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HomeMy WebLinkAboutCity of Plano - Public Financial ReportFOR FISCAL YEAR ENDED SEPTEMBER 30, 2021 CITY OF PLANO, TEXAS POPULARANNUAL FINANCIALREPORT2021 On behalf of the City Council and City of Plano, I am pleased to present the Fiscal Year End 2021 Popular Annual Finan- cial Report. The purpose of this publication is to provide highlights of the City’s finances and performance, as well as offer accolades and additional transparency lending to what makes Plano a great place to work, play and live. As the City of Excellence, Plano has proven to be one of the greatest communities in America. Our reputation as the City of Excellence is built upon the strong bonds of relation- ship we have as a community. Our community partnerships are key to our successes, as well as the efforts from City Staff. Plano is a global economic leader, bonded by a shared sense of community, where residents experience unpar- alleled quality of life. The City Council and City Staff are collectively committed to excellence by focusing on the values and priorities that have made Plano successful. Sincerely, John B. MunsMayor Table of Contents Mayors Message 1 Government Finance Officers Association Award 2 City Government 3 Plano’s Profile 4 Plano’s Profile 5 Plano’s Employment 6 Government-Wide Statement of Net Position 7 Plano’s Performance 8 Government-Wide Statement of Activities 9 Governmental Funds 10 General Fund Revenue and Expenses 11 Proprietary Funds 12 Live, Work and Play 13 In Conclusion 14 1 Popular Annual Financial Report Fiscal Year Ending SEPTEMBER 30, 2021 The Popular Annual Financial Report (PAFR) is intended to summarize and simplify the statistical, economic and financial information contained in the 2021 Annual Comprehensive Financial Report (Annual Report). The Annual Report was prepared in conformance with generally accepted accounting principles (GAAP) and independently audited by Weaver and Tidwell, L.L.P. The PAFR, while unaudited, provides a brief analysis of where the City’s reve- nues are generated and where the dollars are spent, as well as trends in the local economy. It is presented as a means of increasing public awareness about the City’s financial condition through a more user-friendly presenta- tion. Most of the detailed information in this report refers to our operating accounts, not all of the individual funds and component unit funds. For a more detailed, GAAP based, full disclosure review of the individual funds and component unit financial statements, please refer to the City’s Annu- al Report that is accessible through the City’s website: plano.gov/2021acfr 2 Plano was incorporated on June 2, 1873, and chartered as a Home Rule City on June 10, 1961. The City operates under a Coun- cil-Manager form of government. The Council sets City policy and the City Manager is responsible for City operations. Citizen advisory boards and commissions add to the governing process. The City Council is comprised of a Mayor and seven members who are all elected citywide. They are responsible for enacting ordi- nances, resolutions and regulations governing the City, as well as appointing the members of various statutory and advisory boards, the City Manager, City Attorney, and Municipal Judge. More in- formation can be found: www.plano.gov/1345/Mayor-City-Council The City Manager, Mark Israelson, is the chief administrative of- ficer of the government. He is responsible for the enforcement of laws and ordinances, the appointment and supervision of the deputy city managers and department heads and the performance of functions within the municipal organization. More informa- tion can be found: www.plano.gov/1292/City-Managers-Office The City’s Director of Finance, Denise Tacke, is the chief fis- cal officer of the City. She acts as the primary contact with the City’s bond counsel, rating agencies and underwriters, and is also responsible for general supervision and oversight of the Finance Administration, Accounting, Treasury, Munic- ipal Court and Customer Utility Services divisions. More in- formation can be found: www.plano.gov/1750/Finance City Government John Muns Mayor Place 6 Kayci PrinceMayor Pro Tem Place 4 Maria Tu Deputy Mayor Pro TemPlace 1 Anthony RicciardelliPlace 2 Rick Grady Place 3 Shelby Williams Place 5 Julie Holmer Place 7 Rick SmithPlace 8 3 Plano’s Profile Plano is the hometown choice of 288,100 resi- dents. Plano is a community that offers exception- al housing, award-winning schools and a dynamic business climate, all of which are strong factors in the success of the City of Plano’s economy. Based on information obtained from the U.S. Census Bureau, Plano is ranked 74th in the na- tion and 9th in Texas on the list of the most populous cities over 50,000. Plano’s medi- an average household income is $95,602, 52% above the national average of $67,521. Plano offers 5 public libraries with 729,551 volumes, public internet access and a vari- ety of children’s programs. It also offers 5 recreation centers, 9 public swimming pools, 70 playgrounds, and 151 athletic fields. In fiscal year 2021, Plano’s property tax rate was 44.82 cents per $100 of assessed valua- tion, remaining the same as the fiscal year 2020 tax rate. Plano continues to offer one of the lowest municipal tax rates in the area, based on a property tax base of $45.2 billion, as well as greater homestead exemptions than most neighboring cities. Plano also continues to of- fer its residents a 20% Homestead Exemption and up to $40,000 for Disability or Over 65 ex- emptions. In addition to these exemptions, the City offers a property tax freeze for home- owners 65 and over, their spouses and for indi- viduals who are disabled. The average home market value and taxable value for a Plano home is $378,396 and $301,598 respectively. 4 Plano’s Profile Property taxes, the City’s largest rev- enue source, were $200.3 million in fiscal year 2021. The assessed val- ue for the tax roll as of January 1, 2020, upon which the fiscal year 2021 levy was based, was $45.2 billion. Seventy-two percent of Plano’s property tax value is the combination of single-fami- ly residence and commercial real property. The City’s top five taxpayers are Toyota Mo- tor North America, Inc., Legacy West Investors LP, CXA-16 Corporation, JP Morgan Chase Bank NA and Oncor Electric Delivery Company with a combined tax value of $1.7 billion. Committed to a growth-oriented busi- ness environment, Plano offers an attractive tax incentive program de- signed to promote ongoing develop- ment for business allowing citizens to live, work and play in Plano. Con- veniently located in the Dallas/Fort Worth metroplex, Plano has access to four airports (international, regional, municipal and private), as well as the benefit of membership in the regional public transportation system known as Dallas Area Rapid Transit (DART). Plano also contains within its bound- aries President George Bush Turnpike (SH 190), Dallas North Tollway, Central Expressway (US 75) and Sam Rayburn Tollway (SH 121). Interstates 20, 30, 35 and 635 are within a 30 minute drive. $3 3 . 8 $3 8 . 3 $4 1 . 7 $4 3 . 8 $4 5 . 2 $161.6 $178.0 $189.8 $193.8 $200.3 $100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200 $210 $25$26$27$28$29$30$31$32$33$34$35$36$37$38$39$40$41$42$43$44$45$46 FY17 FY18 FY19 FY20 FY21 Co l l e c t i o n s ( M i l l i o n s ) As s e s s e d V a l u e ( B i l l i o n s ) Property Tax Values and Collections Assessed Valuation Collections 5 Plano’s Employment Home to three Fortune 1000 employers, Plano’s greatest economic strength is its diversified employment base. Plano has been fortunate to have some of the na- tion’s largest and most recognized corpo- rate employers make Plano their home. The principal employers within the City claim 17.5% of the total City employment, which equates to 28,096 employees. Capital One Finance, 5,023 Liberty Mutual Insurance Company, 2,652 Toyota Motor North America, Inc., 3,815 Ericsson, 2,545 AT&T Foundry, 2,500 PepsiCo, 1,881 NTT Data, Inc., 1,794 Frito-Lay, 1,712 JP Morgan Chase, 4,988 FedEx Office , 1,186 Principal Employers Since 2017, the City’s full-time equivalent positions decreased by 95, primarily in the water and sew- er and parks and recreation areas. 2,380 2,430 2,480 2,530 2,580 2,630 2,680 2,730 2,780 2017 2018 2019 2020 2021 Full-Time Equivalent City Employees The unemployment rate in Plano at Sep- tember 30 decreased from 6.3% in 2020 to 3.8% in 2021. This compares favor- ably to the national unemployment rate of 4.8% and 5.6% for the state of Texas. 0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0% 2017 2018 2019 2020 2021 Unemployment Rate Plano Texas United States 6 Government-Wide Statement of Net Position Net position may serve over time as a use- ful indicator of the City’s financial posi- tion. It is a snapshot of the City’s entire re- sources and obligations or net worth, at the close of the fiscal year. The City of Plano’s combined net position was $1.7 billion as of September 30, 2021, which consists of $1.2 billion in governmental activities and $480 million in business-type activities. Pla- no’s combined net position has increased $57.9 million or 3.6% over the prior year. In fiscal year 2021, the City recognized $10.2 million in Coronavirus Aid, Relief, and Eco- nomic Security (CARES Act funding from Collin County to assist in COVID-19 response efforts as allowed by the U.S. Department of the Treasury’s Coronavirus Relief Fund Guidance for State, Territorial, Local, and Tribal Governments. The City used the di- rect expense funds primarily to recover payroll costs associated with public safety employees, as work performed was substan- tially dedicated to mitigating or responding to the COVID-19 public health emergency. By far the largest portion of the City’s net position (79.4%) reflects its investment in capital assets (e.g., land, buildings, machinery and equipment) less any related debt used to acquire those as-sets that is still outstanding. The City uses these capital assets to provide services to citizens. Consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources need-ed to repay this debt must be provided from oth-er sources since the capital assets themselves cannot be used to liquidate these liabilities. Capital assets, net of depreciation(in millions) 7 Plano’s Performance As of September 30, 2021, the City’s non-current liabilities for its governmental and business-type activities amounted to $737.7 million, which includes bonded debt, net pension and other postemployment benefits liabilities, compensat- ed absences and liability for insurance claims. The City’s General Obligation bonds are is- sued for general government capital projects and to refund previously issued bonds for debt service savings. The bonds are to be re- paid from property tax revenue of the City. The City’s Water and Sewer bonds are issued for extending and improving the water and san- itary sewer system. The bonds are secured by the net revenues of the Water and Sewer Fund as defined in the respective bond indentures. The City’s Municipal Drainage Revenue bonds are issued to fund the acquisition, construction and repair of structures, equipment and facilities for the City’s municipal drainage utility system, re- fund a portion of the City’s outstanding municipal drainage utility system revenue debt, fund a debt service reserve fund, and pay costs of issuance associated with the sale of bonds. These bonds are secured by a first lien on and pledge of all income of the Municipal Drainage Fund in accor- dance with the provisions of the bond indenture. The City’s General Obligation Bonds and tax notes continue to receive AAA ratings based on conservative budgeting practices, adequate fund balance, timeliness of audit, maintaining a capi- tal maintenance fund, creation of the Other Post Employment Benefit Trust, as well as, dedication to economic development. As a result of receiv- ing these superior credit ratings, the City is able to benefit from lower interest rates. If the City low- ered to AA ratings, the true interest cost would increase by approximately 10 basis points which translates into increased debt service payments. Highly rated bonds helps the City receive better pricing and rates at the time of the sale. The higher rating also makes the City’s debt more marketable to investors. Bond Official Statements can be found here: www.plano.gov/443/Bond-Official-Statements 8 Government-Wide Statement of Activities The Statement of Activities, as of September 30, 2021, and the previous two years, presents a gov- ernment-wide financial analysis of how the City’s net position changed during the last three fiscal years. General government $0.05 Administrative services $0.02 Public safety $0.26 Libraries $0.02 Development $0.08 Public services and operations $0.01 Parks and recreation$0.06 Public works $0.07 Technology services $0.04 Interest on long-term debt $0.02 Water and sewer $0.29 Sustainability and environmental services $0.05 Municipal drainage $0.01 Convention and tourism $0.01 Other$0.01 Where the Money GoesCost per $1 Public safety $0.05 General government $0.01 Development $0.04 Parks and recreation $0.01 Public works $0.01 Technology services $0.01 Water and sewer $0.26Sustainability and environmental services $0.03 Municipal drainage $0.01 Property taxes $0.33 Sales taxes $0.16 Hotel occupancy $0.01 Franchise fees $0.04 Investment income $0.01 Other $0.02 Where the Money Comes FromRevenues per $1 9 Governmental Funds The fund financial statements in the Annual Report provide detailed information about the City’s major funds. The non-major funds are combined in a separate column. The General Fund, the chief oper- ating fund of a state or local gov- ernment, is the most significant of the City’s governmental funds. The majority of the City’s basic ser- vices, such as police, fire, libraries, development, public services and op- erations, public works, technology ser-vices and general administration are reported in governmental funds. Prop- erty taxes, sales tax and franchise fees finance most of these activities. The City of Plano maintains 21 individ- ual governmental funds. As of Sep- tember 30, 2021, the City of Plano’s governmental funds reported a com- bined ending fund balance of $394.2 million, an increase of $19.0 million in comparison to the prior fiscal year. The fund balance (equity) of the City’s General Fund increased $3.9 million, or 6.4% to $65.5 million from prior year balance of $61.6 million. Fund balance is a particularly important measure in the general fund because it reflects the primary functions of the gov- ernment and primarily includes local tax revenues. 10 General Fund Revenues and Expenses The General Fund increased by $3.9 million during the current fiscal year. Expenditures increased $5.6 million primarily due to a decline in payroll cost reimbursements from CARES funding for public safety employees’ salaries. General fund revenues increased $11.9 million compared to prior year. Property tax revenues increased $4.9 mil- lion and sales tax increased $5.8 million over the prior year due to increases in total assessed proper- ty values and economic recovery. The General Fund reported a net increase of $3.7 million in net transfers out compared to prior fiscal year. Transfers are primar- ily used to move funds to finance various programs in accordance with budgetary authorizations. In fiscal year 2021, the General Fund expenditures on a budgetary basis were $7.5 million under final budget.The City’s responsiveness to emerging econom- ic challenges and its long-term planning have been key factors in maintaining its fiscal health. The City continues to focus on initiatives that help better engage the community to deliver ser- vices that address needs and concerns and im- prove the quality of life across the City of Plano. 11 Proprietary Funds The City charges internal and external cus- tomers for the services it provides in order to cover all or most of the cost of services delivered. These services are generally reported in proprietary funds. The City’s proprietary funds are comprised of en- terprise funds and internal service funds. The enterprise funds are the most signif- icant of the proprietary fund types. The City of Plano maintains seven individual enterprise funds. The City uses enterprise funds to account for operations in water and sewer, sustainability and environmen- tal services, municipal drainage, conven- tion and tourism, municipal golf course, recreation revolving and downtown devel- opment. These funds account for “busi- ness-type activities,” similar to those found in the private sector, that include services primarily funded through user charges. The Enterprise Funds had a combined to- tal net position of $466.0 million, a de- crease from prior year of $4.6 million. 148 16,902 54,569 57,719 64,371 82,425 Plano Centre days bookedand serviced Recyclables collected (tons) Recreation center members Rounds of golf played Refuse collected (tons) Water customers Enterprise Vitals 12 Live, Work and Play Plano is ranked 10th for the “Best Cities for Jobs” according to Wallethub. com. Cities were ranked based upon job market and socio-economics. Plano is the 4th best city to buy a house in the nation, according to the Best Places to live rankings by Niche.com. In this ranking, Plano received an A-plus rating in public schools, jobs, family life and diversity, as well as, nightlife, health and fitness. WalletHub.com’s Best & Worst Places to Raise a Family ranked Plano the 4th best place to raise a family. WalletHub compared more than 180 U.S. cities considering 48 key metrics, including essential family dynamics, the quality of local school and health-care systems and opportunities for fun and recreation. Based on five characteristics of an effective park system: access, in- vestment, acreage, amenities and equity, the City of Plano ranked with best parks in Texas, 15th in the U.S. according to Trust for Public Land. Plano is a global economic leader bonded by a shared sense of community where residents ex- perience unparalleled quality of life. Offering a welcoming and engaged community, safe, vi- brant neighborhoods, residential and commercial economic vitality, excellent, innovative and ac- countable City government and multi-modal transportation and mobility solutions, the City of Plano continues to foster this vision creating an environment of excellence and partnership with business and community. This vision makes Plano a place people love to live, work, and play. 13 In Conclusion To learn more about the City of Plano’s financial funds or to view the 2020-2021 An- nual Financial Report, please visit the City of Plano’s Finance Department’s website. www.plano.gov/1750/finance 14