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2021-Annual-Comprehensive-Financial-Report City of Wichita Falls , Texas ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED 09 / 30 / 2021 • A. 4. ':' #(..'7..3: • r .y ti , *, ram. y 'a. Vir 4^t .ie. ° '• ,�i Y' '� �.:� x � 1, c, �-.� t.fi. ,f. - s W W W. WICHITAFALLSTX, GOV H AlittLTON __ _-_ _.- :aula.: PA-FZKI_NG :- '4 ''' _ a "- I g r : ., lei III �ii frwi Li. 1, �L_ III ® a �' � � s ■ • n ■■ no U mr II to • ■ : ,,° ` 11111 ■■ NO ■Fit 111111 1111 iit'm$ • a r r ■ _ * A. r r r I ■■ ■■ ■ 1. 111111 . /■ 111111 ) ■■ !■ 11111 a� ■■ I'll!! sir.. ��, 11111 ■� j1111 :/■ 111j1� �;� �., !! ! t_ P! P! 11 i ■■ ■■ .■ 1/j111 •- is r . r meana"..........ammlat -: � 'a „ 7 - T _ /aai i teas CITY OF WICHITA FALLS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2021 ISSUED BY: DEPARTMENT OF FINANCE CITY OF WICHITA FALLS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2021 TABLE OF CONTENTS Exhibit Page INTRODUCTORY SECTION Letter of Transmittal i-ix GFOA Certificate of Achievement x Organizational Chart xi City Council&List of Principal Officials xii-xiii FINANCIAL SECTION Independent Auditor's Report 1-2 Management's Discussion and Analysis(Required Supplementary Information) 3-12 BASIC FINANCIAL STATEMENTS: Statement of Net Position A-1 13 Statement of Activities A-2 14 Balance Sheet-Governmental Funds A-3 15 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position A-4 16 Statement of Revenues, Expenditures and Changes in Fund Balances- Governmental Funds A-5 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of the Governmental Funds to the Statement of Activities A-6 18-19 Statement of Net Position-Proprietary Funds A-7 20-21 Statement of Revenues, Expenses and Changes in Net Position- Proprietary Funds A-8 22 Statement of Cash Flows- Proprietary Funds A-9 23-24 Statement of Fiduciary Net Position A-10 25 Statement of Changes in Fiduciary Net Position A-11 26 Notes to the Financial Statements 27-67 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 Retirement Fund B-5 72 Schedule of Changes in Net OPEB Liability and Related Ratios— City of Wichita Falls Retiree Health Care Plan B-6 73 Schedule of Contributions—City of Wichita Falls Retiree Health Care Plan B-7 74 Notes to the Required Supplementary Information 75-76 CITY OF WICHITA FALLS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2021 TABLE OF CONTENTS(CONT'D.) Exhibit Page COMBINING FINANCIAL STATEMENTS: Nonmajor Governmental Funds: Combining Balance Sheet C-1 77 Combining Statement of Revenues, Expenditures and Changes in Fund Balances C-2 78 Budgetary Comparison Schedule—Community Development Block Grant Fund C-3 79 Budgetary Comparison Schedule—Section 8 Housing Fund C-4 80 Budgetary Comparison Schedule—Home Investment Partnership Agreement Fund C-5 Si Budgetary Comparison Schedule—MPEC/Hotel/Motel Tax Fund C-6 82 Budgetary Comparison Schedule—Golf Fund C-7 83 Budgetary Comparison Schedule—Debt Service Fund C-8 84 Nonmajor Enterprise Funds: Combining Statement of Net Position D-1 85 Combining Statement of Revenues, Expenses and Changes in Fund Net Position D-2 86 Combining Statement of Cash Flows D-3 87-88 Internal Service Funds: Combining Statement of Net Position E-1 89 Combining Statement of Revenues, Expenses and Changes in Fund Net Position E-2 90 Combining Statement of Cash Flows E-3 91 Component Units: Combining Statement of Net Position F-1 92 Combining Statement of Activities F-2 93 SUPPORTING SCHEDULES: Combined Schedule of Bonded Debt and Interest Maturities G-1 94 Combined Schedule of Bonds Payable G-2 95-99 Debt Service Coverage—Revenue Bonds G-3 100 Capital Assets Used in the Operation of Governmental Funds- Schedule By Function and Activity G-4 101 Capital Assets Used in the Operation of Governmental Funds- Schedule of Changes By Function and Activity G-5 102 Regional Airport Fund—Capital Assets and Accumulated Depreciation G-6 103 Kickapoo Airport Fund—Capital Assets and Accumulated Depreciation G-7 104 Transit Fund—Capital Assets and Accumulated Depreciation G-8 105 Stormwater Drainage Fund-Capital Assets and Accumulated Depreciation G-9 106 Sanitation Fund—Capital Assets and Accumulated Depreciation G-10 107 CITY OF WICHITA FALLS, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2021 TABLE OF CONTENTS(CONT'D.) Exhibit Page Water and Sewer Fund—Capital Assets and Accumulated Depreciation G-11 108 Waterpark Fund—Capital Assets and Accumulated Depreciation G-12 109 Fleet Maintenance Fund—Capital Assets and Accumulated Depreciation G-13 110 Duplicating Services Fund—Capital Assets and Accumulated Depreciation G-14 111 Information Technology Fund—Capital Assets and Accumulated Depreciation G-15 112 Wichita Falls Economic Development Corporation—Capital Assets and Accumulated Depreciation G-16 113 STATISTICAL SECTION (UNAUDITED) Net Position By Component—Last Ten Fiscal Years H-1 114 Changes in Net Position—Last Ten Fiscal Years H-2 115-116 Fund Balances,Governmental Funds—Last Ten Fiscal Years H-3 117 Changes in Fund Balances,Governmental Funds—Last Ten Fiscal Years H-4 118 Tax Revenues By Source, Governmental Funds—Last Ten Fiscal Years H-5 119 Assessed and Estimated Actual Value of Taxable Property—Last Ten Fiscal Years H-6 120 Direct and Overlapping Property Tax Rates—Last Ten Fiscal Years H-7 121 Principal Property Taxpayers—Current Year and Nine Years Ago H-8 122 Property Tax Levies and Collections—Last Ten Fiscal Years H-9 123 Ratios of Outstanding Debt by Type—Last Ten Fiscal Years H-10 124 Ratios of General Bonded Debt Outstanding—Last Ten Fiscal Years H-11 125 Direct and Overlapping Governmental Activities Debt H-12 126 Computation of Legal Debt Margin—Last Ten Fiscal Years H-13 127 Pledged Revenue Coverage—Water and Sewer Revenue Bonds— Last Ten Fiscal Years H-14 128 Demographic Statistics—Last Ten Fiscal Years H-15 129 Principal Employers—Current Year and Ten Years Ago H-16 130 Full-Time Equivalent City Government Employees by Function/Program— Last Ten Fiscal Years H-17 131 Operating Indicators by Function/Program—Last Ten Fiscal Years H-18 132 Capital Asset Statistics by Function/Program—Last Ten Fiscal Years H-19 133 Graphics: Cash and Investments I-1 134 Total Bonds Payable 1-2 135 General Obligation Bonds Payable 1-3 136 Revenue Bonds Payable 1-4 137 General Fund Equity 1-5 138 Comparison of Tax Levy and Collections 1-6 139 Revenues by Source—FYE 9/30/20 1-7 140 Expenditures by Function—FYE 9/30/20 1-8 141 General Governmental Revenues(General Fund Only) 1-9 142 General Governmental Expenditures(General Fund Only) 1-10 143 INTRODUCTORY SECTION FINANCE DEPARTMENT It)k4if T E X AS Nae.5 to i/den griper.t r{te. March 28, 2022 The Honorable Mayor, Members of the City Council, City Manager and Citizens of Wichita Falls,Texas, We are pleased to submit the Annual Comprehensive Financial Report of the City of Wichita Falls, Texas for the fiscal year ended September 30, 2021, 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 an 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 30,2021. The Independent Auditor's Report may be found on pages 1-2 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 2021 population for Wichita Falls, as estimated by the City, is 104,683, however the 2020 census, not published until after the publication of the City's FY 2020-21 budget,estimates the City's population at 102,316.1 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 U.S.Census Bureau, Resident Population in Wichita Falls,TX(MSA) [WIFPOP],retrieved from FRED, Federal Reserve Bank of St. Louis;https://fred.stlouisfed.org/series/WIFPOP,March 10,2022. 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. Neighboring counties include Archer and Clay. M M, la IR 111. - 441 :-:ii: T 00 00 ■■ 00t q_# �, 0■ 00 00 00 P. 'maw ' 11 1k ItII II 00 J0 52! E."s" v` r mil itor f , 110I; 0000 • a 1 `' ti, , 4 i -o6 fi 7ria�_-6-Yr1®— s E r/�;k a 'S1 �` 44 !` �y� , -N i �p }-Fp tali , 1 7#er ;•:t Af. t ', 7 M 't, r. '++c „ n ' tit,., ', (Downtown Wichita Falls,TX) ECONOMIC CONDITION AND ACTIVITY 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 Total Gross Domestic Product of the Wichita Falls, TX MSA totaled $6,432,554,000 in 2020. This is a decrease of 2.74% from the prior year, primarily due to the impact of the COVID-19 Pandemic. The largest portion of the MSA production includes Health, Social Services, and Manufacturing. "The total population of the MSA increased from 151,485 in 2019 to 152,485 in 2020.4'5 The economy is based on mineral production, retail trade, manufacturing, agribusiness, and government installations. Principal sources of agricultural income include cattle, cotton, and wheat. The City has several institutions of higher learning, a strong international presence through Sheppard Air Force Base, an eager workforce, with a community spirit geared toward family, friends, and a desire to see that this thriving city continues to grow and prosper. The central business district is 5 miles from Sheppard Air Force Base. Sheppard Air Force Base was established in 1941 and is the most diverse training installation for the Air Force.The base is home to the Air Force's largest 2 U.S. Bureau of Economic Analysis,Total Gross Domestic Product for Wichita Falls,TX(MSA) [NGMP48660],retrieved from FRED,Federal Reserve Bank of St.Louis; https://fred.stlouisfed.org/series/NGMP48660, March 10,2022. 3 Trading Economics,www.tradingeconomics.com,accessed 3/3/2022 4 United States Bureau of Economic Analysis,www.bea.gov,accessed 3/3/2022. The reader is directed to the cited sources.As this information changes,the US Bureau of Economic Analysis updates and revises this data. It is imperative that the reader is aware of this fact and sources this information as it may change. 5 U.S.Census Bureau, Resident Population in Wichita Falls,TX(MSA) [WIFPOP],retrieved from FRED, Federal Reserve Bank of St. Louis;https://fred.stlouisfed.org/series/WIFPOP,March 10,2022. technical training wing and Euro-NATO Joint Jet Pilot Training program, which trains combat pilots for 14 NATO partners.Sheppard Air Force Base employs approximately 22,323 individuals.' The City's major University is Midwestern State University (MSU). Established in 1922, MSU is a public university that currently enrolls 5,797 students. MSU offers 49 undergraduate programs and 27 graduate programs. The University has a student to faculty ratio of 16:1. ' The City is also home to a branch of Vernon College, a fully accredited community college. Vernon College enrolls approximately 2,773 students. The College serves a 12 county area, which includes Archer, Baylor, Clay, Cottle, Foard, Hardeman, Haskell, King, Knox,Throckmorton,Wichita,and Wilbarger.8 The City's largest employers include the North Texas State Hospital-Wichita Falls Branch, Midwestern State University, James V. Allred Prison, Sheppard Air Force Base and United Regional Healthcare System. The City operates a Multi-Purpose Events Center (MPEC), which includes a coliseum, exhibit hall, and an agricultural arena/show barn. In the current year, the City has collaborated with a private investor to complete a hotel and convention center. This collaboration will include a privately owned hotel with a private investment of over $48 million and a public conference center, supported with 4B Sales Tax funds. Construction on this facility began during the 2020-21 fiscal year. In 1998, voters in Wichita Falls approved a %-cent economic development sales tax. The passage of the sales tax for economic development created two separate corporations, the Wichita Falls Economic Development Corporation (WFEDC), previously referred to as a 4A Corporation, and the 4B Sales Tax Corporation. The WFEDC 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 $9,454,708 and is divided evenly between the two separate sales and economic development corporations for a total of $4,727,354 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 2020-21 fiscal year was $0.763323 per $100 of assessed value. This property tax rate generated approximately $43.0 million in revenues, of this amount $38.8 million was received into the City's General Fund for general city operation. This represents a collection rate of 100.13% of budget. The City receives 2.0% of the sales tax collected within City limits. During the 2020-21 fiscal year, the City collected $28.4 million in sales taxes for general operations. The City ended the year with sales tax collections approximately 12.53% higher than the prior year. 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. 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. 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, 6 https://comptroller.texas.gov/economy/economic-data/military/sheppard.php#en3,March 10,2022 7 Midwestern State University,Quick Facts, https://msutexas.edu/about/quick-facts/index.php March 10,2022 s Vernon College, https://www.collegetuitioncompare.com/edu/229504/vernon- college/enroll ment/#:-:text=Vernon%20Co Ilege%20has%20a%20tota I%20of%202%2C773%20enrolled,A11%202%2C773%20 students%20are%20enrolled%20into%20undergraduate%20programs,March 10,2022 iii 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 City is in conformity with all Governmental Accounting Standards Board (GASB)statements. 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 27. The City's financial direction begins with the City's Charter, which is the basis for all financial policies the City implements. The City maintains financial policies for general operations, which include policies for financial management and fund balances, budget compliance, debt issuance and management, accounts payable, water service, and purchasing, among others. Additional information about financial policies may be found in the City's Adopted Operating Budget in the Policy Statement section. In developing and evaluating the City's accounting system, the City Manager considers the adequacy of internal control as deemed appropriate. 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. 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 (class)/fund level by the Finance Department through the use of an integrated enterprise resource planning solution. In instances when budgetary transfers are necessary, management control of the operating budget is maintained at the fund and department level. The City Manager must approve transfers within a department of the same fund. Transfers across unlike Departments (outside of class) or funds must be approved by the City Council. A summary look at the City's budget process is presented in the graphic on the following page. The process starts in March and concludes with Budget Adoption in September. The City's fiscal year runs from October 1 to September 30. WICHITA FALLS Downtown art. iV BUDGET CALENDAR Budget Kick-Off City Budget Manager Adoption Budget Hearings Public Budget Hearings Workshop with City Council Proposed Public Notice Budget Completed City Council Budget Hearings 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, 2021, 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 to replenish the fund balance are created. 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, 2021, the City's tax-supported debt, totaled $51.5 million and equated to 0.94%of the assessed property value. GENERAL GOVERNMENTAL FUNCTIONS The City's two largest revenue sources are property tax (ad valorem tax) and sales tax. The City Council is responsible for adopting a tax rate annually. All eligible property within the City is subject to assessment, levy, and collections of a continuing, direct ad valorem tax. The City Council works closely with City staff to analyze and adopt rates that assist the City, the taxpayer and the community at large. The following discussion highlights the property and sales tax information for the next fiscal year. Recognition for completion of the Wichita Falls Citizen's Academy. 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(interest and sinking).The table below shows the total of each over the past five years. Property Tax Maintenance Interest& %ChangeAverage Annual Rate &Operations Sinking Total Rate $Change %Change 2017-18 0.687815 0.018165 0.705980 - 0.00% 2018-19 0.687102 0.042778 0.729880 0.024 3.39% 2019-20 0.721571 0.041752 0.763323 0.033 4.58% 2020-21 0.722736 0.040587 0.763323 - 0.00% 2021-22 0.726565 0.034363 0.760928 (0.002) -0.31% 1.51% The adopted total tax rate is applied to the total Certified Value of the City to generate the total tax levy. Over the past five years,the City has seen an average growth rate of 3.28%in the Certified Property Tax Values. Over the past ten years, the annual average growth is 2.66%. The economy in the area is strong with home prices seeing record highs in the last year.This year the City saw increases in the Certified Valuation not seen in over a decade. Fiscal Year Certified Value Average Annual Change, (In billions) 5 Years 2017-18 4.942 2018-19 5.075 2019-20 5.276 2020-21 5.456 2021-22 5.807 3.28% Property Tax is the largest source of revenue in the General Fund. The property tax base for 2021, as certified by the Wichita Appraisal District, increased 6.45% from $5,455,879,419 in FY 2021 to $5,807,983,335 in FY 2022. Sales Tax is an inherently volatile revenue source, and represents 29%of the General Fund revenues. Sales Tax is derived from businesses operating within City limits and is applied to goods and services sold. Sales Tax is affected by changes in the economy, and it is projected that this revenue source will increase 9.68%from the previous year's budgeted collections. Sales Tax receipts have steadily recovered month over month since the onset of the pandemic. Actual and Budgeted Sales Tax Revenues 26,500,000 25,500,000 24,500,000 / 23,500,000 22,500,000 21,500,000 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 (Budgeted) (Bud geted) ••Sales Tax Revenue 22,413,397 23,861,014 24,894,930 25,205,996 23,097,309 25,332,885 Vi MAJOR INITIATIVES PAST YEAR: The City conservatively set revenue expectations and adjusted costs to address the Pandemic in the 2019-20 fiscal year. The 2019-20 fiscal year's budget included reductions in all revenue sources. In total, the City's budget included reductions of 4.97% in revenues and expenditures. The City maintained its hiring freeze and asked all Director's to consider cutting their budget to address the Pandemic,while ensuring that there was no decrease in City services. As the year progressed, the City saw stable revenues; however, the Pandemic is ongoing and could further affect the City in coming years. The City has received federal funds, including an allotment from the American Rescue Plan Act, passed in March of 2021. The City Manager and Council will consider uses for these funds in the next year and will adopt any action when that action is determined. The City contracted with Management Advisory Group International, Inc. (MAG) to conduct a comprehensive compensation study and assessment of jobs for all current City of Wichita Falls job classifications.The next year adopted budget reflects the recommendations of that report. MAG's findings and recommendations are based on: • salary survey results; • current organizational structure; • discussions with human resources and management,and review of current compensation practices; • job analysis based on current class/job descriptions; and • internal equity and external competitiveness considerations. The goal of the City for this project was to provide the foundation for an appropriate classification and compensation system and pay plan based on current compensation levels for similar public sector employers, municipalities, and local market competitors. In response, MAG developed an adopted pay plan and salary adjustment recommendations for current positions included in the City of Wichita Falls job classifications. Strategic Planning: In March 2021, the City Council and City staff conducted a 2-day strategic planning workshop at the MPEC to ensure the best possible decisions for Wichita Falls are made over the next few years. The Azimuth Group, Inc. was contracted to facilitate and document the results of this collective planning and priority-setting effort. The Strategic Plan is an example of the operation of the "Council-Manager" form of government in that the City Council adopts the Strategic Plan and its policies,and the City Manager is responsible for implementation. The City Council ratified the plan and its goals on May 18, 2021. The plan describes the three highest priority items (those items with the greatest opportunity for continued improvement) as (1) Accelerate Economic Growth, (2) Provide Quality Infrastructure,and (3) Redevelop Downtown. During the 2020-21 fiscal year,the City's efforts toward these goals included the following: In support of the goal, Provide Adequate Infrastructure,the City issued $17.3 million in voter-approved General Obligation Bonds in 2018, and work on this project, while slowed due to the Pandemic, continued in the 2020- 21 fiscal year. This issue allows 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). In support of the goal, "Efficiently Deliver City Services," in the 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. The 2018-19 fiscal year was the first year this software was used for budget creation, and since that time, the City has expanded and further integrated functionality in the system. vii In the 2019-20 fiscal year,the City integrated all payroll functions into the new system and increased the usage of the system in the Human Resources Department. Implementation is complete; however,the City continues to implement smaller modules within the software to further streamline internal processes. These include grant management and project accounting, among others. The cost of the new systems was approximately $840,000 for the Finance and HR applications. These funds were provided for in the Information Technology fund and were saved over time to allow the City to implement this software solution without impact on available general revenues in any one year. During the 2021-22 fiscal year,this software will be upgraded to the newest version available. This will allow the City to further integrate functionality and offer additional services to the community. In prior years, 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 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 and continued despite the COVID-19 Pandemic. The completed facility will open during the 2021-22 fiscal year and 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 NEXT YEAR: As mentioned, the City completed a strategic study related to employee pay. The City will implement parts of the plan in the 2021-22 fiscal year.The City will implement the below items: • A flat salary increase of 2%for all employees. • An increase to the minimum pay, per job, for employees who, with the 2% increase, were still below the minimum pay for the grade of work they were completing. • Adjustments to steps for police officers and fire fighters whose pay, with the above increases, still did not reach the grade and step for their currently held positions. • Implementation of the merit based pay increase program at 2.5%for all employees. In total, the implementation of the plan increased payroll costs by approximately $4.4 million citywide. Additional salary increases stem from increased employee counts in the Hotel/Motel and Water & Sewer Funds. The City released the hiring freeze on all frozen positions. These costs increased the City's contribution to the Texas Municipal Retirement System, FICA, and contributions to the City's Firefighter Pension. While the rates for the contributions did not change for FICA or the City's Firefighter Pension, the increase in salary conversely creates an increase in cost to the City to fund these programs. The City's contribution to the Texas Municipal Retirement System is a fixed contribution, determined by actuarial analysis performed by the TMRS system and will reduce in the current year from 16.57% of total compensation to 16.42%. The City's viii contribution to the Firefighter's Pension System will remain at 13.25%.This amount was increased in the prior year from 13.00%and is above the State required minimum of 12%. 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 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 Annual Comprehensive Financial Report for the fiscal year ended September 30, 2020. This was the 26th 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 Annual Comprehensive 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, Susan White,Assistant Finance Director and the Finance staff. I also extend my appreciation to the City Council, City Manager, City Department Directors and staff for their contributions to the sound financial management of the City. Respectfully submitted, Jessica Williams, MPA, CPFO Chief Financial Officer W9chlta WFalis ... k:: ix GD Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Wichita Falls Texas For its Annual Comprehensive Financial Report For the Fiscal Year Ended September 30, 2020 �. P. 23zevule Executive Director/CEO x c 0 .� as = U g O - T ro �. a), C .7d 9 U E on o '" P O W ,� P U cC c5 O W U �, ^• V]7,1 tC Q p s _='' c� N bC y U bA U U C 4. t ki sJi .� c o .Jr '� �i C. w 3 Q H - 6li P W o ‘.3 L O N Qi U YN.i .Jr '. "4 c y� irL) U �. a --• a)IDI O , r+ .2 N `. � U N O .O. v O ' �� , .fir E P., O N _ U . 2 U ,g 00 O hr.9 U �� Qs'J UL. N ^ ^ E ^, O O O �' iC o z x P a = 2 ¢ x u Tc _ 9 oa 0 ii J o ti o J E w g w P- H `J v 0 rl U • __ := a) o • O N L_ Z N w O N O U E. F. `°I s3 ° C O cc U O �U o ^ ^ Cu°¢ TTTY3 70 v .a. C P- I 1! ] TI a J .0 WU a u o 4 m U w .__,iU J s. x U Clew/ I JTTTJ J U m In. CITY OF WICHITA FALLS, TEXAS LIST OF PRINCIPAL OFFICIALS SEPTEMBER 30,2021 Title Name Mayor Stephen Santellana Mayor Pro-Tem Deandra Chenault City Council Member Michael Smith 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 xii ELECTED OFFICIALS & CITY MANAGER c Stephen Santellana Mayor lit , lift iii 0. \ N Bobby Whiteley Deandra Chenault Tim Brewer At Large District 2, Mayor Pro Tem District 4 iLi Ai Michael Smith Jeff Browning Steve Jackson District 1 District 3 District 5 t ti k *, Darron Leiker City Manager xiii FINANCIAL SECTION EDGIN, PARKMAN, FLEMING & FLEMING, PC CERTIFIED PUBLIC ACCOUNTANTS 1401 HOLLIDAY ST.,SUITE 216 • 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, 2021, 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, 2021, 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. 1 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 22, 2022, 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, ed•64,,T0/4„--/&;i1 7 Wez-b ‘'(-- Edgin, Parkman, Fleming & Fleming, PC March 22, 2022 2 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2021 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, 2021. The management of the City offers it here to the readers of its financial statements. Readers should use the information presented in conjunction with additional information furnished in our letter of transmittal, which is in the Introductory Section of this Annual Comprehensive Financial Report. Financial Highlights The assets and deferred outflows of the City of Wichita Falls exceeded its liabilities and deferred inflows on September 30,2021,by$433,494,474(net position). The net position for the City increased by$35,339,031 over the prior year. This increase is a result of an increase in net position of$20,760,339 from the current fiscal year business-type activities and an increase in net position of$14,578,692 from the current fiscal year governmental activities. The unrestricted net position for Governmental Activities was ($85,096,370), while the Business-type Activities had an unrestricted net position of $45,447,623, for an overall unrestricted net position of ($39,648,747). Governmental Activities increased by$9,412,848 in unrestricted net position from the prior year,while Business-type Activities unrestricted net position decreased by$2,131,269 from the prior year. The increase in unrestricted net position in the Governmental Activities is due to increases in the City's total Assets and Deferred Outflows of$32,183,915 offset by an increase in total Liabilities and Deferred Inflows of$17,605,222. Assets increased $29,835,511 due to increases in cash and cash equivalents, and capital assets net of accumulated depreciation. Cash and cash equivalents have increased during the COVID-19 Pandemic primarily due to additional resources the City received from the American Rescue Plan Act(Act). The Act allocated a total of$29.5 million dollars to the City through the United States Treasury.Half of these funds, $14.5 million,were received by the City during the fiscal year;the remaining half will be received in the next fiscal year. Due to delays in the United States Treasury's publishing of a Final Rule,the City did not allocate the majority of these funds in this fiscal year. The City waited until final guidance received in December of 2021 was published to begin discussions about uses of the funds. The City will allocate the funds in the next fiscal year, through action of the City Council. The City also saw increases in sales tax collections of$5.2 million over budget and a 98.56%property tax collection rate to levy.Capital Assets Net of Depreciation increased $10,681,306, which was offset by a decrease in Capital Assets Not Being Depreciated of $7,405,016. Deferred Outflows of Resources increased $2,348,404 due to increases in Pension and Other Post Employment Benefit(OPEB) related costs. The City's total assets also benefited from increases in fund balance in the City's General Fund of $10,094,282,of which$10,226,213 is unassigned. Increases in fund balance are a combination of increased economic activity and federal aid received. Liabilities in the City's General Fund increased $684,697 primarily due to increases in accrued payroll at year-end. Asset increases were also due to the inclusion of the American Rescue Plan Act Fund.This fund, listed as a major Governmental Fund, is funded by contributions from the United States Treasury, to the City to continue the fight against COVID-19 and the resulting economic impacts of the pandemic. As stated previously,this funding source totals approximately$14.5 in the current year,with funds committed by the City Council to address the emergency replacement of the City's SCADA system. Business-type Activities unrestricted net position decreased by$2,131,269. Assets and Deferred Outflows increased$7,977,654, primarily due to increases in cash and cash equivalents collected in the current year. Cash and cash equivalents increased by $5,279,201. Of this amount, the largest increase was in the Nonmajor Enterprise funds,which in total increased$2,589,284 coupled with an increase in the Sanitation fund of$2,172,915 over the prior year. Internal Balances also increased by $1,789,608. These increases 3 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 were offset by changes in liabilities. Overall,liabilities decreased by$12,755,059,primarily due to decreases in long-term liabilities payable after one year. Assets and Deferred Outflows in the Water and Sewer Fund decreased $2,174,220. This decrease is primarily due to decreases in Capital Assets, Net of Accumulated Depreciation of $2,109,192. Liabilities and Deferred Inflows decreased$12,262,025 due to decreases in long-term liabilities payable after one year. In the Sanitation Fund, Assets and Deferred Outflows increased $2,130,312.This increase is, in part, due to an increase in Sanitation Rates of 6%during the year,offset with a decrease in spending during the fiscal year. In the Regional Airport Fund, Assets and Deferred Outflows decreased $1,134,785. This decrease is attributed to decreases in Capital Assets, Net of Accumulated Depreciation of $1,501,576 offset by increases in Government Agencies Receivable. Due to legislation passed, in various bills, the Regional Airport has received additional federal support for operations during the COVID-19 Pandemic. At September 30, 2021, the City's governmental funds reported combined ending fund balances of $57,086,327. Of this amount, $36,401,425, or 63.7%, is available for spending at the government's discretion (unassigned fund balance). At the end of the current fiscal year, the unassigned fund balance for the General Fund was$37,181,391, or 47.01%of total General Fund expenditures of$79,087,357. During the 2020-21 fiscal year, the City's total debt decreased by $14,241,400. This decrease is the result of the City retiring $2,795,000 in outstanding General Obligation Bonds, $7,635,000 in Utility System Revenue Bonds, $2,925,000 in Combination Tax and Revenue Bonds, $1,637,738 in Capital Leases, $42,892 in Notes Payable and $1,840,770 in Bond Premiums. Venue Tax Revenue Bonds were issued at $2,680,000 with $45,000 retired. 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 13-14 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 4 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 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 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. 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, stormwater 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 fund's 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 5 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 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 fund's financial statements. The City of Wichita Falls maintains 16 individual governmental funds. Information for the General Fund and the American Rescue Plan Act Fund are presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances because they are considered major funds of the City. Data for the other governmental funds are combined into a single, 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 15-19 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,stormwater 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. Custodial 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 a custodial fund used to account for property that has been abandoned or unclaimed pending escheatment to the State of Texas. 6 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 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 27-67 of this report. Government-Wide Financial Analysis The City's combined net position was$433,494,474 as of September 30, 2021,an increase of$35,339,031 or 8.88% 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,$454,046,148,or 104.74%,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,$19,097,073,or 4.41%,represents resources that are subject to external restrictions on how they may be used. Net Position (in thousands) Governmental Business-type Activities Activities Total 2021 2020 2021 2020 2021 2020 Current and Other Assets $82,206 $55,647 $89,234 $81,759 $171,440 $137,406 Capital Assets 187,134 183,858 393,811 393,142 580,945 577,000 Total Assets 269,340 239,505 483,045 474,901 752,385 714,406 Deferred Outflows of Resources 39,980 37,631 4,484 4,650 44,464 42,281 Long Term Liabilities 184,964 183,106 126,153 138,813 311,117 321,919 Other Liabilities 24,613 11,214 7,810 7,905 32,423 19,119 Total Liabilities 209,577 194,320 133,963 146,718 343,540 341,038 Deferred Inflows of Resources 17,137 14,789 2,677 2,705 19,814 17,494 Net Position: Net Investment in Capital Assets 160,442 155,903 293,604 270,540 454,046 426,443 Restricted 7,260 6,633 11,837 12,009 19,097 18,642 Unrestricted (85,096) (94,509) 45,448 47,579 (39,648) (46,930) Total Net Position $82,606 $68,027 $350,889 $330,128 $433,495 $398,155 7 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 CHANGES IN NET POSITION (in thousands) Governmental Business-type Activities Activities Total 2021 2020 2021 2020 2021 2020 Revenues: Program Revenues: Charges For Services $10,271 $7,642 $70,330 $68,965 $80,601 $76,607 Operating Grants and Contributions 17,666 21,240 8,224 5,738 $25,890 26,978 Capital Grants and Contributions 1,997 - 874 651 $2,871 651 General Revenues: Property Taxes 43,020 41,399 - - 43,020 41,399 Sales Taxes 28,362 25,206 - - 28,362 25,206 Other Taxes/Fees 8,422 7,299 - - 8,422 7,299 Investment Earnings 48 582 24 371 72 953 Miscellaneous 521 525 - (2) 521 523 Total Revenue 110,307 103,893 79,452 75,723 189,759 179,616 Expenses: Administrative Services 16,023 15,623 - - 16,023 15,623 Police 26,119 34,226 - - 26,119 34,226 Fire 26,145 26,796 - - 26,145 26,796 Parks and Recreation 5,135 6,058 - - 5,135 6,058 Accounting/Finance 760 1,005 - - 760 1,005 Community Development 6,955 7,587 - - 6,955 7,587 Public Works 7,895 8,708 - - 7,895 8,708 Health 6,229 6,630 - - 6,229 6,630 Traffic and Transportation 2,412 3,256 - - 2,412 3,256 MPEC 2,849 2,792 - - 2,849 2,792 Interest and Fees on Long-term Debt 1,696 1,607 - - 1,696 1,607 Regional Airport - - 2,753 2,097 2,753 2,097 Kickapoo Airport - - 1,186 1,282 1,186 1,282 Transit - - 2,255 2,553 2,255 2,553 Sanitation - - 10,138 11,728 10,138 11,728 Water and Sewer - - 33,126 34,893 33,126 34,893 Stormwater Drainage - - 1,138 865 1,138 865 Waterpark - - 1,605 1,495 1,605 1,495 Total Expenses 102,218 114,288 52,201 54,913 154,419 169,201 Increase(Decrease) in Net Position 8,089 (10,395) 27,251 20,810 35,340 10,415 Before Transfers Transfers 6,490 5,046 (6,490) (5,046) - - Increase(Decrease) in Net Position 14,579 (5,349) 20,761 15,764 35,340 10,415 Net Position-Beginning of Year 68,027 73,376 330,128 314,364 398,155 387,740 Net Position-End of Year $82,606 $68,027 $350,889 $330,128 $433,495 $398,155 8 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 Governmental Activities—Governmental Activities increased the City's net position by $14,578,692. The increase in net position in the Governmental Activities is primarily due to an increase in the City's Cash and Cash Equivalents of$30,505,345.This increase is primarily due to the City's receipt of American Rescue Plan Act funding in FY 2020-21 of$13,961,173.The City saw strong sales tax and property tax revenues during the year, which contributed to increased tax collections of $5,292,091. These increases were offset by decreases in the Nonmajor Governmental Funds, Government agencies receivable, by $4,159,811. This decrease is due to receipt of the City's final payment of the City's allocation of federal funds received from the Texas Department of Emergency Management's Coronavirus Aid, Relief and Economic Security Act. Business-Type Activities — Business-type Activities increased the City's net position by $20,760,339. This increase is primarily due to an increase in Net Investment in Capital Assets of$23,063,746 and a decrease in Unrestricted Net Position of $2,131,269. Total liabilities decreased $12,755,059 of this; Long Term Liabilities, Portion Due or Payable After One Year decreased $12,156,292.This decrease is reflective of the City's payment of bonds in the current year. 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, 2021, the City's governmental funds reported combined fund balances of$57,086,327,which is an increase of$11,810,762 from the prior year. The General Fund is the chief operating fund of the City. At the end of the current fiscal year,the unassigned fund balance of the General Fund was $37,181,391, an increase of$10,226,213 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 47.01%of total General Fund expenditures,while the total fund balance represents 47.33%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, 2021,the net position for the City's internal service funds was$38,848,407, an increase of$3,106,495. This change is due primarily to an increase in Restricted Cash and a decrease in the amount payable to other City funds. General Fund Budgetary Highlights The final amended expenditure budget for the General Fund, including transfers out, was increased by $3,417,241 from the original adopted budget in fiscal year 2020-21. This increase was primarily due to the carry-forward of projects from the prior year and an increase for purchase and sale of land,through a 380 Agreement with O'Reilly Hospitality. The increase was completed through a carry-forward amendment approved by the City Council and the City Council approval of the O'Reilly Hospitality Management Group's 380 Agreement. These are funds legally committed to the completion of these projects. 9 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 Actual revenues in the General Fund for the 2020-21 fiscal year were $85,577,429, which was$5,736,271 over final budgeted revenues. Actual expenditures in the General Fund for the 2020-21 fiscal year were $79,087,357, which was $5,126,320 below final budgeted expenditures. Expenditure decreases reflect ongoing capital projects not completed during the year. This includes work at Memorial Auditorium to stabilize the west wing of the building.This work was delayed due to contractor and supply challenges.The work was bid twice and will occur in the current year. Delays in contractor availability and supply availability decreased the expenditures for the Street Outlay program.Salary savings contributed to savings throughout the City. During the year,the City struggled to fill open positions.To offset this,the City held multiple hiring events, however, hiring lower paid positions remains a challenge. Capital Asset and Debt Administration Capitol Assets-The City's investment in capital assets for its governmental and business-type activities as of September 30, 2021, amounts to $580,945,824 (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: • Street Rehabilitation and Utility Improvement Projects • Construction in progress of the new Travel Facility Project • Completion of the Lake Kickapoo Dam Rehabilitation Project • Construction in progress of various trail projects • Completion of the Maplewood Street Extension Project Capital Assets,net of Accumulated Depreciation (in thousands) Governmental Business-type Activities Activities Total 2021 2020 2021 2020 2021 2020 Land $10,753 $10,753 $11,072 $10,837 $21,825 $21,590 Land Betterments 15,593 14,713 35,275 36,661 50,868 51,374 Buildings,Systems and 43,010 44,241 314,493 311,272 357,503 355,513 Improvements Infrastructure 106,276 96,513 1,282 1,300 107,558 97,813 Machinery and Equip 7,675 6,405 2,185 2,217 9,860 8,622 Furniture and Fixtures 1 1 - 1 1 2 Motor Vehicles - - 19,206 19,697 19,206 19,697 Construction in Progress 3,827 11,232 10,298 11,157 14,125 22,389 Totals $187,135 $183,858 $393,811 $393,142 $580,946 $577,000 Additional information on the City's capital assets can be found in Note 7 on pages 43-44 of this report. Long Term Debt-At the end of the current fiscal year,the City had total bonded debt, notes, and capital leases outstanding of $154,122,250. During the 2020-21 fiscal year, the City's total debt decreased by $14,241,400. 10 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 As of September 30, 2021, 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. Outstanding Debt at Year-End (in thousands) Governmental Business-type Activities Activities Total 2021 2020 2021 2020 2021 2020 General Obligation Bonds $26,275 $29,070 $ - $ - $26,275 $29,070 Combination Tax and 53,255 Revenue Bonds 16,665 18,040 36,590 38,140 56,180 Venue Tax 2,635 - - - 2,635 Revenue Bonds Utility System Revenue Bonds - 46,670 54,305 46,670 54,305 Premiums on 1,524 1,800 4,345 5,910 5,869 7,710 Bonds Capital Lease Payable 4,010 4,556 15,212 16,304 19,222 20,860 Notes Payable - - 196 239 196 239 Total 51,109 53,466 103,013 114,898 154,122 168,364 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, 2021, was $.763323 per$100 which means that the City has a tax margin of$1.486677 per$100,and could generate up to $81,111,304 additional tax revenue a year from the present assessed valuation of$5,455,879,419 before the limit is reached. The current ratio of general bonded debt outstanding to the assessed value of all taxable property is.48%. Additional information about the City's long-term debt can be found in Note 14 on pages 59-63 of this report. Economic Factors and Next Year's Budget and Rates The total operating budget for the City includes all expenditures, revenues,and transfers anticipated in the coming year. This includes expenditures for items funded outside of the City, like federal grants for large capital projects and funds for programs received from other sources.The budget also includes the adoption of payments for debt services. The total Adopted City Operating Budget for the 2021-22 fiscal year is $195,449,875,which is an increase of$11,010,331,or 5.97%,from the 2020-21 Adopted Operating Budget of$184,439,544. 11 CITY OF WICHITA FALLS,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (CONT'D.) SEPTEMBER 30, 2021 Work in the 2020-21 fiscal year, included the implementation of a comprehensive pay plan study, which increased City-wide payroll approximately $4.4 million. Additional salary increases in the year stemmed from increased employee counts in the Hotel/Motel and Water&Sewer Funds.The City also released the hiring freeze on all frozen positions. These costs increased the City's contribution to the Texas Municipal Retirement System, FICA, and contributions to the City's Firefighter Pension. While the rates for the contributions did not change for FICA or the City's Firefighter Pension, the increase in salary conversely creates an increase in cost to the City to fund these programs.The City's contribution to the Texas Municipal Retirement System is a fixed contribution,determined by actuarial analysis performed by the TMRS system and reduced in the current year from 16.57%of total compensation to 16.42%. The City's contribution to the Firefighter's Pension System remained at 13.25%. This amount was increased in the prior year from 13.00%and is above the State required minimum of 12%.The City also saw a 2%increase in health insurance costs in the current year to both the employees and the employer. Increasing salary and health care costs affect an employee's total compensation, which is used to calculate their retirement contributions and taxes. The budget also included the use of one-time funds (surplus) in the General Fund to complete one-time projects and committed funds for future capital equipment and infrastructure needs. The entire Budget may be found on the City's website at www.wichitafallstx.gov. Moving forward, into the FY 2022-23 Budget year,the City continues to monitor changing economics.The local economy is projected to remain strong due to the addition of a Hotel and Conference Center downtown and the completion of two new high schools. The City received additional federal funds to combat the COVID-19 Pandemic from the American Rescue Plan.These funds will be committed for use by the City Council in April of 2022. 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. 12 BASIC FINANCIAL STATEMENTS EXHIBIT A-1 CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30,2021 Primary Government Governmental Business-type Component Activities Activities Total Units Assets Cash and cash equivalents $ 71,596,121 $ 48,454,351 $ 120,050,472 $ 54,743,527 Receivables(net): Taxes and assessments 1,196,537 - 1,196,537 - Customer and trade - 8,448,143 8,448,143 - Government agencies 10,648,102 2,227,301 12,875,403 1,708,327 Other 2,109,109 550,561 2,659,670 Internal balances (13,235,893) 13,235,893 - - Inventory 139,887 1,856,996 1,996,883 - Prepaid items 119,713 521,770 641,483 11,968 Other assets 259,412 - 259,412 - Restricted assets: Cash and cash equivalents 9,372,786 13,938,342 23,311,128 - Capital assets not being depreciated 14,579,702 21,370,750 35,950,452 2,517,331 Capital assets net of accumulated depreciation 172,554,954 372,440,418 544,995,372 - Total assets 269,340,430 483,044,525 752,384,955 58,981,153 Deferred Outflows of Resources Pension-related 37,383,068 1,580,338 38,963,406 - OPEB-related 2,347,623 878,021 3,225,644 - Deferred losses on bond refundings 248,913 2,025,844 2,274,757 - Total deferred outflows of resources 39,979,604 4,484,203 44,463,807 - Liabilities Accounts payable-trade 1,517,138 1,740,590 3,257,728 254,563 Accrued payroll 3,222,607 877,324 4,099,931 - Accrued interest payable 233,951 457,348 691,299 - Payable to government agencies 559,218 1,370 560,588 - Estimated health claims payable 1,380,955 - 1,380,955 - Other liabilities 3,701,551 1,328,879 5,030,430 41,233 Unearned revenue 13,997,760 - 13,997,760 - Customer deposits - 3,404,174 3,404,174 - Long-term liabilities: Portion due or payable within one year 7,520,516 11,456,129 18,976,645 590,000 Portion due or payable after one year 54,124,193 98,105,536 152,229,729 28,540,916 Net pension liability(payable after one year) 111,562,189 12,194,645 123,756,834 Net OPEB liability(payable after one year) 11,756,959 4,397,149 16,154,108 Total liabilities 209,577,037 133,963,144 343,540,181 29,426,712 Deferred Inflows of Resources Pension-related 16,355,471 2,384,386 18,739,857 - OPEB-related 781,840 292,410 1,074,250 - Total deferred inflows of resources 17,137,311 2,676,796 19,814,107 - Net Position Net investment in capital assets 160,441,794 293,604,354 454,046,148 979,912 Restricted for: Perpetual care(nonexpendable) 1,470,561 - 1,470,561 - Debt service(expendable) 1,933,732 11,836,811 13,770,543 - Federal grant programs(expendable) 3,848,271 - 3,848,271 - Tourism(expendable) 7,698 - 7,698 - Unrestricted (85,096,370) 45,447,623 (39,648,747) 28,574,529 Total net position $ 82,605,686 $ 350,888,788 $ 433,494,474 $ 29,554,441 See accompanying notes to the basic financial statements. 13 a 1— m x N m o io 00 0•. o Hi m v•. To -I a E S --. o wm vop mn 0a0i vmv oonm vimroN maom cm v m a�moromcc mam oOoo•mm^ivw gc mw -i i v maw 51 L:4.,T_ _ m Na m o - _ v anv �z .- c o_ o�a'2 mcro - v'v°�i�n1O ry om ooMoi LI. 'o m c zu c n N a , ry ry — m m E m , To w mo wim r,'i 5184' �01� coN 8 mov m ry vo E:Y ry, o�ry a � a oma4 m 5o6� m mvry ti0r 0 - - 0 co u ti ry ti ro ry o u v. .n m v m _ -ocm ov vw ,,, m,i' L%8 8,1 88 m `gym E O4j , ry rvti , n ry u .n -L.,.° o 0 0 o m o .a 2m a a o 8 ,� m a m c u. N a LAN v u Q N a I-x M `n.1vm vmiomc ovv mry v7-imvCOry m Nv N a W vW W VIFm C J > g m IV ' m ti QfaW , , 00 t0na, rvry rv,yrvOM W oU LL Q W n ,n n Fa O o 4 « ,, Z 0 2 U W Z g w W OC 01 U. Q W 0 O '^ w 0 F G E U 0o v 2o v _ u m R 0 04 c - E v o — - a y —' 6 Ov 1 E `—` I - EEa 1— 47, > v v ,1 - do E $ E a - c vz �nLLsm o0o - o vm E " o o ` 288,-0aaLLaaud =, _ mY, � , au r zz- _ v t 8 EXHIBITA-3 CITY OF WICHITA FALLS, TEXAS BALANCE SHEET-GOVERNMENTAL FUNDS SEPTEMBER 30,2021 Total ARPA Nonmajor Governmental General Fund Governmental Funds Assets Cash and cash equivalents $ 33,122,694 $ 13,961,173 $ 17,529,612 $ 64,613,479 Receivables(net): Taxes and assessments 861,003 - 335,534 1,196,537 Other City funds 5,403,977 - - 5,403,977 Government agencies 5,376,968 - 5,271,134 10,648,102 Other 2,059,881 - 40,196 2,100,077 Inventory 139,560 - - 139,560 Prepaid items 112,105 - 7,608 119,713 Other assets 1,000 - 258,412 259,412 Total assets $ 47,077,188 $ 13,961,173 $ 23,442,496 $ 84,480,857 Liabilities Accounts payable $ 600,956 $ - $ 790,935 $ 1,391,891 Accrued payroll 2,969,007 - 191,262 3,160,269 Payable to other City funds - - 2,424,327 2,424,327 Payable to government agencies 471,157 - 88,061 559,218 Other liabilities 3,471,892 - 208,802 3,680,694 Claims and judgments payable 11,922 - - 11,922 Unearned revenue - 13,960,524 37,236 13,997,760 Total liabilities 7,524,934 13,960,524 3,740,623 25,226,081 Deferred inflows of resources Unavailable revenues 2,119,198 - 49,251 2,168,449 Fund balances Nonspendable: Inventory and prepaid items 251,665 - - 251,665 Permanent Fund principal - - 1,470,561 1,470,561 Restricted for: Debt service - - 1,884,481 1,884,481 Capital projects - - 10,006,085 10,006,085 Federal and state grant programs - 649 3,848,271 3,848,920 Tourism - - 842,555 842,555 Committed for: Golf course - - 144,073 144,073 Local projects - - 2,236,562 2,236,562 Unassigned 37,181,391 - (779,966) 36,401,425 Total fund balances 37,433,056 649 19,652,622 57,086,327 Total liabilities,deferred inflows of resources and fund balances $ 47,077,188 $ 13,961,173 $ 23,442,496 $ 84,480,857 See accompanying notes to the basic financial statements. 15 EXHIBIT A-4 CITY OF WICHITA FALLS, TEXAS RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION SEPTEMBER 30,2021 Total fund balances-governmental funds(Exhibit A-3) $ 57,086,327 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 $ 345,180,997 Related accumulated depreciation 163,141,721 182,039,276 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. 2,168,449 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 45,575,000 Premiums on bonds payable 1,524,354 Capital lease payable 4,010,237 Accrued vacation and sick leave 9,541,857 Claims and judgments payable 926,002 Accrued interest 233,951 (61,811,401) 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. 248,913 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 110,673,816 Deferred outflows-pension related items (37,267,942) Deferred inflows-pension related items 16,181,771 (89,587,645) 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 11,555,032 Deferred outflows-OPEB related items (2,307,303) Deferred inflows-OPEB related items 768,412 (10,016,141) 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. 16,449,871 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. (13,971,963) Total net position-governmental activities(Exhibit A-1) $ 82,605,686 See accompanying notes to the basic financial statements. 16 EXHIBIT A-5 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2021 Total ARPA Nonmajor Governmental General Fund Governmental Funds Revenues Taxes $ 75,096,176 $ - $ 4,759,100 $ 79,855,276 Charges for services 3,066,404 - 635,135 3,701,539 Licenses and permits 1,631,602 - - 1,631,602 Fines and forfeitures 2,198,715 - 236,754 2,435,469 Intergovernmental revenue - 585,301 14,062,468 14,647,769 Contributions 179,483 - 2,843,391 3,022,874 Miscellaneous revenue 3,405,049 649 1,014,632 4,420,330 Total revenues 85,577,429 585,950 23,551,480 109,714,859 Expenditures Administrative services 15,211,294 - 1,432,859 16,644,153 Police 26,144,281 - 1,236,098 27,380,379 Fire 18,241,191 - 161,724 18,402,915 Parks and recreation 4,996,125 - 85,704 5,081,829 Accounting/finance 853,221 - - 853,221 Community development 2,221,870 - 5,040,405 7,262,275 Public works 4,735,920 - 60,921 4,796,841 Health 3,304,684 585,301 2,609,811 6,499,796 Traffic and transportation 1,668,533 - 557,849 2,226,382 Multi-Purpose Events Center - - 2,064,199 2,064,199 Capital outlay 1,710,238 - 5,707,511 7,417,749 Debt service-principal - - 4,215,000 4,215,000 Debt service-interest and paying agent fees - - 1,821,451 1,821,451 Debt service-bond issuance costs - - 103,139 103,139 Total expenditures 79,087,357 585,301 25,096,671 104,769,329 Excess of revenues over(under)expenditures 6,490,072 649 (1,545,191) 4,945,530 Other Financing Sources(Uses) Issuance of bonds - - 2,685,339 2,685,339 Transfers in 3,769,421 - 2,052,683 5,822,104 Transfers out (165,213) - (1,476,998) (1,642,211) Total other financing sources(uses) 3,604,208 - 3,261,024 6,865,232 Net change in fund balance 10,094,280 649 1,715,833 11,810,762 Fund balances-beginning 27,338,776 - 17,936,789 45,275,565 Fund balances-ending $ 37,433,056 $ 649 $ 19,652,622 $ 57,086,327 See accompanying notes to the basic financial statements. 17 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 30,2021 Net change in fund balances-total governmental funds(Exhibit A-5) $ 11,810,762 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 $ 7,434,290 Depreciation expense for the year 6,771,871 662,419 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. 1,996,829 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. (62,080) 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 increased by this amount this year. 438,198 The issuance of long-term debt provides current financial resources to governmental funds.However,the issuance increases long-term liabilities in the Statement of Net Position.The City issued bonds during 2020-2021. (2,680,000) 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 2020-2021 were: 5,036,102 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 (34,946) Claims and judgments payable (220,925) (255,871) 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 30,2020 240,944 Accrued interest at September 30,2021 233,951 6,993 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 plans 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. (4,163,224) 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. 218,100 See accompanying notes to the basic financial statements. 18 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 30,2021 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. 2,222,983 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. (598,791) Change in net position of governmental activities(Exhibit A-2) $ 14,578,692 See accompanying notes to the basic financial statements. 19 EXHIBIT A-7 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2021 Enterprise Funds Non major Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Assets Current assets: Cash and cash equivalents $ 26,508,695 $ 10,334,890 $ 1,350 $ 9,829,013 $ 46,673,948 $ 8,763,045 Restricted cash and cash equivalents 12,804,784 - 1,133,558 - 13,938,342 9,372,786 Receivables(net): Customer and trade 6,406,844 1,645,524 - 395,775 8,448,143 - Government agencies 71,859 - 305,067 1,850,375 2,227,301 - Other 272,331 19,445 82,736 141,173 515,685 43,908 Inventory 1,083,524 - - 46,755 1,130,279 726,717 Prepaid items 460 - 32,730 13,762 46,952 475,142 Total current assets 47,148,497 11,999,859 1,555,441 12,276,853 72,980,650 19,381,598 Long-term assets: Capital assets,net of accumulated depreciation 260,497,247 8,843,165 45,099,204 57,892,299 372,331,915 26,574,636 Total long-term assets 260,497,247 8,843,165 45,099,204 57,892,299 372,331,915 26,574,636 Total assets 307,645,744 20,843,024 46,654,645 70,169,152 445,312,565 45,956,234 Deferred Outflows of Resources Pension-related 874,447 349,182 23,608 154,373 1,401,610 293,855 OPEB-related 471,267 214,183 2,581 86,447 774,478 143,863 Deferred losses on bond refundings 2,025,844 - - - 2,025,844 - Total deferred outflows of resources 3,371,558 563,365 26,189 240,820 4,201,932 437,718 See accompanying notes to the basic financial statements. 20 EXHIBIT A-7 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30,2021 Enterprise Funds Non major Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Liabilities Current liabilities: Accounts payable-trade 924,654 108,681 11,707 566,937 1,611,979 253,858 Accrued payroll 481,251 189,442 12,378 99,641 782,712 156,950 Accrued vacation and sick leave 437,989 186,830 9,351 75,035 709,205 177,206 Payable to other City funds - - 360,309 1,453,120 1,813,429 1,166,221 Payable to government agencies - - 289 1,081 1,370 - Estimated health claims payable - - - - - 1,380,955 Other liabilities 315,974 54,223 53,303 905,379 1,328,879 8,932 Payable to U.S.Government-current maturity 45,728 - - - 45,728 - Capitalleases-current maturities 698,844 - - - 698,844 456,557 Revenue bonds-current maturities 9,580,000 - - - 9,580,000 - Accrued interest-revenue bonds 457,348 - - - 457,348 - Total current liabilities 12,941,788 539,176 447,337 3,101,193 17,029,494 3,600,679 Long-term liabilities: Payable to U.S.Government,less current maturities 150,325 - - - 150,325 - Capital leases,less current maturities 13,590,713 - - - 13,590,713 465,596 Revenue bonds,less current maturities 78,024,896 - - - 78,024,896 - Estimated liability for landfill closure and post-closure care costs - 5,729,854 - - 5,729,854 - Customer deposits 3,404,174 - - - 3,404,174 Net pension liability 6,747,652 2,694,458 182,173 1,191,214 10,815,497 2,267,522 Net OPEB liability 2,360,115 1,072,633 12,923 432,931 3,878,602 720,474 Total long-term liabilities 104,277,875 9,496,945 195,096 1,624,145 115,594,061 3,453,592 Total liabilities 117,219,663 10,036,121 642,433 4,725,338 132,623,555 7,054,271 Deferred Inflows of Resources Pension-related 1,319,350 526,840 35,620 232,915 2,114,725 443,363 OPEB-related 156,948 71,330 859 28,790 257,927 47,911 Total deferred inflows of resources 1,476,298 598,170 36,479 261,705 2,372,652 491,274 Net Position Net investment in capital assets 161,212,583 8,843,165 45,099,204 57,892,299 273,047,251 25,652,483 Restricted for debt service 11,836,811 - - - 11,836,811 - Unrestricted 19,271,947 1,928,933 902,718 7,530,630 29,634,228 13,195,924 Total net position $ 192,321,341 $ 10,772,098 $ 46,001,922 $ 65,422,929 314,518,290 $ 38,848,407 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 36,370,498 Net position of business type activities $ 350,888,788 See accompanying notes to the basic financial statements. 21 EXHIBIT A-8 CITY OF WICHITA FALLS, TEXAS STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2021 Enterprise Funds Nonmajor Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Operating revenues: Charges for services $ 45,695,423 $ 16,151,197 $ 26,354 $ 5,240,998 $ 67,113,972 $ 14,031,952 Rents,concessions and other 115,270 2,918 1,485,163 1,613,118 3,216,469 1,096,149 Contributions - - - - - 15,293,364 Total operating revenues 45,810,693 16,154,115 1,511,517 6,854,116 70,330,441 30,421,465 Operating expenses: Personnel services 9,749,458 3,895,980 380,789 2,342,119 16,368,346 3,302,750 Supplies and materials 2,600,899 296,969 337,771 794,614 4,030,253 3,030,667 Maintenance and repairs 1,943,099 112,080 172,665 393,465 2,621,309 2,782,758 Utilities and other services 5,762,663 4,850,387 188,199 1,105,958 11,907,207 383,241 Insurance and contract support 855,724 97,394 42,400 77,155 1,072,673 14,409,956 Other expenses 2,025,210 488,787 244,114 172,835 2,930,946 2,472,528 Depreciation and amortization 8,712,691 309,427 1,531,302 1,376,600 11,930,020 5,078,883 Total operating expenses 31,649,744 10,051,024 2,897,240 6,262,746 50,860,754 31,460,783 Operating income(loss) 14,160,949 6,103,091 (1,385,723) 591,370 19,469,687 (1,039,318) Nonoperating revenues(expenses): Interest income 10,670 6,765 563 5,873 23,871 1,724,368 Gain/(loss)on sale/abandonment of capital assets - - - - - 62,700 Interest expense and paying agent fees (2,747,739) - - - (2,747,739) (27,123) Intergovernmental operating grants - - 926,286 7,297,269 8,223,555 - Total nonoperating revenues(expenses) (2,737,069) 6,765 926,849 7,303,142 5,499,687 1,759,945 Income(loss)before contributions and transfers 11,423,880 6,109,856 (458,874) 7,894,512 24,969,374 720,627 Capital contributions 874,423 - - - 874,423 - Transfers in 93,313 - - - 93,313 2,697,861 Transfers out (2,303,811) (3,811,299) (102,096) (441,861) (6,659,067) (312,000) Change in net position 10,087,805 2,298,557 (560,970) 7,452,651 19,278,043 3,106,488 Net position-beginning 182,233,536 8,473,541 46,562,892 57,970,278 35,741,919 Net position-ending $ 192,321,341 $ 10,772,098 $46,001,922 $ 65,422,929 $ 38,848,407 Adjustment to reflect the consolidation of internal service funds activities related to enterprise funds 1,482,296 Change in net position of business type activities $ 20,760,339 See accompanying notes to the basic financial statements. 22 EXHIBIT A-9 (Page 1 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2021 Enterprise Funds Non major Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Cash flows from operating activities: Received from customers and users $ 45,417,375 $ 16,294,832 $ 1,463,025 $ 6,794,597 $ 69,969,829 $ 4,442,103 Received from interfund charges - - - - - 25,697,004 Other operating receipts - - - - - 811,046 Payments to suppliers (13,138,547) (1,876,225) (889,412) (2,120,193) (18,024,377) (23,180,259) Payments for interfund services (3,669,071) (5,200,120) (149,739) (1,111,406) (10,130,336) (665,361) Payments to employees (7,116,107) (2,862,883) (249,471) (1,719,548) (11,948,009) (2,418,863) Net cash provided by operating activities 21,493,650 6,355,604 174,403 1,843,450 29,867,107 4,685,670 Cash flows from noncapital financing activities: Intergovernmental operating grants - - 621,219 6,883,648 7,504,867 (1,100,245) Interfund loans received(repaid) - - (663,451) (53,579) (717,030) - Transfers in from other funds 93,313 - - - 93,313 2,697,861 Transfers out to other funds (2,303,811) (3,811,299) (102,096) (441,861) (6,659,067) (312,000) Net cash provided(used)by noncapital financing activities (2,210,498) (3,811,299) (144,328) 6,388,208 222,083 1,285,616 Cash flows from capital and related financing activities: Acquisition and construction of capital assets (5,730,471) (378,156) (29,725) (5,648,245) (11,786,597) (5,125,130) Proceeds from sale of capital assets - - - - - 62,700 Principal paid on long-term debt (9,872,496) - - - (9,872,496) (447,692) Interest and fees paid on long-term debt (4,028,627) - - - (4,028,627) (27,123) Net cash provided(used)for capital and related financing activities (19,631,594) (378,156) (29,725) (5,648,245) (25,687,720) (5,537,245) Cash flows from investing activities: Interest on investments 10,670 6,765 563 5,873 23,871 1,724,368 Net cash provided by investing activities 10,670 6,765 563 5,873 23,871 1,724,368 Net Increase(Decrease)in Cash and Cash Equivalents (337,772) 2,172,914 913 2,589,286 4,425,341 2,158,409 Cash and Cash Equivalents-Beginning 39,651,251 8,161,976 1,133,995 7,239,727 56,186,949 15,977,422 Cash and Cash Equivalents-Ending $ 39,313,479 $ 10,334,890 $ 1,134,908 $ 9,829,013 $ 60,612,290 $ 18,135,831 Reconciliation of cash and cash equivalents on the balance sheet to the statement of cash flows: Cash and cash equivalents $ 26,508,695 $ 10,334,890 $ 1,350 $ 9,829,013 $ 46,673,948 $ 8,763,045 Restricted assets-cash and cash equivalents 12,804,784 - 1,133,558 - 13,938,342 9,372,786 Total cash and cash equivalents at end of year $ 39,313,479 $ 10,334,890 $ 1,134,908 $ 9,829,013 $ 60,612,290 $ 18,135,831 See accompanying notes to the basic financial statements. 23 EXHIBIT A-9 (Page 2 of 2) CITY OF WICHITA FALLS, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2021 Enterprise Funds Non major Water and Regional Enterprise Internal Sewer Sanitation Airport Funds Total Service Funds Reconciliation of Operating Income(Loss)to Net Cash Provided by Operating Activities: Operating income(loss) $ 14,160,949 $ 6,103,091 $ (1,385,723) $ 591,370 $ 19,469,687 $ (1,039,318) Adjustments to reconcile operating income(loss) to net cash provided(used)by operating activities: Depreciation and amortization 8,712,691 309,427 1,531,302 1,376,600 11,930,020 5,078,883 Customer deposits received(refunded) 81,875 - - - 81,875 - (Increase)decrease in assets and deferred outflows: Receivables: Customer and trade (385,669) 140,717 - 50,661 (194,291) - Other (89,524) - (48,492) (110,180) (248,196) 521,032 Inventory (60,076) - - - (60,076) 18,330 Prepaid items 3,832 2,223 (905) 36,919 42,069 49,371 Deferred outflows-pension-related 32,515 26,781 (10,716) (5,585) 42,995 7,018 Deferred outflows-OPEB-related (129,082) (58,388) (698) (23,376) (211,544) (39,137) Increase(decrease)in liabilities and deferred inflows: Accounts payable-trade (456,913) 27,015 5,251 (100,868) (525,515) (448,717) Accrued payroll 43,640 11,205 (4,698) 21,094 71,241 (6,186) Accrued vacation and sick leave (19,529) 10,892 (6,828) (4,024) (19,489) 445 Estimated health claims payable - - - - - 701,953 Payable to government agencies - (79,669) (140) 582 (79,227) - Other liabilities 189,588 16,660 2,238 6,660 215,146 7,656 Estimated liability for landfill closure - 211,276 - - 211,276 Net pension liability (632,684) (364,911) 77,265 (19,530) (939,860) (180,817) Net OPEB liability 64,827 27,598 294 9,866 102,585 17,996 Deferred inflows-pension-related (55,459) (43,059) 16,078 7,378 (75,062) (12,714) Deferred inflows-OPEB-related 32,669 14,746 175 5,883 53,473 9,875 Total adjustments 7,332,701 252,513 1,560,126 1,252,080 10,397,420 5,724,988 Net cash provided by operating activities $ 21,493,650 $ 6,355,604 $ 174,403 $ 1,843,450 $ 29,867,107 $ 4,685,670 Noncash capital and financing activities: Capital assets received from developers $ 874,423 $ - $ - $ - $ 874,423 $ - See accompanying notes to the basic financial statements. 24 EXHIBIT A-10 CITY OF WICHITA FALLS, TEXAS STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2021 Custodial Fund Assets Cash and cash equivalents $ 180,812 Liabilities Other liabilities $ 180,812 Net position $ See accompanying notes to the basic financial statements. 25 EXHIBIT A-11 CITY OF WICHITA FALLS, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Custodial Fund Additions Escheatment additions $ 22,115 Deductions Escheatment deductions 22,115 Change in net position - Net position -beginning - Net position -ending $ - See accompanying notes to the basic financial statements. 26 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30,2021 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 various Governmental Accounting Standards Board (GASB) statements, 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. 27 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) The Wichita Falls 48 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. 28 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. 29 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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 funds are the General Fund and the American Rescue Plan Act (ARPA) Fund. The major enterprise funds are the Water and Sewer Fund, the Sanitation Fund and the Regional Airport Fund. Nonmajor funds are combined in a column in the fund financial statements. Nonmajor 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. 30 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. The ARPA Fund is used to account for Coronavirus State and Local Fiscal Recovery Funds received through the American Rescue Plan Act of 2021. Nonmajor governmental funds are a summarization of all the nonmajor 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 nonmajor 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. 31 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) A custodial 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. 32 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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: 33 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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 (See 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 ($941,461) and municipal court fines receivable ($788,790) 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. 34 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. 35 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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. 36 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(CONT'D.) 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, 2021 is based on management's estimate of probable losses in the amount of $926,002. 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, 2019 to September 30, 2021: Health Workers' Care Compensation Liability balance, October 1, 2019 $ 491,647 $ 775,231 Incurred claims/adjustments 13,370,147 869,685 Claim payments ( 13,182,792) ( 939,839) Liability balance, September 30, 2020 679,002 705,077 Incurred claims/adjustments 13,728,631 1,101,255 Claim payments ( 13,026,678) ( 880,330) Liability balance, September 30, 2021 $ 1,380,955 $ 926,002 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. 37 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 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 30,2021. Deficit Fund Balances—Individual Funds The Airport Improvement Grant Fund, a special revenue fund, had a deficit fund balance of$779,966 as of September 30,2021.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, 2021, the total amount of the City's demand and time deposits per the general ledger was $4,750,311, and the total amount per the City's September 30, 2021 bank statements was $5,686,627. At September 30, 2021, the City's deposits were under-secured by the City's depository in the amount of$1,297,722. Investments The investment policies of the City and its discretely presented component units are governed by The Public Funds Investment Act (PFIA). 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 City was in compliance with PFIA during the year ended September 30, 2021. The investments of the City and its discretely presented component units at September 30, 2021 are as follows: Average Fair Value/ Credit Weighted Average Carrying Quality/ Months to Types of Investments Amount Cost Ratings Maturity Primary Government: TexPool $ 84,240,477 $ 84,240,477 Not rated 1.00 LOGIC 35,487,551 35,487,551 Not rated 1.00 Money market accounts 20,016,261 20,016,261 Not rated 1.00 Total primary government investments 139,744,289 139,744,289 Component Units: TexPool 52,621,640 52,621,640 Not rated 1.00 Total component unit investments 52,621,640 52,621,640 Total investments $192,365,929 $192,365,929 38 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 3 - DEPOSITS AND INVESTMENTS(CONT'D.) 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. 39 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 3 - DEPOSITS AND INVESTMENTS(CONT'D.) 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 $100 of assessed valuation for general governmental services including the payment of principal and interest on long- term debt. The combined tax rate to finance general governmental services for the year ended September 30, 2021 was$.763323 per$100 which means that the City has a tax margin of$1.486677 per$100, and could raise up to $81,111,304 additional tax revenue a year from the present assessed valuation of$5,455,879,419 before the limit is reached. 40 Ln 00 L11 N O O O N CO N 0 bCA N LO 001 O^1 N. LD 0 OO LO 0 N Y O .0 N 0 CO Lf1 N O1 0 Q- C 0 c-I V) LD CO Lr1 N 4 H v w N m Lrl 4 N n Lr) N N .c cc -1 m m 4 to U CU x U N N v a- N ' i i N i N ' (NJ Q C .) 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N 0 OM Lo N 0 cs > I- 0 torn N Cr)m in 4, ,� 0 VI o C a) Lu H c O C O C m D m O1 0- co • l0 1 1 M 01 CO N LO C - ' Z -I-, U LO ci c I CO ci CO - Q o E _ V .--1 O Lr1 Ol l0 N -' c u c N N a co m v -o CO +•' o 0) LL. m N LO LD •- Z Q Lri Lei' Lei CO n C "' s ai o +' Cr) U L W c-I L)1 N co -1 CON ,--1 N O o^1 c co W o 00 as--' t/} Oco N C) rri LD ai COC i--I N C C LD m 0 a m N0 1 +s-' CU Pr) Vr ,� Lfl Lfl N L�-1` L-1 D o Nto ._ to co o - o 0o ate, c v Y N O 0- E u c N L 0 CL) c0 C 7 0) �-., cl- l/I v-i �., 'n O O D C i )- 6 C) o as C N CO v�i _C c +' _o u > O aJ LL) Ln /0 (0 4- C CD C 0) 0) C a-+ a ro U Q _o 7, (0 E U C U O U - L m m O SD C) CC CO •x Ill 'F 7 x N L > t a 0 O 4) O xus N LL1 al CC CC � ~ uOC70 J Z 0 ? Lc) o) O Z CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 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 $12,010,023 For Capital Improvements: Cash and cash equivalents 794,761 Total $12,804,784 Regional Airport restricted assets are comprised of the following: For Passenger Facility Charges: Cash and cash equivalents $ 316,109 For Customer Facility Charges: Cash and cash equivalents 817,449 Total $1,133,558 Internal Service Fund restricted assets are comprised of the following: For Employee Insurance: Cash and cash equivalents $9,372,786 42 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 7 - CAPITAL ASSETS Capital asset activity for the year ended September 30, 2021 was as follows: Balance Balance Governmental activities: October 1, September 30, 2020 Increases Decreases 2021 Capital assets not being depreciated: Land $ 10,752,781 $ - $ - $ 10,752,781 Construction in progress 11,231,937 2,441,246 9,846,262 3,826,921 Total capital assets not being depreciated 21,984,718 2,441,246 9,846,262 14,579,702 Capital assets being depreciated: Land betterments 23,425,044 1,350,829 - 24,775,873 Buildings,systems and improvements 75,551,641 473,895 27,328 75,998,208 Infrastructure 198,474,231 13,554,132 2,060,333 209,968,030 Machinery and equipment 27,718,305 2,918,074 1,817,642 28,818,737 Furniture and fixtures 143,082 - 12,233 130,848 Total capital assets being depreciated 325,312,303 18,296,930 3,917,536 339,691,696 Less accumulated depreciation for: Land betterments 8,712,062 471,348 - 9,183,410 Buildings,systems and improvements 31,310,770 1,699,223 21,637 32,988,356 Infrastructure 101,960,561 3,736,332 2,005,238 103,691,655 Machinery and equipment 21,313,579 1,646,174 1,816,348 21,143,405 Furniture and fixtures 141,683 466 12,233 129,916 Total accumulated depreciation 163,438,655 7,553,543 3,855,456 167,136,742 Total capital assets being depreciated, net 161,873,648 10,743,387 62,080 172,554,954 Governmental activities capital assets,net $183,858,366 $13,184,633 $9,908,342 $187,134,656 Depreciation expense was charged to functions as follows: Governmental activities: Administrative services $ 1,278,297 Police 862,425 Fire 214,236 Parks and recreation 249,803 Accounting/finance 1,326 Community development 6,918 Public works 3,302,194 Health 154,046 Traffic and transportation 459,752 Multi-Purpose Events Center 1,024,546 Total governmental depreciation $7,553,543 43 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 7 - CAPITAL ASSETS(CONT'D.) Balance Balance Business-type activities: October 1, September 30, 2020 Increases Decreases 2021 Capital assets not being depreciated: Land $ 10,837,247 $ 235,197 $ - $ 11,072,444 Construction in progress 11,156,503 6,854,796 7,712,993 10,298,306 Total capital assets not being depreciated 21,993,750 7,089,993 7,712,993 21,370,750 Capital assets being depreciated: Land betterments 59,312,377 241,359 - 59,553,736 Buildings,systems and improvements 473,842,925 13,228,433 614,000 486,457,358 Infrastructure 1,308,101 - - 1,308,101 Machinery and equipment 10,251,010 435,610 56,473 10,630,147 Furniture and fixtures 16,943 - - 16,943 Motor vehicles 66,432,273 3,614,398 706,104 69,340,567 Total capital assets being depreciated 611,163,629 17,519,800 1,376,577 627,306,852 Less accumulated depreciation for: Land betterments 22,651,037 1,628,133 - 24,279,170 Buildings,systems and improvements 162,571,453 10,007,127 614,000 171,964,580 Infrastructure 8,721 17,441 - 26,162 Machinery and equipment 8,033,936 467,305 56,473 8,444,768 Furniture and fixtures 15,661 1,283 - 16,944 Motor vehicles 46,734,972 4,105,942 706,104 50,134,810 Total accumulated depreciation 240,015,780 16,227,231 1,376,577 254,866,434 Total capital assets being depreciated, net 371,147,849 1,292,569 - 372,440,418 Business-type activities capital assets,net $393,141,599 $8,382,562 $ 7,712,993 $393,811,168 Depreciation expense was charged to programs as follows: Business-type activities: Regional Airport $ 1,537,477 Kickapoo Airport 543,684 Transit 360,926 Sanitation 3,510,315 Water and sewer 9,461,647 Stormwater drainage 569,693 Waterpark 243,489 Total business-type depreciation $16,227,231 44 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 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, 2021. Detailed information for each plan follows. TMRS WFFRRF Total Net pension liability $43,614,774 $80,142,060 $123,756,834 Deferred outflows of resources 5,652,159 33,311,247 38,963,406 Deferred inflows of resources 8,527,875 10,211,982 18,739,857 Pension expense 2,938,947 9,305,750 12,244,697 Texas Municipal Retirement System Plan Description The City participates as one of 895 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 annual comprehensive financial report (ACFR) that can be obtained at www.tmrs.corn. 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. 45 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) Employees Covered by Benefit Terms At the December 31, 2020 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 718 Inactive employees entitled to but not yet receiving benefits 497 Active employees 932 Contributions 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 are required to contribute 7% of their annual gross earnings. The contribution rates for the City were 16.32% and 16.57% in calendar years 2020 and 2021, respectively. The City's contributions to TMRS for the year ended September 30, 2021, were $7,684,733, and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of December 31, 2020, and the Total Pension Liability 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, 2020 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall payroll growth 2.75%per year Investment rate of return 6.75%, net of pension plan investment expense, including inflation Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB(10) mortality tables with the Public Safety table used for males and the General Employee table used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender-distinct 2020 Municipal Retirees of Texas mortality tables. The rates for actives, healthy retirees and beneficiaries are projected on the fully generational basis by Scale UMP to account for future mortality improvements. For disabled annuitants, the same mortality tables for healthy retirees is used with a 4-year set-forward for males and a 3-year set-forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and females respectively,to reflect the impairment for younger members who become disabled.The rates are 46 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2014 to December 31, 2018. They were adopted in 2019 and first used in the December 31, 2019 actuarial valuation. The post- retirement mortality assumption for healthy annuitants and Annuity Purchase Rate (APRs) are based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. In conjunction with these changes first used in the December 31, 2013 valuation, the System adopted the Entry Age Normal (EAN) actuarial cost method and a one-time change to the amortization policy. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments 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. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, TMRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and best estimates of arithmetic real rates of return for each major asset class in fiscal year 2021 are summarized in the following table: Long-Term Expected Real Asset Class Target Allocation Rate of Return (Arithmetic) Global Equities 30% 5.30% Core Fixed Income 10% 1.25% Non-Core Fixed Income 20% 4.14% Real Return 10% 3.85% Real Estate 10% 4.00% Absolute Return 10% 3.48% Private Equity 10% 7.75% Total 100% 47 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Changes in Net Pension Liability Increase(Decrease) Total Pension Fiduciary Net Net Pension Liability Position Liability (a) (b) (a)—(b) Balances as of December 31,2019 $293,657,654 $245,532,302 $48,125,352 Changes for the year: Service cost 6,472,668 - 6,472,668 Interest on total pension liability 19,539,894 - 19,539,894 Change of benefit terms - - - Difference between expected and actual experience ( 1,175,031) - ( 1,175,031) Change of assumptions - - - Contributions—employer - 7,598,124 ( 7,598,124) Contributions—employee - 3,257,273 ( 3,257,273) Net investment income - 18,618,015 ( 18,618,015) Benefit payments, including refunds of employee contributions ( 14,828,151) ( 14,828,151) - Administrative expense - ( 120,598) 120,598 Other changes - ( 4,705) 4,705 Balances as of December 31,2020 $303,667,034 $260,052,260 $43,614,774 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. 1% Current 1% Decrease Discount Rate Increase 5.75% 6.75% 7.75% Net pension liability $83,114,918 $43,614,774 $10,944,011 Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2021,the City recognized pension expense of$2,938,947 related to its participation in TMRS. 48 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) At September 30, 2021, 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 $ 121,592 $1,543,163 Net difference in assumptions - 12,234 Net difference between projected and actual earnings - 6,972,578 Contributions made subsequent to measurement date 5,530,567 - Total $5,652,159 $8,527,975 $5,530,567 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, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Plan Year Ended December 31: 2021 ($3,270,404) 2022 ( 342,600) 2023 ( 4,384,464) 2024 ( 408,915) Total ($8,406,383) 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. 49 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) 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, 2020. Employees Covered by Benefit Terms At the January 1, 2020 measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 147 Inactive employees entitled to but not yet receiving benefits 5 Active employees 159 Contributions The contribution rate for the firefighters is 13% and the City contributes 13.25%. 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, 2021,were$1,615,395, and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability (NPL) was measured as of January 1, 2021, and the Total Pension Liability used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. The NPL related to Governmental Activities is generally liquidated by the General Fund through annual contributions. Actuarial Assumptions The Total Pension Liability in the January 1, 2021, actuarial valuation was determined using the following actuarial assumptions: Inflation 3.0% per year Salary increases Service-based Discount Rate 4.99% per year Investment rate of return 7.75%, net of pension plan investment expense, including inflation 50 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) Mortality rates for employee and healthy annuitant combined rates were taken from the PubS- 2010 Mortality Tables. The mortality assumptions for all participants are sex distinct with mortality improvement projected 5 years beyond the valuation date using scale MP-2020 and a base year of 2010. 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 2021 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, 2020 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 provide future benefit payments for 26 years. These payments were discounted using a discount rate of 7.75%. Future benefit payments beyond 26 years were discounted using a high quality municipal bond rate of 3.26%. The high quality municipal bond rate was based on the week closest to, but not later than, the measurement date of the S&P Municipal Bond 20 Year High Grade Rate Index as published by the S&P Dow Jones.The single equivalent discount rate was 4.99%. 51 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) 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, 2020 $125,886,607 $52,877,954 $73,008,653 Changes for the year: Service cost 3,066,397 - 3,066,397 Interest on total pension liability 6,287,518 - 6,287,518 Change of benefit terms - - - Difference between expected and actual experience - - - Change of assumptions 8,631,596 - 8,631,596 Contributions—employer - 1,551,830 ( 1,551,830) Contributions—employee - 1,551,830 ( 1,551,830) Net investment income - 7,864,359 ( 7,864,359) Benefit payments, including refunds of employee contributions ( 5,901,298) ( 5,901,298) - Administrative expense - ( 115,915) 115,915 Balances as of December 31, 2021 $137,970,820 $57,828,760 $80,142,060 Sensitivity Analysis The following presents the net pension liability of the City, calculated using the discount rate of 4.47%, 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(3.47%) or 1 percentage point higher(5.47%)than the current rate. 1% Current 1% Decrease Discount Rate Increase 3.47% 4.47% 5.47% Net pension liability $99,501,281 $80,142,060 $64,244,424 Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2021,the City recognized pension expense of$9,305,750 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. 52 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 8 - PENSION PLANS(CONT'D.) At September 30, 2021, 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 $ 2,947,055 $ 1,824,238 Difference due to changes in actuarial assumptions 29,179,502 1,169,208 Net difference between projected and actual earnings - 7,218,536 Contributions made subsequent to measurement date 1,184,690 - Total $33,311,247 $10,211,982 $1,184,690 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, 2021. 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: 2022 $ 3,743,029 2023 4,528,253 2024 3,771,377 2025 5,135,983 2026 3,756,126 Thereafter 979,807 Total $21,914,575 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. 53 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS(CONT'D.) 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. 54 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS(CONT'D.) 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, 2020 measurement date, the following employees were covered by the benefit terms: Inactive plan members or beneficiaries currently receiving benefits 735 Inactive plan members entitled to but not yet receiving benefits - Active plan members 1,108 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, 2018 as conducted for the Texas Municipal Retirement System (TMRS). The firefighter assumptions are based on the January 1, 2020 Valuation for the Wichita Falls Firemen's Relief and Retirement Fund. Actuarial Methods and Assumptions: Valuation Date December 31, 2020 Actuarial Cost Method Individual Entry Age Normal Discount Rate 6.75%as of December 31, 2020 Inflation 2.50% Salary Increases 3.50% to 11.50% for TMRS and 3.50% to 12.00% for Fire, including inflation Demographic Assumptions TMRS: Based on the experience study covering the four-year period ending December 31, 2018 as conducted for TMRS. Based on the January 1, 2020 valuation for the Wichita Falls Firemen's Relief and Retirement Fund. Mortality TMRS: For healthy retirees, the gender-distinct 2019 Municipal Retirees of Texas mortality tables are used. The rates are projected on a fully generational bases using the ultimate mortality improvement rates in the MP tables to account for future mortality improvements. Fire: For healthy retirees, gender-distinct PubS-2010 (safety employees) mortality tables are used. The rates are projected on a fully generational basis using the projection scale MP- 2019 to account for future mortality improvements. 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. 55 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS(CONT'D.) Healthcare Cost Trend Rates Initial rate of 7.00% declining to ultimate rates of 4.25% after 13 years. Discount Rate 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, 2019 $22,362,048 $6,576,023 $15,786,025 Changes for the year: Service cost 557,600 - 557,600 Interest on total OPEB liability 1,471,238 - 1,471,238 Change of benefit terms - - - Difference between expected and actual experience 678,603 - 678,603 Change of assumptions 733,999 - 733,999 Contributions—employer - 2,051,116 ( 2,051,116) Contributions—employee - -Net investment income - 1,022,243 ( 1,022,243) Benefit payments, including refunds of employee contributions ( 1,689,454) ( 1,689,454) - Administrative expense - -Other changes - - - Balances as of December 31, 2020 $24,114,034 $7,959,928 $16,154,106 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% $18,332,335 $16,154,106 $14,236,841 56 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 9 - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS(CONT'D.) 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 $14,411,775 $16,154,106 $18,183,295 For Governmental Activities,the net OPEB liability is generally liquidated by the General Fund. Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2021, the City recognized OPEB expense of$1,682,330 related to the City of Wichita Falls Retiree Health Care Plan. At September 30, 2021, 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 $ 549,029 $328,472 Difference due to changes in actuarial assumptions 1,132,002 - Differences between expected and actual experience,assets - 745,779 Contributions made subsequent to measurement date 1,544,613 - Total S3,225.644 $1,074,251 $1,544,613 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, 2021. 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 September 30: 2022 $109,582 2023 199,878 2024 45,933 2025 187,410 2026 63,977 Total $606,780 57 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 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, 2021 was $51,909. The lease payment increases by 3% per year with a final lease payment of$157,805 in 2058. 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, 2021. 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, 2021: Year ending September 30: 2022 $ 125,234 2023 88,760 2024 61,537 2025 59,824 2026 61,281 2027-2031 335,112 2032-2036 388,486 2037-2041 450,362 2042-2046 522,093 2047-2051 605,249 2052-2056 701,650 2057-2058 311,013 Total minimum payments required $3,710,601 The total rental expenses for all operating leases for the year ended September 30, 2021 was $140,135. There were no contingent rentals during the year ended September 30, 2021. 58 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 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 $5,657,057 as of September 30, 2021, which is based on 24% usage of the landfill. The City will recognize the remaining estimated cost of closure and postclosure care of $18,276,645 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$72,797 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, 2021 are summarized as follows: Balance at Balance at October 1, Retired and September 30, Due Within 2020 Issued Transferred 2021 One Year Governmental Activities: General obligation bonds $ 29,070,000 $ - $ 2,795,000 $ 26,275,000 $2,390,000 Combination tax and revenue bonds 18,040,000 - 1,375,000 16,665,000 1,425,000 Venue tax revenue bonds - 2,680,000 45,000 2,635,000 50,000 Premiums on bonds 1,800,015 - 275,661 1,524,354 - Accrued vacation and sick leave payable 9,570,489 3,147,151 3,108,524 9,609,116 3,000,000 Capital leases payable 4,555,678 - 545,441 4,010,237 579,263 Claims and judgments payable 705,077 846,389 625,464 926,002 76,253 Total governmental activities 63,741,259 6,673,540 8,770,090 61,644,709 7,520,516 Business-type Activities: Utility system revenue bonds, net of premium(discount) 54,305,000 - 7,635,000 46,670,000 8,010,000 Combination tax and revenue bonds 38,140,000 - 1,550,000 36,590,000 1,570,000 Premiums on bonds 5,910,005 - 1,565,109 4,344,896 - Accrued vacation and sick leave payable 841,877 783,188 805,913 819,152 675,000 Note payable 238,945 - 42,892 196,053 45,728 Capital leases payable 16,304,007 - 1,092,297 15,211,710 1,155,401 Landfill closure,post-closure costs 5,518,578 211,276 - 5,729,854 - Total business-type activities 121,258,412 994,464 12,691,211 109,561,665 11,456,129 Total long-term liabilities $184,999,671 $7,668,004 $21,461,301 $171,206,374 $18,976,645 For governmental activities, claims and judgments payable and compensated absences are generally liquidated by the General Fund. 59 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 14 - LONG-TERM LIABILITIES(CONT'D.) Bonds Payable Bonds payable as of September 30, 2021 are comprised of the following individual issues: Range of Final Annual Bonds Interest Maturity Serial Bonds Outstanding Rates Date Payments Authorized At 9/30/21 General Obligation Bonds: General Obligation Refunding 2.00%- 9/01/26 $200,000 to $9,650,000 $ 5,135,000 Bonds,Series 2015A 5.00% $1,105,000 General Obligation Refunding 0.73%- 9/01/26 $110,000 to 2,885,000 1,470,000 Bonds,Series 2015B 3.48% $310,000 General Obligation Bonds, 2.00%- 9/01/38 $550,000 to 16,345,000 14,625,000 Series 2018A 5.00% $1,155,000 General Obligation Refunding 2.00%- 10/01/28 $80,000 to 6,170,000 5,045,000 Bonds,Series 2018B 4.00% $725,000 Total General Obligation Bonds 26,275,000 Combination Tax and Revenue Bonds: Combination Tax and Revenue 5.60% 2/01/25 $165,000 to 3,930,000 1,385,000 Certificates of Obligation,Series 2010 $375,000 Combination Tax and Revenue 2.00%- 9/01/31 $135,000 to 3,200,000 1,885,000 Certificates of Obligation,Series 2011 4.00% $220,000 Combination Tax and Revenue 2.00%- 9/01/33 $530,000 to 19,875,000 13,395,000 Certificates of Obligation,Series 2013 3.375% $1,315,000 Combination Tax and Revenue 2.00%- 9/01/33 $505,000 to 13,000,000 8,750,000 Certificates of Obligation,Series 4.625% $905,000 2013A Combination Tax and Revenue 0.00%- 3/01/45 $890,000 to 33,545,000 27,840,000 Certificates of Obligation,Series 2015 2.12% $1,425,000 Total Combination Tax and Revenue Bonds 53,255,000 Revenue Bonds: Water&Sewer System Revenue 2.00%- 8/01/27 $2,635,000 to 74,005,000 46,670,000 Refunding Bonds,Series 2016 5.00% $9,705,000 Venue Tax Revenue Bonds, 4.00% 9/01/50 $45,000 to 2,680,000 2,635,000 Series 2020 $150,000 Total Revenue Bonds 49,305,000 Total All Bonds $128,835,000 60 CO 0 CO N V ul ul N .-I 0 CO CO 0 CT Ln Ol O N N O O 0 CO N r1 CO Cr O1 01 CO M V M v r` M M. 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COl CO CO N COl O CO CO CO -O c-1 c-1 CO C in C (1) '^ ON V N 00 0 0 0 .--1 -� -0N 0 c-1 N r1 COO v) ul 0 C CO ul 01 01 V CO 01 O) CO Co v ti oc l0 Oi Cr' O O of NI z 0 C— o Cr COn CO N NJ to CO c 1 N c-I A N f0 v) in V _ _ �� -, 4- 0 0 O 0 O O 0 0 0 LLI Vl To 0 0 O 0 O O 0 0 0 41 N 2 00) 00 00 CO A. CO CO CO IN C ,I- u1 0 N c-I 01 N N COL d- M N N N N N CO V N uo N .o N Q 4-- no • E d COr1 U1 M c-1 CO O CC on M M V V COL ea 6 C a, 0 0 O O 0 I_ bD -O -D N N N N N v( • Q) C E N CO V u1 0 N N ^ N N @ i ` N N N N N N N M C V V lla O o 0 o O O 0 0 0 0 O (6 Q NININNNNININNN H J Q } to Ct H N O Z CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 14 - LONG-TERM LIABILITIES(CONT'D.) 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, 2021, this fund had a fund balance of$1,448,934. 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. The Venue Tax Revenue Bonds were issued for the purpose of improving the City's MPEC and Memorial Auditorium facilities and are serviced by an additional hotel/motel tax designated for these purposes. 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, 2021 is classified as follows: Long-term $ 150,325 Current portion 45.728 Total $ 196,053 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. 62 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 14 - LONG-TERM LIABILITIES(CONT'D.) 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, 2021 were as follows: Transfers From Transfers To Amount Reason General Fund Nonmajor Governmental Funds $ 116,231 Supplement operating grants General Fund Nonmajor Governmental Funds 48,982 Supplement operating deficits Nonmajor Governmental Funds Nonmajor Governmental Funds 941,394 Fund debt service payment Nonmajor Governmental Funds Water and Sewer Fund 5,435 Purchase capital assets Nonmajor Governmental Funds Internal Service Funds 530,169 Purchase capital assets Water and Sewer Fund General Fund 1,771,811 Administrative overhead Water and Sewer Fund Nonmajor Governmental Funds 500,000 Fund debt service payment Water and Sewer Fund Internal Service Funds 32,000 Purchase capital assets Sanitation Fund General Fund 1,685,610 Administrative overhead Sanitation Fund Water and Sewer Fund 63,530 Transfer capital assets Sanitation Fund Internal Service Funds 2,062,159 Purchase capital assets Regional Airport Fund Nonmajor Governmental Funds 28,563 Supplement capital grants Regional Airport Fund Internal Service Fund 73,533 Purchase capital assets Nonmajor Enterprise Funds Nonmajor Governmental Funds 403,261 Fund debt service payment Nonmajor Enterprise Funds Nonmajor Governmental Funds 14,252 Supplement capital grants Nonmajor Enterprise Funds Water and Sewer Fund 24,348 Transfer capital assets Internal Service Funds General Fund 312,000 Administrative overhead Total $8,613,278 63 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 15 - INTERFUND BALANCES(CONT'D.) Balances due to and from other funds as of September 30, 2021 were as follows: Due To Fund Due From Fund Amount Purpose General Fund Nonmajor Governmental Funds $2,424,327 Short-term loan General Fund Regional Airport Fund 360,309 Short-term loan General Fund Nonmajor Enterprise Funds 1,453,120 Short-term loan General Fund Internal Service Funds 1,166,221 Short-term loan Total $5,403,977 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, 2021 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. In December 2021,this contract was assumed by Oklaunion Industrial Park, LLC. Contract Commitments At September 30, 2021, the City was committed to various contracts. The amounts for which the various funds are committed to complete these contracts are as follows: 64 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 Note 16 - COMMITMENTS AND CONTINGENCIES(CONT'D.) General Fund $ 1,246,071 Nonmajor Governmental Funds 6,864,625 Water and Sewer Fund 4,369,130 Sanitation Fund 326,060 Nonmajor Enterprise Funds 3,231,724 Nonmajor Enterprise Funds 69,685 Total contract commitments-City $16,107,295 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, 2021, the City abated property taxes totaling $1,836,761 under this program and received payments in lieu of taxes totaling$1,521,075. 65 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONT'D.) SEPTEMBER 30,2021 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, 2021 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 $25,205,993 $26,973,524 $2,902,135 $803,676 $578,494 $56,463,822 Capital assets,net of accumulated depreciation 2,517,331 - - - - 2,517,331 Total assets 27,723,324 26,973,524 2,902,135 803,676 578,494 58,981,153 Accounts payable and other current liabilities 295,253 543 - - - 295,796 Long-term liabilities 10,130,916 19,000,000 - - - 29,130,916 Total liabilities 10,426,169 19,000,543 - - - 29,426,712 Net position $17,297,155 $7,972,981 $2,902,135 $803,676 $578,494 $29,554,441 Condensed statement of activities: Expenses: Community development $ 4,582,703 $4,300,839 $ - $ - $ 10,000 $ 8,893,542 Program revenues: Operating grants and contributions - - - - - - Net program expense ( 4,582,703) ( 4,300,839) - - ( 10,000) ( 8,893,542) General revenues: Tax revenues 4,727,354 4,727,354 847,416 93,704 213,746 10,609,574 Non-tax general revenues 193,423 6,451 403 365 89 200,731 Total general revenues 4,920,777 4,733,805 847.819 94,069 213,835 10,810,305 Change in net position 338,074 432,966 847,819 94,069 203,835 1,916,763 Beginning net position 16,959,081 7,540,015 2,054,316 709,607 374,659 27,637,678 Ending net position $17,297,155 $7,972,981 $2,902,135 $803,676 $578,494 $29,554,441 66 CITY OF WICHITA FALLS, TEXAS NOTES TO THE FINANCIAL STATEMENTS(CONTD.) SEPTEMBER 30,2021 Note 19 - SUBSEQUENT EVENTS Refunding Bonds On October 1, 2021, the City issued $7,595,000 in bonds titled "General Obligation Refunding Bonds, Taxable Series 2021" and $1,675,000 in bonds titled "General Obligation Refunding Bonds, Series 2021." The General Obligation Refunding Bonds, Taxable Series 2021 were issued to refund the remaining outstanding Combination Tax and Revenue Certificates of Obligation, Taxable Series 2010 and portions of the outstanding Combination Tax and Revenue Certificates of Obligation, Series 2013A. This refunding will reduce the City's debt service payments by a total of $749,231, with a present value of savings of$681,211. The General Obligation Refunding Bonds, Series 2021 were issued to refund the remaining outstanding Combination Tax and Revenue Certificates of Obligation, Taxable Series 2011. This refunding will reduce the City's debt service payments by a total of$222,887, with a present value of savings of$202,982. Purchase of Fire Apparatus via Capital Lease In December 2021,the City approved the replacement of front-line fire apparatus.This purchase was financed through the issuance of a capital lease. The total lease payments will be $11,165,446 and will be repaid over 11 annual payments of $1,015,041. These annual payments begin on October 1, 2023. 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, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 69,314,693 $ 69,314,693 $ 75,096,176 $ 5,781,483 Charges for services 2,948,586 2,948,586 3,066,404 117,818 Licenses and permits 1,746,983 1,746,983 1,631,602 (115,381) Fines and forfeitures 2,361,451 2,361,451 2,198,715 (162,736) Contributions 225,963 225,963 179,483 (46,480) Miscellaneous revenue 1,373,777 3,243,482 3,405,049 161,567 Total revenues 77,971,453 79,841,158 85,577,429 5,736,271 Expenditures: Current: Administrative services 13,982,000 16,701,705 15,211,294 1,490,411 Police 26,822,585 26,822,585 26,144,281 678,304 Fire 17,739,639 18,317,176 18,241,191 75,985 Parks and recreation 5,877,501 5,877,501 4,996,125 881,376 Accounting/finance 862,524 862,524 853,221 9,303 Community development 2,348,935 2,348,935 2,221,870 127,065 Public works 5,185,970 5,185,970 4,735,920 450,050 Health 3,514,189 3,515,445 3,304,684 210,761 Traffic and transportation 1,743,575 1,700,975 1,668,533 32,442 Capital outlay 2,719,518 2,880,861 1,710,238 1,170,623 Total expenditures 80,796,436 84,213,677 79,087,357 5,126,320 Excess of revenues over(under)expenditures (2,824,983) (4,372,519) 6,490,072 10,862,591 Other financing sources(uses): Transfers in 3,769,421 3,769,421 3,769,421 - Transfers out (944,438) (944,438) (165,213) 779,225 Total other financing sources(uses) 2,824,983 2,824,983 3,604,208 779,225 Excess of revenues and other sources over(under)expenditures and other uses - (1,547,536) 10,094,280 11,641,816 Fund balance-beginning 27,338,776 27,338,776 27,338,776 - Fund balance-ending $ 27,338,776 $ 25,791,240 $ 37,433,056 $ 11,641,816 68 N m H 07 x W N-1 M R O M N CO M O O O N m O a a a N N N M N N a .0N M N 00 ,00010 .0.0 `-1 N m O a ' ND ' M a m CO CO N CO CO O N N O N .--1 .-I O O a CO'N N a lD a c-1 m N m a 6 m M O M W O m m , m l0 a a N .-I m N O O a '—N m N m 00 M N O O N 0 N CO O N M M c-1 N .-1 m N.-I a N N a N N e-I N N co. 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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 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 $1,547,536 were approved by the City Council ($3,417,241 total less $1,869,705 in supplemental revenue). 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. 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 75 CITY OF WICHITA FALLS, TEXAS NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (CONT'D.) SEPTEMBER 30,2021 Effective April 20, 2016,there have been multiple changes in benefits, as follows: - 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 12/31/2019 measurement date, a depletion date projection as of that date was performed. The results of this projection showed a single discount rate of 4.99%.The discount rate was decreased from 5.13%to 4.99%. For purposes of determining the GASB discount rate at the 12/31/2018 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 12/31/2017 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%. 76 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 Agreement 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. MPEC/Hotel/Motel Tax Fund The MPEC/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. These funds are used to support the City's MuItH-Purpose Events Center. Hotel/Motel Venue Tax Fund The Hotel/Motel Venue Tax Fund accounts for revenues derived from an additional occupancy tax which is expended on projects classified as a venue such as an arena, coliseum, stadium, or other facilities. 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. 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. 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. Venue Tax Bond Projects This fund was established to account for projects financed by the Venue Tax Revenue Bonds, Series 2020. These funds are to be used to make renovations to the MuItH-Purpose Events Center and Memorial Auditorium. 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. ) /\\) \ (\»~3 \ $/»(»/ » d \\ � � �\ \ On On On on /`� ° . . ; . . . \ . . . 3 . 9 . . . . . . . A {\\ / E \ ` \ ,, F.' } )}/ @ ® . . . . :Tag ` ! J®a 2 %r!s° [ ` ` ! tel ! {§ [ Lro;, . . „ , . . . . . \ \ { j �)))Won \ ` \ \: @° G \ \ � ! # _ - . 1111 ,e . , . , . . . 1 . . ' 1 > p ! . . , , , - - - 1 ; ( § ° ° ° ° ° j ( } ' {{{ ° , , . . . . . ( 0 , , . , , : , u :/_ _ — ciz ILL' { f : ) \\ , \ : } \ \ \\ LLX « §: _ : r ; ) }\ �j {\\ \ !\_\ _ \ -- \} j }/\\f?"- 2 \$\\\\ \ \j }\\ )) //!)::„)a>} / ) `g_ , , Yll /` , , r ° / . . . . \\ / . . . . . . . \ . . . . \ % E . E E : 3 ?7 . , 0 , j \ '0r / `\ f - ° , G »t , _ _ _ 0 > } WE . . . § y§ . . . . / . . . . . . . . q R . . . . , ■ = % , : : : _ ) (\ § , , ICI 2 / ) , , . . . l . E§ . . . . / . . . . . . . . / \ . . . . / y u ' / , : : , ~ ,ri k \ / , , 2 § ] ! _E: ! . . . . . . . . § ■ _ - . . , _ , , , _ ( \ :!_ , , -7 - E= li [~® )\j \� - - TrO\/:::,� "c,,, /} /3/f \ \ ) EXHIBIT C-3 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE-COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ - $ - $ 15,978 $ 15,978 Intergovernmental revenue 1,246,504 1,246,504 1,246,291 (213) Miscellaneous revenue - - 9,242 9,242 Total revenues 1,246,504 1,246,504 1,271,511 25,007 Expenditures: Administrative services 130,883 130,883 130,883 - Parks and recreation 40,000 40,000 32,237 7,763 Community development 1,070,078 1,070,078 807,540 262,538 Public works 5,543 5,543 6,596 (1,053) Capital outlay - - 172,710 (172,710) Total expenditures 1,246,504 1,246,504 1,149,966 96,538 Excess of revenues over(under)expenditures - - 121,545 121,545 Fund balance-beginning 800,013 800,013 800,013 - Fund balance-ending $ 800,013 $ 800,013 $ 921,558 $ 121,545 79 EXHIBIT C-4 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE-SECTION 8 HOUSING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 3,867,314 $ 3,867,314 $ 3,931,099 $ 63,785 Miscellaneous revenue - - 4,502 4,502 Total revenues 3,867,314 3,867,314 3,935,601 68,287 Expenditures: Community development 3,867,314 3,867,314 3,862,041 5,273 Total expenditures 3,867,314 3,867,314 3,862,041 5,273 Excess of revenues over(under)expenditures - - 73,560 73,560 Fund balance-beginning 1,647,940 1,647,940 1,647,940 - Fund balance-ending $ 1,647,940 $ 1,647,940 $ 1,721,500 $ 73,560 80 EXHIBIT C-5 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE- HOME INVESTMENT PARTNERSHIP AGREEMENT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Intergovernmental revenue $ 291,832 $ 291,832 $ 440,263 $ 148,431 Miscellaneous revenue - - 11,900 11,900 Total revenues 291,832 291,832 452,163 160,331 Expenditures: Community development 406,101 406,102 89,823 316,279 Total expenditures 406,101 406,102 89,823 316,279 Excess of revenues over(under)expenditures (114,269) (114,270) 362,340 476,610 Fund balance-beginning 842,873 842,873 842,873 - Fund balance-ending $ 728,604 $ 728,603 $ 1,205,213 $ 476,610 81 EXHIBIT C-6 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE- MPEC/HOTEL/MOTEL TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 1,500,000 $ 1,500,000 $ 2,029,268 $ 529,268 Miscellaneous revenue 1,341,266 1,341,266 44,326 (1,296,940) Total revenues 2,841,266 2,841,266 2,073,594 (767,672) Expenditures: Administrative services 97,000 79,000 51,550 27,450 Multi-Purpose Events Center 3,444,266 3,462,266 2,064,199 1,398,067 Total expenditures 3,541,266 3,541,266 2,115,749 1,425,517 Excess of revenues over(under)expenditures (700,000) (700,000) (42,155) 657,845 Other financing sources(uses): Transfers in 700,000 700,000 48,982 (651,018) Excess of revenues and other sources over(under)expenditures and other uses - - 6,827 6,827 Fund balance-beginning 871 871 871 - Fund balance-ending $ 871 $ 871 $ 7,698 $ 6,827 82 EXHIBIT C-7 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE-GOLF FUND FOR THE YEAR ENDED SEPTEMBER 30, 2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Charges for services $ 830,000 $ 830,000 $ 516,577 $ (313,423) Miscellaneous revenue - - 443,280 443,280 Total revenues 830,000 830,000 959,857 129,857 Expenditures: Administrative services 910,000 910,000 856,367 53,633 Total expenditures 910,000 910,000 856,367 53,633 Excess of revenues over(under)expenditures (80,000) (80,000) 103,490 183,490 Other financing sources(uses): Transfers in 80,000 80,000 - (80,000) Total other financing sources(uses) 80,000 80,000 - (80,000) Excess of revenues and other sources over(under)expenditures and other uses - - 103,490 103,490 Fund balance-beginning 40,583 40,583 40,583 - Fund balance-ending $ 40,583 $ 40,583 $ 144,073 $ 103,490 83 EXHIBIT C-8 CITY OF WICHITA FALLS, TEXAS BUDGETARY COMPARISON SCHEDULE- DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30,2021 Variance With Final Budget- Budgeted Amounts Positive Original Final Actual (Negative) Revenues: Taxes $ 2,191,697 $ 2,191,697 $ 2,150,267 $ (41,430) Contributions 1,882,463 1,882,463 1,882,463 - Miscellaneous revenue - - 1,012 1,012 Total revenues 4,074,160 4,074,160 4,033,742 (40,418) Expenditures: Debt service-principal 4,170,000 4,170,000 4,170,000 - Debt service-interest and paying agent fees 1,748,815 1,748,815 1,745,815 3,000 Total expenditures 5,918,815 5,918,815 5,915,815 3,000 Excess of revenues over(under)expenditures (1,844,655) (1,844,655) (1,882,073) (37,418) Other financing sources(uses): Transfers in 1,844,655 1,844,655 1,844,655 - Total other financing sources(uses) 1,844,655 1,844,655 1,844,655 - Excess of revenues and other sources over(under)expenditures and other uses - - (37,418) (37,418) Fund balance-beginning 1,486,352 1,486,352 1,486,352 - Fund balance-ending $ 1,486,352 $ 1,486,352 $ 1,448,934 $ (37,418) 84 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, the City acquired Kickapoo Downtown Airport, a private airport. The Kickapoo Airport Fund was established to account for the operating revenues and expenses of the airport. Transit Fund 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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E z to > u do = m - - -a � woovaoo — cc ° ov • y0- , o -a -a CO F° cfa a O '6 v ° cwa O Z ° Q La,)m N .+ 3c - uyu00— °. 3 ` ` > 0 ~ u `° 7. ` vvvvuuu vas C '> O. u 0 c 73 oa) ' (3) C oDuQQ oZZoo 2 . i. _c aio lO' V c a CO Q O U U Z 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 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30,2021 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Assets Current assets: Cash and cash equivalents $ 1,780,403 $ 88,436 $ 2,775,880 $ 4,118,326 $ 8,763,045 Restricted cash and cash equivalents - - 9,372,786 - 9,372,786 Receivables: Other 34,876 - 9,032 - 43,908 Inventory 726,717 - - - 726,717 Prepaid items 474,815 327 - - 475,142 Total current assets 3,016,811 88,763 12,157,698 4,118,326 19,381,598 Capital assets,net of accumulated depreciation 21,479,256 - - 5,095,380 26,574,636 Total assets 24,496,067 88,763 12,157,698 9,213,706 45,956,234 Deferred outflows of resources Pension-related 178,728 1,871 10,033 103,223 293,855 OPEB-related 103,543 1,290 - 39,030 143,863 Total deferred outflows of resources 282,271 3,161 10,033 142,253 437,718 Liabilities Current liabilities: Accounts payable-trade 128,611 4,304 104,655 16,288 253,858 Accrued payroll 94,612 1,047 4,811 56,480 156,950 Accrued vacation and sick leave 109,947 - - 67,259 177,206 Payable to other City funds - - 1,166,221 - 1,166,221 Estimated health claims payable - - 1,380,955 - 1,380,955 Other liabilities - - 8,932 - 8,932 Capital leases-current maturities 456,557 - - - 456,557 Total current liabilities 789,727 5,351 2,665,574 140,027 3,600,679 Long-term liabilities: Capital leases,less current maturities 465,596 - - - 465,596 Net pension liability 1,379,148 14,437 77,420 796,517 2,267,522 Net OPEB liability 518,547 6,462 - 195,465 720,474 Total long-term liabilities 2,363,291 20,899 77,420 991,982 3,453,592 Total liabilities 3,153,018 26,250 2,742,994 1,132,009 7,054,271 Deferred inflows of resources Pension-related 269,661 2,823 15,138 155,741 443,363 OPEB-related 34,483 430 - 12,998 47,911 Total deferred inflows of resources 304,144 3,253 15,138 168,739 491,274 Net position Net investment in capital assets 20,557,103 - - 5,095,380 25,652,483 Unrestricted 764,073 62,421 9,409,599 2,959,831 13,195,924 Total net position $ 21,321,176 $ 62,421 $ 9,409,599 $ 8,055,211 $ 38,848,407 89 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 30,2021 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Operating revenues: Charges for services $ 10,100,290 $ 118,081 $ - $ 3,813,581 $ 14,031,952 Rents,concessions and other 12,000 - 1,084,149 - 1,096,149 Contributions - - 15,293,364 - 15,293,364 Total operating revenues 10,112,290 118,081 16,377,513 3,813,581 30,421,465 Operating expenses: Personnel services 2,031,569 22,257 99,935 1,148,989 3,302,750 Supplies and materials 2,896,027 843 - 133,797 3,030,667 Maintenance and repairs 2,038,992 - - 743,766 2,782,758 Utilities and other services 76,482 800 71,192 234,767 383,241 Insurance and contract support 67,032 - 14,342,909 15 14,409,956 Other expenses 191,309 70,040 2,202,294 8,885 2,472,528 Depreciation and amortization 4,297,211 - - 781,672 5,078,883 Total operating expenses 11,598,622 93,940 16,716,330 3,051,891 31,460,783 Operating income(loss) (1,486,332) 24,141 (338,817) 761,690 (1,039,318) Nonoperating revenues(expenses): Interest income - - 1,724,368 - 1,724,368 Gain(loss)on sale of capital assets 62,700 - - - 62,700 Interest expense (27,123) - - - (27,123) Total nonoperating revenues (expenses) 35,577 - 1,724,368 - 1,759,945 Income(loss)before transfers (1,450,755) 24,141 1,385,551 761,690 720,627 Transfers in 2,167,692 - - 530,169 2,697,861 Transfers out (312,000) - - - (312,000) Change in net position 404,937 24,141 1,385,551 1,291,859 3,106,488 Net position-beginning 20,916,239 38,280 8,024,048 6,763,352 35,741,919 Net position-ending $ 21,321,176 $ 62,421 $ 9,409,599 $ 8,055,211 $ 38,848,407 90 EXHIBIT E-3 CITY OF WICHITA FALLS,TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30,2021 Employee Information Fleet Duplicating Benefit Technology Maintenance Services Trust Fund Totals Cash flows from operating activities: Received from customers and users $ 310,805 $ - $ 4,131,298 $ - $ 4,442,103 Received from interfund charges 9,783,335 118,081 11,982,007 3,813,581 25,697,004 Other operating receipts - - 811,046 - 811,046 Payments to suppliers (5,765,976) (72,640) (15,830,772) (1,510,871) (23,180,259) Payments for interfund services (527,932) (7,142) - (130,287) (665,361) Payments to employees (1,498,245) (15,302) (82,691) (822,625) (2,418,863) Net cash provided by operating activities 2,301,987 22,997 1,010,888 1,349,798 4,685,670 Cash flows from noncapital financing activities: Interfund loans received(repaid) - - (1,100,245) - (1,100,245) Transfers in from other funds 2,167,692 - - 530,169 2,697,861 Transfers out to other funds (312,000) - - - (312,000) Net cash provided(used)by noncapital financing activities 1,855,692 - (1,100,245) 530,169 1,285,616 Cash flows from capital and related financing activities: Acquisition of capital assets (3,664,335) - - (1,460,795) (5,125,130) Proceeds from sale of capital assets 62,700 - - - 62,700 Principal paid on long-term debt (447,692) - - - (447,692) Interest and fees paid on long-term debt (27,123) - - - (27,123) Net cash used for capital and related financing activities (4,076,450) - - (1,460,795) (5,537,245) Cash flows from investing activities: Interest on investments - - 1,724,368 - 1,724,368 Net cash provided by investing activities - - 1,724,368 - 1,724,368 Net Increase in Cash and Cash Equivalents 81,229 22,997 1,635,011 419,172 2,158,409 Cash and Cash Equivalents-Beginning 1,699,174 65,439 10,513,655 3,699,154 15,977,422 Cash and Cash Equivalents-Ending $ 1,780,403 $ 88,436 $ 12,148,666 $ 4,118,326 $ 18,135,831 Cash flows from operating activities: Operating income(loss) $ (1,486,332) $ 24,141 $ (338,817) $ 761,690 $ (1,039,318) Adjustments to reconcile operating income(loss)to net cash provided(used)by operating activities: Depreciation and amortization 4,297,211 - - 781,672 5,078,883 (Increase)decrease in assets and deferred outflows: Receivables: Other (18,062) - 539,094 - 521,032 Inventory 18,330 - - - 18,330 Prepaid items 678 273 48,377 43 49,371 Deferred outflows-pension-related 7,856 69 (180) (727) 7,018 Deferred outflows-OPEB-related (28,234) (349) - (10,554) (39,137) Increase(decrease)in liabilities and deferred inflows: Accounts payable-trade (343,309) (4) 55,393 (160,797) (448,717) Accrued payroll (11,015) 99 (116) 4,846 (6,186) Accrued vacation and sick leave (3,236) - - 3,681 445 Estimated health claims payable - - 701,953 - 701,953 Other liabilities (88) - 7,744 - 7,656 Net pension liability (139,166) (1,350) (2,762) (37,539) (180,817) Net OPEB liability 13,394 148 - 4,454 17,996 Deferred inflows-pension-related (13,171) (118) 202 373 (12,714) Deferred inflows-OPEB-related 7,131 88 - 2,656 9,875 Total adjustments 3,788,319 (1,144) 1,349,705 588,108 5,724,988 Net cash provided(used)by operating activities $ 2,301,987 $ 22,997 $ 1,010,888 $ 1,349,798 $ 4,685,670 91 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 F-1 CITY OF WICHITA FALLS, TEXAS COMBINING STATEMENT OF NET POSITION COMPONENT UNITS SEPTEMBER 30,2021 Wichita Falls Economic Wichita Falls Wichita Falls Wichita Falls Wichita Falls Development 4B Sales Tax Reinvestment Reinvestment Reinvestment Corporation Corporation Zone#2 Zone#3 Zone#4 Totals Assets Cash and cash equivalents $ 24,328,149 $26,129,179 $ 2,902,135 $ 805,570 $ 578,494 $ 54,743,527 Receivables: Government agencies 865,876 844,345 - (1,894) - 1,708,327 Prepaid items 11,968 - - - - 11,968 Capital assets,net of accumulated depreciation 2,517,331 - - - - 2,517,331 Total assets 27,723,324 26,973,524 2,902,135 803,676 578,494 58,981,153 Liabilities Accounts payable-trade 254,020 543 - - - 254,563 Other liabilities 41,233 - - - - 41,233 Long-term liabilities: Portion due or payable within one year 85,000 505,000 590,000 Portion due or payable after one year 10,045,916 18,495,000 28,540,916 Total liabilities 10,426,169 19,000,543 - - - 29,426,712 Net position Net investment in capital assets 979,912 - - - - 979,912 Unrestricted 16,317,243 7,972,981 2,902,135 803,676 578,494 28,574,529 Total net position $ 17,297,155 $ 7,972,981 $ 2,902,135 $ 803,676 $ 578,494 $ 29,554,441 92 N LL F- — M 01 O N N co O In u1 M CO In 0 m 0 a N 0 N .--I 0 N I, N = N 00 ' ' 0 V1 00 N N N M N N a X — N O O N NNNNO O N a W 00 0 In CO .N-I In N N .-I .-I M V) O In m 00 Cr 00 O) N v) F .0-- .0' CO In rn O .-I N Qi N N v- V} 0 0 7 00 M M In 01 To O E a ' ' ' ' O O N ' ' co co N a LL O O to M. 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O 00 N N h O U \ \ _ p O O 0 LL 2 O O I- N Z Q O X co W m \ co , o 0 0 V) >!y o .-I J Q N J ao Q VI N U. Zm H mm rn U I LLI- OO w " .. o - —I 1— Y C =a v 8 CI NJ N 0 LL W - V 00 on O U O.-I o o .-I • \ o \ HZ a V m E O U N• o o m co v v a v a °J io C0 0 0 a v 0 0 m a F N a m > .L., 0 0 0 v co c• s `n > `n 0 a To ✓ o -CC I— I— EXHIBIT G-3 CITY OF WICHITA FALLS, TEXAS DEBT SERVICE COVERAGE- REVENUE BONDS SEPTEMBER 30, 2021 Water and Sewer Revenue Bonds: Change in net position (Exhibit A-8) $ 10,087,805 Add: Depreciation and amortization $ 8,712,691 Interest expense and paying agent fees 2,747,739 Transfers out 2,303,811 13,764,241 Subtract: West Texas Utilities water revenues 500,000 Gain (loss)on sale/abandonment of capital assets - Capital contributions from developers 874,423 Transfers in 93,313 (1,467,736) Net earnings for determining debt service coverage $ 22,384,310 Priority Subordinate Lien Bonds Lien Bonds Net earnings for determining debt service coverage $ 22,384,310 Principal and interest requirements to maturity $ 58,611,900 $ - Number of years remaining to pay bonds 6 N/A Average annual principal and interest requirement 9,768,650 N/A Minimum bond covenant debt service coverage 1.25 1.10 Minimum debt service coverage requirement $ 12,210,813 $ - 12,210,813 Excess over debt service coverage requirements $ 10,173,498 100 $ `} ® « ®~ ® , . _ . ,,:„= . . . s; e « H. . Eg' . . e ms , : , , , , / ! ,{ , , ; ; , , , , „ ! \ ( i )( : . . . . y . . ;§ . . . f7 5 ° . . . . 1- k� , E ` ~ :,gLq , ° , , ° „ `~ ° ~ , , 2« CO CO , o;2 00 — } §J} § )u. 3 k§§ �LI o 2§` [ m§ u § § ,8 / \ : j \ ) \\ \ . �\ s z ! \ -\ 2. 8 : - \ ? - \ \ {_ - gE, : ` ! \ - 0 E _ _ \j .1 i - - j\\\ 33 :9 _ )81 < -- : (}\ 3 /\) )\ })\ _ ) j} §\ »7 }{%){ ) { } ) { iv.f, Eo 8 {% r - )«\/: _ - L'_.. \ \ / \{5)l±±2 232 3 } _ _: __ : $ } `-- } `- ` \ 2 \ j EXHIBIT G-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 30,2021 Beginning Ending Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Administrative services: Mayor and City Council $ 5,218 $ - $ - $ 5,218 City Manager 281,562 - - 281,562 Personnel/Risk Management 7,623 - - 7,623 Martin Luther King Center 749,447 - - 749,447 Library 5,648,873 - 29,610 5,619,263 General Public Information 784,812 4,428 79,403 709,837 Building Maintenance 2,907,123 - - 2,907,123 Nondepartmental 512,598 - - 512,598 Municipal Court 607,833 - 22,748 585,085 Legal 1,518 - - 1,518 Homeland security 604,824 - 19,856 584,968 Training center 2,271 - - 2,271 Golf course 4,717,515 - 28,909 4,688,606 Total administrative services 16,831,217 4,428 180,526 16,655,119 Police 26,554,259 53,405 139,545 26,468,119 Fire 8,106,135 - - 8,106,135 Parks and recreation: Recreation 2,677,977 - 61,127 2,616,850 Park maintenance 5,243,713 - 48,204 5,195,509 Cemetery 148,133 - - 148,133 Lake Wichita Revitalization 1,261,180 - - 1,261,180 Lynwood Community Center 42,185 172,710 - 214,895 Total parks and recreation 9,373,188 172,710 109,331 9,436,567 Accounting/finance: Information Systems 9,670,004 2,851,933 2,750,560 9,771,377 Total accounting/finance 9,670,004 2,851,933 2,750,560 9,771,377 Community development: Planning 31,458 - 11,020 20,438 Inspection 3,610 - 2,250 1,360 Property management 10,767,100 - 2,110 10,764,990 Weed and Seed program 7,504 - 7,504 - Hazard Mitigation Grant 170,800 - - 170,800 Total community development 10,980,472 - 22,884 10,957,588 Public works: Engineering 189,728 57,577 2,129 245,176 Street maintenance 140,861 89,648 - 230,509 Lake Wichita Revitalization 784,475 22,700 - 807,175 Infrastructure 191,881,644 8,542,771 1,988,041 198,436,374 Total public works 192,996,708 8,712,696 1,990,170 199,719,234 Health: Administration 3,256,591 - 38,505 3,218,086 General city nursing 87,642 - - 87,642 Environmental health 66,389 5,811 2,604 69,596 Lab water pollution 49,108 - 3,873 45,235 Animal reclaim center 4,292,359 - - 4,292,359 Total health 7,752,089 5,811 44,982 7,712,918 Traffic and transportation 15,694,107 278,148 120,189 15,852,066 Multi-Purpose Events Center 48,239,335 259,000 5,567 48,492,768 Wichita Falls Business Park 1,099,507 - - 1,099,507 Total capital assets $ 347,297,021 $ 12,338,131 $ 5,363,754 $ 354,271,398 102 EXHIBIT G-6 CITY OF WICHITA FALLS, TEXAS REGIONAL AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 20,384,952 $ 4,904 $ - $ 20,389,856 Buildings and improvements 34,086,309 17,861 - 34,104,170 Machinery and equipment 213,664 6,960 (1,095) 221,719 Furniture and fixtures 12,829 - - 12,829 Infrastructure 1,308,101 - - 1,308,101 Total capital assets 56,005,855 29,725 (1,095) 56,036,675 Accumulated Depreciation: Land and betterments 5,226,265 815,643 - 6,041,908 Buildings and improvements 4,073,840 677,112 - 4,750,952 Machinery and equipment 84,702 19,822 (1,095) 105,619 Furniture and fixtures 11,547 1,283 - 12,830 Infrastructure 8,721 17,441 - 26,162 Total accumulated depreciation 9,405,075 1,531,301 (1,095) 10,937,471 Net capital assets $ 46,600,780 $ (1,501,576) $ - $45,099,204 103 EXHIBIT G-7 CITY OF WICHITA FALLS, TEXAS KICKAPOO AIRPORT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30,2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 13,643,355 $ - $ - $ 13,643,355 Buildings and improvements 3,264,730 - - 3,264,730 Machinery and equipment 583,215 - - 583,215 Construction in progress 35,247 - - 35,247 Total capital assets 17,526,547 - - 17,526,547 Accumulated Depreciation: Land and betterments 3,562,020 383,078 - 3,945,098 Buildings and improvements 1,412,128 107,433 - 1,519,561 Machinery and equipment 468,876 30,918 - 499,794 Total accumulated depreciation 5,443,024 521,429 - 5,964,453 Net capital assets $ 12,083,523 $ (521,429) $ - $ 11,562,094 104 EXHIBIT G-8 CITY OF WICHITA FALLS, TEXAS TRANSIT FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 2,001,247 $ - $ - $ 2,001,247 Buildings and improvements 6,221,927 - - 6,221,927 Machinery and equipment 521,446 - - 521,446 Construction in progress 3,045,634 5,728,399 - 8,774,033 Total capital assets 11,790,254 5,728,399 - 17,518,653 Accumulated Depreciation: Land and betterments 79,119 10,549 - 89,668 Buildings and improvements 998,648 149,371 - 1,148,019 Machinery and equipment 384,567 41,155 - 425,722 Total accumulated depreciation 1,462,334 201,075 - 1,663,409 Net capital assets $ 10,327,920 $ 5,527,324 $ - $ 15,855,244 105 EXHIBIT G-9 CITY OF WICHITA FALLS, TEXAS STORMWATER DRAINAGE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Drainage $ 29,933,400 $ 230,754 $ - $ 30,164,154 Land and betterments 451,332 235,197 - 686,529 Machinery and equipment 94,980 16,000 50,585 60,395 Construction in progress 262,275 - - 262,275 Total capital assets 30,741,987 481,951 50,585 31,173,353 Accumulated Depreciation: Drainage 2,869,669 400,650 - 3,270,319 Land betterments 39,892 6,354 - 46,246 Machinery and equipment 90,437 3,604 50,585 43,456 Total accumulated depreciation 2,999,998 410,608 50,585 3,360,021 Net capital assets $ 27,741,989 $ 71,343 $ - $ 27,813,332 106 EXHIBIT G-10 CITY OF WICHITA FALLS, TEXAS SANITATION FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 8,512,233 $ 236,455 $ - $ 8,748,688 Buildings and improvements 3,571,328 - - 3,571,328 Machinery and equipment 687,898 - - 687,898 Construction in progress - 141,701 - 141,701 Total capital assets 12,771,459 378,156 - 13,149,615 Accumulated Depreciation: Land and betterments 1,726,663 168,917 - 1,895,580 Buildings and improvements 1,830,341 94,435 - 1,924,776 Machinery and equipment 440,020 46,074 - 486,094 Total accumulated depreciation 3,997,024 309,426 - 4,306,450 Net capital assets $ 8,774,435 $ 68,730 $ - $ 8,843,165 107 EXHIBIT G-11 CITY OF WICHITA FALLS, TEXAS WATER AND SEWER FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 24,330,343 $ - $ - $ 24,330,343 Buildings,systems and improvements 387,363,763 12,936,009 614,000 399,685,772 Machinery and equipment 6,204,399 395,787 4,533 6,595,653 Furniture and fixtures 1,164 - - 1,164 Construction in progress 7,813,347 984,696 7,712,993 1,085,050 Total capital assets 425,713,016 14,316,492 8,331,526 431,697,982 Accumulated Depreciation: Land and betterments 12,014,467 243,592 - 12,258,059 Buildings,systems and improvements 146,202,514 8,225,163 614,000 153,813,677 Machinery and equipment 4,888,432 243,936 4,533 5,127,835 Furniture and fixtures 1,164 - - 1,164 Total accumulated depreciation 163,106,577 8,712,691 618,533 171,200,735 Net capital assets $ 262,606,439 $ 5,603,801 $ 7,712,993 $ 260,497,247 108 EXHIBIT G-12 CITY OF WICHITA FALLS, TEXAS WATERPARK FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 389,894 $ - $ - $ 389,894 Buildings and improvements 4,622,343 - - 4,622,343 Machinery and equipment 280,750 10,735 2,450 289,035 Total capital assets 5,292,987 10,735 2,450 5,301,272 Accumulated Depreciation: Buildings and improvements 2,185,351 231,322 - 2,416,673 Machinery and equipment 213,253 12,167 2,450 222,970 Total accumulated depreciation 2,398,604 243,489 2,450 2,639,643 Net capital assets $ 2,894,383 $ (232,754) $ - $ 2,661,629 109 EXHIBIT G-13 CITY OF WICHITA FALLS, TEXAS FLEET MAINTENANCE FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 436,269 $ - $ - $ 436,269 Buildings and improvements 4,779,125 43,809 - 4,822,934 Machinery and equipment 1,664,658 6,128 - 1,670,786 Furniture and fixtures 2,950 - - 2,950 Motor vehicles 66,432,273 3,614,398 706,104 69,340,567 Total capital assets 73,315,275 3,664,335 706,104 76,273,506 Accumulated Depreciation: Land and betterments 2,611 - - 2,611 Buildings and improvements 2,998,960 121,639 - 3,120,599 Machinery and equipment 1,463,649 69,629 - 1,533,278 Furniture and fixtures 2,950 - - 2,950 Motor vehicles 46,734,974 4,105,942 706,104 50,134,812 Total accumulated depreciation 51,203,144 4,297,210 706,104 54,794,250 Net capital assets $ 22,112,131 $ (632,875) $ - $ 21,479,256 110 EXHIBIT G-14 CITY OF WICHITA FALLS, TEXAS DUPLICATING SERVICES FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Machinery and equipment $ 9,117 $ - $ - $ 9,117 Accumulated Depreciation: Machinery and equipment 9,117 - - 9,117 Net capital assets $ - $ - $ - $ - 111 EXHIBIT G-15 CITY OF WICHITA FALLS, TEXAS INFORMATION TECHNOLOGY FUND CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Machinery and equipment $ 6,964,325 $ 2,851,933 $ 734,975 $ 9,081,283 Construction in progress 1,391,138 - 1,391,138 - Total capital assets 8,355,463 2,851,933 2,126,113 9,081,283 Accumulated Depreciation: Machinery and equipment 3,939,206 781,672 734,975 3,985,903 Net capital assets $ 4,416,257 $ 2,070,261 $ 1,391,138 $ 5,095,380 112 EXHIBIT G-16 CITY OF WICHITA FALLS, TEXAS WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION CAPITAL ASSETS AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED SEPTEMBER 30, 2021 Balance Balance 10/1/2020 Additions Deletions 9/30/2021 Capital Assets: Land and betterments $ 1,434,069 $ - $ 256,913 $ 1,177,156 Buildings and improvements 957,191 - 957,191 - Construction in progress - 1,340,175 - 1,340,175 Total capital assets 2,391,260 1,340,175 1,214,104 2,517,331 Accumulated Depreciation: Buildings and improvements 277,585 9,572 287,157 - Net capital assets $ 2,113,675 $ 1,330,603 $ 926,947 $ 2,517,331 113 STATISTICAL SECTION (UNAUDITED) This part of the City of Wichita Falls, Texas' annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health. Contents Page Financial Trends 114 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 119 These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity 124 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 129 These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information 131 These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. `-1 V N 0 10 V .--I m CO 00 m I0 Cr = Ol t0 N 00 ul , N CO N N V N N N m l0 m 00 t0 N O N a I— N .4 O t0 u1 V tD 0-2 CO' l0 01 N 01 CO 0 a N 01 0 0 m 0 00 a 01 10 01 N mrO LD 1p CO V Oo 0 0 o V = th O r 6 N 01.--I u) C O1 O1 n1 W N 00 00 - c m o - 0101 . . a ru N 00 m 00 t0 N. ul O t0 01 O O O1 O C of V on O N m- N N 01 . m C0'orO N m'or O ''Di uo O 00 c0 of C i'O vi N 0 m 0 N mr 0 N N m-mr m- m LnLC/ u O1 LC/ O ul o u1 tp 01 O1 u1 l0•of 00 O N n O tD oo.1 W o Li, on t0 N .--I m F V on m N mr V1 V. 01 Vf N LA. 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W N.-I O t0 O.. m W Z Z in vT a 0 DI- N F Z J a V O at E O Z = CO u ul o o _ a u m v vili Ln o j c v E- c > .;,., ,hit a C ' n v 4 ,43 01 nil v v - R V w ^� tt c a a;; a_ a _ N = 0n E o- Yo no cy, a - a 0 N = J Y ,: o U v v aoi C O N ` 4g m c ar `o ,0 m° w v °p1` .4 • 'E o -a a o L L v w 5 o N o o - N 1 N �N `° '° °' `6 -a.c tari x o rosE.- .'� :° �, � � ,a LL v ;° f6 y .@ v x a Y o E v o m R o_ 9 a F V v v o a- to rca s ,. u E vHU 0 u � x-a t� tiaud =� 2u000 a- rdu0E- H v o v°, z w w ot O Z p c 0 EXHIBIT H-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 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 2019-2020 41,362,767 25,205,996 5,164,962 1,878,957 255,816 1,211 73,869,709 2020-2021 43,069,773 28,362,467 5,451,658 2,660,388 309,857 1,132 79,855,275 119 EXHIBIT H-6 CITY OF WICHITA FALLS,TEXAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY- LAST TEN FISCAL YEARS(UNAUDITED) Personal Ratio of Total Real Property Property Total Total Assessed to Fiscal Assessed Assessed Assessed Direct Estimated Total Estimated Year Value Value Value Tax Rate Actual Value Actual Value 2011-2012 $ 3,714,449,662 $ 716,365,316 $ 4,430,814,978 $0.62526 $ 4,430,814,978 100.00% 2012-2013 3,749,608,055 715,113,536 4,464,721,591 0.63526 4,464,721,591 100.00% 2013-2014 3,777,010,620 771,002,233 4,548,012,853 0.63526 4,548,012,853 100.00% 2014-2015 3,859,560,337 765,251,406 4,624,811,743 0.65526 4,624,811,743 100.00% 2015-2016 3,944,783,610 820,827,696 4,765,611,306 0.70598 4,765,611,306 100.00% 2016-2017 4,031,689,962 817,687,012 4,849,376,974 0.70598 4,849,376,974 100.00% 2017-2018 4,123,022,727 818,629,114 4,941,651,841 0.70598 4,941,651,841 100.00% 2018-2019 4,230,948,499 843,630,297 5,074,578,796 0.72988 5,074,578,796 100.00% 2019-2020 4,387,106,524 889,487,609 5,276,594,133 0.76332 5,276,594,133 100.00% 2020-2021 4,582,918,683 872,960,736 5,455,879,419 0.76332 5,455,879,419 100.00% 120 EXHIBIT H-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 l&S Total M&O l&S Total M&O l&S Total 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 2019-2020 0.72 0.04 0.76 0.60 0.07 0.67 1.07 0.37 1.44 2020-2021 0.72 0.04 0.76 0.57 0.07 0.64 1.05 0.38 1.43 City View ISD(2) Iowa Park CISD(3) Wichita Falls ISD(4) Grand M&O l&S Total M&O l&S Total M&O l&S Total Total 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 2019-2020 1.07 0.32 1.39 1.07 0.36 1.43 0.97 0.18 1.15 6.84 2020-2021 1.05 0.32 1.37 1.05 0.38 1.43 0.97 0.18 1.15 6.78 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 121 EXHIBIT H-8 CITY OF WICHITA FALLS, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO SEPTEMBER 30,2021 2020-2021 2011-2012 Percentage Percentage Taxable of Total Taxable of Total Assessed Assessed Assessed Assessed Taxpayer Value Rank Valuation Value Rank Valuation Oncor Electric Delivery Co $ 65,216,900 1 1.20% $ 36,786,078 2 0.83% GGP-Sikes Senter LLC 51,500,000 2 0.94% 49,506,348 1 1.12% Atmos Energy/Mid-Tex Division 27,710,280 3 0.51% 11,721,246 10 0.26% Valero Marketing&Supply Co 23,215,606 4 0.43% - N/A 0.00% Kell West Regional Hospital LLC 17,259,418 5 0.32% 12,847,161 8 0.29% Quail Creek Crossing Ltd 16,585,000 6 0.30% 15,358,000 6 0.35% Arbor Creek Apartments LLC 15,873,900 7 0.29% - N/A 0.00% Wal-Mart Stores Texas LP 14,992,104 8 0.27% 24,597,829 3 0.56% Burlington Northern&Santa Fe Railroad 14,610,152 9 0.27% - N/A 0.00% Wal-Mart Stores East Inc 13,089,213 10 0.24% 17,932,134 5 0.40% Southwestern Bell - N/A 0.00% 19,089,579 4 0.43% North American Pipe Corp - N/A 0.00% 12,987,822 7 0.29% Lowe's Home Centers Inc. - N/A 0.00% 12,087,569 9 0.27% Totals $ 260,052,573 4.77% $ 212,913,766 4.80% Source: Wichita Appraisal District 122 EXHIBIT H-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 2011-2012 $ 27,704,114 $ 27,306,706 98.57% $ 312,734 $ 27,619,440 99.69% 2012-2013 28,362,591 27,906,520 98.39% 293,024 28,199,544 99.43% 2013-2014 28,876,552 28,375,563 98.27% 292,114 28,667,677 99.28% 2014-2015 30,270,748 29,809,308 98.48% 326,955 30,136,263 99.56% 2015-2016 33,644,264 33,124,968 98.46% 403,324 33,528,292 99.66% 2016-2017 34,228,872 33,694,059 98.44% 369,868 34,063,927 99.52% 2017-2018 34,887,074 34,298,367 98.31% 359,338 34,657,705 99.34% 2018-2019 37,037,918 36,347,721 98.14% 367,037 36,714,758 99.13% 2019-2020 40,280,490 39,531,671 98.14% 307,952 39,839,623 98.91% 2020-2021 41,645,982 41,044,294 98.56% - 41,044,294 98.56% 123 CoN-I CO 1-1 Co M Co N Co Co Co Co .-1 Co Co . 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Co Co Co E ✓ I- C m m O N O CO ul ,--� N N n_ iy C ' 0J 0 Co Co N .-1 Co Co Co .-1 .-1 E > 9 Co .--I Co Co = Cr ,--1 Co 00 C LL LL W O E H 0J Cl o, Co Co M Co Co ,-1 .-1 c-1 Q 0 0 (Oj K 0 a g (cc Co Co co Co Co N M Co N co Co O C c-1 NCoCoCoo CoO M 0 Co Co u c-1 Co co N c-1 a, C a, 00 00 C Co 1-1" Co Co Co Co Co N N N 0J VD c-I a) N Co Co M Co al 00 co C 00 O c-1 7 Co co c-1 c-1 N N N N C U •• CO Co Co1 Co M Co 7 Co M o 0 00 O c-1 c-1 M M M M E t/} Q N N M Co Co Co N C a, Co c-1 c-1 c-1 c-1 c-1 c-1 c-1 c-1 c-1 N N uN Co Co Co Co Co Co Co Co Co Co y Co Co Co Co Co Co Co Co Co Co 1i } .-1 N M 4 N l0 N o a, O ,-i ,-i c-1 c-1 c-1 c-1 c-I c-1 ,-i N Co 0 Co Co Co Co Co Co Co Co N N N N N N N N N N EXHIBIT H-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 Venue Tax Value of Per Year Bonds Revenue Bonds Revenue Bonds Total Property Capita 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 2019-2020 30,787,806 18,122,209 - 48,910,015 0.93% 467.73 2020-2021 30,787,806 18,122,209 2,635,000 51,545,015 0.94% 492.39 125 EXHIBIT H-12 CITY OF WICHITA FALLS, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT(UNAUDITED) SEPTEMBER 30, 2021 Gross Percentage Amount Governmental Applicable Applicable Activities to City of to City of Debt(1) Wichita Falls(2) Wichita Falls Direct: City of Wichita Falls $ 56,100,693 100% $ 56,100,693 Overlapping: Wichita County 67,124,043 100% 67,124,043 Burkburnett Independent School District 40,641,394 25% 10,160,349 City View Independent School District 15,964,914 90% 14,368,423 Iowa Park Consolidated Independent School District 36,064,891 2% 721,298 Wichita Falls Independent School District 353,887,719 99% 350,348,842 Total overlapping 513,682,961 442,722,954 Total direct and overlapping bonded debt $ 569,783,654 $ 498,823,647 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. 126 4. 0 0 0 cc 0 00 in an• ari 0 CO '7I i _ j § mc U \\ \ § \ u, \ LU N \7 { § z N - » r ® < ‘ - ~ ` nE , § ) C ° ° sy IN CO q ir, 2 NC NC � - 2 , - o k , , ® § § , \\ § u 8 _ _ © - U \ @ \ \ \\\ \ { il t eV ( } E ` ®Z I, \\ \\ \ \ \ \ \ )E FA \ J E: J © ! / 'E' ! - _ ) } \ /) \ ) CO ) \ E , _ N 1-1 - CO LU v o0 O N l0 ,-o 01 N a a N N .N-1 a to N N N M Ol N N > rl ci r-I N N M M N N N O V O N N N Ln N O� O O On M 01 01 00 N m N O O N To N Vi 00 iH N O tD N O cr W ch 00 W 0�1 a a OM co co c-I N N N N l0 l0 O O O e-I c-I r-I N• C v E v co vl to to v1 N O O O O O O N N N In c-1 In O 0 In ✓ �' m Ol Ol 00 N M N O O N K v co' vi co' tD N v1 c-i N d ✓ N LU 00 m Ln N m 01 00 O M Lc., M N M N v1 M iD M y Vl a N a M M M M N N N 4 v 0 `^ o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p_ O vi O o vi N vt vi tn. 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N M a V1 Lo N o0 Cl O .-1 O v 3 0 N N v 0 0- W O O O 0 O O O O O Ov N N N N N N N N N N - ..L.'..' - -6 LLtil > r1 N M a In LU N CO Ol O v --- O O O O O O O O O O p N m N N N N N N N N N N Z EXHIBIT H-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) 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% 2019-2020 104,568 2,558,445,480 24,467 32.9 13.2 15,133 7.0% 2020-2021 104,683 2,546,937,390 24,330 33.1 13.2 14,144 6.5% Sources: (1) World Population Review and U.S.Census Bureau (2) U.S.Census Bureau (3) Texas Education Agency (4) Bureau of Labor Statistics 129 EXHIBIT H-16 CITY OF WICHITA FALLS, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO(UNAUDITED) SEPTEMBER 30,2021 2020-2021 2011-2012 Percentage Percentage of Total of Total City City Employer Employees Rank Employment Employees Rank Employment Sheppard Air Force Base 8,987 1 12.57% 12,272 1 17.16% United Regional Health Care System 2,305 2 3.22% 1,778 4 2.49% Wichita Falls ISD 1,854 3 2.59% 2,059 2 2.88% Midwestern State University 1,354 4 1.89% 1,284 6 1.80% City of Wichita Falls 1,223 5 1.71% 1,477 5 2.07% Wal-Mart-3 locations 1,069 6 1.50% - N/A - North Texas State Hospital 970 7 1.36% 1,974 3 2.76% James V.Allred Prison Unit 939 8 1.31% 704 10 0.98% United Supermarkets-3 locations 823 9 1.15% 971 7 1.36% Work Services Corporation 791 10 1.11% 730 9 1.02% Arconic(formerly Howmet Corp.WF) - N/A 0.00% 732 8 1.02% Totals 20,315 28.41% 23,981 33.54% Sources: 2020-2021 data is from Wichita Falls Chamber of Commerce. 2011-2012 data is from Texas Workforce Commission. 130 ti - 7 .n 0 01 m O o m 0 .n o 01 , 7 N m N 00 .n 7 O l0 O O N m 7 l0 m 7 7 .n = O CO O1 Lb 01 N 7 N N N DO DON I— N N .-1 .1 1 CO O N = O X N O N vl O N 10 O 1.,1 7 .-1 O O1 111 .--1 '7 N CO co 01 ..00 01 N C 1, N DI 0 7 mm 00 m 7 N 7 o O N N .i . 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