0 N N M o) N co co Z} o a) N N N N LO LO V V M fl FQ U �v -o mm LL 0 p E v - r o) O coo CO o Lc) o) O coo N o) v rn o) O LL LL W O F '— m LO O o) O Lo O O m F t/� p N LO N N o) I� LO N - M N 0 o) } 0 u) u) O O O m m m m W r co � Efl U (p 9 o N a co M 0 o) O_ o) LO O o o LO o o o co V c0 m JT a) LO V M CO LO M N LO CO (O V (O (o V O d 69 M M M N N LO LO 0 (D O Z � a 69 U Q o -O E O -p p C m o LO CO CO N (O V M M M N (o CDN M O LO D) m N O LO (o CO O O o r O o) M V 9 o) O� OO - OM � M m , V (D O H a) M M M LO V V M N N C) > o 6 .n O O O O O CO (o (O c0 (O N M M o) V I� Lo co c0 o) a) m a O O CD o - o V o V (O o W �2 o 0)C N (D 9 m 0 V Efl V V LO V M (O V (O M M M a) u, o jL i O O N O O N O N O O N N O N O N M O N N O N O N M O N O N V O N O N Ln O N O N CO O N W m O O N N r O O N N EXHIBIT 1-11 CITY OF WICHITA FALLS, TEXAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING - LAST TEN FISCAL YEARS (UNAUDITED) Governmental Activities Percentage of General Combination Actual Taxable Fiscal Obligation Tax and Value of Per Year Bonds Revenue Bonds Total Property Capita 2009-2010 $ 4,790,000 $ 35,918,687 $ 40,708,687 0.92% $ 389.36 2010-2011 4,450,000 34,104,162 38,554,162 0.87% 368.75 2011-2012 4,116,110 35,503,123 39,619,233 0.89% 381.21 2012-2013 5,491,678 51,570,623 57,062,301 1.28% 545.78 2013-2014 4,679,866 49,302,503 53,982,369 1.19% 514.62 2014-2015 3,850,706 46,710,294 50,561,000 1.09% 481.01 2015-2016 16,129,132 31,138,675 47,267,807 0.99% 451.42 2016-2017 14,132,973 29,435,100 43,568,073 0.90% 416.03 2017-2018 36,285,854 21,261,971 57,547,825 1.16% 549.40 2018-2019 33,792,967 19,464,301 53,257,268 1.05% 509.27 128 EXHIBIT 1-12 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT (UNAUDITED) SEPTEMBER 30, 2019 Gross Percentage Governmental Applicable Activities to City of Debt (1) Wichita Falls (2) Direct Amount Applicable to City of Wichita Falls City of Wichita Falls $ 58,325,731 100% $ 58,325,731 Overlapping: Wichita County 69,291,586 100% 69,291,586 Burkburnett Independent School District 46,355,580 25% 11,588,895 City View Independent School District 16,826,773 90% 15,144,096 Iowa Park Consolidated Independent School District 14,484,069 2% 289,681 Wichita Falls Independent School District 89,557,767 99% 88,662,189 Total overlapping 236,515,775 184,976,447 Total direct and overlapping bonded debt $ 294,841,506 $ 243,302,178 Sources: (1) Listed taxing jurisdictions (2) City of Wichita Falls Planning Department calculated based on percentage of taxing entity within the City of Wichita Falls city limits. 129 M rn o N 0 c� O N c� O N c� LL� o ON A c � LL 0 u� O � fA M W � fA LL� r v V O » N N � 0 LL� N � O N N fA O LL� N N � 0 N N O » o O 0 W O O O � O W O � O 0 N � O O o m N O O fA O O � fA O N O � V M 0 r � N r2 fA N N N fA rn LL� fA 0 0 N N N LL� � ro � fA ON O N O I V fA r V fA N v u N N � N 0 N o N � 0 N v h r � � fA N fA 0 N O X Sg 0 N � � Y m m W O O ON 0 � O fA 0 A N 0 A N 0 A r fA � m N Q N O coY > W LJ O N O N U N � O N U N � o B N O N A N E Q N °3 N N A °3 E N Q 41 Y X E E4 Y E ; Y E X E4 Y E N 41 I N F U :2 F Q U F 4 O Q N � E4 L m U 4 > E x " o 0 U O O O LO LO LO LO V O O W LO O N N r LO LO O CD N_ M O O W N_ CO N O V 0) M LO W N O CD O LO O V V V W N O V V V W CO W O V V Cl) O O O LO LO LO LO V O O W LO O N N r LO LO O CD N M O O W N CO N O_ O CD V CO LO W o - Ln I� ITCD CO Cl)LO I� Cl)O) W co M LO Cl) N M LO M LO LO LO V V V Cl) Cl) Cl) Cl) EH O O O O O O O O O O O O O O O O O O O O Ln LO O 0 O O 0 LO 0 Ln CD 00 � M V CD CND CMD W O) Ln LO CD M Cl) M V N N CD EH j 0 C0) C W O O LO 0) O) 0) LO CO CO M V O M LO 0 N O) � N� 9 U) Lp O V M CD co M O O) O V O I� X) CO W I� O) V W O O V CO O) N Ln O) (DN }' (6 9 (d co O r- N N N Z O z Q Ea N X ° Q N � U N O N y LO N V M LO O LO Lo rn (6 L � a N O) " C co W (D V N LO N o) o) Ln M O CO M (D (D I� m M Ln N o)N_ M (D Lo m o to O C O LL C O) O) V Lo O) O) m O T O V O co W O r OQ N N N 5 W 69 o a C U N = N > 9 L � C O W CO r LO I� N M W N N O N .oN (D V O) (D W co N O W V LO V M W N to N to N o)j a) 0 C (DN COO OV N O CO LnV O)V LOO Ln (D o a)C Q jp !6 C� O M O (D N O W N M (D V O X N E �- Bch �a o: � a oo C 6 9 O 6.0 9 n X n o a W a � -o 76 o O O O O O O O O O O U O C U fl X C O W — a � i N 00 N O N N N N M N V N n N D N N CO � N N M O N O N O N O N O N O N O N O N O N O N O Z EXHIBIT 1-15 CITY OF WICHITA FALLS, TEXAS DEMOGRAPHIC STATISTICS - LAST TEN FISCAL YEARS (UNAUDITED) Per Capita Fiscal Estimated Personal Personal Median Education School Unemployment Year Population (1) Income Income (2) Age (1) Level Enrollment (3) Rate (4) 2009-2010 104,553 $ 2,205,022,770 $ 21,090 32.3 13.3 16,217 7.3% 2010-2011 104,553 2,766,263,274 26,458 32.8 13.2 15,539 6.6% 2011-2012 103,931 2,330,756,606 22,426 32.4 13.2 14,569 6.9% 2012-2013 104,552 2,499,106,456 23,903 32.5 13.1 14,639 6.2% 2013-2014 104,898 2,336,602,950 22,275 32.5 13.2 15,181 4.9% 2014-2015 105,114 2,397,229,884 22,806 32.5 13.2 15,155 4.4% 2015-2016 104,710 2,394,298,860 22,866 32.5 13.2 15,181 4.8% 2016-2017 104,724 2,395,980,396 22,879 32.5 13.2 15,124 3.4% 2017-2018 104,747 2,597,725,600 24,800 32.8 13.2 15,150 3.1% 2018-2019 104,576 2,439,548,928 23,328 32.9 13.2 15,158 3.0% Sources: (1) World Population Review (2) U.S. Census Bureau (3) Texas Education Agency (4) Bureau of Labor Statistics 132 EXHIBIT 1-16 CITY OF WICHITA FALLS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) SEPTEMBER 30, 2019 Employer Employees Sheppard Air Force Base 9,067 Wichita Falls ISD 2,150 United Regional Health Care System 1,728 Midwestern State University 1,182 City of Wichita Falls 1,166 Wal-Mart - 3 locations 1,140 Arconic (formerly Howmet Corp. WF) 980 North Texas State Hospital 976 James V. Allred Prison Unit 844 Cryovac Division - Sealed Air Corp 825 Work Services Corporation - AT&T Wireless - Totals 20,058 2018-2019 Rank 1 2 3 4 5 6 7 8 9 10 N/A N/A Percentage of Total City Employment Employees 12.68% 12,272 3.01 % 2,059 2.42% 1,778 1.65% 1,284 1.63% 1,477 1.59% - 1.37% 704 1.37% 1,974 1.18% 971 1.15% - - 730 - 538 28.05% 23,787 2009-2010 Percentage of Total City Rank Employment 1 17.16% 2 2.88% 4 2.49% 6 1.80% 5 2.07% N/A 9 0.98% 3 2.76% 7 1.36% N/A - 8 1.02% 10 0.75% 33.27% Sources: 2009-2010 data is from Texas Workforce Commission. 2018-2019 data is from Wichita Falls Chamber of Commerce. 133 O Ln O r r O Ln V 0 0 0 Ln (O V N W Ln Ln V O Ln O N Ln N V M CO —';T V V W O (O O N V I� r Ln W CO N N � � I� Ln Ln W r O Ln M O (O O Ln (O V N W CO N .0 L O NCO N V M CO V Ln V W M (O W N V I� r Ln W CO N O W Ln 0 0 0 0 W O W S Ln 0 T N W . . 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