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2023-2024 Popular Annual Financial Report CITY OF WICHITA FALLS, TX +, ,fir"%` . . PO P U LA R „ ...../.0" / 1„...: . _ ... ANNUAL . • ..„.., ., __ , - _,,,,, ,... . • . ,,, FINANCIAL �p 11�,�� iii , ., t �F ,, _ ...,, , ' ' 111 f"' ; , „:, _,„ �. REPO RT M _ bra, :.. N. Y' - FOR FISCAL YEAR ENDED - 1 rw . , SEPTEMBER 30, 2024 r x r�r t -- ji:,•r \milliklilliii*PENtysi w p� a 'A ii,- 4,44a . TEXAS Me-Skie$4a/der,0a ionities ' ?it `'1 • �" `• r Contact 940-761-7462 www.wichitafallstx.gov Table of Content Welcome Message 1 City Leadership I 3 About Wichita Falls 4 FY24 Accomplishments 5 Financial Overview 7 Revenue and Expenses 8 General Fund 9 Capital Assets and Debt 10 FY25 Adopted Budget 11 WELCOME MESSAGE 14.44,4 5-itx 8!•nSRr�s • •• a . • We are pleased to present the City of Wichita Falls' Popular Annual Financial Report for the fiscal year ended September 30, 2024. This report provides a summary of the City's A financial activities and complements , other financial documents, such as �; -� �' the Annual Comprehensive Financial �— A Report and Annual Operating Budget, available on the City's Financial Transparency webpage. w Tom' ` The Government Finance Officers Association (GFOA) awarded the City `mmulump—, an Award for Outstanding Achievement in ' _ Popular Annual Financial Reporting for the fiscal year ended September 30, 2023. We believe this year's report continues to meet these high s'L' ,,c standards and have submitted it for consideration again. This report is based on information from the Annual Comprehensive Financial Report, which is audited annually by an external firm. It provides insights into the City's financial position and references information from the Operating Budget for the fiscal year ending September 30, 2024. City Management is proud to present this report and hopes it provides clear and transparent information for our community. For more details, please visit www.wichitafallstx.gov. The Popular Annual Financial Report (PAFR) is intended to summarize and simplify the financial information from the Annual Comprehensive • Financial Report (ACFR). This report is designed to provide a summary of the City's overall financial condition in a user friendly format available to citizens. The ACFR was prepared in accordance with Generally Accepted Accounting Principles (GAAP) and was audited by an independent certified public accountant. •u • FINANCIAL RE a ! TING The City of Wichita Falls is dedicated to increasing fiscal transparency. The City participates in the Texas State Comptrollers Transparency Star program, which recognizes government entities for going above and beyond in their transparency efforts. fr.040 //1.1°' TRANSPARENCY TRANSPARENCY TRANSPARENCY STAR STAR S TAR Texas Comptroller Texas Comptroller Texas Comptroller TRADITIONAL FINANCES PUBLIC PENSIONS DEBT OBLIGATIONS 2023 felCV'vtAjVt4 Government Finance Officers Association Award for Outstanding GO Achievement in Popular Annual Financial Reporting Nov I � , 0 � Presented to City of Wichita Falls COA PAFR BUDGET Texas AWARD AWARD AWARD For its Annual Financial Report For the Fiscal Year Ended —...011111111111111 September 30.2023 P '.7.-u Executive Direetar.'CEO For additional details,visit the City's website at www.wichitafallstx.gov. WICHITA FALLS CITY COUNCIL AS OF MARCH 31, 2024 TIM SHORT MAYOR r m, ti AUSTIN COBB WHITNEY FLACK ROBERT BROOKS AT LARGE DISTRICT 1 DISTRICT 2 Paha\ • JEFF BROWNING MIKE BATTAGLINO TOM TAYLOR DISTRICT 3 DISTRICT 4 DISTRICT 5 The City of Wichita falls operates under a Council-Manager form of Government. This system combines the strong political leadership of elected officials in the form of a City Council, with the strong managerial experience of an appointed City Manager. The City of Wichita Falls has a Mayor and a six-member Council who are elected into 3 year terms in non-partisan elections. OKLAHOMA WI OH IT FALL OKLAHOMA ,, A I A _ _ _ .., ! „, sip , , Wichita Vail$ The City of Wichita Falls, home to Sheppard Air TEX AS Force Base, is located in north-central Texas and Fort wnrth0 Callas encompasses 70.1 square miles. Incorporated in 1889, Wichita Falls serves as a regional economic hub for North Texas and South-Central Oklahoma. It is approximately 130 miles northwest of the Dallas/Fort Worth Metroplex, 15 miles from the Red River marking the Texas/Oklahoma border, and 125 miles south of Oklahoma City. The city 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. Situated in the crosstimbers area of the gently rolling north-central plains and crossed by the Wichita River, Wichita Falls is the county seat of Wichita County and a major population center in North Texas. According to the 2023 U.S. Census Bureau estimate,the population of Wichita Falls is 102,691. Q Incorporated in The City provides a full range of 0 1889 municipal services to the community. These services include public safety, fire IIP protection, public works, health and 111 Population el welfare, parks and recreation, 102 691 el cemeteries, library, public improvement, engineering, planning and zoning, and general administrative services. As part Median List Price of public works services, the City $164K provides water, sewer, and sanitation for its citizens. The City also provides a full 0 range of transportation options, Unemployment including bus service, a regional and Rate municipal airport, and a trolley. s 3.5% O • Avg. Household ' Ab 4lgo . Ii ' IL Income 0 i A � $58K a : =, \ fil HOME TO: 1 { Museum of North TX History Sheppard Air Force Base Hotter N' Hell Hundred Euro-NATO Joint Jet Pilot Training World's Littlest Skyscraper Midwestern State University 4 FY 2024 ACG .) M PLISH M ENTS The fiscal year 2024 budget provided an opportunity for the City Council to lower the City's property tax rate as the local economy continued to experience above average property appreciation. The budget continued current service levels despite continued inflation. The budget reduced the property tax rate by 1.4 cents or 2.1% from 0.6943 to 0.6800. The budget increased employee wages by 6.5% for civil service and 6% for non-civil service and increased the City's contribution to the Firefighter's Pension Fund. The budget also invested over $30 million for infrastructure replacement and capital improvement projects. The budget also set aside $10 million in excess General Fund Reserves for future capital projects. Emergency Responses: r-20=-_„ Refuse Collected (tons): 14,329 184,667 EN A IP' 6 •iii doPPP. ..„../Iiri ... 0 rj• powi 0 00 Building Permits Issued: 41111 Transit Route New Water Connections: 6,241 514,996 122 Building Inspections Conducted: Total Passengers: Average Daily Consumption: 13,692 293,701 16,548 thousands of gallons 1I il , i I ,r, 4 . ,-4,.. -, 1 r ,-4,. , , 1, r„, ,, r.:: f y.�a 1?t _Ns Ftr Neil S' A a A Xr t olill 1 ti 1" f �T ti �r 'r� i M ,w /' ^t. M 1r ^.. �1 f 0 F#4 �„. .. yy P A Funds Appropriated in the Annual Operating Budget Fund Fund Class Fund Type Fe r General Fund Governmental General Fund Debt Service Fund Governmental Debt Service . Community Development Block Grant Governmental Special Revenue Section 8 Housing Fund Governmental Special Revenue Home Investment Partnership Agreement Governmental Special Revenue MPEC/Hotel/Motel Tax Governmental Special Revenue Hotel/Motel Venue Tax Governmental Special Revenue Airport Improvement Grant Governmental Special Revenue Golf Fund Governmental Special Revenue Miscellaneous Special Revenue Governmental Special Revenue Water&Sewer Fund Proprietary Enterprise Water&Sewer Capital Fund Proprietary Capital INF Microfiltration and Reverse Osmosis Proprietary Capital Lake Ringgold Fund Proprietary Capital Sanitation Fund Proprietary Enterprise Regional Airport Fund Proprietary Enterprise TFVPKickapoo Airport Fund Proprietary Enterprise L__ Transit Fund Proprietary Enterprise Storm Water Fund Proprietary Enterprise Waterpark Fund Proprietary Enterprise Fleet Fund Proprietary Internal Service Information Technology Fund Proprietary InternalService Duplicating Services Fund Proprietary Internal Service GOVERNMENTAL FUNDS Governmental Funds are primarily used to manage most of the City's activities. Financial statements for these funds follow the modified accrual basis of accounting,which tracks cash and easily convertible financial assets.These funds prioritize short-term inflows and outflows of resources,as well as available resources for future spending at the end of the fiscal year. The Net Position represents the fund balance in governmental funds. The General Fund serves as the main operating fund, accounting for all general tax revenues and unallocated receipts. It covers general operating expenses, fixed charges, and certain capital improvement costs not covered by other funds. Special Revenue Funds manage revenue from specific sources earmarked for purposes other than debt service or capital projects. PROPRIETARY FUNDS When the City charges customers for its services,whether to external customers or other units within the City, these activities are typically recorded in proprietary funds.The City of Wichita Falls manages two types of proprietary funds: enterprise funds and internal service funds. Proprietary funds are accounted for using the economic resources measurement focus and the accrual basis of accounting in the City's financial statements. The fund balance in a proprietary fund is termed 'working capital' in accounting, representing the difference between current assets and liabilities.This is because proprietary funds account for long-term commitments not covered in governmental funds. Enterprise funds are used to manage various City operations,including water and sewer services,sanitation collection, airports, transit, stormwater management, event centers, golf courses, and water parks. Internal service funds are utilized to report activities providing supplies and services to other City programs,such as fleet maintenance, printing, information technology, and employee benefits. As these services benefit both governmental and business-type functions, they are allocated between governmental and business-type activities in the government-wide financial statements. Enterprise funds adhere to the accrual basis of accounting and the economic resources measurement focus. ,00 - 6 FINANCIAL OVERVIEW The City of Wichita Falls continues to maintain a strong financial position,with a net position of$533.25 million as of September 30,2024,reflecting an increase of$29.02 million from the prior year.This growth is highlighted in the net position chart,which shows increased assets and reduced liabilities across both governmental and business-type activities. The statement of net position is like a financial snapshot of the city,showing what it owns (assets) and what it owes (liabilities).The difference between these gives . • the city's net position, which reflects its overall financial health, and changes in this number over time •'• indicate whether the city's finances are improving or declining. •' Net Position • (in thousands) Governmental • Activities Business-type Activities Total 2024 2023 2024 2023 2024 2023 ••` ' Current and Other Assets $100,697 $ 99,721 $100,718 $ 98,598 $201,415 $198,320 Capital Assets 204,985 200,240 412,285 402,067 617,270 602,307 Total Assets 305,683 299,961 513,003 500,666 818,686 800,627 Deferred Outflows of Resources 31,791 48,100 6,899 10,495 38,690 58,596 Long Term Liabilities 167,224 186,626 103,877 112,491 271,101 299,117 Other Liabilities 26,377 31,103 5,793 6,951 32,169 38,054 Total Liabilities 193,601 217,729 109,669 119,442 303,270 337,171 Deferred Inflows of Resources 19,390 18,802 1,470 144 20,860 18,945 Net Position: Net Investment in Capital Assets 178,715 170,464 336,375 323,220 515,090 493,684 Restricted 14,111 11,202 12,818 12,395 26,929 23,597 Unrestricted (68,344) (70,135) 59,570 57,082 (8,774) (13,053) • Total Net Position $124,482 $111,530 $408,763 $392,697 $533,245 $504,227 • • • • • $374.74M $350.89111 •a As of September 30, 2024, 23.3% .,�: $330,13M r • u •• of the City's net position comes from governmental activities, while 76.7%comes from business- type activities. The following chart illustrates the City's improving financial health year M $99.66M -111.53M over year. $73 38 124.48M $68.03M $82.61M FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 •Governmental Activities ■Business-Type Activities ..,4 ..., iliff: .,/ mor /_ A;),„,,,,c,„ s i - 1:77,,,,,',.: 4"-----7 ''''' ''_1,,.":_,-:\k-s:4_:,,, ... , . il. .,__,_ 1 14,,,, ,, X Al .ms...-r, ,• .--a 1 b..a • �� u I1 • • I •• • •• • • � ate. RAd .� Revenue by Source 1 im....ettalF, FY 2022 FY 2023 FY 2024 The revenue table shows that total revenues for the City of Wichita Falls increased from $200.61 Property Taxes $ 45,229,447 $ 46,719,098 $ 50,166,104 million in FY 2022 to $216.76 million in FY 2024, Sales Taxes 31,099,772 30,988,808 30,656,869 driven mainly by higher property taxes and Other Taxes 8,915,246 9,244,233 8,919,407 charges for services. Investment earnings also Investment earnings 915,689 6,948,111 8,150,180 saw significant growth, rising from $915K in FY Miscellaneous 568,103 971,682 842,386 2022 to $8.15 million in FY 2024. However, sales Charges f or Services 87,601,878 89,019,659 92,135,865 taxes declined slightly, and grants and Grants and Contributions 26,281,010 30,840,641 25,892,386 contributions decreased by about $5 million from Total Revenues $200,611,145 $214,732,232 $216,763,197 FY 2023 to FY 2024. • • • a • Expenses by Function • •• FY 2022 FY 2023 FY 2023 • • Primary Government • Governmental Activities: •• •• General Government $ 17,423,657 $ 20,275,875 $ 21,372,974 • •• Public Safety 48,053,820 56,240,160 56,686,325 The expenditure chart shows that Parks and Recreation 5,810,019 6,554,341 7,415,430 total primary government Community Development 7,498,256 10,261,349 8,402,052 expenses increased from $159.25 Public Works 8,620,682 9,329,189 10,628,459 million in FY 2022 to $187.29 million Health 7,065,470 7,585,313 7,550,956 in FY 2024, with the largest costs Traffic and Transportation 3,076,440 3,265,753 4,195,482 coming from public safety, water Multi-Purpose Events Center 5,134,193 6,049,052 5,177,255 and sewer, and sanitation. Notable Interest and Fees on Long-Term Debt 1,455,563 1,306,918 1,214,911 increases include public works, Business-Type Activities: which grew by $1.3 million from FY Regional Airport 2,929,361 3,041,535 3,055,752 2023 to FY 2024, and parks and Kickapoo Airport 1,642,866 1,549,000 1,581,879 recreation, which increased by Transit 3,123,714 3,377,663 3,431,762 $861K over the same period. Sanitation 10,857,203 11,688,957 13,787,413 Water and Sewer 33,728,464 39,661,150 39,813,704 Stormwater Drainage 1,147,940 1,118,252 1,037,049 Waterpark 1,681,431 1,880,642 1,938,552 Total Primary Government $ 159,249,079 $ 183,185,149 $ 187,289,955 8 GENERAL FUND The General Fund is the City's primary operating fund, accounting for resources that have no specific restrictions. These resources may be used for general city operations. Each year,the City reports the status of the General Fund in a separate statement in the Annual Comprehensive Financial Report. This statement is listed on the next page. The statement shows the reader the Fund's revenues, current expenditures, excesses of revenues and expenditures,other financing sources and total ending fund balance. Fund balances listed on this statement do not necessarily exclude uses of fund balance committed for future years by the City's Council. Additional information about the City's Fund Balance Policies and uses are available in the City's Annual Operating Budget, available at www.wichitafallstx.gov. Variance Actual Positive(Negative Revenues: General Revenues: Taxes 85,852,149 84,573,463 (1,278,686) Chargesfor Services 3,215,258 3,248,734 33,476 • • Licenses and Permits 2,071,200 1,861,123 (210,077) •• Fines and forfeitures 2,940,400 3,284,620 344,220 Contributions 232,500 295,378 62,878 Miscellaneous 3,746,686 5,767,967 2,021,231 Total Revenue 98,058,193 99,031,235 973,092 • • • Expenses: •• Administrative Services 17,096,826 16,310,983 785,843 • • Police 32,682,147 31,376,078 1,306,069 • •• Fire 21,565,568 21,460,539 105,029 •• Parks and Recreation 7,902,719 7,170,632 732,087 • • Accounting/Finance 1,306,794 1,165,466 141,328 • Community Development 2,832,696 2,602,408 230,288 • • Public Works 6,567,417 6,420,334 147,083 • Health 4,376,452 4,237,708 138,744 • Traffic and Transportation 2,227,701 2,043,032 184,659 II • •• Capital outlay 10,650,378 5,078,296 5,572,082 Total Expenses 107,208,693 97,365,476 9,343,222 Excess of revenues over(under)expenditures (9,150,505) 1,165,809 10,316,314 Other Financing Sources(uses): Transfers in 5,380,216 3,288,409 (2,091,807) Transfers out (972,726) (2,264,583) (1,291,857) $ 4,407,490 $1,023,826 5 (3,383,664) Excess of revenues and other sources over(under)expenditures and other uses (4,743,015) 2,139,635 6,932,650 Fund Balance-Beginning 48,665,119 48,665,119 - Fund Balance-Ending 43,922,104 50,854,754 6,932,650 t FUND BALANCE GOAL Maintain at least 20%of annual operating expenditures in unassigned funds. 9 CAPITAL ASSETS V il Capital Assets,Net of Accumulated Depreciation fieh (in thousands) 0.144 Governmental Activities Business-type Activities Total 2024 2023 2024 2023 2024 2023 Land $ 11,903 $ 11,541 $ 11,072 $ 11,072 $ 22,976 $ 22,613 Land Betterments 19,172 18,063 31,849 33,123 51,020 51,185 Buildings,Systems&improvements 45,352 43,665 319,687 323,173 365,039 366,837 Infrastructure 112,582 111,968 1,230 1,247 113,811 113,215 Machinery and Equipment 9,244 7,880 2,712 1,979 11,957 9,859 Subscription assets 558 471 - - 558 471 Motor Vehicles - - 32,716 22,566 32,716 22,566 Right-to-use leased assets - - 2,112 2,175 2,112 2,175 .. . . Construction in Progress 6,175 6,654 10,906 6,732 17,081 13,386 ••• Totals $204,985 $ 200,240 $412,285 $ 402,067 $617,27'0 $602,307 •• • The City's investment in capital assets for its governmental and business-type activities as of September 30,2024 was$617,270,432 (net of accumulated depreciation).This • • investment in capital assets includes land,buildings,equipment,infrastructure,and construction in progress. •• S. • •• • Outstanding Debt at Year-End (in thousands) Governmental Busiress :ype Total _Al EST 2024 2023 2024 2023 2024 2023 General Obligation Bonds $ 21,238 $24,050 $ 5,102 $ 5,455 $ 26,340 $ 29,505 IP* Combination Tax&Revenue Bonds 10,485 11,485 26,220 27,840 2,480 2,535 36,705 39,325 Venue Tax Revenue Bonds 2,480 2,535 Utility System Revenue Bonds 21,415 30,250 21,415 30,250 Premiums an Bonds 961 1,221 1,031 1,894 1,992 3,115 Notes Payable 2,251 2,817 21,295 12,935 23,546 15,752 fkg Subscription Liabilities 563 460 563 460 O Right-To-Use Leases 2,819 2,849 2,819 2,849 $ 37,978 $42,567 $77,882 $81,223 $115,860 $123,791 As of September 30,2024,the City had total bonded debt,notes,and capital leases outstanding of$115,297,294.During the fiscal year,the City's total debt decreased by $8,033,017. 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. •• I r • or 10 • • .• FY 2025 • )TEDF' • The City's Operating Budget for the fiscal year ended September 30,2025 (FY 2025)was adopted • by the City Council on September 3, 2024. The revenue and expenditures across all funds were •• budgeted at$242,024,764 which was an increase of$9,072,408 or 3.89%from the previous year's . •• budget. This increase was primarily due to increased compensation for personnel and increased • capital expenditures. FY24 FY 25 FY 23 Adopted Adopted Revenue Source Actual Budget Budget Difference %Diff. Property Taxes 44,719,973 48,739,569 52,125,970 3,386,401 6.95% Sales Tax 30,995,258 31,725,000 30,903,921 (821,079) -2.59% Franchise Fees 5,912,238 5,527,634 5,979,706 452,072 8.18% Payments in Lieu of Taxes 1,573,379 1,573,446 1,576,000 2,554 0.16% Other Tax Revenue 3,631,028 3,341,500 3,515,482 173,982 5.21% Service Charges 92,041,730 97,026,937 100,055,181 3,028,244 3.12% Licenses&Permits 1,994,008 2,049,700 2,114,105 64,405 3.14% Fines&Forfeitures 3,008,785 2,940,400 3,178,200 237,800 8.09% Intergovernment Rev. 13,646,995 12,378,000 13,532,690 1,154,690 9.33% Contributions 5,363,752 1,981,356 2,154,852 173,496 8.76% Interest Income 5,487,659 5,433,200 5,436,000 2,800 0.05% Misc,Revenues 9,221,699 5,930,401 7,051,11.9 1,120,718 18.90% Operating Revenues 217,596,504 218,647,143 227,623,226 8,976,083 4.11% Transfer In 18,583,998 7,942,567 5,443,345 (2,499,222) -31.47% • • • • • Oth. Fin.Sources - 6,362,646 8,958,193 2,595,547 40.79% • Consolidated Revenues 236,180,502 232,952,356 242,024,764 9,072,408 3.89% • Two main sources of general revenue in the City's budget are Property Taxes and Sales Taxes • which provide funding for many City services including Police, Fire, and Health. Property Tax revenue FY 2025 is a 6.95% increase in anticipated revenues due to increased property market • values, new property added to the tax base, and an increased tax rate. The City increased the • property tax rate by 0.71% from .680000 to .684800. The Water & Sewer, Sanitation, and ••• Stormwater funds receive the majority of their revenues from service charges on each utility bill. ' • • • The FY 2025 budget included a 2.5%increase in retail water,sewer, and sanitation rates to support the increased cost of infrastructure and maintain market competitive salaries. FY 24 FY 25 FY 23 Adopted Adopted Expenditures Actual Budget Budget Difference %Diff. Personnel Services 95,645,696 104,741,917 110,598,663 5,856,746 5.59% Supplies 14,717,586 15,838,944 16,133,920 294,976 1.86% Maintenance& Repair 10,296,703 10,378,043 10,534,680 156,637 1.51% Utilities/Other Sery 28,776,487 28,573,613 28,702,379 128,766 0.45% Insur&Contr 5upp, 27,957,999 3,395,1O56 3,513,449 118,393 3.49% Debt Expenditures 7,312,177 20,030,328 19,995,351 (34,977) -0.17% Other Expenditures 12,580,787 14,494,516 15,376,576 882,060 6.09% Non Cap Improvements 78,152 414,634 391,950 (22,684) -5.47% Capital Improvements 28,722,984 30,041,703 31,410,348 1,368,645 4.56% Transfers Out 7,342,291 5,043,602 5,367,447 323,845 6.42% Total Expenditures 233,430,862 232,952,356 242,024,764 9,072,408 3.89% Personnel expenses make up the largest category of spending at 46%of total expenditures. Utilities and Other Services like professional fees and fleet maintenance costs are 11.9%of the total budget. IMi( ifE X A S $/ct&SkieS'4oldei Orportrrmttf : GET IN TOUCH 6 940-761-7462 ., . ..„ ■uI www.wichitafallstx.gov 1300 7th Street. Wichita Falls, TX 76301 This report was prepared and presented by the City of Wichita Falls Finance Department. Copies of the City's Annual Operating Budget and Annual Comprehensive Financial Report may be found on the City's website at www.wichitafallstx.gov. frr , n 1' IIA P 1.+ It. . _ PP , 1 1 A P. 1:--1 IP II f I A . A 1 A 1 .LL - M A a a : p : k R e, l ... r. • tiJ 5u . :.;::::::: �':, a a_ r j x I\ I` i - _ -- .,$ff,f-1.., ,;_.±-.-7--7-7..,-„,_. . ' si' ' \ 111 it -^ 1, r.`k l