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HomeMy WebLinkAboutCity of Lewisville - Public Financial Report CITY OF LEWISVILLE, TEXAS POPULAR ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDING SEPTEMBER 30, 2021 Table of Contents 2 Message from the City Manager……………………………...………...3 Meet the Leaders - Mayor…………………………….………………....4 Meet the Leaders - City Council ….………………………………….....5 At a Glance ….……………………………………………….…………...6 Success Stories…………………………………………………………...8 Economic Development…………………………………………...……..9 Government-Wide Financials - Statement of Net Position……..........10 (Balance Sheet) Government-Wide Financials - Statement of Activities……….……...12 (Income Statement) General Fund Overview……………………………………………….....14 General Fund Financials……………………………………….……..….15 General Fund Revenue…………………………………….……………..16 General Fund Expenditures……………………………….………..……17 Enterprise Funds…………………………………..…….…….……….....18 (Water and Sewer) (Stormwater) Debt…………………………………………………….……..………..….19 To the Reader…………………………………………………….……....20 Message from the City Manager   3 Dear Residents, We are pleased to present Lewisville’s 2021 Popular Annual Financial Report (PAFR). As city officials, we believe that good communication and transparency is integral to having a successful and responsive government. The PAFR is a summarized version of the city’s Annual Comprehensive Financial Report. Where the Annual Comprehensive Financial Report is voluminous and technically complex, the PAFR is designed to be more understandable for individuals who are not accounting professionals. Simply put, the PAFR highlights the city’s financial results for the past fiscal year. Although the Government Finance Officers Association of the United States and Canada (the widely recognized professional association of government finance officers) encourages state and local governments to issue PAFRs, only a small number do so. The City’s issuance of this PAFR is completely voluntary and reflects the City’s ongoing commitment to transparency. We thank you for taking an active role in your city and community. If you have any questions about the PAFR or any aspects of our finances, I encourage you to contact the City of Lewisville’s Finance Department at 972-219-3420. Respectfully, Claire Powell City Manager The Mission of the City of Lewisville is to enhance the quality of life for our community and provide effective municipal service.   Meet the Leaders - Mayor   4 About the Mayor TJ Gilmore was elected Mayor in May 2021 after serving 10 years on the Lewisville City Council. He is a native of Arizona and a graduate of the University of Arizona with a degree in Social and Behavioral Science. Gilmore and his wife, Tanya, have lived in Lewisville since 2001 and have three children who are Lewisville High School graduates and current college students. In addition to serving as Mayor, Gilmore is vice-chairman of the DCTA Board of Directors, a member of the Denton County Behavioral Health Leadership Team, and a Rotarian. City of Lewisville, Texas—Organizational Chart Meet the Leaders - City Council   5 Kristen Green Mayor Pro Tem Place No. 5 Brandon Jones Deputy Mayor Pro Tem Place No. 4 Ronni Cade Councilmember Place No.3 William J. Meridith Councilmember Place No.2 Bob Troyer Councilmember Place No.1 About City Council Lewisville is a home-rule city and operates under the Council-Manager form of government. The City Council is comprised of the Mayor and five Council members and is responsible for enacting ordinances, resolutions and regulations governing the City. In addition, the City Council appoints the members of various boards and commissions, the City Manager, City Attorney, Municipal Judge, and City Secretary. As chief administrative officer, the City Manager is responsible for implementing Council polices, overseeing all operations, and hiring and supervising the various department directors. City Council meetings are held on the first and third Mondays of each month at 7 p.m. unless the meeting falls on a recognized holiday at which time the meeting will be held the next Monday. Council meetings are held in the Council Chambers at Old Town City Hall at 151 W. Church Street. At a Glance   PopulaƟon 109,270 Average Home Value: $261,985 Lewisville was incorporated in 1925 and is located in Denton County, in the northern part of the Dallas/Fort Worth metroplex. Lewisville is a vibrant community offering the best in education, sought-after business opportunities and a variety of recreational and entertainment options. Square Miles: 43.22 (approx.) 6 At a Glance   7 Between the years 2012 to 2021, Lewisville’s population grew 14 percent from 96,000 to 109,270. The City has added a tremendous number of new and infill development and redevelopment projects that have aided in the renewal and growth of the City. Lewisville’s thriving economic climate has resulted in a higher quality of life, more entertainment options and greater access to jobs than ever before. The City’s assessed valuation for 2021 was $11.8 billion, a 5 percent increase from the prior year. Success Stories 8 Texas Comptroller Glenn Hegar recently announced the City of Lewisville is the latest local government entity to achieve specific transparency goals through the Comptroller’s Transparency Stars program. The City of Lewisville received a star in the area of Traditional Finances, which recognizes entities for their outstanding efforts in making their spending and revenue information available. Scan the QR code to above to access the City’s website regarding the Financial Transparency page. The City of Lewisville has earned the Gold Level Recognition Award from DFW Clean Cities for its fuel-saving and pollution-reducing efforts in fleet vehicles during 2021. The Government Finance Officers Association has awarded to the City both of Certificate of Achievement in Financial Reporting (FY 2020) and Distinguished Budget Presentation Award (FY 2021) during 2021. The City of Lewisville has been awarded the prestigious 26th Annual Achievement of Excellence in Procurement (AEP) for 2021 from the National Procurement Institute, Inc. (NPI). Economic Development   9 Lewisville is located in Denton County, one of the top 20 fastest-growing counties in the country per the U.S. Census. The 2021 population estimate from the North Central Texas Council of Governments (NCTCOG) is 109,270, an increase of 2.0% from the prior year. The City continues to add a tremendous number of infill development and redevelopment projects that have aided in the rejuvenation of the City. This development has led to strong annual growth in assessed value for the City. The City’s assessed value for fiscal year 2021 exceeded $11.8 billion which reflects a 5.2% increase from the prior year. The five-year average annual growth in assessed value was 8.1%.   Economic Success Stories Despite the pandemic, the City of Lewisville was busy introducing new projects and advancing the local economy through several ongoing initiatives. Some of these projects and initiatives include: There are several major projects planned for Old Town including the Main and Mill Lofts, Deck on Main, and The Mill at Old Town. These are significant residential and mixed-use developments that will add more than 500 new residential units, new restaurants, office space, and hundreds of public parking spaces in Old Town. The Deck on Main will feature a third floor balcony overlooking Wayne Ferguson Plaza, a 1.5-acre urban park and community gathering space located in the heart of Old Town Lewisville. Two new restaurants, Sfereco and Baja Cantina, were opened in Old Town during 2021 expanding dining options in the downtown area. Anixter Inc, currently operates a manufacturing facility in the City’s Waters Ridge Business Park. Due to significant growth in sales and market share in 2021 extended their lease and expanded their operations. Norman Window fashions is another company that also expanded their operations due to significant growth. Both of these companies have added an additional investment value to the property with their expansion and new jobs to the existing workforce. The City entered into an economic development agreement for the development of a family entertainment venue occupying 30,000 square feet of space at Music City Mall. This will be a unique sport and “Eatertainment Venue” that involves interactive high-tech entertainment activities such as simulation baseball, and golf, along with a food and beverage lounge/dining experience. Government-Wide Financials - Statement of Net Position Statement of Net Position  The purpose of government-wide financial statements is to present the financial position and operating results of the governmental entity as a whole. The City’s combined net position was $872.7 million as of September 30, 2021. By far the largest portion of the City’s net position (78.5%) reflects its investment in capital assets (streets, water/sewer system, buildings, machinery & equipment). The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Unrestricted net position, the portion available for future spending, increased $19.2 million from the prior year to $116.8 million. Discretely presented component units are reported in a separate column in the government-wide financial statements to emphasize that they are legally separate from the government. For fiscal year 2021, the following are included within the discretely presented component units: Lewisville Housing Finance Corporation, Lewisville Industrial Development Authority, Inc., Tax Increment Reinvestment Zone Number 1, and the Lewisville Parks and Library Development Corporation.   * Deferred ouƞlows of resources represent a consumpƟon of net posiƟon that applies to a future period(s) and so will not be  recognized as an ouƞlow of resources (expense/expenditure) unƟl then. Deferred inflows of resources represent an acquisiƟon  of net posiƟon that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) unƟl that Ɵme.  Examples include differences in expected and actual pension/OPEB experience and differences in projected and actual earnings  on OPEB assets.   10 *  *  Government-Wide Financials - Statement of Net Position   11 Net position represents the City’s assets less liabilities. Governmental activities are activities that are generally financed through taxes and other non-exchange revenues. It includes the general fund, debt service, capital projects and special revenues like grants and donations. Business type activities are activities financed in whole or in part by fees charged to external customers for goods or services like water, wastewater, and drainage and their related capital projects. Discretely Presented Component Units are legally separate organizations for which the City is financially accountable. An example of this would be Tax Increment Reinvestment Zone Number 1. Government-Wide Financials - Statement of Activities   Statement of Activities Governmental activities relating to general revenues and operating grants and contributions increased $13.7 million over the previous year. Capital grants and contributions decreased $1.7 million from 2020 mainly due to a decrease in contributions related to Castle Hills. The most significant governmental expense for the City is payroll and personnel-related cost. For the year, these costs were $76.1 million or 64.8 percent of total expenses. This was an increase in payroll cost from prior year of $6.1 million due to an increase in personnel and merit salary increases. Payroll costs are closely monitored to ensure they fall in line with budgeted amounts. Due to vacancies throughout the year, payroll costs came in $2.1 million less than originally budgeted. Business-type activities increased the City’s net position by $17.4 million. The City’s water and sewer system recorded charges for services of $37.7 million. This revenue source increased $3.3 million from the prior fiscal year. Revenues for the stormwater utility in fiscal year 2021 amounted to $4.3 million. This was a slight increase in stormwater utility of $.5 million. Non-cash capital contributions from developers and cash receipts in the form of development impact fees amounted to $10.2 million. This was an increase of $1.4 million from 2020 due to an increase in the amount of dedicated Castle Hills infrastructure as well as an increase in water and sewer capital recovery collections.   * Beginning Net Position increased $710,203 due to a reclassification from a blended component to a discretely presented component unit (TIRZ2) due to implementation of GASB 84 - Fiduciary Activities. 12 Government-Wide Financials - Statement of Activities   Contributions are revenue received in support of City activities such as a donation for a special event. Operating grants are those grants received to finance regular operations of a specific purpose. These include City activities such as social service agencies supported through the Community Development Block Grant (CDBG). Capital grants are grants or other capital assets received by the City restricted for capital purposes. These include funding from Texas Department of Transportation to support capital projects. Revenue and Expenses Comparison 13 General Fund - Overview   14 General Fund Balance vs. Expenditures The fund balance for the General Fund as of September 30, 2021 was $47.5 million, an increase of $6.7 million or 16.4 percent from the prior year. Fund balance is the difference between assets and liabilities and indicates funds available to support non-recurring City services. Property and other taxes exceeded the final budget by $8.7 million due to conservative original projections as a result of the pandemic. Of this amount, sales tax accounted for $7.4 million. Non-spendable and assigned fund balance totaling $1.4 million accounts for prepaid items and supplemental appropriations committed for a specific purpose. The remaining unassigned fund balance of $46.1 million can be used for supporting one- time or emergency-type uses. The City of Lewisville seeks to maintain a reserve level above 20% of expenditures. As you can see above, the City exceeds that goal annually. Unassigned fund balance for fiscal year 2021 is 52.2% of yearly expenditures. General Fund - Financials   15 Statement of Revenues, Expenditures, and Changes in Fund Balance (in millions)  General Fund Revenue   16 Tax revenue exceeded the final budget by $8.7 million. The primary reason was sales tax revenue, which was $7.4 million more than budgeted due to conservative projections as a result of the pandemic that did not materialize. The City’s largest source of revenue is sales tax, accounting for 37.6 percent of total General Fund revenues. Property Tax and Other Revenue account for 36.5 percent and 25.9 percent, respectively, of total General Fund revenues. Property Tax Rate: 0.443301 General Fund Expenditures   A FUND is an accounting entity with a set of self-balancing accounts that is used to account for financial transactions for specific activities of government functions. General Government - City Administration, Finance, Legal, and other departments. Culture and Recreation - Parks and Recreation and Arts and Cultural Events Public Safety - Police, Fire, Emergency Management, Municipal Court Public & Development Services - Public Services and Neighborhood Services Capital Outlay - Machinery and equipment, vehicles, project costs The General Fund is the City’s primary operating fund and is the foundation for all governmental activities. About the Fund 17 Expenditure Categories Enterprise Funds   18 OPERATING REVENUES OPERATING EXPENSES The City reports two major enterprise funds. Enterprise Funds are defined as funds where user fees are set at a level sufficient to cover the costs of services provided. User fees collected are restricted in their use and can only be used to support the operation and maintenance of the utility system. Activity listed here is also reflected in the government-wide financials found on page ten of this report. Water and Sewer Utility Enterprise Fund – This Enterprise Fund is used to account for operations of the City’s water and wastewater systems. Stormwater Utility Enterprise Fund – This Enterprise Fund is used to account for the Drainage Utility Fee revenue established in January 2018 to fund stormwater programs and infrastructure. Debt 19 The City’s underlying bonds ratings at September 30, 2021 were AAA from both Standard & Poor’s and Fitch Ratings for the City’s General Obligation, Certificate of Obligation and Revenue bonds. The higher rating leads to lower overall cost of borrowing. The City utilizes bond financing to support long-lived infrastructure assets such as roads and bridges, facilities, and utility system improvements. The City primarily issues debt that is exempt from federal and state income taxes, which lowers the City’s cost of borrowing. C AAA Aa A Baa Ba, B Caa/Ca/C The City’s current outstanding debt is set to be paid off by 2041. General Obligation (GO) Debt is debt used for public improvements where repayment is supported by ad valorem taxes or other alternative revenues to pay for principal and interest on the bonds Certificates of Obligation (CO) Debt is non referendum debt used for public improvements where payment is supported by ad valorem taxes or other alternative revenues to pay for principal and interest on the bonds Revenue Debt is debt used for public improvements that is supported by pledged revenues to pay for principal and interest on the bonds To the Reader   20 This Popular Annual Financial Report is intended to provide information on the City’s financial condition in a summarized, easily understandable format. Information in the Popular Annual Financial Report is drawn from the 2021 Annual Comprehensive Financial Report. Please note that the Annual Comprehensive Financial Report discloses detailed information regarding all of the information provided herein. The FY 2021 Annual Comprehensive Financial Report can be found on the link and QR code below: https://www.cityoflewisville.com/about-us/city-departments/financial- services/annual-financial-reports Comments or suggestions for improving the document should be addressed to the City of Lewisville, Finance Department, 151 West Church Street, Lewisville, TX 75057. Phone: 972-219-3420, Email: financedepartment@cityoflewisville.com Additionally, metrics related to City activity can be found using the QR code below.