HomeMy WebLinkAboutTown of Little Elm - Public Financial ReportA Y E A R O FLOOKING F O R W A R D
F I N A N C I A L
H I G H L I G H T S
Town of Little Elm, Texas | Fiscal Year ended September 30, 2021
0 6 Property Values
0 7 Tax Rate
0 9 Sales Tax
1 1 Pension
1 6 Long-Term Debt
1 8 Economic Outlook
Table of Contents
0 1 Town Manager's
Message
0 3 Little Elm: By the
Numbers
0 4 Net Position
1 2 General Fund
Revenues &
Expenditures
1 3
General Fund Revenues
& Expenditures Detail
Unassigned Fund
Balance
1 5 General Fund
Key Terms
D E A R L I T T LE E LM RE S I D E NT S,
I am pleased to present the Town of Little Elm Popular Annual Financial Report (PAFR) for the fiscal year
(FY) ended September 30, 2021. The purpose of the report is to provide a snapshot of the Town’s
financial performance and major initiatives as well as an overview of financial, economic, and
demographic trends. Above all, it is designed to present a more easily understandable financial report.
It also represents the Town’s ongoing commitment to keep the Town of Little Elm residents informed
about the Town’s finances and to be accountable in all aspects for the receipt and expenditures of
public funds.
The financial information contained in this report has been derived from the FY 2020-2021 Town of
Little Elm Annual Comprehensive Financial Report (ACFR), both of which are located on the Town’s
website, www.littleelm.org/95/Annual-Financial-Report. The ACFR is comprised of approximately 130
pages of detailed financial statements, notes, schedules, and reports as required by Generally Accepted
Accounting Principles. For financial reporting purposes, the Town of Little Elm Economic Development
Corporation and Community Development Corporation is presented as discretely blended component
units of the Town of Little Elm’s primary government. Blended component units are legally separate
entities that provide services that function almost entirely for the primary government and for the
benefit of the Town. The ACFR was audited by Weaver and Tidwell, L.L.P., and received an unqualified
(“clean”) opinion.
The PAFR, which was prepared by the Town of Little Elm Finance office, summarizes the financial
activities of the primary government of the Town of Little Elm. The reports and statements contained in
the PAFR condense and simplify the Town’s FY 2020-2021 ACFR for all of the Town’s funds. The
information in this report is unaudited, and not in accordance with Generally Accepted Accounting
Principles due to the condensed and simplified presentation and absence of notes to the financial
statements as presented in the Town’s ACFR.
The Town of Little Elm provides a wide range of municipal services, including fire and police protection,
emergency medical services, construction and maintenance of streets and other infrastructure, a
multitude of recreational and cultural events throughout the year, and library services. The Town also
provides water, sewer, drainage, and solid waste services to its residents and operates its own sewer
treatment facility. Additional detailed financial information on these operations may be found in the
Town’s ACFR in Notes 1 within the notes section to the financial statements.
As you review our PAFR, I invite you to share any questions, concerns, or recommendations you may
have. Those seeking a deeper understanding of the Town’s finances are encouraged to review a copy of
the Town’s ACFR. Questions concerning any data provided in the PAFR or requests for additional
financial information should be addressed to the Town of Little Elm’s Finance Office, 100 West Eldorado
Parkway, Little Elm, Texas 75068, or by visiting the Town’s website at www.littleelm.org/96/Finance-
Department.
Sincerely,
FI N ANCIAL HIG H L IGH T S 2021 PAGE 1
MATT MUELLE R
Town Manager
V I S I O N
T h e T o w n o f L i t t l e
E l m i s a d i s t i n c t a n d
d e s i r a b l e l a k e s i d e
d e s t i n a t i o n f o r a l l
p e o p l e t o l i v e a n d
p l a y w h i l e e n j o y i n g
a s a f e , v i b r a n t , a n d
w e l c o m i n g
c o m m u n i t y .
M I S S I O N
B u i l d o n o u r u n i q u e
l a k e o p p o r t u n i t i e s
a n d h o m e t o w n c h a r m ,
e n c o u r a g e d i v e r s e
h o u s i n g o p t i o n s a n d
b u s i n e s s
o p p o r t u n i t i e s , a n d
p r o v i d e a n u n m a t c h e d
q u a l i t y o f l i f e .
S T R A T E G I C G O A L S
P r ov i d e a s a f e a nd we l co m i ng
e n v i ro n m e n t fo r L i t tl e E l m re s i d e n t s a n d
vi s i t o r s | E n s u r e st r on g re l a t io n shi p
wi t h i n th e c o m m u n it y an d r e g i o n |
Max i m iz e co m m u ni t y r e c r e at i o n and
l ei s u r e a ct i v it i es | M a i nt a i n op e r a t i o n a l
i n t e g r i t y a nd v ia b i lit y | Pro m o t e a nd
e x p an d Lit t l e E l m ’s i d en t i ty | E n sur e
e xc e lle n c e i n p u b l i c s e r v ic es wh i l e
k e e p i n g u p w i th th e g r o w th in t h e
co m m uni t y |
Integrity Customer Service Efficiency Innovation
FI N ANCIAL HIG H L IGH T S 2021 PAGE 2
MAYOR & COUNCIL
From left to right: Jamell T. Johnson, Place 1; Tony Singh, District 2; Neil Blais, Mayor Pro Tem/District 3;
Mayor Curtis J. Cornelious; Lisa G. Norman, District 4; Jeremy Lukas, District 5; Michael McClellan, Place 6
LITTLE ELM: BY THE NUMBERS
48,910 22.7
326POPULATIONTOWN EMPLOYEES
SQUARE
MILES66
MILES OF
SHORELINE
3.9%
UNEMPLOYMENT RATE
$42,368
PER CAPITA INCOME
8
PARKS
7
LARGE EVENTS
31
PEOPLE
PROMOTED
$485
MILLION
COMMERCIAL
VALUATIONS
78
SWORN
OFFICERS
42,715
CALLS FOR
SERVICE
3
FIRE
STATIONS
5,322
CALLS FOR
SERVICE
$3.5
BILLION
RESIDENTIAL
VALUATIONS
1,370
PERMITS ISSUED
ECONOMIC
INDICATORS
$293,403
MEDIAN HOME VALUE
PUBLIC
WORKS
3,000+
SIGNS
184
MILES OF STREET
992.5
MILLION
GALLONS OF
WASTEWATER
TREATED
12,390
WATER CUSTOMERS
PARKS &
RECREATION
25,000
SQUARE-FOOT
RECREATION CENTER
32
TENURE
MILESTONES
OUR
TEAM
MEMBERS
5
ANNUAL
AWARDS
10
VIRTUAL
EVENTS
$448
MILLION
MULTIFAMILY
VALUATIONS
FI N ANCIAL HIG H L IGH T S 2021 PAGE 3
42,000
SQUARE-FOOT
AQUATIC PARK
STATEMENT IN NET POSITION
This represents all of the Town’s assets and liabilities with the differences reported as net
position. Over time, increases or decreases in net position may serve as a useful indicator of
whether or not the financial position of the Town is improving or deteriorating. The statement
of net position combines and consolidates governmental and business-type current financial
resources with capital assets and long-term obligations.
$31.046
MILLION
$24.001
MILLION
GOVERNMENTAL
ACTIVITIES
BUSINESS-TYPE
ACTIVITIES
UNRESTRICTED
NET POSITION
FI N ANCIAL HIG H L IGH T S 2021 P AG E4
C H A N G E S I N
N E T P O S I T I O N
The Town continues to manage and plan for the continued
growth as a result of a strong economy in the Dallas Fort
Worth area. New development is guided by design guidelines,
a 2017 Comprehensive Plan, a Strategic Plan, and a Capital
Improvement Plan. The Little Elm Economic Development
Corporation continues its work in attracting high-quality
businesses to Little Elm in order to increase both the tax base
and local employment. The Town continues to benefit from
other favorable conditions associated with a desirable
location for people to live and play.
GOVERNMENTAL
ACTIVITIES
Governmental activities finance most
of the Town's services such as general
administrative services, fire, police,
development services, street
construction and repair, and
community development. Examples
of these activities are:
Property Tax
Sales Tax
Franchise and Impact Fees
Building Permits
Business-Type Activities pay for
services such as water, sewer,
drainage, solid waste, and utility
billing by charging user fees.
Examples of these activities are:
Resident & Commercial Utility Bills
Impact fees
$74.014
MILLION
INCREASE IN
TOTAL NET POSITION
BUSINESS-TYPE
ACTIVITIES
FI N ANCIAL HIG H L IGH T S 2021 PAGE 5
Most of the increase in total net position is
largely in part due to capital grant
contributions related to the activity in the
Public Improvement Districts.
P RO P E R TY
V A LU ES
New construction is attributed to $262 million
added to the tax roll which includes improvements
and personal property. The Town is primarily a
bedroom community, which has a great attraction
of being located on Lewisville Lake with over 66
miles of shoreline. The lake draws significant
attention from visitors throughout the DFW area.
The Town has maintained significant growth. Certified property valuations increased by $286
million or 7.01% for FY 2020-2021, from $4.08 billion to $4.37 billion.
7 .0 1 %
CERTIFIED PROPERTY
VALUATIONS
INCREASE
FI N ANCIAL HIG H L IGH T S 2021 PAGE 6
F Y 2021 T O W N
T A X R A T E
The Operations & Maintenance (O&M) portion of the Town's tax rate pays for daily
operations of the Town such as personnel, supplies, and maintenance costs. The Debt
Service (I&S) portion of the tax rate pays for the Town's obligation for debt that has been
issued for infrastructure improvements.
$.5200 00
OPERATIONS &
MAINTENANCE RATE
$.12 9702
DEBT SERVICE RATE
$.649702
TOWN TAX RATE
FI N ANCIAL HIG H L IGH T S 2021 P AG E7
A V E R A GE
RE S I DE N T I A L
TAX B I L L
B Y T A XIN G
E NT I T Y
A common question the Town receives is
"Where do my taxes go?" A resident's total tax
bill consists of three taxing entities: the Town,
Denton County, and one of three school
districts. Each entity has its own tax rate. Below
is a breakdown of the tax bill for the average
taxable single home value ($293,403) that
includes the average of the three school
districts' tax rates.
FI N ANCIAL HIG H L IGH T S 2021 PAGE 8
S AL E S T A X D OL L A R
DIS TRIBU T I O N
The State of Texas sales tax rate is 6.25 % and is added to the 2% Town's sales tax rate that is
levied on all taxable sales within the Town. Below demonstrates how each sales tax dollar is
split and the distribution of the Town's 2% sales tax rate.
$.76
$.12
$.06
$.03
$.03
1%
.5%
.25 %
.25%
6.2 5%
8 .2 5 %
TOTAL SALES
TAX RATE
STATE
GENERAL FUND
ECONOMIC DEVELOPMENT CORPORATION
COMMUNITY DEVELOPMENT CORPORATION
STREET MAINTENANCE
FI N ANCIAL HIG H L IGH T S 2021 PAGE 9
S A LE S T A X
B Y I ND U S T RY
The top four industries providing sales tax to the Town of Little Elm are:
RETAIL GENERAL
SERVICES
FOOD PROFESSIONAL
SERVICES
$6.5
MILLION
$2.5
MILLION
$1.4
MILLION
$0.9
MILLION
FI N ANCIAL HIG H L IGH T S 2021 P AG E 10
P E NS I O N
8 7 .7 4 %
FUNDED
PENSION
TOWN RECOGNIZED PENSION EXPENSE OF
$2,936,801
ACTUARIAL ASSUMPTIONS
2.50%
PER YEAR
INFLATION
3.50% - 11.5%
PER YEAR
OVERALL PAYROLL GROWTH
6.75%
NET OF PENSION
PLAN INVESTMENT
EXPENSE, INCLUDING
INFLATION
INVESTMENT RATE OF
RETURN
24
YEARS
REMAINING
AMORTIZATION
PERIOD
The Town participates as one of 895
member cities in the nontraditional, joint
contributory, hybrid defined benefit pension
plan administered by the Texas Municipal
Retirement System (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 as an agent multiple-employer
retirement system for municipal employees
in the State of Texas. TMRS issues a publicly
available comprehensive annual financial
report that can be obtained at
www.TMRS.org.
FI N ANCIAL HIG H L IGH T S 2021 P AG E 11
R EVE N U E S &
E X PEN DITU R E S SU M M A R Y
The Town of Little Elm maintains a General Fund that reflects the Town's basic services,
including public safety, public works, parks maintenance, development services, general
government, etc. The chart below displays General Fund results for Fiscal Year 2021 in
cents to provide an easy to understand summary of activity (e.g. Property Taxes make up
43 cents of every $1 received; Public Safety accounts for 60 cents of every $1 spent; etc.)
1 4
from
LICENSES &
PERMITS 1 5from
SALES & USE
TAX/FRANCHISE
FEE 13
from
CHARGES FOR
SERVICES
43
from
PROPERTY
TAXES
1 5
from
OTHER
6 0
for
PUBLIC
SAFETY
12
for
GENERAL
GOVERNMENT
6
for
PUBLIC
WORKS
15
for
CULTURE &
RECREATION
7for
COMMUNITY
SERVICES
FI N ANCIAL HIG H L IGH T S 2021 P AG E 12
UNASSIGNED FUND BALANCE
GEN E R A L FU N D
The unassigned fund balance is an indication of the amount
of available resources the Town has at a point in time to
fund emergencies, shortfalls, or other unexpected needs. In
this analysis, only the General Fund information is reported.
The Town's financial goal is to achieve and maintain an
unassigned fund balance in the General Fund equal to 25%
of budgeted expenditures. The remaining funds are used to
stabilize the Town's budget over the coming years as we
address our tremendous growth.
REVENUE
EXPENDITURES
7 3 %
UNASSIGNED FUND
BALANCE
The General Fund is the primary operating fund for Town services. It is used for all activities,
except those legally or administratively required to be accounted for in other funds.
FI N ANCIAL HIG H L IGH T S 2021 P AG E 13
*total does not include transfers and other financing sources
GEN E R A L FU N D (CON T .)
REVENUE
EXPENDITURES
FI N ANCIAL HIG H L IGH T S 2021 P AG E 14
The General Fund saw an increase in property taxes and sales tax collections over last year.
This is primarily due to increased property values and new growth within Little Elm. This, in
turn, brings in more tax revenue to the Town that supports services. The Town also
approved a new development known as Spiritas Ranch that will bring 2,100 homes into the
community. The Town reported an increase in building permit revenue of 89% over last year.
This and the growth in the community is a strong indicator that the economy is recovering
from COVID.
The Town implements a five-year financial plan that allows the Town to look forward in
order to meet the growth and service needs of the Town. The Town still continues to be
conservative in revenue projections, however, the Town was able to lower the property tax
rate to the community while increasing services for Public Safety, Parks and Recreation, and
Public Works. Due to the strong reserves, forward planning, significant ongoing
development, and conservative budgeting efforts, the Town received an increase in our
bond rating from S&P and Moody’s. This means the Town is able to issue future debt at a
lower cost to the citizens which in turn helps reduce the property tax rate related to debt.
Another significant revenue stream the Town received to assist in unforeseen COVID-related
expenditures was the American Recovery Act Program that the federal government
presented to municipalities. The Town has been allotted over $4.2 million that helps respond
to public health and economic conditions.
While the Town saw increases over last year’s expenditures, the General Fund budget to
actual shows significant cost savings which in turn is rolled into Fund Balance. With the
future five-year financial plan, the Town is planning to draw down Fund Balance to provide
more services due to growth and response to services needed within the Town. In alignment
with its core value of innovation, the Town has continued to provide services in a virtual
state, i.e. virtual court, online registrations, and permit applications.
D EF I N I TIO N O F K E Y T ER M S
CHARGES FOR
SERVICES
Includes all revenues collected on services provided through the General Fund, such as plan
review fees, special events, facility rentals, and parks and recreation fees.
FINES, FEES, &
WARRANTS
Includes all court fines and fees, contractor and construction fees, alarm fees, development
application fees, zoning fees, and copying fees.
FRANCHISE
TAXES Includes fees assessed for private use of public property.
GENERAL FUND REVENUES
INTERGOVERNMENTAL
INVESTMENT
INCOME Revenue earned from the Town's investment portfolio.
MISCELLANEOUS Items that are not covered by any of the aforementioned categories.
LICENSES &
PERMITS
Includes permits and licenses required by the Town including occupational licenses, plumbing,
building, electrical, fire permits, temporary certificate of occupancy, and sign permits.
PROPERTY
TAXES
Property Taxes are based on the appraised values provided by Denton County Central Appraisal
District. Taxes are levied by October 1 of each year. Unpaid property taxes become delinquent on
February 1 of the following year. Penalty and interest is levied throughout the year. Under state law,
property taxes levied on real property constitute a lien on the real property which cannot be forgiven
without specific approval of the State Legislature. The lien expires at the end of twenty years. Taxes
levied on personal property can be deemed uncollectible by the Town.
SALES & USE
TAXES
Of the two percent sales tax on taxable sales within the Town, one cent is recorded as revenue in the
General Fund. Use tax is if you have purchased items for use in Texas from retailers who do not
collect Texas sales tax, you owe Texas use tax on those items. Use tax is paid by the buyer when the
Texas sales tax has not been collected by the seller. This includes purchases made from out-of-state
retailers whether by mail order, catalog, television shopping networks, radio, Internet, phone, or in
person.
Activities of two or more goverments providing assistance for a program.
GENERAL FUND EXPENDITURES
COMMUNITY
SERVICES
Makes up the building permits and safety division, community integrity that monitors code
violations, and provides GIS interactive maps for the Town. Also this area provides planning,
zoning, and engineering services for the Town.
CULTURE &
RECREATION
Dedicated to the development of well-maintained parks, municipal facilities, view and natural
open spaces, as well as promoting exceptional recreation and leisure activities.
GENERAL
GOVERNMENT
Includes Town Council, Town Manager, Finance, Information Technology, Human Resources,
Marketing, and Town Secretary offices.
PUBLIC SAFETY Expenditures within the funds that supports the safety of our residents, such as police, fire, animal
services, and municipal court.
PUBLIC WORKS Street rehabilitation and resurfacing, and upkeep with the streets, sidewalks, and signage.
FI N ANCIAL HIG H L IGH T S 2021 P AG E 15
L O NG -T ER M D EBT
What is a credit rating? Credit ratings are important because they define the universe of
buyers for the debt obligations, the price that will be paid to obtain credit, and they heavily
influence how much it costs to borrow the cash required to support the capital program. The
Town has the second highest credit rating, AA+, from Standard & Poor's. This allows the Town
to borrow at lower interest rates and to save taxpayers' money.
What exactly is bond financing? Bond financing is a type of long-term borrowing that the Town
uses to raise money, primarily for long-lived infrastructure assets. The Town obtains money by
selling bonds to investors. In exchange, the Town promises to repay this money, with interest,
according to specific schedules. For tax-exempt issuances, the interest the Town has to pay
investors on the bonds it uses for public infrastructure is exempt from their federal income tax,
which make the Town's interest cost on the bonds less than it would be otherwise.
FI N ANCIAL HIG H L IGH T S 2021 P AG E 16
In 2021, the Town issued the 2021 Certificates of Obligations in the amount of $21.765 million.
The Government recorded $13.605 million for the 2021 Certificates and the Business-Type
recorded $8.160 million.
L O NG -T ER M D EBT
At fiscal year-end, the Town had $126 million in long-term debt outstanding which represents
a $17.5 million or 16% increase from the prior year.*
FI N ANCIAL HIG H L IGH T S 2021 P AG E 17
*Due to issuance of 2021 CO - $21.76 million
E C ON O M I C O UT L O OK
This chart reflects the actual amount of sales tax received for the last five fiscal years ending
September 30, 2021. The sales tax revenues collected for 2022 thus far has shown a significant
increase compared to prior years due to local shopping and increased economic development
coming online. The Management Discussion & Analysis (MD&A) of the Town's ACFR provides
more information on our economic growth.
FI N ANCIAL HIG H L IGH T S 2021 P AG E 18