Partnering with Texas communities since 1974.
TABLE OF CONTENTS
1………………………………….WHO WE SERVE
3…………………….……BOARD OF TRUSTEES
4……………………LETTER FROM THE CHAIR
6……………...AUDITOR’S OPINION LETTER
8………..MANAGEMENT’S DISCUSSION & ANALYSIS
24………………………………….REINSURANCE
25…………….……FINANCIAL STATEMENTS
74………………..ORGANIZATIONAL CHART
75………………….……..POOL MEMBERSHIP
WHO WE SERVE
The Pool is an intergovernmental, risk-sharing partnership, formed in 1974 by the members of the Texas Municipal League for the purpose of offering workers’ compensation, liability, and property protection to Texas political subdivisions including:
Cities • Housing Authorities • Municipal Utility Districts • Water & Irrigation Districts • Tax Appraisal Districts • Fire Districts/Emergency Service Districts • Hospital Districts • Transit Authorities • Councils of Government • 911 Districts • Drainage Districts • Flood Control Districts • Navigation Districts & Authorities • Public Utility Boards • River Authorities • Airports • Downtown Management & Improvement Districts • Conservation & Reclamation Districts • MHMR Districts • Toll Road Authorities • Library Districts
GOVERNANCE
The Pool’s mission, objectives, and overall policy governance is set by the Board of Trustees, who are elected and appointed officials that represent the membership.
TOTAL CONTRIBUTIONS - $209,658,487 AT SEPTEMBER 30, 2020 Appraisal Districts 1% ESD & 911 Districts Housing Authorities 2% 6% Hospitals & Health Districts Water Districts & 1% MUDs 7% Transit Authorities 2% Councils of Other Government 2% 1%
Cities 78%
1 MISSION STATEMENT
The Mission of the Texas Municipal League Intergovernmental Risk Pool is to offer and provide Texas municipalities and other units of local government with a stable and economic source of risk financing and loss prevention services. OBJECTIVES
x Educate members about avoiding and reducing risks x Control losses with effective legal defense and claims handling x Anticipate emerging risks x Be aware of and anticipate emerging state and national trends x Provide appropriate coverages that meet the needs of the Pool’s members x Serve as an expert source of information on risk management for cities, other units of local government, and the Texas Municipal League x Develop, train, and retain highly qualified staff
CORE VALUES
The Pool adheres to the following four core values to fulfill its mission: FISCAL RESPONSIBILITY INTEGRITY OPERATIONAL EXCELLENCE PUBLIC SERVICE
FINANCIAL & OPERATIONAL HIGHLIGHTS
REVENUES OVER (UNDER) EXPENSES FISCAL YEARS ENDING SEPTEMBER 30, 2020 & 2019 (In Thousands) 2020 2019 Revenues Over (Under) Expenses BEFORE Unrealized Gains/(Losses) $12,801 $12,971 Unrealized Investment Gains/(Losses) 20,060 37,734 Revenues Over (Under) Expenses AFTER Unrealized Gains/(Losses) $32,861 $50,706
NET POSITION AS OF SEPTEMBER 30, 2020 & 2019 (In Thousands) 2020 2019 Net Position BEFORE Cumulative Unrealized Gains/(Losses) $378,445 $369,643 Cumulative Unrealized Investment Gains/(Losses) 39,049 18,990 Net Position AFTER Cumulative Unrealized Gains/(Losses) $417,495 $388,633
SERVING MEMBERS SINCE 1974
• Financially strong & stable • $168.5 million of claims during accident year 2019-20 • Stable rates for members • Workers’ Compensation coverage for 212,000 employees • “Members first, staff always” • Protecting $42 billion of municipal property • Returned $5.5 million to members
2 %2$5'2)75867((6
#2'@B7-9>(00B,#-8B #7@BB(22-9B!-&(B,#-8B 4%(7;B B(77(7$B "B
4%(7;B#<&/B $-8-,1 *3-8 #7@B#<(7B #77@B(0;42B 2'7(9B#7A#B7B 41%#00B &00(2B (2;7#0B (?#9B B '(99#BB ",#7;42B 0#&(B B 0#&(B B 0#&(B B 0#&(BB 0#&(BB
#740B4<+,0-3B (7;B<1%7(7#:B @742B0#&.B #=-'B#77-9B -&.(@B,-0'(7:B #00#9B #2B#7&49B 4,2942B4<2;@BB #0&42(9B(-+,;:B #2 (7B 0#&(BB 0#&(BB 0#&(B B 0#&(B B 0#&(B B
(22(;;B #2'0-2B (27@B"-0942B -&,#(0B 1-;,B <9;-2B <79;B #&.9%474B B (67(9(2;#;-=)B B (67(9(2;#;-=)B B(#0;,B(2(*-;:B (67(9(2;#;-=(B
3 L(77(5)5207+(&+$,5
MEMBERS FIRST, STAFF ALWAYS
Members,
The 2019-20 year was extraordinary for the Pool, and one filled with exceptional performance. The Covid-19 pandemic changed the world, including how the Pool operated. The Pool remained fully operational from day one of the pandemic, and the Leadership transformed challenges into opportunities to serve the Members. During this transformation, one thing became clear: the Pool needed to respond to the changing environment in order to continue the support Members have relied on for nearly fifty years. At the same time, the Pool had to ensure stability for its staff as they worked to meet the member needs. It was these two truths that led to the guiding precept, “Members First, Staff Always”. Based on one of the Pool’s core values of “Public Service”, this precept became the calling card for the Board, management, and staff.
During 2020, and as a result of COVID-19, the Pool, just like many of you, experienced a multi-year digital transformation compressed into weeks and months in order to adapt to a new environment. The Pool identified new ways to communicate with staff, members and other stakeholders. The Pool’s IT Department did a remarkable job implementing new technological platforms necessary to not only perform – but to excel – in serving the Members. At the same time, the Pool fully implemented a cutting-edge underwriting and billing system primarily from a remote work setting.
The financial condition of the Pool is strong and stable. Revenues exceeded expenses for the third consecutive year, following the Pool’s largest loss ever as a result of Hurricane Harvey in 2017. The Net Position (Members’ Equity) of the Pool was $417.5 million at the end of 2019-20. In April 2020, the Board approved a $5.5 million Return of Equity to Members, which included $4.0 million in response to member hardships during the Covid-19 pandemic and $1.5 million designated to the membership Cyber Defense and Resiliency Program.
Some of the other major accomplishments this year include:
Best Places to Work in Insurance. Business Insurance recognized the Pool in the annual “Best Places to Work in Insurance” program, which recognizes employers for their outstanding performance in establishing workplaces where employees thrive, enjoy their work, and help their companies grow.
Funding the Workers’ Compensation Lifetime Benefits Investment Portfolio (LTB Investment Portfolio). To fulfill the Pool’s dedication to serving its members, the Pool accumulated $100 million in the LTB Investment Portfolio to provide for long-term workers’ compensation death and lifetime income benefits. For the first time in the Pool’s history, authorized investments have been expanded to include investment grade corporate bonds and mutual funds with allocation to high-yield corporate bonds and dividend-focused equities (stocks). These higher yielding investments will support workers’ compensation rates for the long-run, and improve the Pool’s capital efficiency.
Cyber Defense and Resiliency Services for Members. The Pool implemented a cyber security awareness training program for members to satisfy the requirements for the Cybersecurity Training Certification for State and Local Governments as mandated under the Texas Government Code. In addition to the existing cyber liability and data breach response coverage offered by the Pool, the Board approved a cyber security grant of $1.5 million to provide member funding for network intrusion detection and quarantined backups.
Enhanced Property Loss Recovery Programs for Members. The Pool developed programs to assist members after property losses from catastrophic floods or devasting fires. For roofing and building envelope damages, the Pool 4 provides the Building Envelope Systems Team (BEST) roofing program to assist with the procurement process and management of the repair project. For larger scale damage requiring coordination of many trades, the Pool utilizes Synergy NDS to provide a viable estimate of the true cost of the repairs, as well as options for repair.
Partnership Award. The Pool initiated a partnership award presented to members that exhibit exemplary service to their communities, strengthen the bond between Pool partners and espouse the core values of integrity, public service, fiscal responsibility, and operational excellence. The Pool presented the inaugural Partnership Award to the Austin Police Department in January 2020 for its tireless approach to treating Post-Traumatic Stress Injuries (PTSI) in first responders.
Based on the Pool’s financial condition and operational excellence, we believe your confidence in us is well-placed. We will continue to meet our mission of providing our members with a long-term, stable and economic source of risk financing and loss prevention services.
It is with pride that the Board of Trustees and staff present the 2019-20 annual financial report.
Randyy Criswell
ChChair,aiirr, Board of Trustees Texas Municipal League Intergovernmental Risk Pool
5 Report of Independent Auditors
Board of Trustees Texas Municipal League Intergovernmental Risk Pool
We have audited the accompanying financial statements of each major fund of the Texas Municipal League Intergovernmental Risk Pool (the Pool), which comprise the statements of net position as of September 30, 2020 and 2019 and the related statements of operations and changes in net position and cash flows for the years then ended and the related notes to the financial statements.
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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of 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 Pool’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 Pool’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 presentation of the financial statements.
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 positions of each major fund of the Pool as of September 30, 2020 and 2019, and the respective results of operations and cash flows thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America.
+ JohnsonLambert.com 6 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion & Analysis 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.
Our audit was conducted for the purpose of forming an opinion on the financial statements of the Pool’s major funds. The ten-year claims development information, schedule of the changes in net pension liability and related ratios, schedule of employer pension contributions, schedule of changes in OPEB liability and related ratios and schedule of employer OPEB contributions are 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. The required supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic 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 information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
December 16, 2020
Registration: 092-0000267
7
MANAGEMENT’S DISCUSSION & ANALYSIS
8 MANAGEMENT DISCUSSION AND ANALYSIS
Management’s Discussion and Analysis (MD&A) of the Texas Municipal League Intergovernmental Risk Pool (Pool) provides a narrative overview and analysis of the financial activities of the Pool for the fiscal year ended September 30, 2020. Information presented herein should be considered in conjunction with the detailed information provided in the basic financial statements, notes to financial statements, and required supplementary information.
OVERVIEW OF THE FINANCIAL STATEMENTS
FUND ACCOUNTING AND FINANCIAL STATEMENTS The Pool has six operating funds that are accounted for as self-sustaining business-like activities or enterprise funds. The Pool's six funds are the Workers' Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds that by policy are classified as major funds.
The Statement of Net Position presents the Pool’s assets, liabilities, and net position of the Pool at the end of the two most recent fiscal years. The Statement of Operations and Changes in Net Position shows how the Pool's Net Position has changed during the two fiscal years. All interrelated balances and transactions have been eliminated and are presented in a separate column. The Statement of Cash Flows shows cash received and used by the Pool during the year and presents a reconciliation of revenues over expenses to net cash provided by operating activities.
UNREALIZED INVESTMENT GAINS (LOSSES) Governmental Accounting Standards Board (GASB) Statement 31 requires the Pool to include unrealized investment gains and losses as a component of investment income. Unrealized investment gains (losses) occur when the market value of investment holdings fluctuates. Due to the volatility of market conditions and the resulting unrealized gains (losses), as well as the Pool’s intent to hold most investments until maturity (in the case of bonds), the Pool makes many key financial decisions without considering unrealized gains (losses), including rate making. Some of the financial information and analysis in the MD&A separates unrealized gains (losses) to provide a clearer picture of the financial results of the Pool.
FINANCIAL HIGHLIGHTS AND ANALYSIS
The Pool’s financial condition is strong, supported by a net position (members’ equity) of $417.5 million. In 2019-20, revenues over expenses were $32.9 million, which included $20 million in unrealized investment gains. The Covid-19 pandemic changed the world, and the Pool supported its members who served on the front-line to keep Texas safe and vibrant. Contribution rates for members were steady with no overall rate change. The financial strength of the Pool allowed it to absorb higher claim losses, including almost $10 million of Covid-19 related workers’ compensation claims. Operating expenses were $3.4 million under budget, due primarily to the
9 pandemic restrictions and austerity measures, yet the Pool was fully operational thanks to a dedicated staff and previous technological investments. This analysis highlights the financial and operational strengths of the Pool.
CONDENSED STATEMENTS OF OPERATIONS AND CHANGES IN NET POSITION AS OF SEPTEMBER 30, 2020, 2019 & 2018 (In Thousands) 2020 2019 2018 REVENUES Earned Contributions $209,658 $202,106 $190,093 Reinsurance Expense (13,637) (11,584) (10,459) Investment Income (w/Unrealized Gains/(Losses)) 41,342 59,749 (4,857) Other Revenues 887 317 367 TOTAL REVENUES 238,250 250,588 175,144
EXPENSES Net Losses and Loss Adjustment Expenses 160,083 154,233 145,068 G&A, Pension and Contract Service Fees 45,306 45,649 43,147 TOTAL EXPENSES 205,389 199,882 188,215
Return of Net Position (Equity) 3,999 - - CHANGE IN NET POSITION 28,862 50,706 (13,071)
Prior Period Adjustment - OPEB (555) Net Position - Beginning 388,633 337,927 351,553 NET POSITION - ENDING $417,495 $388,633 $337,927
CONTRIBUTIONS Combined earned contributions rose $7.6 million in 2020 to $209.7 million. Contributions were $202.1 million and $190.1 million in 2019 and 2018, respectively. As shown below, the growth in contributions is in the Property Fund due to a modest rate increase and exposure growth. For members with all lines of coverage, overall rates were flat.
Gross Earned Contributions (Millions) $100 $89.5 $82.4 $80 $71.8 $68.3 $69.5 $69.9
$60 $49.7 $49.9 $50.0
$40
$20
0.2 0.3 0.3 $0 17/18 18/19 19/20
Workers' Compensation Liability Property Coastal Storm
10 Key Notes x Due to the financial strength of the Workers’ Compensation Fund, the Pool was able to lower rates even after considering the impact of changes to the firefighter presumption law (SB 2551 in 2019).
x The rate increase for property was only 2.8%, even as OVERALL RATES FOR 2019-20 property reinsurance cost rose considerably. Coverage Rate Change x For the decrease of 2.7% in liability, rates for general Workers’ Compensation -1.3% liability, law enforcement liability and public officials Liability -2.7% liability decreased while auto liability was unchanged. Property 2.8% Overall 0.0%
INVESTMENT INCOME Total investment income (including unrealized gains (losses)) was $41.3 million and $59.7 million in 2020 and 2019, respectively.
INVESTMENT INCOME 12 MONTHS ENDING SEPTEMBER 30, 2020 & 2019 2020 2019 Interest Income $23,708,844 $25,409,586 Dividend Income 693,222 0 Amortization Expense (4,664,212) (3,734,978) Realized Gains 1,544,430 339,590 Investment Income before Unrealized Gains (Losses) $21,282,284 $22,014,198 Unrealized Gains (Losses) 20,059,801 37,734,380 Investment Income after Unrealized Gains (Losses) $41,342,085 $59,748,578
As mentioned, unrealized investment gains (losses) occur when the market value of investments changes due to market conditions. Due to the volatility of the market and changes in market value, the chart below removes unrealized gains (losses) for a better view of financial results and condition of the Pool.
REVENUES OVER (UNDER) EXPENSES FISCAL YEARS ENDING SEPTEMBER 30, 2020, 2019 & 2018 (In Thousands) 2020 2019 2018 Revenues Over (Under) Expenses BEFORE Unrealized Gains/(Losses) $12,801 $12,971 $12,695 Unrealized Investment Gains/(Losses) 20,060 37,734 (25,765) Revenues Over (Under) Expenses AFTER Unrealized Gains/(Losses) $32,861 $50,706 ($13,070)
NET POSITION AS OF SEPTEMBER 30, 2020, 2019 & 2018 (In Thousands) 2020 2019 2018 Net Position BEFORE Cumulative Unrealized Gains/(Losses) $378,446 $369,643 $356,672 Cumulative Unrealized Investment Gains/(Losses) 39,049 18,990 (18,745) Net Position AFTER Cumulative Unrealized Gains/(Losses) $417,495 $388,633 $337,927
11 REINSURANCE EXPENSE Reinsurance expense paid to external reinsurers was $13.6 million in 2020, $2 million more than 2019, and $3 million more than 2018. External reinsurance is primarily used to protect against property losses.
Key Reinsurance Notes x The Property Fund retains the first $4 million of a property occurrence and shares 50-50 with the Reinsurance Fund for the $6 million excess of $4 million layer. x In May 2019, the Pool also added the top layer ($50 million excess of $250 million), funded internally, 50% allocated to the Property Fund and 50% to the Reinsurance Fund x External reinsurance expense is higher in 2020 due to the following: Reinsurance premiums rose after the $100 million Hurricane Harvey occurrence, and continuing market deterioration. The Pool purchased 46% of the $50 million excess of $200 million layer, previously internally financed solely by the Property and Reinsurance Funds. x See notes to financial statements for workers’ compensation and liability reinsurance.
NET LOSSES & LOSS ADJUSTMENT EXPENSES Net losses and loss adjustment expenses increased by $5.9 million to $160.1 million. Net losses and loss adjustment expenses were $154.2 million and $145.1 million in 2019 and 2018, respectively. Reported losses (paid and case reserves) were $20 million higher than last year due primarily to higher workers’ compensation and liability losses, including workers’ compensation related Covid-19 claims. Prior-years’ property losses decreased during the year due to reserve takedowns, primarily related to favorable development of the Hurricane Harvey occurrence.
NET LOSSES & LOSS ADJUSTMENT EXPENSES Workers’ Reinsurance & Total Reported Other Fund Year Compensation Liability Property Coastal Storm Losses Losses IBNR Total Losses 2019-20 $56.8M $57.5M $55.7M ($2.8M) $167.2M $3.1M ($10.2M) $160.1M 2018-19 $46.5M $46.6M $54.8M ($600K) $147.2M $3.2M $3.8M $154.2M 2017-18 $38.2M $36.2M $37.3M $19.7M $131.5M $1.2M $12.4M $145.1M
12 Key Notes Workers’ Compensation Fund x In 2020, current-year losses were $59.5 million and prior-years’ losses decreased by $3.9 million. In 2019, current-year losses were $47.4 million and prior-years’ losses were $3.1 million. x The Pool discounts claim reserves in the Workers’ Compensation Fund for all unpaid lifetime benefits to beneficiaries of employees fatally injured on the job (see notes to the financial statements). x There were nine new fatality claims (discounted value of $7.3 million) compared to four new in 2018-19 (discounted value of $3.1 million). x There were 1,016 Covid-19 claims in 2020 (none in 2019).
COVID-19 CLAIMS # of Claims Total Incurred Losses Total Paid First Responders 950 $9,400,000 $2,200,000 Non-First Responders 66 $84,000 $38,000
Liability Fund x Current-year and prior-years’ losses were $44.2 million and $6.2 million, respectively. In 2019, current-year and prior-years’ losses were $43.4 million and $1.7 million, respectively. x Law enforcement and public officials’ liability losses were higher than last year; general liability was lower; and auto liability was in-line with expectations. Prior-years’ loss development was higher than last year.
Liability Fund Losses (Millions) Current Accident Year Prior Accident Years’ 2020 2019 2020 2019 Coverage Fiscal Year Fiscal Year Fiscal Year Fiscal Year General Liability $4.1 5.3 $0.7 ($0.5) Law Enforcement 8.5 7.7 4.0 3.7 Public Officials 9.6 8.7 4.9 3.8 Auto Liability 20.9 20.8 (3.5) (5.2) Others 1.1 0.9 0.1 (0.1) Total $44.2 $43.4 $6.2 $1.7
Property Fund x Current-year losses were $60.2 million, and prior-years’ losses decreased by $5.0 million in 2020. In 2019, current-year losses were $59.2 million and prior years’ losses increased by $46,000. x There were ten occurrences (group of losses from one event) over $1 million in 2020 totaling $33.8 million, compared to ten occurrences in 2019 totaling $25.2 million. The increased occurrence severity resulted in the transfer of losses to the Reinsurance Fund as noted below.
13 Reinsurance Fund x In 2020, current-year losses were $3.4 million and $1.2 million of property and workers’ compensation losses, respectively. In 2019, there was only $259,000 of property losses. x There were significant prior-years’ reserve takedowns for Hurricane Harvey and other occurrences in both 2020 and 2019. Total property takedowns were $8.3 million and $2.6 million in 2020 and 2019, respectively. Reserve takedowns have a positive effect on financial results and reflect post- loss reduction efforts implemented by the Pool.
OPERATING EXPENSES (G&A, CONTRACT SERVICE FEES and PENSION EXPENSES) Operating expenses in 2020 were $43.7 million compared to $43.9 million in 2019. Personnel related costs account for 70.6% operating expenses. The expense ratio (operating expenses to net contributions) was 23.1% in 2020 compared to 24.0% in 2019.
ADMINISTRATIVE EXPENSES & CONTRACT SERVICE FEES (Millions)
Key Notes x Operating expenses are accounted for in an MAJOR LINE ITEMS UNDER BUDGET administrative fund and allocated to the Pool’s 2019-20 six funds based on a Board approved Office-related expenses $619,000 allocation, which includes both direct and Workshops & conferences 225,000 indirect costs. Contract service fees 341,000 Staff-related expenses 619,600 x Due to the Covid-19 pandemic, operating Auto maintenance 140,000 costs were significantly lower than budgeted Professional fees 547,500 amounts. Total $2,492,100
14 CONDENSED STATEMENTS OF NET POSITION
CONDENSED STATEMENTS OF NET POSITION AS OF SEPTEMBER 30, 2020, 2019 & 2018 (In Thousands) 2020 2019 2018 ASSETS AND DEFERRED OUTFLOWS Cash, investments, and accrued interest $767,440 $712,277 $645,472 Capital assets 14,137 13,445 11,158 Other assets 13,650 15,058 16,842 Net pension asset 2,844 0 5,006 Deferred outflows of pension resources (2,034) 10,624 (236) TOTAL ASSETS AND DEFERRED OUTFLOWS $796,037 $751,404 $678,241 LIABILITIES Estimated ultimate unpaid losses & loss adjustment expenses (net) 344,586 326,949 315,256 Payables 8,941 1,546 1,600 Other liabilities 25,015 25,499 23,458 Net pension liability 0 8,777 0 TOTAL LIABILITIES $378,542 $362,771 $340,314 NET POSITION Invested in capital assets 14,137 13,445 11,158 Restricted 8,321 18,510 13,820 Unrestricted 395,037 356,678 312,949 TOTAL NET POSITION $417,495 $388,633 $337,927
CASH, INVESTMENTS, AND ACCRUED INTEREST Cash, investments, and accrued interest totaled $767.4 million (including $39.0 million in unrealized gains) as of September 30, 2020, increasing from $712.3 million (including $19 million unrealized gains) as of September 30, 2019. Cash and investments account for 96.4% of total assets and deferred items for 2020 and 94.8% for 2019.
Consolidated Investment Portfolio - September 30, 2020
Total Market Value $767,439,757
Market Value & Combined Asset Allocation Accrued Interest Portfolio (%) Mortgages$ 433,833,275 56.5 Municipal Bonds 184,918,175 24.1 Cash, Money Market & Accrued Interest 35,761,756 4.7 Agencies 6,110,511 0.8 Stock Mutual Funds 37,678,900 4.9 High Yield Corp. Bond Mutual Fund 15,626,400 2.0 Investment Grade Corp. Bonds 49,362,355 6.4 US Treasury 4,148,385 0.6 Total Market Value$ 767,439,757 100.0
15 Key Investment Notes x Interest rates and bond yields remain near historical lows and will put downward pressure on the Pool’s (realized) investment returns. x The expanded investment authority granted the Pool by Chapter 504 (see notes to financial statements), including the allocation to corporate bonds and equity mutual funds, has enhanced portfolio diversification and expected long-term investment returns. x Investments are consolidated for portfolio management purposes and investment income is allocated to the Pool’s six funds based on their respective cash and investment balances.
TOTAL MARKET VALUE $767,439,757 COMPARATIVE PERFORMANCE
Total Rate of Return* 1 Year 2 Year 3 Year 4 Year 5 Year Consolidated Portfolio 5.7% 7.0% 4.4% 3.3% 3.5% Government Benchmark 5.0% 6.5% 4.0% 3.1% 3.2%
Return on Investment 1 Year 2 Year 3 Year 4 Year 5 Year Consolidated Portfolio 2.9% 3.0% 3.0% 3.0% 3.0% * includes Unrealized Gains (Losses)
NET PENSION ASSET (LIABILITY) and DEFERRED OUTFLOWS (INFLOWS) OF PENSION RESOURCES Net pension asset was $2.8 million as of September 30, 2020 compared to a net pension liability of $8.8 million as of September 30, 2019. Deferred outflows (inflows) of pension resources were ($2.1) million for 2020 compared to $10.6 million for 2019. The gain in the net pension asset was primarily attributable to favorable asset performance at the Texas Municipal Retirement System (TMRS) compared to expected return of plan assets. The pension is essentially fully funded with net position as a percentage of the pension liability at 101.7% and 94.3% at 2019 and 2018, respectively (see notes to financial statements). The 2020 valuation will not be available until 2021.
CLAIM RESERVES (ESTIMATED ULTIMATE UNPAID LOSSES and LOSS ADJUSTMENT EXPENSES) Reserves for estimated ultimate net unpaid losses and loss adjustment expenses (loss reserves) were $344.6 million as of September 30, 2020, compared to $326.9 million at the end of the 2019 fiscal year (accounting for 91.0%, and 90.1% of total liabilities, respectively).
CLAIM RESERVES (in Millions) 2020 2019 Reserves for Reported Claims $274.4 $245.2 Reserves for Incurred but Not Reported Claims * 89.5 99.7 Reserves for Unallocated Loss Adjustment Expenses 9.4 8.2 Estimated Future Investment Income (Discount for LTB Reserves) (28.7) (26.1) Total Reserves $344.6 $327.0 *A significant increase in Reserves for Reported Claims along with a modest increase in ultimate losses resulted in a $10.2M decrease in IBNR.
16 x Reserves for reported claims: estimated reserves set up in the claims system to settle clams. x Reserves for incurred but not reported claims (IBNR): estimated reserves for unreported/under- reserved claims. x Reserves for unallocated loss adjustment expenses (ULAE): estimated reserves for expenses that cannot be associated with specific claims. x Estimated future investment income: discount for workers’ compensation lifetime and death indemnity benefit claims.
As of September 30, the reserves for reported lifetime benefit claims (net of reinsurance) and estimated present value of these reserves were as follows:
LIFETIME INCOME BENEFITS
2020 2019 Reserves $76,312,140 $66,540,849 Discount (28,737,613) (26,110,383) Present Value $47,574,527 $40,430,466
NET POSITION Net position increased by $32.9 million during the year to $417.5 million due primarily to unrealized investment gains of $20.1 million. Without these gains, net position increased by $12.8 million before the $4.0 million return of net position to members. Net position was $388.6 million and $337.9 million in 2019 and 2018, respectively. In April 2020, the Board approved a Return of Net Position of $5.5 million from the Reinsurance Fund: $4.0 million was related to a Partnership Equity Return declared in response to member hardships during the Covid-19 pandemic, and $1.5 million of Net Position was restricted for the membership Cyber Defense and Resiliency Program. There was no return of Net Position in 2019 or 2018.
Net position, or members’ equity, is the foundation of the Pool’s financial strength. It supports long-term stable rates for members and protects the Pool from unexpected losses. To maintain financial stability and protect against enterprise risks, the Pool has adopted a target equity policy which includes minimum and maximum levels. The Pool’s net position is near the midpoint of the range as of September 30, 2020.
17 CONDENSED STATEMENTS OF CASH FLOWS
SUMMARY COMPARATIVE STATEMENTS OF CASH FLOWS AS OF SEPTEMBER 30, 2020, 2019 & 2018 (In Thousands) 2020 2019 2018 Net cash provided by (used for) operating activities* $40,910 $36,094 ($5,485) Net cash provided by (used for) capital and related activities (2,960) (3,759) (4,768) Net cash provided by (used for) investing activities (24,692) (36,083) 2,770 Net increase (decrease) in cash and cash equivalents $13,258 ($3,748) ($7,483) Cash and cash equivalents (beginning of year) 19,379 23,127 30,610 Cash and cash equivalents (end of year) $32,637 $19,379 $23,127 * includes investment interest received of $24,426,389, $25,286,714, and $24,602,015 for the years ended September 30, 2020, 2019, and 2018, respectively
Net cash provided by (used for) operating activities was $40.9 million and $36.1 million in 2020 and 2019, respectively. Receipts from member contributions is the Pool’s largest cash inflow, and payments for claims is the largest cash outflow. Receipts from member contributions were $211.3 million and $202.4 million in 2020 and 2019, respectively. Payments for claims were $159.0 million and $190.8 million in 2020 and 2019, respectively.
OPERATING RESULTS BY FUND
The Pool’s operations consist of six funds: Workers’ Compensation, Liability, Property, Coastal Storm, Reinsurance and Stability. The table below includes operating ratios used by the industry to analyze underwriting results and are calculated as follows:
x Loss Ratio: the ratio of claims and claims expense to net contributions (gross contributions minus reinsurance expense). x Expense Ratio: the ratio of operating expense to net contributions x Combined Ratio: the sum of the loss ratio and expense ratio (expense ratio not included in table). x Operating Ratio: includes the impact of investment income on the combined ratio.
How to interpret the ratios: A combined ratio of less than 100% means that the Pool earned more net contributions than losses plus expenses. Conversely, a combined ratio more than 100% means the Pool had more losses plus expenses than net contributions.
When including investment income, an operating ratio less than 100% means that net contributions plus investment income are more than losses plus expenses. Conversely, an operating ratio more than 100% means the Pool had more losses plus expenses than net contributions plus investment income.
18 NOTE: The following analysis excludes unrealized investment gains (losses) from “Revenues over Expenses” and ratio calculations.
WORKERS’ COMPENSATION FUND The financial condition of the Workers’ Compensation Fund is strong with Net Position of $109.0 million at the end of the 2019-20 fiscal year. While expenses exceeded revenues by $2.9 million (not including unrealized gains) due to higher losses as indicated by an 84% loss ratio. The combined ratio which includes operating expenses was 118%. The operating ratio of 105% indicates that even after including investment income, expenses exceed revenues. 2019 and 2018 were solid, with operating ratios of 96% and 90%, respectively.
WORKERS’ COMPENSATION FUND ($ in Thousands) 2020 2019 2018 Net Contributions $67,401 $67,305 $66,240 Losses $56,456 $50,485 $46,834 Revenues over Expenses (w/o Unrealized) ($2,888) $3,007 $6,509 Total Assets and Deferred Charges $297,672 $281,362 $257,312 Net Position $109,042 $106,663 $91,886 Loss Ratio 84% 75% 71% Current Accident Year Loss Ratio 89% 70% 65% Expense Ratio 34% 33% 32% Combined Ratio 118% 108% 102% Operating Ratio 105% 96% 90%
LIABILITY FUND Net position of the Liability Fund was solid at $100.2 million. The loss ratio has been trending higher over the past three years, driven primarily by prior years’ loss increases. Higher current and prior years’ losses led to a loss ratio of 103%. Operating ratios above 100% the past two years reflect two consecutive years of expenses exceeding revenues.
LIABILITY FUND ($ in Thousands) 2020 2019 2018 Net Contributions $48,769 $48,801 $48,585 Losses $50,176 $45,151 $42,737 Revenues over Expenses (w/o Unrealized) ($6,709) ($644) $1,437 Total Assets and Deferred Charges $216,621 $208,935 $194,478 Net Position $100,241 $101,635 $92,386 Loss Ratio 103% 93% 88% Current Accident Year Loss Ratio 90% 88% 85% Expense Ratio 22% 22% 22% Combined Ratio 125% 114% 110% Operating Ratio 116% 101% 97%
19 PROPERTY FUND The Property Fund experienced the largest loss in the Pool’s history in 2017. Along with series of large weather-related losses in 2017 and 2018, rates have been rising. As shown, net position has been improving over the past three years. Higher contributions and better loss experience in 2020 led to an improved loss ratio of 81% compared to 95% in 2019.
PROPERTY FUND ($ in Thousands) 2020 2019 2018 Net Contributions $68,368 $62,640 $55,010 Losses $55,238 $59,196 $38,830 Revenues over Expenses (w/o Unrealized) $7,646 ($1,858) $9,295 Total Assets and Deferred Charges $113,471 $95,354 $79,065 Net Position $66,521 $55,976 $54,439 Loss Ratio 81% 95% 71% Current Accident Year Loss Ratio 86% 93% 73% Expense Ratio 12% 13% 18% Combined Ratio 93% 108% 88% Operating Ratio 89% 103% 83%
COASTAL STORM FUND There were no major storms that affected the Coastal Storm Fund in the past three years. This is the smallest Pool fund with contributions at $275K, and net position at $13.5 million. All ratios were extraordinary based on very few losses.
COASTAL STORM FUND ($ in Thousands) 2020 2019 2018 Net Contributions $275 $285 $238 Losses ($5) $5 ($12) Revenues over Expenses (w/o Unrealized) $458 $496 $450 Total Assets and Deferred Charges $13,508 $12,712 $11,602 Net Position $13,492 $12,691 $11,586 Loss Ratio -2% 2% -5% Current Accident Year Loss Ratio 0% 0% 3% Expense Ratio 55% 51% 58% Combined Ratio 53% 53% 53% Operating Ratio -67% -74% -89%
20 REINSURANCE FUND The Reinsurance Fund is playing a major role in the Pool’s reinsurance program. The overall financial strength of the Pool has allowed it to “self-insure” through the Reinsurance Fund. The strong net position of $102 million is a success story. If the Pool had not self-insured, outside reinsurers would have been the beneficiaries managing excess coverage risk. The loss ratios of (27%) and (20%) in 2020 and 2019, respectively, are reflections of better property loss experience and reserve takedowns for the Hurricane Harvey Occurrence and other large property losses.
REINSURANCE FUND ($ in Thousands) 2020 2019 2018 Net Contributions $11,210 $11,491 $9,561 Losses ($2,981) ($2,304) $15,480 Revenues over Expenses (w/o Unrealized) $16,060 $15,761 ($3,795) Total Assets and Deferred Charges $118,166 $110,731 $106,299 Net Position $101,812 $87,004 $65,297 Loss Ratio -27% -20% 162% Current Accident Year Loss Ratio 57% 2% 36% Expense Ratio 11% 10% 12% Combined Ratio -16% -10% 174% Operating Ratio -43% -37% 140%
STABILITY FUND The Stability Fund began the fiscal year with $24.7 million in net position. Expenses exceeded revenues by $1.8 million. The fund’s negative results were primarily due to the pension expense and the increase in the ULAE reserve.
STABILITY FUND ($ in Thousands) 2020 2019 2018 Total Assets and Deferred Charges $36,597 $42,309 $29,485 Pension Asset (Liability) $2,844 ($8,777) $5,006 Net Position $26,386 $24,664 $22,333
21 BUDGET COMPARISON In the preceding sections, the Pool addressed the operating results of the 2019-20 fiscal year. Below is a chart comparing the budget to actual expenses. The budget and actual results exclude the effects of the change in unrealized gains and losses.
BUDGET COMPARISON
Budget Actual Difference 2019-20 2019-20 Earned Contributions $206,143,000 $209,658,487 $3,515,487 Service Fee and Other Income 990,000 886,052 (103,948) Investment Income* 22,600,000 21,282,284 (1,317,716) Total Revenues $229,733,000 $231,826,823 $2,093,823 Total Losses and Loss Adjustment Expenses 151,850,000 160,082,758 8,232,758 Reinsurance Expenses 12,819,000 13,636,570 817,570 Pension Expenses 2,800,000 3,861,461 1,061,461 Contract Service Fees 1,273,600 1,610,304 336,704 Administrative Expenses 44,618,300 39,834,563 (4,783,737) Total Expenses $213,360,900 $219,025,656 $5,664,756 Revenues over Expenses before Return of Equity $16,372,100 $12,801,167 ($3,570,933) Return of Equity 0 (3,999,369) (3,999,369) Revenues over Expenses after Return of Equity $16,372,100 $8,801,798 ($7,570,302) * excludes the effects of the change in net unrealized gains of $20,059,801
22 SIGNIFICANT EVENTS DURING 2019-20
BUSINESS OPERATIONS SYSTEMS Significant progress was made integrating Policy Center (underwriting) and Billing Center (member billing) with Claim Center to provide a complete “start to finish” operating system. A Segregation of Duties Analysis of the major operating systems was conducted by an independent accounting firm. No material items were reported, and the Pool initiated recommendations to strengthen controls.
CYBER SECURITY and DEFENSE PROGRAM The Pool adopted a formal cyber security and defense program based on a framework published by the Center for Internet Security (CIS). The implementation of the program involved an external assessment to identify critical security gaps which were addressed by controls described under the CIS’s security framework.
BUSINESS CONTINUITY FRAMEWORK In response to the Covid-19 pandemic and as a measure to manage other operational risks, the Pool developed a business continuity plan to allow the Pool to continue serving members while protecting the health and welfare of staff. Utilizing cutting-edge technology, remote working options, and other measures, the Pool met its key precept of “Members First, Staff Always”.
CYBER DEFENSE and RESILIENCY SERVICES for MEMBERS The Pool implemented a cyber security awareness training program for members to satisfy the requirements for the Cybersecurity Training Certification for State and Local Governments as mandated under the Texas Government Code. In addition to the existing cyber liability and data breach response coverage offered by the Pool, the Board approved a cyber security grant of $1.5 million to provide member funding for network intrusion detection and quarantined backups. This amount has been restricted by the Board as of September 30, 2020 for future grants.
ENHANCED PROPERTY LOSS RECOVERY PROGRAMS for MEMBERS The Pool developed programs to assist members after property losses from catastrophic floods or devastating fires. For roofing and building envelope damages, the Pool provides the Building Envelope Systems Team (BEST) roofing program to assist with the procurement process and management of the repair project. For larger scale damage requiring coordination of many trades, the Pool utilizes Synergy NDS to provide a viable estimate of the true cost of the repairs.
23 PARTNERSHIP AWARD The Pool initiated a partnership award for members that exhibit exemplary service to their communities, strengthen the bond between Pool partners, and espouse the core values of integrity, public service, fiscal responsibility, and operational excellence. The Pool presented the inaugural Partnership Award to the Austin Police Department in January 2020 for its tireless approach to treating Post-Traumatic Stress Injuries (PTSI) in first responders.
FUNDING of the LIFETIME BENEFITS PORTFOLIO The investment policy was updated, and the initial funding of $100 million to the Lifetime Benefits Investment Portfolio was completed, a move intended to improve the Pool’s capital efficiency.
BEST PLACES TO WORK Business Insurance recognized the Pool in the annual “Best Places to Work in Insurance” program, which recognizes employers for their outstanding performance in establishing workplaces where employees thrive, enjoy their work, and help their companies grow.
CAROL A. LOUGHLIN LEADERSHIP and DEVELOPMENT PROGRAM (CALLeD) Expanded the Leadership and Development Program designed to create and maintain a culture of “servant leadership” at the Pool.
TARGET EQUITY STUDY In 2014, the Pool adopted target equity and members’ equity distribution policies based on a target equity study performed by PricewaterhouseCoopers’, LLP (PwC). The study analyzes the risk profile of the Pool including underwriting, reserving, asset/credit default and operational risks. PwC will perform an updated study based on September 30, 2020 financial results.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the Pool's finances. Questions concerning the information provided in this report, or requests for additional financial information, should be addressed to the Chief Financial Officer, Texas Municipal League Intergovernmental Risk Pool, P.O. Box 149194, Austin, Texas 78714-9194.
24 5(,1685$1&(
Property & Auto Physical Damage Liability
Lloyd’s of London; Everest Reinsurance Co.; TMLIRP Up to $10 million Endurance Specialty Reinsurance; American Agricultural Insurance Co.; Partner Reinsurance Company Ltd.; Chubb Tempest Reinsurance; Hiscox Cyber Liability & Data Breach Insurance Ltd.; Allied World Assurance Co., Ltd.; Da Third Party Liability* Vinci Re, Renaissance Reinsurance Ltd.; Lancashire Insurance Co.,Ltd.; Arch Reinsurance Ltd.; Fidelis 75% Quota Share of $50,000 – Beazley Insurance Bermuda Ltd.; Nautical Management Ltd.; Vermeer Reinsurance Ltd.; Aspen Bermuda Ltd.; 25% Quota Share of $50,000 – TMLIRP Axis Reinsurance Co.; Cincinnati Insurance Co.; 100% Quota Share of $1 million** excess $50,000 – Convex Reinsurance; & TMLIRP TMLIRP
$275 million per occurrence in excess of $25 million First Party Liability
*A.M. Best Rating A- & Above 75% Quota Share of $1 million – Beazley
25% Quota Share of $1 million - TMLIRP
**or up to member’s chosen limit if higher than $1 million
Lloyd’s of London, NLC Mutual Insurance Company, & TMLIRP Workers’ Compensation $15 million per occurrence in excess of $10 million TMLIRP Statutory Limits *A.M. Best Rating A- & Above Catastrophic Coverage - 100% Quota Share of $10 million excess of $15 million – Lloyd’s of London; Arch Reinsurance; & Endurance Specialty TMLIRP Retention Insurance Ltd. $10 million per occurrence in excess of member *A.M. Best Rating A & Above deductibles
*A.M. Best Rating applies only to Lloyd’s of London, Bermuda, Domestic (excluding NLC), and Beazley.
25 FINANCIAL STATEMENTS & REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2020 & 2019
26 Texas Municipal League Intergovernmental Risk Pool
TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL STATEMENTS OF NET POSITION AS OF SEPTEMBER 30, 2020 AND 2019
ASSETS Workers' CompensationLiability Property Coastal Storm Current Assets 2020 2019 2020 2019 2020 2019 2020 2019 Cash and cash equivalents $ 12,246,471 $ 7,379,060 $ 8,959,842 $ 5,529,902 $ 4,252,027 $ 2,215,420 $ 571,198 $ 343,877 Short-term investments 5,715,879 4,912,080 4,181,887 3,681,137 1,984,576 1,474,758 266,599 228,912 Long-term investments 268,830,010 257,724,364 196,683,128 193,139,873 93,338,887 77,376,783 12,538,735 12,010,421 Accrued investment income 1,172,331 1,195,510 857,709 895,921 407,038 358,929 54,680 55,714 Total cash, investments, and accrued interest (amortized cost $728,390,343 for 2020 and $693,286,904 for 2019) (notes 3 and 4) 287,964,691 271,211,014 210,682,566 203,246,833 99,982,528 81,425,890 13,431,212 12,638,924 Investment trade receivables 1,291 7,289 925 5,463 439 2,189 60 340 Contributions and other receivables 1,229,842 2,055,145 1,436,109 1,417,319 823,146 444,251 123 - Reinsurance recoverable on paid losses 64,024 57,405 136,713 87,787 338,310 2,164,039 - - Prepaid reinsurance 27,500 - - - 8,063,987 7,208,887 - - Total Current Assets 289,287,348 273,330,853 212,256,313 204,757,402 109,208,410 91,245,256 13,431,395 12,639,264 Noncurrent Assets Capital assets (land, building, furniture and equipment) 6,715,221 6,386,239 3,357,610 3,193,120 3,357,610 3,193,120 70,687 67,223 (note 5) Net pension asset (note 10) ------Other assets (note 6) 549,808 589,535 454,686 474,549 520,289 540,152 - - Total noncurrent assets 7,265,029 6,975,774 3,812,296 3,667,669 3,877,899 3,733,272 70,687 67,223 Deferred outflows/(inflows) of pension resources 1,119,202 1,055,383 552,063 509,702 385,007 375,780 6,288 5,996 Deferred outflow/(inflows) of pension resources - OPEB ------Total Assets and Deferred Outflows $ 297,671,579 $ 281,362,010 $ 216,620,672 $ 208,934,773 $ 113,471,316 $ 95,354,308 $ 13,508,370 $ 12,712,483
LIABILITIES AND NET POSITION Current Liabilities Claim Reserves: Reserve for reported claims - net $ 138,259,655 $ 122,715,225 $ 93,471,934 $ 76,356,145 $ 30,969,102 $ 27,130,515 $ - $ 5,000
Reserve for incurred but not reported claims - net (note 2) 66,600,000 66,900,000 18,000,000 25,600,000 325,000 2,425,000 - -
Reserve for unallocated loss adjustment expenses ------Estimated future investment income (28,737,613) (26,110,383) ------Estimated ultimate unpaid losses & loss adjustment expenses 176,122,042 163,504,842 111,471,934 101,956,145 31,294,102 29,555,515 - 5,000 Payable to admin. service only contracts 1,745,950 1,546,425 ------Investment trade payables 225,647 ------Outstanding loss drafts 1,571,244 1,731,922 1,032,723 1,723,334 2,502,546 3,302,857 - - Unearned contribution reserve (note 2) 1,334,441 946,875 1,138,872 914,721 3,283,536 2,709,250 16,361 16,064 Reinsurance payable -- 30,950 27,425 7,162,780 1,127,798 - - Other liabilities (note 2) 4,147,664 3,324,572 964,319 856,500 966,360 861,063 - - OPEB liability (note 11) ------Net pension liability - (note 10) ------Total current liabilities 185,146,988 171,054,636 114,638,798 105,478,125 45,209,324 37,556,483 16,361 21,064 Noncurrent Liabilities Funds invested for TML (note 9) 3,482,300 3,644,239 1,741,150 1,822,119 1,741,150 1,822,119 - - Total noncurrent liabilities 3,482,300 3,644,239 1,741,150 1,822,119 1,741,150 1,822,119 - - Total Liabilities 188,629,288 174,698,875 116,379,948 107,300,244 46,950,474 39,378,602 16,361 21,064 NET POSITION Invested in capital assets (net) - (note 5) 6,715,221 6,386,239 3,357,610 3,193,120 3,357,610 3,193,120 70,687 67,223 Restricted Net Position - Pension (note 10) 1,119,202 1,055,383 552,063 509,702 385,007 375,780 6,288 5,996 Restricted Net Position - ULAE (note 2) - 750,000 - 160,000 - 290,000 - - Restricted Net Position - SIF (note 2) ------Restricted Net Position - Cyber Security Member ------Grants (note 2) Unrestricted Net Position 101,207,868 98,471,513 96,331,051 97,771,707 62,778,225 52,116,806 13,415,034 12,618,200 Total Net Position (includes net unrealized investment gains/(losses) of $39,049,414 for 2020 and $18,989,613 for 2019) (note 2) 109,042,291 106,663,135 100,240,724 101,634,529 66,520,842 55,975,706 13,492,009 12,691,419 Total Liabilities and Net Position $ 297,671,579 $ 281,362,010 $ 216,620,672 $ 208,934,773 $ 113,471,316 $ 95,354,308 $ 13,508,370 $ 12,712,483
The accompanying notes are an integral part of these financial statements 27 Texas Municipal League Intergovernmental Risk Pool
Totals September 30, September 30, Reinsurance Stability 2020 2019 2020 2019 2020 2019 Current Year Prior Year $4,999,135 $ 2,996,790 $ 1,608,764 $ 914,440 $ 32,637,437 $ 19,379,489 2,333,280 1,994,898 750,869 608,722 15,233,090 12,900,507 109,739,158 104,667,230 35,314,993 31,938,104 716,444,911 676,856,775 478,557 485,521 154,004 148,151 3,124,319 3,139,746
117,550,130 110,144,439 37,828,630 33,609,417 767,439,757 712,276,517 523 2,960 166 903 3,404 19,144 - - - -3,489,220 3,916,715 - - - -539,047 2,309,231 - - - -8,091,487 7,208,887 117,550,653 110,147,399 37,828,796 33,610,320 779,562,915 725,730,494
565,492 537,789 70,688 67,223 14,137,308 13,444,714
- -2,844,436 - 2,844,436 - - - - -1,524,783 1,604,236 565,492 537,789 2,915,124 67,223 18,506,527 15,048,950 50,302 45,973 (4,235,969) 8,617,110 (2,123,107) 10,609,944 - -89,225 14,312 89,225 14,312 $118,166,447 $ 110,731,161 $ 36,597,176 $ 42,308,965 $ 796,035,560 $ 751,403,700
$11,747,583 $- 18,977,104 $-$$ 274,448,274 $ 245,183,989
4,550,000 4,750,000 - -89,475,000 99,675,000
- -9,400,000 8,200,000 9,400,000 8,200,000 - - - -(28,737,613) (26,110,383)
16,297,583 23,727,104 9,400,000 8,200,000 344,585,661 326,948,606 - - - -1,745,950 1,546,425 56,412 - - -282,059 - - - - -5,106,513 6,758,113 - - - -5,773,210 4,586,910 - - - -7,193,730 1,155,223 - - - -6,078,343 5,042,135 - -810,915 668,120 810,915 668,120 - - - 8,776,711 - 8,776,711 16,353,995 23,727,104 10,210,915 17,644,831 371,576,381 355,482,243
- - - -6,964,600 7,288,477 - - - -6,964,600 7,288,477 16,353,995 23,727,104 10,210,915 17,644,831 378,540,981 362,770,720
565,492 537,789 70,688 67,223 14,137,308 13,444,714 50,302 45,973 (1,391,532) 8,617,110 721,330 10,609,944 - - - - -1,200,000 6,100,000 6,700,000 - -6,100,000 6,700,000 1,500,000 - - -1,500,000 0 93,596,658 79,720,295 27,707,105 15,979,801 395,035,941 356,678,322
101,812,452 87,004,057 26,386,261 24,664,134 417,494,579 388,632,980 $118,166,447 $ 110,731,161 $ 36,597,176 $ 42,308,965 $ 796,035,560 $ 751,403,700
The accompanying notes are an integral part of these financial statements 28 Texas Municipal League Intergovernmental Risk Pool
TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL STATEMENTS OF OPERATIONS AND CHANGES IN NET POSITION FOR THE YEARS ENDED SEPTEMBER 30, 2020 AND 2019
Workers' Compensation Liability Property Coastal Storm Operating Revenues 2020 2019 2020 2019 2020 2019 2020 2019 Earned Contributions $69,922,938 $ 69,470,529 $ 49,955,527 $ 49,934,438 $ 89,500,880 $ 82,412,208 $279,142 $ 289,248 (less: cost of reinsurance - outside reinsurers) (302,500) - (457,046) (404,034) (12,877,024) (11,179,632) - - (less: cost of reinsurance - reinsurance fund) (2,219,509) (2,165,317) (729,808) (729,598) (8,256,088) (8,592,226) (4,186) (4,339) Net Contributions 67,400,929 67,305,212 48,768,673 48,800,806 68,367,768 62,640,350 274,956 284,909
Investment Income (Interest & Dividend Income) (note 4) 9,579,549 9,631,308 6,430,248 7,305,937 3,422,768 3,426,754 379,917 417,433 Investment Income (Change in Fair Value) (note 4) 5,772,379 13,192,181 4,567,870 9,949,314 3,064,890 3,575,015 295,740 561,783 Service Fees and Other Income 852,288 292,110 16,882 12,202 16,882 12,202 - - Reinsurance Revenue ------Total Operating Revenues 83,605,145 90,420,811 59,783,673 66,068,259 74,872,308 69,654,321 950,613 1,264,125 Operating Expenses Net Paid Losses and Loss Adjustment Expenses 43,838,821 42,527,341 40,396,656 39,221,538 51,896,465 44,303,094 - - Net Change in Reserve for Reported Claims 15,544,430 3,277,849 17,115,788 7,341,271 3,838,586 10,463,592 (5,000) 5,000 Net Change in Reserve for Incurred but not Reported Claims (300,000) 4,000,000 (7,600,000) (1,800,000) (2,100,000) 3,300,000 - - Net Change in Estimated Future Investment Income (2,627,230) 679,985 ------Change in Unallocated Loss Adjustment Expense ------Independent Adjusters Fees - - 263,063 388,350 1,602,454 1,129,560 - -
Total Losses and Loss Adjustment Expenses 56,456,021 50,485,175 50,175,507 45,151,159 55,237,505 59,196,246 (5,000) 5,000
Contract Service Fees (note 7) 956,188 1,048,430 328,408 344,131 278,383 291,370 4,733 5,020 Pension expense (note 10) 1,351,067 1,442,037 655,553 728,293 477,496 489,847 7,658 8,016 OPEB expense (note 11) ------General and Administrative Expense 20,761,656 19,957,792 9,925,985 9,562,753 7,732,551 7,507,091 139,042 132,345 Total Operating Expenses 79,524,932 72,933,434 61,085,453 55,786,336 63,725,935 67,484,554 146,433 150,381 Revenues Over(Under) Expenses Before Members' Equity Return 4,080,213 17,487,377 (1,301,780) 10,281,923 11,146,373 2,169,767 804,180 1,113,744 Members' Equity Return ------Revenues Over(Under) Expenses After Members' Equity Return 4,080,213 17,487,377 (1,301,780) 10,281,923 11,146,373 2,169,767 804,180 1,113,744 Transfer of Equity - Pension (note 10) (651,057) (1,460,177) (332,025) (673,344) (211,237) (543,517) (3,590) (8,473) Transfer of Equity - ULAE (note 2) (1,050,000) (1,250,000) 240,000 (360,000) (390,000) (90,000) - - Net Position, beginning of year 106,663,135 91,885,935 101,634,529 92,385,950 55,975,706 54,439,456 12,691,419 11,586,148 Net Position, end of year $109,042,291 $ 106,663,135 $100,240,724 $ 101,634,529 $ 66,520,842 $ 55,975,706 $ 13,492,009 $ 12,691,419
The accompanying notes are an integral part of these financial statements Texas Municipal League Intergovernmental Risk Pool
Totals Interfund September 30, September 30, Reinsurance Stability Transactions 2020 2019 2020 2019 2020 2019 2020 2019 Current Year Prior Year $-- $-$-$-$-$$ 209,658,487 $ 202,106,423 ------(13,636,570) (11,583,666) - -- - 11,209,591 11,491,480 ------11,209,591 11,491,480 196,021,917 190,522,757
3,551,437 3,619,206 1,038,147 1,008,948 - - 24,402,066 25,409,586 2,318,355 5,522,719 920,785 1,537,980 - - 16,940,019 34,338,992 ------886,052 316,514 11,209,591 11,491,480 - - (11,209,591) (11,491,480) - - 17,079,383 20,633,405 1,958,932 2,546,928 - - 238,250,054 250,587,849
4,448,245 14,970,344 - - - - 140,580,187 141,022,317 (7,229,520) (15,574,635) - - - - 29,264,284 5,513,077 (200,000) (1,700,000) - - - - (10,200,000) 3,800,000 ------(2,627,230) 679,985 - - 1,200,000 1,700,000 - - 1,200,000 1,700,000 ------1,865,517 1,517,910
(2,981,275) (2,304,291) 1,200,000 1,700,000 - - 160,082,758 154,233,289
37,860 40,151 4,732 5,019 - - 1,610,304 1,734,121 59,263 63,999 1,239,881 2,764,424 - - 3,790,918 5,496,616 - -70,543 53,370 - - 70,543 53,370 1,125,048 1,064,032 150,281 140,846 - - 39,834,563 38,364,859 (1,759,104) (1,136,109) 2,665,437 4,663,659 - - 205,389,086 199,882,255 18,838,487 21,769,514 (706,505) (2,116,731) - - 32,860,968 50,705,594 (3,999,369) - - - - - (3,999,369) - 14,839,118 21,769,514 (706,505) (2,116,731) - - 28,861,599 50,705,594 (30,723) (62,423) 1,228,632 2,747,934 ------1,200,000 1,700,000 - - - - 87,004,057 65,296,966 24,664,134 22,332,931 - - 388,632,980 337,927,386 $101,812,452 $ 87,004,057 $ 26,386,261 $ 24,664,134 $-- $$ 417,494,579 $ 388,632,980
The accompanying notes are an integral part of these financial statements 30 Texas Municipal League Intergovernmental Risk Pool
TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2020 AND 2019
Workers' CompensationLiability Property Coastal Storm Cash Flows From Operating Activities: 2020 2019 2020 2019 2020 2019 2020 2019 Receipts from member contributions $ 71,135,807 $ 69,647,207 $ 50,160,888 $ 49,641,325 $ 89,696,271 $ 82,877,710 $ 279,316 $ 267,831 Receipts from service fees and other income 818,538 267,708 7 - 7 - - - Receipts from reinsurers 201,453 272,383 213,235 9,628 9,043,516 47,087,962 - - Receipts from third parties - claim recoveries 1,076,704 989,317 719,857 854,225 7,264,140 4,908,511 - - Payments on claims (45,284,276) (43,297,775) (42,126,284) (40,691,470) (67,178,703) (91,870,964) - - Payments to outside reinsurers (302,500) - (396,520) (376,617) (6,842,042) (11,981,220) - - Payments for employee salary and benefits (17,128,789) (16,346,593) (8,254,659) (7,864,402) (5,996,098) (5,851,029) - - Payments to suppliers (3,121,101) (3,198,636) (1,709,641) (1,871,161) (1,566,099) (1,651,109) (134,462) (132,365) Payments to contractors (956,188) (1,048,430) (591,471) (732,481) (1,880,837) (1,420,930) (4,733) (5,020) Contributions (to)/from other funds - Reinsurance (2,219,509) (2,165,317) (729,808) (729,598) (8,256,088) (8,592,226) (4,186) (4,339) Receipts from/Payments (to) ASO members 199,525 (53,875) ------Payments for members' contribution return ------Payments for reinsurance (27,500) - - - (855,100) (1,529,162) - - Payments (for)/Receipts from other assets 39,727 (39,279) 19,863 (19,639) 19,863 (19,639) - - Receipts from TML for investment (161,939) 104,251 (80,969) 52,124 (80,969) 52,124 - - Net cash provided by/(used for) operating activities (without interest 4,269,952 5,130,961 (2,775,502) (1,728,066) 13,367,861 12,010,028 135,935 126,107 income)
Cash Flows From Capital and Related Financing Activities: Proceeds from sale of capital assets 33,750 24,402 16,875 12,201 16,875 12,201 - - Purchases of capital assets (1,432,542) (1,808,688) (716,270) (904,345) (716,270) (904,345) (15,993) (19,039) Transfer of equity - ULAE (1,050,000) (1,250,000) 240,000 (360,000) (390,000) (90,000) - - Transfer of equity - Pension (651,057) (1,460,177) (332,025) (673,344) (211,237) (543,517) (3,590) (8,473)
Net cash (used for)/provided by capital and related financing activities (3,099,849) (4,494,463) (791,420) (1,925,488) (1,300,632) (1,525,661) (19,583) (27,512)
Cash Flows From Investing Activities: Proceeds from sale and maturity of investments 87,318,201 46,459,495 68,898,204 38,698,018 19,041,022 3,543,474 4,088,667 2,126,940 Purchase of investments (93,455,267) (58,188,790) (68,374,339) (43,606,959) (32,448,054) (17,470,065) (4,358,928) (2,711,703) Increase in trade receivables 2,623 1,295 1,990 1,054 730 171 122 61 Increase in trade payables 225,647 ------Interest income received 9,606,104 9,593,776 6,471,007 7,296,464 3,375,680 3,366,535 381,108 415,756 Net cash provided by/(used for) investing activities 3,697,308 (2,134,224) 6,996,862 2,388,577 (10,030,622) (10,559,885) 110,969 (168,946) Net increase/(decrease) in cash and cash equivalents 4,867,411 (1,497,726) 3,429,940 (1,264,977) 2,036,607 (75,518) 227,321 (70,351) Cash and cash equivalents at beginning of year 7,379,060 8,876,786 5,529,902 6,794,879 2,215,420 2,290,938 343,877 414,228 Cash and cash equivalents at end of year $ 12,246,471 $ 7,379,060 $ 8,959,842 $ 5,529,902 $ 4,252,027 $ 2,215,420 $ 571,198 $ 343,877
The accompanying notes are an integral part of these financial statements 31 Texas Municipal League Intergovernmental Risk Pool
Totals September 30, September 30, Reinsurance Stability 2020 2019 2020 2019 2020 2019 Current Year Prior Year $ - $- - $ $ - $ 211,272,282 $ 202,434,073 - - - - 818,552 267,708 - - - - 9,458,204 47,369,973 - - - - 9,060,701 6,752,053 (4,448,245) (14,970,343) - - (159,037,508) (190,830,552) - - - - (7,541,062) (12,357,837) - - - - (31,379,546) (30,062,024) (1,086,003) (1,064,194) (148,362) (143,410) (7,765,668) (8,060,875) (37,860) (40,152) (4,732) (5,019) (3,475,821) (3,252,032) 11,209,591 11,491,480 ------199,525 (53,875) (3,999,369) - - - (3,999,369) - --- - (882,600) (1,529,162) --- - 79,453 (78,557) --- - (323,877) 208,499
1,638,114 (4,583,209) (153,094) (148,429) 16,483,266 10,807,392
--- - 67,500 48,804 (130,341) (152,311) (15,993) (19,039) (3,027,409) (3,807,767) - - 1,200,000 1,700,000 -- (30,723) (62,423) 1,228,633 2,747,934 --
(161,064) (214,734) 2,412,640 4,428,895 (2,959,909) (3,758,963)
35,057,440 24,006,748 9,678,548 1,899,342 224,082,082 116,734,017 (38,149,395) (23,631,680) (12,276,799) (7,210,959) (249,062,782) (152,820,156) 1,063 635 314 80 6,842 3,296 56,412 -- - 282,059 - 3,559,775 3,628,262 1,032,715 985,921 24,426,389 25,286,714 525,295 4,003,965 (1,565,222) (4,325,616) (265,410) (10,796,129) 2,002,345 (793,978) 694,324 (45,150) 13,257,947 (3,747,700) 2,996,790 3,790,768 914,440 959,590 19,379,489 23,127,189 $ 4,999,135 $ 2,996,790 $ 1,608,764 $ 914,440 $ 32,637,437 $ 19,379,489
The accompanying notes are an integral part of these financial statements 32 Texas Municipal League Intergovernmental Risk Pool
TEXAS MUNICIPAL LEAGUE INTERGOVERNMENTAL RISK POOL STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2020 AND 2019
Cash Flow - Reconciliation of Revenues Over/(Under) Expenses to Net Cash provided by Workers' CompensationLiability Property Coastal Storm (used for) Operating Activities 2020 2019 2020 2019 2020 2019 2020 2019 Operating revenues over/(under) operating expenses $4,080,213 $ 17,487,377 $(1,301,780) $ 10,281,923 $ 11,146,373 $2,169,767 $ 804,180 $ 1,113,744
Adjustments to reconcile revenues over/(under) expenses to net cash provided by/(used for) operating activities
Depreciation expense 1,103,560 722,389 551,780 361,195 551,780 361,195 12,530 7,604 (Increase) Decrease to pension asset ------Increase (Decrease) to deferred outflows/(inflows) of pension resources (63,819) 64,689 (42,361) 63,110 (9,227) (1,003) (292) 392 Increase (Decrease) to deferred outflows/(inflows) of pension resources - OPEB ------Decrease (Increase) in fair value of investments (5,772,379) (13,192,181) (4,567,870) (9,949,314) (3,064,890) (3,575,015) (295,740) (561,783) Pension contribution to TMRS ------Increase (Decrease) in OPEB liability ------Increase (Decrease) in loss reserves 12,617,200 7,957,834 9,515,789 5,541,271 1,738,587 13,763,592 (5,000) 5,000 Gain from sale of property and equipment (33,750) (24,402) (16,875) (12,201) (16,875) (12,201) - - Decrease (Increase) in contributions and other receivables 825,302 458,463 (18,790) (267,548) (378,895) 267,292 (123) (21,530) Decrease (Increase) in reinsurance recoverable (6,619) 12,258 (48,926) (87,787) 1,825,729 3,022,875 - - (Increase) Decrease in prepaid reinsurance (27,500) - - - (855,100) (1,529,162) - - (Increase) Decrease in other assets 39,727 (39,279) 19,863 (19,639) 19,863 (19,639) - - Increase (Decrease) in other liabilities 823,092 1,067,521 107,819 131,178 105,297 134,608 - - Increase (Decrease) in unearned contributions reserve 387,566 (281,785) 224,151 (25,565) 574,286 198,210 297 113 (Decrease) Increase in funds invested for TML (161,939) 104,251 (80,969) 52,124 (80,969) 52,124 - - Increase (Decrease) in reinsurance payable - - 3,525 27,417 6,034,982 (801,588) - - Increase (Decrease) in payable to Administrative Services Only contracts 199,525 (53,875) ------(Decrease) Increase in outstanding loss drafts (160,678) 479,009 (690,611) (518,293) (800,311) 1,405,727 - - (Increase) Decrease in accrued investment income 23,179 (39,012) 38,212 (10,661) (48,109) (60,458) 1,033 (1,746) (Increase) Decrease in investment trade receivable 3,376 1,480 2,548 1,188 1,020 239 158 69 Net cash provided by/(used for) operating activites 13,876,056 14,724,737 3,695,505 5,568,398 16,743,541 15,376,563 517,043 541,863 Adjustment for Receipt of Interest Income (9,606,104) (9,593,776) (6,471,007) (7,296,464) (3,375,680) (3,366,535) (381,108) (415,756)
Net cash provided by/(used for) operating activites (without interest income) $4,269,952 $ 5,130,961 $ (2,775,502) $ (1,728,066) $ 13,367,861 $12,010,028 $ 135,935 $ 126,107
The accompanying notes are an integral part of these financial statements 33 Texas Municipal League Intergovernmental Risk Pool
Totals September 30, September 30, Reinsurance Stability 2020 2019 2020 2019 2020 2019 Current Year Prior Year $14,839,118 $ 21,769,514 $ (706,505) $ (2,116,731) $ 28,861,599 $ 50,705,594
102,638 60,833 12,530 7,604 2,334,818 1,520,820 - -(2,844,436) 5,005,695 (2,844,436) 5,005,695 (4,329) 3,004 12,853,079 (11,025,606) 12,733,051 (10,895,414) - -(74,913) 34,752 (74,913) 34,752 (2,318,355) (5,522,719) (920,785) (1,537,980) (16,940,019) (34,338,992) - -(8,776,711) 8,776,711 (8,776,711) 8,776,711 - -142,795 16,074 142,795 16,074 (7,429,521) (17,274,635) 1,200,000 1,700,000 17,637,055 11,693,062 - - - -(67,500) (48,804) - - - -427,494 436,677 - - - -1,770,184 2,947,346 - - - -(882,600) (1,529,162) - - - -79,453 (78,557) - - - -1,036,208 1,333,307 - - - -1,186,300 (109,027) - - - -(323,877) 208,499 - - - -6,038,507 (774,171) - - - -199,525 (53,875) - - - -(1,651,600) 1,366,443 6,964 8,353 (5,853) (23,133) 15,426 (126,657) 1,374 703 420 106 8,896 3,785 5,197,889 (954,947) 879,621 837,492 40,909,655 36,094,106 (3,559,775) (3,628,262) (1,032,715) (985,921) (24,426,389) (25,286,714)
$1,638,114 $ (4,583,209) $ (153,094) $ (148,429) $ 16,483,266 $ 10,807,392
The accompanying notes are an integral part of these financial statements 34 NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF OPERATIONS
The Texas Municipal League Intergovernmental Risk Pool (the Pool) provides workers’ compensation, liability and property coverages for certain governmental entities of the State of Texas. Member entities include cities, housing authorities, municipal utility districts, councils of government, hospital districts, fire districts/emergency service districts, water and irrigation districts, tax appraisal districts and other special districts and authorities. At September 30, 2020 and 2019, the Pool has 2,821 and 2,814 members respectively participating in its programs. The Pool consists of enterprise funds including the Workers’ Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds. For external reporting purposes, the Pool classifies all of its Funds as “major funds” as prescribed by the Governmental Accounting Standards Board (GASB).
The Texas Municipal League Workers’ Compensation Joint Insurance Fund (Workers’ Compensation) was created in January 1974. This Fund provides coverage that conforms to the workers’ compensation laws of Texas. This Fund also provides excess workers’ compensation coverage over per occurrence retentions and corridor deductibles.
In 1981, the Texas Municipal League Joint-Self Insurance Fund (Liability and Property) was created. The coverages provided by the Liability Fund include general liability, errors and omissions liability, law enforcement liability, automobile liability, cyber and data breach liability, hangarkeepers’ liability, chartered aircraft and airport liability, and supplemental sewage backup liability. The Property Fund provides real and personal property, automobile physical damage, mobile equipment, boiler and machinery, crime and animal mortality coverage.
The Stability and Reinsurance Funds were created in 1990. The purpose of these funds is to provide additional self-funded layers of risk and stability for Pool operations. The Stability Fund was created to provide protection for all of the Pool’s claims incurring funds to offset the inability of any such fund to meet its cash requirements, provide a reserve for Unallocated Loss Adjustment Expenses (ULAE), and be the mechanism to fund the non-operational Texas Municipal Retirement System unfunded liability. The Reinsurance Fund provides reinsurance, similar to external reinsurance providers, to the claims incurring funds.
In 2007, the Pool created the Coastal Storm Fund. This Fund is a source of windstorm and hail coverage for properties located in the first tier of counties adjacent to the Gulf of Mexico with certain characteristics that reduce the likelihood of damage caused by windstorm and hail. The Coastal Storm Fund provides coverage that cannot be readily provided by the Property Fund due to reinsurance limitations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statements The basic financial statements consist of individual account balances for the Workers’ Compensation, Liability, Property, Coastal Storm, Reinsurance, and Stability Funds. The effects of interfund transactions were eliminated on the combined financial statements. The financial statements of the
35 Pool have been prepared using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States (GAAP) as applied to governmental entities.
Contribution Recognition Generally, member entities pay annual contributions to obtain workers’ compensation, liability, property, and coastal storm coverage for each fiscal year ending September 30. These contributions are earned on a pro-rata basis over the period of coverage. Contribution rates are determined by the Board. Initial rates were either determined based on rates established by the Insurance Services Office or the Texas Department of Insurance. As the Pool has developed, adjustments were made to the initial rates to reflect current operations. Coastal Storm rates are set at 80% of premiums charged by the Texas Windstorm Insurance Association (TWIA). Contribution rates are adjusted using experience modifiers based on individual members’ loss experience. Cyber liability and breach response services were added to the Pool’s available coverage. The majority of costs for this coverage are absorbed by the Pool’s Liability Fund, however, members that elect higher limits are billed in accordance with the contribution calculated by the Pool’s reinsurer.
Investments Cash, cash equivalents and investments are combined for banking and investment purposes, but individual fund balances are determined by fund operations and financial results. The Pool presents all of its investments on the balance sheet at fair value and recognizes changes in the fair value of investments as a component of investment income on the Statements of Operations and Changes in Net Position.
The intent of the Pool is to buy and hold investments until they mature. However, the Pool may sell securities as a prudent measure based on current market conditions. Long-term fixed income investments consist of United States Government and agency securities, municipal and corporate bonds, and corporate bond and equity mutual funds. Short-term investments include securities with maturity dates within one year. Cash equivalents include demand, money market, and investment pool funds.
Investing is a primary ongoing operation of the Pool and all investment income is used to fund Pool operations. Investment income is also a determining factor used in setting contribution rates. It is the Pool’s policy to consider investment income (excluding change in fair value) as an important component of total operating income.
The Pool complies with the Texas Pubic Funds Investment Act (Chapter 2256, Texas Government Code). However, in June 2019, Senate Bill 2551 expanded the number and types of cancer presumed under the Texas workers’ compensation statues to be related to the hazards of firefighting. To help offset the additional costs afforded by the expansion of benefits, the law expanded the investment authority for governmental self-insurance risk pools (as well as governmental self-insureds). Chapter 504 of the Texas Labor Code grants the Pool the sole discretion, under the “Prudent Person” rule, to accumulate and invest assets for the interest of current and future beneficiaries of workers’ compensation death and lifetime income benefits. The Public Funds Investment Act does not apply to the investment of these assets. In January 2020, the Board revised the investment policy and adopted provisions related to the authorized investments, investment benchmark, investment structure, and funding for the Lifetime Benefits Investment Portfolio (LTB Portfolio). The LTB Portfolio is comprised of claim reserves and members’ equity of the Workers’ Compensation and Reinsurance
36 Funds related to workers’ compensation death and lifetime income benefits. All other funds are invested in accordance with the Texas Public Funds Investment Act.
Fair Value Measurements Estimates of fair value for financial assets are based on the framework established in the fair value measurements and disclosures accounting guidance. The framework is based on the inputs used in valuation and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance includes a hierarchy based on whether significant valuation inputs are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect significant market assumptions.
Fair values are based on quoted market prices when available (Level 1). The Pool receives the quoted market prices from a third party nationally recognized in pricing service. When market prices are not available, the Pool utilizes a pricing service to determine an estimate of fair value, which is mainly used for the Pool’s debt securities’ fair value. The fair value is generally estimated using current market inputs for similar financial instruments with comparable terms and credit quality, commonly referred to as matrix pricing (Level 2). In instances where there is little or no market activity for the same or similar instruments, the Pool estimates fair value using methods, models and assumptions that management believes are relevant to the particular asset. This may include discounted cash flow analysis or other income-based approaches (Level 3). These valuation techniques involve some level of management estimation and judgment. The Pool recognizes transfers between levels at the end of the reporting period.
Claim Reserves After considering the consulting actuary’s analysis, claim reserves represent management’s best estimate of ultimate net unpaid losses. Estimated net ultimate losses include claims that have been reported but not yet paid, estimates of additional development of initial claim estimates, and claims that have been incurred but not yet reported (IBNR) to the Pool, net of reinsurance.
The actuary’s analysis includes allocated loss adjustment expenses that can be associated directly with specific claims, such as legal fees. The Pool also accrues a reserve estimate for ULAE in the Stability Fund, which represents expected future costs that cannot be associated with specific claims but will be related to claims in the process of settlement, such as salaries of the Pool’s claims department, and other costs of administering and closing claims.
The Pool has accumulated a base of reported loss data which is used to project ultimate losses. Estimates of incurred losses for all accident years involve estimation of future events and costs that may significantly differ from costs ultimately realized due to a number of factors.
Although considerable variability is inherent in estimates of trends in loss severity and frequency, management believes the reserves for losses and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. As adjustments to these estimates become necessary, such adjustments are reflected in current operations.
37 Reinsurance premiums, losses, and loss adjustment expenses are accounted for consistent with the original coverage documents issued and the terms of the reinsurance contracts. Certain reinsurance contracts include provisions for reinstatement premiums that are estimated and included in current operations when incurred.
The Pool discounts claim reserves in the Workers’ Compensation Fund for all unpaid lifetime benefits to beneficiaries of employees fatally injured on the job. As such, the unpaid benefits have a determinable duration and amount.
Effective September 30, 2018, the discount rate for qualifying lifetime income benefit and death benefit reserves for the surviving spouse of non-first responder is 4.4%, and 3.5% for death benefit reserves established for the surviving spouse of a first responder. The Board also approved normalizing the discount rates for all previously discounted reserves so that they are in accordance with the updated discount policy. The normalizing of all discount rates increased the reserves by $3.3 million. For rate stabilization purposes, the Board decided to increase the amount of the reserves by 1/3 of the $3.3 million, or $1.1 million per year over the three-year period beginning with the 2017- 18 fiscal year. The 2019-20 fiscal year was the last year of the allocation.
At September 30, the reserves for reported lifetime benefit claims (net of reinsurance) and estimated present value of these reserves were as follows:
Lifetime Income Benefits 2020 2019 Reserves$ 76,312,140 $ 66,540,849
Discount (28,737,613) (26,110,383) Present Value$ 47,574,527 $ 40,430,466
Net Position Net Position supports the Pool’s operations, provides protection against enterprise risks (underwriting, reserving, asset, and operational risks), and maintains the financial stability and strength of the Pool.
In order to maintain financial stability and protect the Pool against enterprise risks, the Pool had a Target Equity Study conducted by PricewaterhouseCoopers, LLP (PwC), and on April 26, 2014, based on that study, the Board adopted a policy establishing minimum and maximum target net position funding levels on a combined fund basis. The minimum target funding level is based on the projected capital requirements to fund a 1-in-250 year occurrence and the maximum level was set at the minimum target funding level plus funding for an additional 1-in-20 year occurrence.
The Board also set minimum net position equity levels for the Workers’ Compensation, Liability, Property, and Coastal Storm Funds based on the projected capital requirements to fund a 1-in-100 year occurrence.
In addition, the Board adopted a Net Position Distribution Policy within a framework of the combined and individual target net position levels described above based on annual financial results.
In April 2020, the Board approved a return of Net Position of $5.5 million from the Reinsurance Fund, including $4.0 million related to a Partnership Equity Return in response to member hardships during the Covid-19 pandemic and a $1.5 million grant for the membership Cyber Defense and Resiliency Program. The $1.5 million grant is reported as restricted equity on the Statements of Net Position. There was no return of Net Position in the 2018-19 fiscal year.
38 Based on an updated Target Equity Study in 2017, the minimum of the combined fund target equity range was $319.0 million, and the maximum was $475.2 million. The Pool ended the 2019-20 fiscal year with $417.5 million, which is above the target equity minimum on a combined fund basis.
GASB Statement No. 31 requires the Pool to report investments on the Statements of Net Position at fair value. Due to this GASB requirement, net position shown on the Statements of Net Position as of September 30, 2020 and 2019 includes unrealized gains and losses on investments as follows: Unrealized Funds Net Position Gains/Losses 2020 2019 Workers' Compensation$ 94,788,750 $ 14,253,541 $ 109,042,291 $ 106,663,135 Liability 89,415,033 10,825,691 100,240,724 101,634,529 Property 60,849,438 5,671,404 66,520,842 55,975,706 Coastal Storm 12,863,711 628,298 13,492,009 12,691,419 Reinsurance 96,097,315 5,715,137 101,812,452 87,004,057 Stability 24,430,918 1,955,343 26,386,261 24,664,134 Total$ 378,445,165 $ 39,049,414 $ 417,494,579 $ 388,632,980
The Board authorized restricting equity for the purpose of establishing a conservative approach for the Subsequent Injury Fund’s (SIF) long-term obligations to the Pool. At September 30, 2020 and 2019, the restricted net position for SIF was $6.1 million and $6.7 million, respectively.
In October 2018, the Board increased the ULAE reserves by $3.6 million. For rate stabilization purposes, the Board decided to recognize 1/3 of the $3.6 million or $1.2 million per year over the three-year period beginning with the 2017-18 fiscal year and ending with the 2019-20 fiscal year. The restricted net position for the phase-in expired during the current year.
Income Taxes The Workers’ Compensation and the Liability and Property programs obtained rulings from the Internal Revenue Service in February 1980 and July 1989, respectively, which recognize these programs as political subdivisions. Pursuant to these rulings, income is not taxable under Section 115(1) of the Internal Revenue Code. Accordingly, the accompanying financial statements do not include income tax expense.
Land and Capital Assets On February 28, 1995, the Pool purchased a 50% undivided interest in the land and building at 1821 Rutherford Lane in Austin, Texas as the site of the Pool’s headquarters. In July 2020, the Board approved to increase the capitalization threshold for capital assets from $30,000 to $100,000, effective August 1, 2020.
Depreciation expense is computed on a straight-line basis over the estimated useful life of the assets, which is assumed to be forty years for building, seven years for software, five years for furniture, fixtures and equipment, and three years for vehicles and computers. Land is reported as a non- depreciable asset (see Note 5).
Other Liabilities Other liabilities include amounts payable to employees and various vendors for goods or services provided during the fund year. The balances at September 30 are as follows:
39
Other Liabilities 2020 2019
Excess Deposit Payables$ 2,117,025 $ 1,397,025 Other Payables 1,330,550 1,476,712 Vacation Wages Payables 2,630,768 2,168,398
Tot al$ 6,078,343 $ 5,042,135
Unearned Contributions During the 2018-19 fiscal year, unearned contributions represented amounts for in-force contributions that had not been earned. During the 2019-20 fiscal year, unearned contributions account for in-force contributions, billed and unbilled, that have not been earned.
The balances at September 30 are as follows:
Unearned Contributions 2020 2019 Workers' Compensation$ 1,334,441 $ 946,875
Liability 1,138,872 914,721 Property 3,283,536 2,709,250 Coastal Storm 16,361 16,064
Total$ 5,773,210 $ 4,586,910
Deferred Compensation Plan The Pool offers its employees deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans available to all Pool employees permit employees to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or qualifying emergency. The Pool contributed $1,467,152 and $1,406,422 during the years ended September 30, 2020 and 2019, respectively to the 457 plans.
Allocations Investment income (without unrealized gains/(losses)) is allocated monthly to each fund on the basis of each fund’s beginning month’s pooled cash balance. Unrealized gains/(losses) are allocated monthly to each fund on the basis of each fund’s ending cash balance. Assets, liabilities, revenues and expenses directly attributable to a particular fund are recorded directly to that fund at 100%. General and Administrative (G&A) expenses, not directly attributable to a particular fund are allocated among the funds. 95% of these G&A expenses are allocated to the Workers’ Compensation, Liability and Property Funds at percentages of 50%, 25%, and 25%, respectively. The other 5% of G&A expenses are allocated to the Reinsurance, Coastal Storm and Stability Funds at 80%, 10%, and 10%, respectively.
Estimates The Pool’s annual financial report contains required estimates in accordance with GAAP. All such estimates are reviewed and approved by management. Required estimates are based on the most current and accurate information available at the time. Actual results, when known, could vary significantly from these estimates.
40 COVID-19 Pandemic In March 2020, the World Health Organization declared a pandemic related to the rapidly spreading coronavirus (COVID-19) which has led to a global health emergency. The ultimate duration and impact of the COVID-19 outbreak on the Pool’s financial position cannot be reasonably estimated at this time.
Subsequent Events The Pool has evaluated subsequent events for disclosure and recognition through December 16, 2020, the date on which these financial statements were available to be issued.
NOTE 3 - CASH AND CASH EQUIVALENTS
The bank balances of the Pool’s cash and cash equivalents are $32,978,313 and $19,547,698 at September 30, 2020 and 2019, respectively. The difference between the bank balances and the recorded cash balances on the statement of net position is due to the outstanding checks net of deposits in transit of $340,876 and $168,209 at September 30, 2020 and 2019, respectively. The cash balances are $32,637,437 and $19,379,489 at September 30, 2020 and 2019, respectively.
Cash equivalents invested in TexPool, a Local Government Investment Pool (LGIP), amounted to $1,487,963 and $2,992,283 at September 30, 2020 and 2019, respectively. Per GASB Statement No. 79, Certain External Investment Pools and Pool Participants, TexPool utilizes amortized cost for valuation and financial reporting. The Pool also invests in money market funds that are recorded at fair value which approximates cost. There are no limitations or restrictions on withdrawals from TexPool or money market funds except for daily trading time deadlines.
NOTE 4 - INVESTMENTS
Investing is a primary ongoing operation of the Pool and it is the Pool’s policy to consider investment income as an important component of operating income. Under provisions of the Pool’s investment policy, and in accordance with regulations for investment of public funds in the State of Texas (i.e., the Public Funds Investment Act), the Pool may invest in the following types of investments:
1. Obligations of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks;
2. Direct obligations of the State of Texas or its agencies and instrumentalities;
3. Mortgage backed securities directly issued by a federal agency or instrumentality except for collateralized mortgage obligations;
4. Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States;
5. Obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than A or its equivalent;
41 6. Certificates of deposit and share certificates authorized by section 2256.010 of the Public Funds Investment Act;
7. Repurchase agreements authorized by section 2256.011 of the Public Funds Investment Act;
8. No-load money market mutual funds authorized by section 2256.014 of the Public Funds Investment Act;
9. No-load mutual funds authorized by section 2256.014 of the Public Funds Investment Act;
10. Investment Pools authorized by sections 2256.016 and 2256.019 of the Public Funds Investment Act;
11. Interest-bearing banking deposits guaranteed or insured by the Federal Deposit Insurance Corporation or its successor.
Following is a list of investments that are authorized by the Pool in accordance with the provisions of Chapter 504 of the Texas Labor Code and the prudent person rule:
1. Obligations of corporations rated as investment grade by a nationally recognized investment rating firm and having received a rating of not less than BBB or its equivalent;
2. Mutual funds invested in below grade corporate bonds with a weighted average rating of B or above;
3. Stock (Equities) of companies traded on US stock exchanges; and
4. Mutual funds invested in stocks traded on US stock exchanges.
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Concentration of credit risk is the risk of loss attributed to the magnitude of an investment in a single issuer. In accordance with the Pool’s investment policy and state law, preservation and safety of principal is the primary objective of the Pool’s investment program and is addressed by purchasing the highest quality and creditworthy investments (see list of authorized investments above).
As of September 30, 2020, and 2019, the percentage of the Pool’s cash equivalents invested in a government money market at Wells Fargo was 43.2% and 35.9%, respectively. The percentage of the Pool’s cash equivalents invested in TexPool as of September 30, 2020 and 2019 was 4.6% and 15.4%, respectively. The remainder of the cash equivalents were invested in a money market fund account at Frost Bank. Federal Deposit Insurance Corporation (FDIC) insures amounts on deposit up to the limits as prescribed by law. For funds in excess of the FDIC insured amount, the Pool requires the depository to place securities as collateral in accordance with state law and the Pool’s investment policy. Cash equivalents held in government money market funds at Wells Fargo and Frost Bank and in TexPool are not FDIC insured. The government money market funds are registered and regulated by the Securities and Exchange Commission (SEC), and the Texas State Comptroller of Public Accounts oversees TexPool. The Pool does not believe it’s exposed to significant credit risk.
42 Neither the Pool’s investment policy nor state law places a limit on the amount the Pool may invest in a single authorized issuer.
The following presents the ratings for each investment type at September 30, 2020:
S&P Moody's Investment Type/Issuer Fair Value Rating Rating
U.S. Treasury $ 4,148,385 AA+ Aaa
Government Agencies FHLB 3,107,115 AA+ Aaa FFCB 3,003,396 AA+ Aaa Sub-Total$ 6,110,511
Municipal Bonds Muni Bonds 52,922,619 AAA** Aaa Muni Bonds 16,152,117 AAA** Aa Muni Bonds 13,473,721 AAA** - Muni Bonds 1,355,171 AA** Aaa Muni Bonds 47,558,196 AA** Aa Muni Bonds - AA** A Muni Bonds 14,176,977 AA** - Muni Bonds 4,522,029 A** Aa Muni Bonds 7,338,176 A** A Muni Bonds 13,577,039 - Aaa Muni Bonds 11,955,042 - Aa Muni Bonds 1,887,088 - A Sub-Total$ 184,918,175
Mortgage Backed Securities FNMA* 330,238,981 AA+ Aaa FHLMC* 92,750,486 AA+ Aaa GNMA 10,843,808 AA+ Aaa Sub-Total$ 433,833,275
Corporate Bonds Corp. Bonds 522,057 AAA** Aaa Corp. Bonds 1,947,757 AA** Aa Corp. Bonds 1,112,712 AA** A Corp. Bonds 15,250,866 A** A Corp. Bonds 2,285,997 A** Baa Corp. Bonds 5,751,254 BBB** A Corp. Bonds 21,273,741 BBB** Baa Corp. Bonds 1,217,971 BBB** Ba Sub-Total$ 49,362,355
Corporate Bond Mutual Fund$ 15,626,400
Equity Mutual Funds$ 37,678,900
Total Investments$ 731,678,001
*Issuer accounts for 5% or more of total investments. AAA** - Refers to those rated as AAA- and AAA. AA** - Refers to those rated as AA-, AA and AA+ A* - Refers to those rated as A-, A and A+.
43 The Pool’s gross unrealized gains and losses on investments were as follows: September 30, 2020 Gross Gross Tot al Gross Unrealized Unrealized Unrealized Amortized Cost Gains Losses Gain/(Loss) Fair Value U.S. Treasury Obligations$ 3,494,966 $- 653,419 $$ 653,419 $ 4,148,385 Municipal Bonds 171,503,375 13,414,862 (62) 13,414,800 184,918,175 U.S. Agency Obligations 5,997,893 112,618 - 112,618 6,110,511 U.S. Agency MBS 412,655,050 21,228,883 (50,658) 21,178,225 433,833,275 Corporate Bonds 48,282,980 1,183,920 (104,545) 1,079,375 49,362,355 Corporate Bond Mutual Fund 15,262,264 364,136 - 364,136 15,626,400 Equity Mutual Funds 35,432,059 2,246,841 - 2,246,841 37,678,900 Total Investments$ 692,628,587 $ 39,204,679 $ (155,265) $ 39,049,414 $ 731,678,001
September 30, 2019 Gross Gross Tot al Gross Unrealized Unrealized Unrealized Amortized Cost Gains Losses Gain/(Loss) Fair Value U.S. Treasury Obligations$ 4,962,300 $- 684,492 $$ 684,492 $ 5,646,792 Municipal Bonds 124,346,261 7,001,388 (9,071) 6,992,317 131,338,578 U.S. Agency Obligations 25,995,798 34,653 (128,121) (93,468) 25,902,330 U.S. Agency MBS 515,463,310 12,153,474 (747,202) 11,406,272 526,869,582 Total Investments$ 670,767,669 $ 19,874,007 $ (884,394) $ 18,989,613 $ 689,757,282
The Pool categorizes its investments fair value measurements within the fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. 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.
The Pool had the following recurring fair value measurements as of September 30, 2020 and 2019, respectively:
Quoted Prices in Active Significant Markets for Significant Other Unobservable
Identical Assets Observable Inputs Investments by fair value level 09/30/20 (Level 1) Inputs (Level 2) (Level 3) U.S. Treasury Securities$ 4,148,385 $ 4,148,385 $ - $ - Total U.S. Treasury Securities 4,148,385 4,148,385 - - Government Agencies Securities FNMA - - - - FHLB 3,107,115 - 3,107,115 - FFCB 3,003,396 - 3,003,396 - Municipal Bonds 184,918,175 - 184,918,175 - Mortgage Backed 433,833,275 - 433,833,275 - Total Government Agencies Securities 624,861,961 - 624,861,961 - Corporate Bonds and Mutual Funds Corporate Bonds 49,362,355 - 49,362,355 - Corporate Bond Mutual Fund 15,626,400 - 15,626,400 - Equity Mutual Funds 37,678,900 37,678,900 - - Total Corporate Bonds and Mutual Funds 102,667,655 37,678,900 64,988,755 - Total investments by fair value level$ 731,678,001 $ 41,827,285 $ 689,850,716 $ -
44 Quoted Prices in Active Significant Significant Markets for Other Unobservable Identical Observable Inputs Investments by fair value level 09/ 30/ 19 Asset s Inputs (Level 2) (Level 3) U.S. Treasury Securities$ 5,646,792 $- 5,646,792 $-$ Total U.S. Treasury Securities 5,646,792 5,646,792 - - Government Agencies Securities FNMA 999,790 - 999,790 FHLB 15,905,690 - 15,905,690 - FFCB 8,996,850 - 8,996,850 - Municipal Bonds 131,338,578 - 131,338,578 - Mortgage Backed 526,869,582 - 526,869,582 - Total Government Agencies Securities 684,110,490 - 684,110,490 - Total investments by fair value level$ 689,757,282 $5,646,792 $- 684,110,490 $
The amortized cost and estimated fair value of long-term and short-term fixed income investments at September 30, 2020 and 2019, by expected maturities, are shown below. Actual maturities will vary from expected maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. September 30, 2020 September 30, 2019
Investment Maturity Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less$ 15,131,012 $ 15,233,090 $ 12,875,790 $ 12,900,507 Due after one year through five years * 81,768,621 84,394,653 33,955,581 34,422,093 Due after five years through ten years 70,821,899 76,363,546 48,900,609 50,465,260 Due after ten years through twenty years 76,834,197 84,188,915 59,572,379 65,099,840 Mortgage-Backed Securities due after one year 412,640,814 433,818,897 515,463,310 526,869,582 Equity Mutual Funds 35,432,044 37,678,900 - - Total$ 692,628,587 $ 731,678,001 $ 670,767,669 $ 689,757,282
* Includes Bond Mutual Fund; Bond Mutual Funds has weighted average maturity of 4.7 years.
Investment income included in the Statement of Operations and Changes in Net Position for the years ended September 30 are as follows:
Investment Income 2020 2019 Investment Income (interest & dividend income)$ 24,402,066 $ 25,409,586
Net unrealized gains $ 20,059,801 $ 37,734,381 Amortization of discounts (premiums) (4,664,211) (3,734,981) Net realized gains 1,544,429 339,592 Investment Income (change in fair value)$ 16,940,019 $ 34,338,992
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Pool’s investment policy addresses interest rate risk by establishing a custom benchmark based on the intent and ability to buy investments and hold them until they mature. However, the Pool may sell securities as a prudent measure based on market conditions. To guide the buying and holding of investments, the Pool utilizes a custom benchmark that takes into account expected payments of liabilities and the Pool’s objectives for utilizing Members’ Equity.
45 The custom benchmark for the investments governed by the Public Funds Investment Act is the following:
70% weighting of the Barclays Capital MBS Fixed Rate Index 20% weighting of the Barclays Capital Intermediate Taxable Municipal Index 10% weighting of the Barclays Capital Intermediate Government Index
The custom benchmark for the investments governed by Chapter 504 of the Texas Labor Code is the following:
50% weighting of the Barclays US Intermediate Corporate Bond Index 17.5% weighting of the Vanguard High Dividend Yield Stock Index (VHYAX) 17.5% weighting of the Vanguard Dividend Appreciation Stock Index (VDADX) 15% weighting of the Vanguard High Yield Corporate Bond Fund (VWEAX)
The estimated effective duration is used to assess interest rate risk by estimating the sensitivity of fixed income securities to interest rate changes. The effective duration estimates the percentage change in the fair value of an investment (or an investment portfolio) for a one percent change in interest rates. It makes assumptions regarding the most likely timing and amounts of variable cash flows for investments that are highly sensitive to interest rate changes, such as mortgage-backed securities, callable bonds, and variable-rate debt.
Estimated Effective As of September 30, 2020 Fair Value Duration
U.S. Treasury $9.18 4,148,385 Government Agencies 6,110,511 1.00
Municipal Bonds 184,918,175 6.32 Mortgage Backed Securities 433,833,275 0.33
Corporate Bonds 49,362,355 4.74 Bond Mutual Funds 15,626,400 4.70 Equity Mutual Funds 37,678,900 N/A
Total Investments$ 731,678,001 2.35 The estimated effective duration of the custom benchmark at September 30, 2019 was 3.67.
NOTE 5 – NET CAPITAL ASSETS
Net capital assets were comprised of the following at September 30: Accum ulat ed Fund Capital Assets Depreciation 2020 2019 Workers' Compensation$ 13,378,288 $ (6,663,067) $ 6,715,221 $ 6,386,239 Liability 6,689,144 (3,331,534) 3,357,610 3,193,120 Property 6,689,144 (3,331,534) 3,357,610 3,193,120 Reinsurance 1,126,593 (561,101) 565,492 537,789 Coastal Storm 140,824 (70,137) 70,687 67,223 Stability 140,824 (70,136) 70,688 67,223 Total$ 28,164,817 $ (14,027,509) $ 14,137,308 $ 13,444,714
46 Purchases & Sales and Ending Balance @ Capitalized Other Ending Balance Capital Assets 10/1/19 Expenses Dispositions @ 9/30/20 Vehicles $- 97,748 $-$$ 97,748 Computers 521,822 - - 521,822 Furniture & Fixtures 964,975 - - 964,975 Software 16,149,933 2,418,917 - 18,568,850 Building & Property Improv. 6,899,762 603,689 (6,726) 7,496,725 Land 514,697 - - 514,697 Total$ 25,148,937 $ 3,022,606 $ (6,726) $ 28,164,817
Sales and Ending Balance @ Depreciation Other Ending Balance Accumulated Depreciation 10/1/19 Expense Dispositions @ 9/30/20 Vehicles $74,209 $- 18,125 $$ 92,334 Computers 508,124 13,698 - 521,822 Furniture & Fixtures 855,564 58,193 - 913,757 Software 5,682,730 2,056,706 (1,526) 7,737,910 Building & Property Improv. 4,583,596 179,206 (1,116) 4,761,686 Total$ 11,704,223 $(2,642) 2,325,928 $ $ 14,027,509
At September 30, 2020, Net Capitalized Assets included $2,318,120 for capital work in progress (Policy & Billing Center Phase 2). Depreciation will begin after the development is substantially completed.
NOTE 6 - OTHER ASSETS
At September 30, the balance of other assets consisted of the following: Workers' Ot her Asset s Compensation Liability Property 2020 2019 Deposit with TML$ 201,798 $ 100,899 $ 100,899 $ 403,596 $ 403,596 Deposit with NLC-MIC 39,518 227,973 293,576 561,067 561,067 Deposit with WC Alliance 56,864 - -56,864 56,864 Prepaid Expenses 241,251 120,625 120,625 482,501 561,956 Rent Deposits 10,377 5,189 5,189 20,755 20,753 Tot al$454,686 549,808 $ $ 520,289 $ 1,524,783 $ 1,604,236
The TML deposit required by contract is equal to one month’s average bill and is based upon an average of six months of billings. The deposit with National League of Cities Mutual Insurance Company (NLC-MIC) is based upon the level of reinsurance purchased from them.
At September 30, 2020, the Pool’s equity interest in NLC-MIC was $4,766,004 which is $4,204,937 more than the Pool’s recorded cost basis. At September 30, 2019, the equity interest was $4,002,966, which was $3,441,899 more than the recorded basis.
47 NOTE 7 – CONTRACT SERVICE FEES
The Pool utilizes several contractors for underwriting, Contract Service Fees 2020 2019 reinsurance brokerage and data Workers' Compensation$ 956,188 $ 1,048,430 processing services. Noted in Liability 328,408 344,131 the table to the right, included Property 278,383 291,370 in the Statements of Operations Coastal Storm 4,733 5,020 were contract service fees for Reinsurance 37,860 40,151 the fiscal years ending Stability 4,732 5,019 September 30, 2020 and 2019. Total$ 1,610,304 $ 1,734,121
NOTE 8 - REINSURANCE
For fiscal years ending September 30, 2020 and 2019, the following Funds carry excess reinsurance as outlined below:
x Workers’ Compensation Fund Carries excess reinsurance up to statutory limits over a retention limit of $3 million. Retains 40% of losses exceeding the Fund’s retention of $3 million up to statutory limits. The Reinsurance Fund assumes a 60% quota share of losses in excess of $3 million up to statutory limits. Beginning on November 1, 2019, the Workers’ Compensation Fund carries a catastrophic retention limit of $10 million excess of $15 million (The Reinsurance Fund assumes no quota share in this layer). x Liability Fund Carries excess reinsurance over a retention of $3 million. Retains 27.5% of losses exceeding the Fund’s retention of $3 million. The Reinsurance Fund assumes a 72.5% quota share of losses in excess of $3 million. Retains a 25% quota share of the first $50,000 of losses related to Cyber & Data Breach coverage. Retains 100% of Cyber & Data Breach losses exceeding $50,000 up to policy limits.
x Property Fund Carries a specific retention limit of $4 million per occurrence and retains 50% of both the $6 million excess of $4 million and $50 million excess of $250 million layers. Through April 30, 2020, the Reinsurance Fund assumes the following: x a 50% quota share for the $6 million excess of $4 million layer, x a 30% quota share of the $15 million excess of $10 million layer, x a 20% quota share of the $25 million excess of $25 million layer, x a 20% quota share of the $50 million excess of $50 million layer, x a 20% quota share of the $50 million excess of $100 million layer, x a 15% quota share of the $50 million excess of $150 million layer, x a 20% quota share of the $50 million excess of $200 million layer, and x a 50% quota share of the $50 million excess of the $250 million layer. Beginning on May 1, 2020, the Property Fund carries a specific retention limit of $4 million per occurrence and retains 50% of the $6 million excess of $4 million layer. The Reinsurance Fund assumes the following:
48 x a 50% quota share for the $6 million excess of $4 million layer, x a 30% quota share of the $15 million excess of $10 million layer, x a 20% quota share of the $25 million excess of $25 million layer, x a 20% quota share of the $50 million excess of $50 million layer, x a 20% quota share of the $50 million excess of $100 million layer, x a 20% quota share of the $50 million excess of $150 million layer, x a 20% quota share of the $50 million excess of $200 million layer, and x a 54% quota share of the $50 million excess of the $250 million layer.
Payments to reinsurers are recognized over the term of the contracts. Reserves for losses and loss adjustment expenses are stated after deduction for reinsured estimated losses; however, the Pool is liable for these amounts in the event the reinsurers are unable to pay their portion of the claims.
The amounts anticipated to be recovered from outside reinsurance on case reserves and IBNR at September 30, 2020 and 2019 were as follows:
September 30, 2020 September 30, 2019 Fund Gross Ceded Net Gross Ceded Net Workers' Compensation Case $ 129,994,063 $ (20,472,021) $ 109,522,042 $ 116,380,005 $ (19,775,163) $ 96,604,842 IBNR 65,958,000 642,000 66,600,000 67,431,000 (531,000) 66,900,000 Total 195,952,063 (19,830,021) 176,122,042 183,811,005 (20,306,163) 163,504,842
Liability Case 93,873,369 (401,435) 93,471,934 76,356,145 - 76,356,145 IBNR 18,000,000 - 18,000,000 25,600,000 - 25,600,000 Total 111,873,369 (401,435) 111,471,934 101,956,145 - 101,956,145
Property Case 43,565,640 (12,596,538) 30,969,102 55,775,943 (28,645,428) 27,130,515 IBNR 4,125,000 (3,800,000) 325,000 6,425,000 (4,000,000) 2,425,000 Total 47,690,640 (16,396,538) 31,294,102 62,200,943 (32,645,428) 29,555,515
Coastal Storm Case - - - 5,000 - 5,000 IBNR ------Total - - - 5,000 - 5,000
Reinsurance Case 11,747,583 - 11,747,583 18,977,104 - 18,977,104 IBNR 4,550,000 - 4,550,000 4,750,000 4,750,000 Total 16,297,583 - 16,297,583 23,727,104 - 23,727,104
Stability ULAE 9,400,000 - 9,400,000 8,200,000 - 8,200,000
Eliminating Case (11,747,583) 11,747,583 - (18,977,104) 18,977,104 - IBNR (4,550,000) 4,550,000 - (4,750,000) 4,750,000 - Total (16,297,583) 16,297,583 - (23,727,104) 23,727,104 -
Total Case 267,433,072 (21,722,411) 245,710,661 256,717,093 (29,443,487) 227,273,606 IBNR 88,083,000 1,392,000 89,475,000 99,456,000 219,000 99,675,000 ULAE 9,400,000 - 9,400,000
Total$ 364,916,072 $ (20,330,411) $ 344,585,661 $ 356,173,093 $ (29,224,487) $ 326,948,606
The gross liabilities shown above are net of discounting.
Approximately 99.1% of the 2020 recoverable balance represents reserves from reinsurers rated “Superior”, “Excellent”, “Good” or “Strong” by A.M. Best Company or Standard and Poor’s. The Pool is a participating member of NLC-MIC (not rated), which provides excess insurance coverage accounting for 0.9% of the reinsurance recoverable.
49 NOTE 9 - RELATED PARTY TRANSACTIONS
The Pool has an administrative services contract with TML for certain management and licensing fees related to the use of the organization’s name. For fiscal years 2020 and 2019, these fees totaled $933,817 and $893,000, respectively.
The Pool maintains a deposit with TML, and at September 30, 2020 and 2019, the amount of this deposit was $403,596.
The Pool has an arrangement to invest funds owned by TML. The amount of these funds, which was recorded as both an investment asset and a liability on the financial statements, is shown in the table below.
Related Party Transactions 2020 2019 Beginning TML Investments$ 7,288,477 $ 7,079,978
Investment Income 176,123 208,499
Additional (Withdrawals) Deposits (500,000) -
Total$ 6,964,600 $ 7,288,477
The Pool purchased 50% of the land and building at 1821 Rutherford Lane from the TML Health Benefits Pool in February 1995. The net purchase price paid by the Pool was $2.184 million. The common areas of the building are managed by a governing committee.
The Pool invests funds in TexPool. The same municipalities that the Pool insures may also be members in TexPool investments as further disclosed in Note 4.
The Executive Director serves on the NLC-MIC Board of Directors.
The Pool is a member of the Political Subdivision Workers’ Compensation Alliance (Alliance), which is an intergovernmental arrangement to develop and maintain network medical services for workers’ compensation providers within the State of Texas. In January 2019, the Pool entered into an interlocal agreement with the Alliance to provide administrative and operational services for the Alliance for an annual fee of $790,000. Effective July 1, 2020, the annual fee increased by 3% to $813,700 in accordance with the terms of the interlocal agreement. The Executive Director serves on the Alliance’s Board of Directors.
NOTE 10 - DEFINED BENEFIT PENSION PLAN
Plan Description The Pool provides pension benefits for all of its eligible employees through a non-traditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), an agent multiple-employer public employee retirement system. The plan provisions adopted by the Pool are within the options available in the governing state statutes of TMRS.
TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for TMRS. The report also provides detailed
50 explanations of the contributions, benefits and actuarial methods and assumptions used by TMRS. This report may be obtained from the TMRS website at www.tmrs.com. Questions concerning the Pool’s retirement provisions should be directed to the Chief Financial Officer at the Texas Municipal League Intergovernmental Risk Pool at (512) 491-2300.
Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the Pool, within the options available in the state statutes governing TMRS. The plan provisions adopted by the Pool’s Board of Trustees as of September 30, 2020 and 2019 are reflected below.
Plan Provisions Plan Year 2020 Plan Year 2019 Employee deposit rate (Employee) 7.0% 7.0% Matching ratio (Pool to Employee) 2 to 1 2 to 1 Years required for vesting 10 10 Service retirement eligibility (expressed as age / years of service) 60/10, 0/25 60/10, 0/25 Updated Service Credit 100% Repeating 100% Repeating Annuity Increase (to retirees) 70% of CPI 70% of CPI Supplemental Death Benefits (to active employees) Yes Yes Supplemental Death Benefits (to retirees) Yes Yes Military Service Credit Yes Yes Buyback Service Yes Yes
Members can retire at certain ages, based on the years of service with the Pool and prior service with participating local governments. The Service Retirement Eligibilities for the Pool are: 10 years/age 60, 25 years/any age.
In addition to the annually repeating updated service credit, the Pool elected to provide an annually repeating annuity adjustment at 70% of the increase in the Consumer Price Index and supplemental death benefits to both active and retired employees. In 2016, the Pool added the transfer service option to its plan’s provisions.
Employees covered by benefit terms At the December 31, 2019 and 2018 valuation and measurement dates, the following numbers of employees were covered by the benefit terms: Plan Valuation Year
2019 2018 Active employees 250 245 Inactive employees or beneficiaries currently receiving benefits 84 81 Inactive employees entitled to but not yet receiving benefits 47 44 381 370
51 Contributions Under the state law governing TMRS, the contribution rate for the Pool is determined annually by the TMRS actuary, using the Entry Age Normal (EAN) actuarial cost method. This rate consists of the normal cost contribution rate and the prior service cost contribution rate, which is calculated to be a level percent of the Pool’s payroll from year to year. The normal cost contribution rate finances the portion of the Pool’s projected benefit allocated annually; the prior service contribution rate amortizes the unfunded actuarial liability over the applicable period for the Pool.
Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and annuity increases.
Schedule of Contributions for Plan Years 2019 and 2018
Notes Actuarially determined contribution rates are calculated as of December 31 and become effective in January 13 months later.
The Pool contributes to the TMRS Plan at an actuarially determined rate. Both the employees and the Pool make contributions monthly. The contribution rates for the Pool were 10.51% and 10.39% in calendar years 2020 and 2019, respectively. The Pool’s contributions to TMRS for the year ended September 30, 2020, were $2,800,443. For the year ended September 30, 2019, the contributions were $2,711,241.
Net Pension Asset (Liability) The Pool’s Net Pension Asset (Liability) was measured as of December 31, and the Total Pension Liability used to calculate the Net Pension Asset (Liability) was determined by an actuarial valuation as of that date.
Actuarial Assumptions The Total Pension Asset (Liability) in the December 31, 2019 and 2018 actuarial valuation was determined using the following actuarial assumptions:
2019 Plan Valuation Methods and Assumptions Methods and Assumptions used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 25 years Asset Valuation Method 10 Year Smoothed Market; 12% soft corridor Inflation 2.50%
Salary Increases 3.50% to 11.50% including inflation Investment Rate of Return 6.75% Retirement Age Experience-based table of rates that are specific to the Pool's plan of benefits. Last updated for the 2019 valuation pursuant to an experience study of the period 2014-2018. Mortality Post-retirement: 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. Pre-retirement: PUB(10) mortality tables, with the Public Safety table used for males and the General Employee table used for females. The rates are
projected on a fully generational basis with scale UMP. Other Information: Notes There were no benefit changes during the year.
52 2018 Plan Valuation Methods and Assumptions Methods and Assumptions used to Determine Contribution Rates: Actuarial Cost Method Entry Age Normal Amortization Method Level Percentage of Payroll, Closed Remaining Amortization Period 26 years Asset Valuation Method 10 Year Smoothed Market; 15% soft corridor Inflation 2.50% Salary Increases 3.50% to 10.5% including inflation Investment Rate of Return 6.75% Retirement Age Experience-based table of rates that are specific to the Pool's plan of benefits. Last updated for the 2015 valuation pursuant to an experience study of the period 2010-2014. Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully generational basis with scale BB.
Other Information: Notes There were no benefit changes during the year.
Actuarial assumptions used in the December 31, 2019, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2014 to December 31, 2018. Health post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. 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 weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of real rates of return for each major asset class are summarized below: Long-Term Expected Real Rat e of Ret ur n Asset Class Target Allocation (Arithmetic) Global Equity 35.0% 5.30% Core Fixed Income 10.0% 1.25% Non-Core Fixed Income 20.0% 4.14% Real Ret u r n 10.0% 3.85% Real Estate 10.0% 4.00% Absolute Return 10.0% 3.48% Private Equity 5.0% 7.75% Total 100.0%
53 Discount Rate The discount rate used to measure the Total Pension Asset (Liability) was 6.75% at December 31, 2019. 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.
The following presents the net pension asset (liability) of the Pool, as well as what the Pool’s net pension asset (liability) 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: Sensitivity of the Net Pension Liability to Changes in the Discount Rate
1% Decrease in 1% Increase in Discount Rate (5.75%) Discount Rate (6.75%) Discount Rate (7.75%) Pool's Net Pension (Asset)/Liability $19,418,977 ($2,844,436) ($21,348,561)
Changes in the Net Pension (Asset)/Liability Schedule of Changes in Net Pension (Asset)/Liability and Related Ratios December 31 Measurement Date
A. Total pension liability 2019 2018 1. Service Cost $ 4,416,547 $ 4,263,766 2. Interest (on the Total Pension Liability) 10,428,055 9,726,192 3. Changes of benefit terms including substantively automatic status - -
4. Difference between expected and actual experience (325,032) (170,223) 5. Changes of assumptions 725,618 - 6. Benefit payments, including refunds of employee contributions (3,849,456) (3,146,837) 7. Net change in total pension liability 11,395,732 10,672,898 8. Total pension liability - beginning 154,206,160 143,533,262 9. Total pension liability - ending$ 165,601,892 $ 154,206,160
B. Plan fiduciary net position 1. Contributions - employer$ 2,684,959 $ 2,838,949 2. Contributions - employee 1,804,777 1,742,345 3. Net investment income 22,507,456 (4,453,479) 4. Benefit payments, including refunds of employee contributions (3,849,456) (3,146,837) 5. Administrative Expenses (127,040) (85,993) 6. Other (3,816) (4,493) 7. Net change in plan fiduciary net position* 23,016,880 (3,109,508) 8. Plan fiduciary net position - beginning * 145,429,448 148,538,957 9. Plan fiduciary net position - ending$ 168,446,328 $ 145,429,449 C. Net pension (asset) liability [A.9 - B.9] $ (2,844,436) $ 8,776,711
D. Plan fiduciary net position as a % of the total pension liability [B.9 / A.9] 101.72% 94.31%
E. Covered-employee payroll $ 25,782,528 $ 24,890,637
F. Net pension (asset) liability as a % of covered employee payroll [C / E] -11.03% 35.26%
* May be off due to rounding.
54 Pension Expense and Deferred Outflows and Inflows of Resources Related to Pensions For the year ended September 30, 2020, the Pool recognized pension expense of $3,917,180, which was the same amount of pension expense for the Pool reported by TMRS (calendar year basis).
Schedule of Pension Expense At December 31, 2019 1. Total Service Cost $ 4,416,547 2. Interest (on the Total Pension Liability) 10,428,055 3. Current Period Benefit Changes 0 4. Employee Contribution (Reduction of Expenses) (1,804,777) 5. Projected Earnings on Plan Investments (Reduction of Expenses) (9,816,488) 6. Administrative Expense 127,040 7. Other Changes in Fiduciary Net Position 3,816 8. Recognition of Current Year Outflows (Inflows) of Resources - Liabilities 72,308 8. Recognition of Current Year Outflows (Inflows) of Resources - Assets (2,538,194) 9. Amortization of Prior Year Outflows (Inflows) of Resources - Liabilities 415,600 10. Amortization of Prior Year Outflows (Inflows) of Resources - Assets 2,613,273 Tot al $ 3,917,180
For the year ended September 30, 2019, the Pool recognized pension expense of $5,595,357, which was the same amount of pension expense for the Pool reported by TMRS (calendar year basis).
Schedule of Pension Expense At December 31, 2018 1. Total Service Cost $ 4,263,766 2. Interest (on the Total Pension Liability) 9,726,192 3. Current Period Benefit Changes 0 4. Employee Contribution (Reduction of Expenses) (1,742,345) 5. Projected Earnings on Plan Investments (Reduction of Expenses) (10,026,380) 6. Administrative Expense 85,993 7. Other Changes in Fiduciary Net Position 4,493 8. Recognition of Current Year Outflows (Inflows) of Resources - Liabilities (29,450) 8. Recognition of Current Year Outflows (Inflows) of Resources - Assets 2,895,972 9. Amortization of Prior Year Outflows (Inflows) of Resources - Liabilities 445,050 10. Amortization of Prior Year Outflows (Inflows) of Resources - Assets (27,934) Tot al $ 5,595,357
55 At September 30, 2020, the Pool reported deferred outflows and inflows of resources related to pensions from the following sources (calendar year basis):
Schedule of Outflows and Inflows - Current and Future Expenses Deferred Total (Inflows) or Outflows 2019 Recognized in (Inflows)/Outflows of Resources current pension expense in future expense Prior Years'* Difference between expected and actual experience$ 699,485 $ 282,845 $ 416,640 Difference in assumptions changes 289,407 132,755 156,652 Difference between projected and actual earnings on pension plan investments 7,622,221 2,613,273 5,008,948 2019 Plan Year Difference between expected and actual experience (325,032) (58,670) (266,362) Difference in assumptions changes 725,618 130,978 594,640 Difference between projected and actual earnings on pension plan investments (12,690,969) (2,538,194) (10,152,775) Deferred Pension Items (3,679,270) 562,987 (4,242,257) Contributions made subsequent to measurement date 2,119,150 2,119,150 Total$ (1,560,120) $ 562,987 $ (2,123,107) * Prior Years' is composed of Plan Years 2015 - 2018.
At September 30, 2019, the Pool reported deferred outflows and inflows of resources related to pensions from the following sources (calendar year basis):
Schedule of Outflows and Inflows - Current and Future Expenses Deferred Total (Inflows) or Outflows 2018 Recognized in (Inflows)/Outflows of Resources current pension expense in future expense Prior Years'* Difference between expected and actual experience$ 1,152,553 $ 312,295 $ 840,258 Difference in assumptions changes 422,162 132,755 289,407 Difference between projected and actual earnings on pension plan investments (3,989,599) (27,934) (3,961,665) 2018 Plan Year Difference between expected and actual experience (170,223) (29,450) (140,773) Difference in assumptions changes - - - Difference between projected and actual earnings on pension plan investments 14,479,857 2,895,972 11,583,885 Deferred Pension Items 11,894,750 3,283,638 8,611,112 Contributions made subsequent to measurement date 1,998,832 1,998,832 Total$ 13,893,582 $ 3,283,638 $ 10,609,944 * Prior Years' is composed of Plan Years 2014 - 2017.
56 The schedule below reflects the deferred outflows and inflows of resources at September 30, 2020 that will be amortized in future pension expense.
Schedule of Outflows and Inflows - Future Pension Expense Net deferred outflows(inflows) of Year resources* 2020 $ (1,009,368) 2021 (1,235,996) 2022 452,919 2023 (2,488,858) 2024 39,046 Thereafter - *Total $ (4,242,257) *Excludes contributions of $2,119,150 remitted to TMRS subsequent to the December 31, 2019 measurement date.
Pension Charges (Credits) The Pool recorded Pension Expense reconciling items as Pension Charges (Credits) as follows:
Pension Charges (Credits) 2019 2018 Capitalized TMRS Contributions$ (126,262) $ (98,649) Changes in Deferred Contributions - - Differences Between Contributions per the Pool and TMRS - (92) Total Pension Charges$ (126,262) $ (98,741)
As a result of Pension Charges (Credits), the following is the Pension Expense line item amount as reported on the financial statements:
Pension Expense as Reported on the Financial Statements 2019 2018 Pension Expense$ 3,917,180 $ 5,595,357 Pension Charges (Credits) (126,262) (98,741) Reported Pension Expense$ 3,790,918 $ 5,496,616
Restricted Net Position The Pool restricted net position for pension-related assets (liabilities) due to the expected volatility in changes to the fair value of pension investments and outflow (inflows) of pension resources.
Following were the balances at September 30, 2020 and 2019:
Rest rict ed N et Posit ion 2020 2019 Net Pension Asset$ 2,844,437 $ - Deferred Outflows of Pension Resources (Future Expenses) (4,242,257) 8,611,114 Deferred Outflows of Pension Resources (Contributions) 2,119,150 1,998,830 Tot al$ 721,330 $ 10,609,944
57 NOTE 11 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
Plan Description The Pool provides all of its eligible employees a defined benefit group-term life insurance through the TMRS Supplemental Death Benefits Fund (SDBF). The SDBF covers both active and retiree benefits with no segregation of assets, and therefore doesn’t meet the definition of a trust under GASB Statement No. 75 Accounting and Financial Reporting of Postemployment Benefits Other Than Pensions (i.e., no assets are accumulated for other postemployment benefits or OPEB), and as such, the SDBF is considered to be an unfunded OPEB plan. The retiree portion of the SDBF is not considered a cost sharing plan and is instead considered a single-employer, defined benefit OPEB plan.
The Pool’s contributions to the TMRS SDBF for the fiscal years ended September 30, 2020 and 2019 were $55,897 and $52,842, respectively, which equaled the required contributions each year.
TMRS issues a publicly available comprehensive annual financial report that includes financial statements and required supplementary information for TMRS. The report also provides detailed explanations of the contributions, benefits and actuarial methods and assumptions used by TMRS. This report may be obtained from the TMRS website at www.tmrs.com. Questions concerning the Pool’s OPEB provisions should be directed to the Chief Financial Officer at (512) 491-2300.
Benefits Provided Benefit provisions are adopted by the governing body of the Pool, within the options available in the state statutes governing TMRS. The death benefits for active employees provides a lump-sum payment approximately equal to the employee’s annual salary (calculated based on the employee’s actual earnings, for the 12-month period preceding the month of death). The death benefits for retirees is considered a postemployment benefit (OPEB) and is a fixed amount of $7,500 per employee. As the SDBF covers both active and retiree participants, with no segregation of assets, the SDBF is considered to be an unfunded OPEB plan (i.e., no assets are accumulated).
Employees covered by benefit terms At the December 31, 2019 and 2018 valuation and measurement dates, the following numbers of employees were covered by the benefit terms: Plan Valuation Year
2019 2018 Inactive employees currently receiving benefits 73 70 Inactive employees entitled to but not yet receiving benefits 21 23 Active employees 250 245
344 338 Contributions The Pool contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy of the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year. The intent is not to pre-fund retiree term life insurance. The Pool’s contributions to TMRS for the plan year ended December 31, 2019 and 2018 for the retiree-only portion (OPEB) were $2,578 and $2,489, respectively.
58 Schedule of Contributions (Retiree-only portion of the rate, for OPEB) Total SDB Retiree Portion of SDB Contribution Plan/Calendar Year Contribution Rate Rat e 2019 0.21% 0.01% 2018 0.20% 0.01%
Total OPEB Liability
The Pool’s Total OPEB Liability at September 30, 2020 was $810,915 as measured as of December 31, 2019 (date of the actuarial valuation). The Total OPEB Liability at September 30, 2019 was $668,120 (December 31, 2018 measurement date).
Actuarial Assumptions: The actuarial assumptions used in the December 31, 2019 valuation was based on the results of an actuarial experience study for the period December 31, 2014 to December 31, 2018, and the 2018 valuation was based on the results of an actuarial experience study for the period December 31, 2010 to December 31, 2014.
The Total OPEB Liability was determined using the following actuarial assumptions:
2019 Plan Valuation Methods and Assumptions Methods and Assumptions used to Determine Contribution Rates: Inflation 2.5% Salary Increases 3.50% to 11.5% including inflation Discount Rate 2.75% Retirees' share of benefit-related costs $0 Administrative Expenses All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. Mortality rates - service retirees 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on on a fully generational basis with scale UMP. Mortality rates - disabled retirees 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set-forward for males and a 3 year set-forward for females. In addition, a 3.5% and 3% mimimum mortality rate will be applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the floor.
59 2018 Plan Valuation Methods and Assumptions Methods and Assumptions used to Determine Contribution Rates: Inflation 2.5% Salary Increases 3.50% to 10.5% including inflation Discount Rate 3.71% Retirees' share of benefit-related costs $0 Administrative Expenses All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. Mortality rates - service retirees RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected on a fully generational basis with scale BB. Mortality rates - disabled retirees RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% with a 3 year set-forward for both males and females. The rates are projected on a fully generational basis with scale BB to account for future mortality improvements subject to the 3% floor.
Discount Rate The discount rate used to measure the Total OPEB Liability was 2.75% at December 31, 2019. The discount rate was based on the Fidelity Index’s “20-Year Municipal GO AA Index” rate as of December 31, 2019.
The following presents the Total OPEB Liability of the Pool, as well as what the Pool’s Total OPEB Liability would be if it were calculated using a discount rate that is 1percentage-point lower (1.75%) or 1 percentage-point higher (3.75%) than the current rate:
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate
1% Decrease in Current Discount 1% Increase in Discount Rat e (1.75%) Rat e (2.75%) Discount Rat e (3.75%) Total OPEB Liability$ 998,006 $ 810,915 $ 667,285
60 Changes in the Total OPEB Liability Schedule of Changes in Total OPEB Liability December 31 Measurement Date
Changes in the Total OPEB Liability 2019 2018 Total OPEB Liability - beginning of year $ 668,120 $ 652,046 Changes for the year: Service Cost 25,783 27,380 Interest on Total OPEB Liability 25,218 21,995 Changes in benefit terms - - Differences between expected and actual experience (47,505) 19,783 Changes in assumptions or other inputs 141,877 (50,595) Benefit payments (2,578) (2,489) Net Changes 142,795 16,074 Total OPEB Liability - end of year$ 810,915 $ 668,120
Covered Payroll $ 25,782,528 $ 24,890,637
Total OPEB Liability as a Percentage of Covered Payroll 3.15% 2.68%
OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the years ended September 30, 2020 and 2019, the Pool recognized OPEB expenses of $70,543 and $53,370, respectively, which were the same amounts reported by TMRS (calendar year basis).
Schedule of OPEB Expense At Decem ber 31 2019 2018 Service Cost$ 25,783 $ 27,380 Interest on Total OPEB Liability 25,218 21,995 Changes in benefit terms 0 0 Employer administrative costs 0 0 Recognition of deferred outflows/inflows of resources: Difference between expected and actual experience (4,696) 3,130 Changes in assumptions or other inputs 24,238 865 Total OPEB Expense$ 70,543 $ 53,370
61 At September 30, 2020, the Pool reported deferred outflows and inflows of resources related to the OPEB from the following sources:
Schedule of Deferred Outflows and Inflows - Current and Future Expenses 2019 Tot al Recognized (Inflows) or in current Deferred Outflows of OPEB (Inflows)/Outflows in Resources expense future expense Due to Liabilities
Prior Years Difference between expected and actual experience {actuarial (gains) or losses} $ 16,653 $ 3,130 $ 13,523
Change in assumptions {actuarial (gains) or losses} (4,267) 865 (5,132)
2019 Plan Year Difference between expected and actual experience {actuarial (gains) or losses} $ (47,505) $ (7,826) $ (39,679)
Change in assumptions {actuarial (gains) or losses} 141,877 23,373 118,504
Contributions made subsequent to measurement date 2,009 2,009 $ 108,767 $ 19,542 $ 89,225
At September 30, 2019, the Pool reported deferred outflows and inflows of resources related to the OPEB from the following sources:
Schedule of Deferred Outflows and Inflows - Current and Future Expenses 2018
Tot al Recognized (Inflows) or in current Deferred Outflows of OPEB (Inflows)/Outflows in Resources expense future expense Due to Liabilities
Prior Years Difference between expected and actual experience {actuarial (gains) or losses} $ - $ - $ -
Change in assumptions {actuarial (gains) or losses} 47,193 8,871 38,322
2018 Plan Year Difference between expected and actual experience {actuarial (gains) or losses} $ 19,783 $ 3,130 $ 16,653
Change in assumptions {actuarial (gains) or losses} (50,595) (8,006) (42,589)
Contributions made subsequent to measurement date 1,926 1,926 $ 18,307 $ 3,995 $ 14,312
62 The schedule below reflects the deferred outflows and inflows of resources at September 30, 2020 that will be amortized in future pension expense.
Schedule of Outflows and Inflows - Future OPEB Expenses Net Deferred Outflows/(Inflows) of Year Resources* 2020 $ 19,542 2021 19,542 2022 19,542 2023 13,509 2024 13,991 Thereafter 1,090 Total $ 87,216 *Excludes contributions of $2,009 remitted to TMRS subsequent to the December 31, 2019 measurement date.
NOTE 12 - CONTINGENCIES
In the normal course of operations, the Pool is involved in litigation related to certain claims. In the opinion of management, the disposition of these matters will not have a materially adverse effect on the Pool’s financial position.
63 NOTE 13 – RECONCILIATION OF CLAIM RESERVES BY CONTRACT TYPE
64 REQUIRED SUPPLEMENTARY INFORMATION
September 30, 2020
TEN-YEAR CLAIMS DEVELOPMENT INFORMATION
The following tables illustrate how earned revenue (net of reinsurance) and investment income compare to related cost of loss (net of reinsurance) and other expenses as of the end of each of the last ten years. The rows of the table are defined as follows:
(1) This line shows the total of each fiscal year’s gross earned contributions and investment revenue, contributions placed with reinsurers, and net earned contributions and reported investment revenue.
(2) This line shows each fiscal year’s other operating costs, including overhead and claims’ expense that cannot be allocated to individual claims.
(3) This line shows the gross incurred claims and allocated claim adjustment expenses, claims assumed by reinsurers, and net incurred claims and allocated claim adjustment expenses (both paid and accrued) as originally reported at the end of the first year in which the event that triggered coverage under the contract occurred (called fund year).
(4) This section of 10 rows shows the cumulative net amounts paid as of the end of successive years for each fund year.
(5) This line shows the latest re-estimated amount of claims assumed by reinsurers as of the end of the current year for each accident year.
(6) This section of 10 rows shows how each fund year’s net incurred claims increased or decreased as of known claims, re-evaluation of existing information on known claims, as well as emergence of new claims not previously known.
(7) This line compares the latest re-estimated incurred claims amount to the amount originally established (line 3) and shows whether this latest estimate of claims cost is greater or less than originally thought.
As data for individual fund years mature, the correlation between original estimates and re- estimated amounts is commonly used to evaluate the accuracy of incurred claims currently recognized.
65
WORKERS' COMPENSATION
Fiscal and Fund Year Ended September 30 (In Thousands of Dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 Contribution and Investment revenues: Earned$ 67,992 $ 62,110 $ 49,607 $ 66,569 $ 69,660 $ 74,831 $ 68,263 $ 66,358 $ 92,294 $ 85,275 Assumed by reinsurers* 2,598 1,778 1,964 1,653 1,858 1,938 2,028 2,104 2,165 2,523 Net 65,394 60,332 47,643 64,916 67,802 72,893 66,235 64,254 90,129 82,752
2 Unallocated expenses 19,902 20,559 21,625 19,325 20,239 20,612 20,434 20,844 22,448 23,069
3 Estimated incurred claims and allocated expenses, end of fund year: Incurred 51,054 50,659 50,879 56,755 47,907 51,719 49,956 43,158 47,460 60,727 Assumed by reinsurers 42 5 238 11 11 11 16 36 42 1,220 Net incurred 51,012 50,654 50,641 56,744 47,896 51,708 49,940 43,122 47,418 59,507
4 Paid (cumulative) as of: End of fund year 19,781 18,476 20,075 20,811 17,705 17,379 18,145 16,721 18,728 19,728 One year later 32,363 30,781 29,849 34,882 31,669 29,999 31,038 28,719 32,867 Two years later 35,169 32,847 33,043 39,701 34,884 32,999 34,318 31,366 Three years later 35,692 33,412 34,858 40,915 35,901 34,296 35,308 Four years later 36,266 34,041 36,304 41,471 36,411 34,898 Five years later 36,656 34,277 37,207 42,213 36,727 Six years later 36,937 34,740 38,024 42,763 Seven years later 37,144 35,020 38,890 Eight years later 37,317 35,271 Nine years later 37,426
5 Re-estimated claims and expenses assumed by reinsurers:001,725006440001,220
6 Re-estimated incurred claims and allocated expenses: End of fund year 51,012 50,654 50,641 56,744 47,896 51,708 49,940 43,122 47,418 59,507 One year later 49,474 47,134 53,460 56,860 48,141 49,599 46,971 43,689 49,349 Two years later 45,072 43,760 50,556 54,268 45,689 46,451 44,700 42,660 Three years later 43,816 42,468 47,295 53,588 44,805 46,608 46,406 Four years later 43,040 41,529 46,970 54,033 45,069 48,552 Five years later 42,082 41,940 49,222 54,264 46,206 Six years later 41,763 41,196 49,149 56,515 Seven years later 41,689 40,372 52,377 Eight years later 41,629 41,240 Nine years later 42,222
7 (Decrease) increase in estimated incurred claims and expense from end of fund year: (8,790) (9,414) 1,736 (229) (1,690) (3,156) (3,534) (462) 1,931 0
Prior to fiscal year ending September 30, 2013, line 4 includes payments to Lifetime Benefits and line 6 reflects discounts taken on claims transferred to Lifetime Benefits (see Note 1).
*Including Reinsurance Fund, Large Loss Fund and Outside Reinsurers.
66 LIABILITY
Fiscal and Fund Year Ended September 30 (In Thousands of Dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 Contribution and Investment revenues: Earned$ 52,207 $ 49,640 $ 40,022 $ 54,224 $ 55,056 $ 54,640 $ 48,383 $ 48,272 $ 67,190 $ 60,954 Assumed by reinsurers* 892 786 807 1,014 946 933 1,120 1,162 1,134 1,187 Net 51,315 48,854 39,215 53,210 54,110 53,707 47,263 47,110 66,056 59,767
2 Unallocated expenses 14,631 13,559 10,620 9,182 9,635 9,277 10,264 10,534 11,024 10,910
3 Estimated incurred claims and allocated expenses, end of fund year: Incurred 29,284 31,810 35,503 35,487 35,357 36,718 39,389 41,303 42,786 43,819 Assumed by reinsurers 21 12 5 2 0 0 0 0 0 0 Net incurred 29,263 31,798 35,498 35,485 35,357 36,718 39,389 41,303 42,786 43,819
4 Paid (cumulative) as of: End of fund year 4,222 4,303 4,155 4,876 4,732 4,821 4,297 5,391 6,099 6,003 One year later 10,825 12,496 12,059 13,184 13,844 12,189 12,683 14,281 16,061 Two years later 18,686 21,494 22,051 23,035 23,180 24,510 22,842 24,226 Three years later 26,898 27,711 30,531 30,369 30,874 31,400 30,431 Four years later 29,482 31,051 33,682 35,818 35,311 34,561 Five years later 30,760 31,769 35,026 37,397 37,601 Six years later 31,323 32,219 35,584 38,095 Seven years later 31,811 32,415 35,922 Eight years later 32,142 32,522 Nine years later 32,389
5 Re-estimated claims and expenses assumed by reinsurers:00000 00000
6 Re-estimated incurred claims and allocated expenses: End of fund year 29,263 31,798 35,498 35,485 35,357 36,718 39,389 41,303 42,786 43,819 One year later 32,304 35,306 37,869 38,767 39,341 39,394 39,790 42,195 46,751 Two years later 32,796 34,014 37,832 39,401 39,470 39,045 39,323 43,417 Three years later 32,885 34,341 37,329 38,728 40,667 39,790 41,257 Four years later 32,441 33,056 36,620 38,744 42,382 38,071 Five years later 32,203 32,794 36,720 38,978 42,123 Six years later 32,199 32,924 36,780 39,153 Seven years later 33,046 33,043 36,548 Eight years later 32,964 32,944 Nine years later 34,606
7 (Decrease) increase in estimated incurred claims and expense from end of fund year: 5,343 1,146 1,050 3,668 6,766 1,353 1,868 2,114 3,965 0
*Including Reinsurance Fund, Large Loss Fund and Outside Reinsurers.
67 PROPERTY
Fiscal and Fund Year Ended September 30 (In Thousands of Dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 Contribution and Investment revenues: Earned$ 46,672 $ 49,539 $ 48,290 $ 55,573 57,607$ 60,063$ 64,611$ 71,921$ 89,414$ $ 95,989 Assumed by reinsurers* 10,087 11,507 11,947 10,666 9,525 9,214 13,238 16,751 19,772 21,133 Net 36,585 38,032 36,343 44,907 48,082 50,849 51,373 55,170 69,642 74,855
2 Unallocated expenses 2,455 3,437 6,329 9,278 9,607 10,034 9,170 9,781 9,418 8,488
3 Estimated incurred claims and allocated expenses, end of fund year: Incurred 29,538 30,800 29,082 37,537 47,339 64,714 96,491 41,127 58,328 62,751 Assumed by reinsurers 5 380 212 4,225 10,312 22,280 55,755 753 259 3,441 Net incurred 29,533 30,420 28,870 33,312 37,027 42,434 40,736 40,374 58,069 59,309
4 Paid (cumulative) as of: End of fund year 20,066 21,542 17,317 24,073 25,726 34,693 28,901 27,603 32,116 35,395 One year later 27,200 27,854 27,819 31,134 34,243 40,763 37,868 36,569 48,546 Two years later 28,995 30,562 29,316 32,193 34,885 41,152 38,012 37,081 Three years later 29,513 31,083 29,512 33,362 34,920 41,644 38,132 Four years later 29,875 31,180 29,648 33,306 35,039 41,294 Five years later 29,781 31,713 29,814 33,241 35,018 Six years later 29,773 31,930 29,795 33,239 Seven years later 29,764 32,907 29,744 Eight years later 29,759 32,907 Nine years later 29,756
5 Re-estimated claims and expenses assumed by reinsurers: 661 234 4,454 20,674 11,026 21,039 109,619 1,252 305 3,441
x 6 Re-estimated incurred claims and allocated expenses: End of fund year 29,533 30,420 28,870 33,312 37,027 42,434 40,736 40,374 58,069 59,309 One year later 30,857 30,912 30,747 34,306 37,197 41,385 39,010 39,858 55,651 Two years later 29,629 31,307 29,939 33,876 35,441 41,959 38,490 36,947 Three years later 29,722 31,942 29,566 33,636 35,342 40,736 38,209 Four years later 29,924 31,870 29,673 33,308 35,268 41,153 Five years later 29,792 32,450 29,901 33,449 35,206 Six years later 29,831 32,466 29,971 33,424 Seven years later 29,764 32,971 29,973 Eight years later 29,799 32,934 Nine years later 29,756
7 (Decrease) increase in estimated incurred claims and expense from end of fund year: 223 2,514 1,103 112 (1,821) (1,281) (2,527) (3,427) (2,418) 0
*Including Reinsurance Fund, Large Loss Fund and Outside Reinsurers.
68 COASTAL STORM
Fiscal and Fund Year Ended September 30 (In Thousands of Dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 Contribution and Investment revenues: Earned $1,092 $1,359 $898 $1,449 $1,146 $1,134 $452 $125 $1,268 $955 Assumed by reinsurers1115151611107444 Net 1,081 1,344 883 1,433 1,135 1,124 445 121 1,264 951
2 Unallocated Expenses 20 10 17 120 129 133 133 137 127 139
3 Expenses incurred claims and allocated expenses, end of fund year: Incurred 0 0 0 0 0 2 15 0 5 0 Assumed by reinsurers0000000000 Net incurred 00000215050
4 Paid (cumulative) as of: End of fund year 0000020000 One year later 000005000 Two years later 000001400 Three years later 00000140 Four years later 0000014 Five years later 00000 Six years later 0000 Seven years later 000 Eight years later 0 0 Nine years later
5 Re-estimated incurred claims and expenses assumed by reinsurers:0000000000
6 Re-estimated incurred claims and allocated expenses: End of fund year 00000215050 One year later 000009000 Two years later 000001400 Three years later 00000140 Four years later 0000014 Five years later 00000 Six years later 0000 Seven years later 000 Eight years later 0 0 Nine years later
7 Increase in estimated incurred claims and expense from end of fund year: 0 0 0 0 0 12 (15) 0 (5) 0
69
REINSURANCE
Fiscal and Fund Year Ended September 30 (In Thousands of Dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
1 Contribution and Investment revenues: Earned $11,500 $10,343 $2,269 $11,254 $10,757 $10,827 $6,052 $8,424 $20,633 $17,079 Assumed by reinsurers0000000000 Net 11,500 10,343 2,269 11,254 10,757 10,827 6,052 8,424 20,633 17,079
2 Unallocated Expenses 96 105 110 1,017 1,086 1,107 1,097 1,114 1,168 1,222
3 Expenses incurred claims and allocated expenses, end of fund year: Incurred 80 147 450 4,225 9,462 22,417 31,455 3,434 259 4,679 Assumed by reinsurers0000000000 Net incurred 80 147 450 4,225 9,462 22,417 31,455 3,434 259 4,679
4 Paid (cumulative) as of: End of fund year 5 0 105 0 0 3,351 2,202 5 259 41 One year later 5 0 195 1,830 4,442 14,462 25,444 119 305 Two years later 5 0 556 7,092 8,567 16,722 33,539 1,244 Three years later 5 0 924 7,850 10,438 18,944 34,444 Four years later 169 14 2,904 8,012 11,026 20,629 Five years later 169 59 3,827 11,676 11,026 Six years later 169 59 3,837 11,713 Seven years later 169 59 4,434 Eight years later 169 59 Nine years later 169
5 Re-estimated incurred claims and expenses assumed by reinsurers:0000000000
6 Re-estimated incurred claims and allocated expenses: End of fund year 80 147 450 4,225 9,462 22,417 31,455 3,434 259 4,679 One year later 23 51 1,159 3,466 10,909 28,183 45,342 2,770 305 Two years later 9 188 1,942 12,350 11,066 24,675 44,667 1,252 Three years later 10 112 3,739 12,622 12,047 24,400 37,815 Four years later 180 113 3,921 12,486 11,534 21,737 Five years later 174 92 5,021 12,272 11,026 Six years later 174 64 4,934 11,713 Seven years later 174 64 5,412 Eight years later 174 59 Nine years later 169
7 (Decrease) increase in estimated incurred claims and expense from end of fund year: 89 (88) 4,962 7,488 1,564 (680) 6,360 (2,182) 46 0
70 REQUIRED SUPPLEMENTARY INFORMATION
September 30, 2020
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS
The schedule below shows the changes in Total Pension Liability less the changes in Fiduciary Net Pension, resulting in the Net Pension (Asset) Liability calculation for the Pool.
Schedule of Changes in Net Pension Liability and Related Ratios December 31 Measurement Date
A. Total pension liability 2014 2015 2016 2017 2018 2019 1. Service Cost $3,462,948 $ 3,729,750 $ 4,043,502 $ 4,173,329 $ 4,263,766 $ 4,416,547 2. Interest (on the Total Pension Liability) 7,091,398 7,854,694 8,316,616 9,012,508 9,726,192 10,428,055 3. Changes of benefit terms - 2,029,099 - -- - 4. Difference between expected and actual experience 177,106 810,546 629,506 296,152 (170,223) (325,032) 5. Changes of assumptions - 820,427 - -- 725,618 6. Benefit payments, including refunds of employee contributions (1,961,917) (2,017,510) (2,728,666) (2,761,390) (3,146,837) (3,849,456) 7. Net change in total pension liability 8,769,535 13,227,006 10,260,958 10,720,599 10,672,898 11,395,732 8. Total pension liability - beginning 100,555,164 109,324,699 122,551,705 132,812,663 143,533,262 154,206,160 9. Total pension liability - ending$ 109,324,699 $ 122,551,705 $ 132,812,663 $ 143,533,262 $ 154,206,160 $ 165,601,892
B. Plan fiduciary net position 1. Contributions - employer$ 8,865,171 $ 2,938,215 $ 2,407,378 $ 2,754,077 $ 2,838,949 $ 2,684,959 2. Contributions - employee 1,532,174 1,579,447 1,636,942 1,692,619 1,742,345 1,804,777 3. Net investment income 5,700,478 167,819 7,863,036 17,900,740 (4,453,479) 22,507,456 4. Benefit payments, including refunds of employee contributions (1,961,917) (2,017,510) (2,728,666) (2,761,390) (3,146,837) (3,849,456) 5. Administrative Expenses (59,507) (102,194) (88,740) (92,692) (85,993) (127,040) 6. Other (4,892) (5,055) (4,781) (4,698) (4,493) (3,816) 7. Net change in plan fiduciary net position 14,071,507 2,560,722 9,085,169 19,488,656 (3,109,508) 23,016,880 7a. Contribution - employer accrual to fund UAAL* 3,700,000 8. Plan fiduciary net position - beginning 99,632,903 113,704,410 119,965,132 129,050,301 148,538,957 145,429,448 9. Plan fiduciary net position - ending$ 113,704,410 $ 119,965,132 $ 129,050,301 $ 148,538,957 $ 145,429,449 $ 168,446,328 C. Net pension (asset) liability [A.9 - B.9] $(4,379,711) $ 2,586,573 $ 3,762,362 $ (5,005,695) $ 8,776,711 $ (2,844,436)
D. Plan fiduciary net position as a % of the total pension liability [B.9 / A.9] 104.01% 97.89% 97.17% 103.49% 94.31% 101.72%
E. Covered-employee payroll $21,888,198 $ 22,563,522 $ 23,171,933 $ 24,179,194 $ 24,890,637 $ 25,782,528
F. Net pension (asset) liability as a % of covered employee payroll [C / E] -20.01% 11.46% 16.24% -20.70% 35.26% -11.03% * Reflects accrual to fund at 9/30/16, with payment at or before December 31, 2016, the December 31, 2015 Plan Valuation's Unfunded Actuarial Accrued Liability (UAAL).
71
REQUIRED SUPPLEMENTARY INFORMATION
September 30, 2020
SCHEDULE OF EMPLOYER PENSION CONTRIBUTIONS
The schedule below shows the Pool’s required annual contributions from the actuarial valuation, compared with the actual contributions remitted. The schedule is based on the Pool’s respective fiscal year-end, not the valuation/measurement date.
The Actuarially Determined Contribution (ADC) dollar amount is calculated by multiplying the Pool’s Full Retirement Rate (excluding portion of rate for Supplemental Death Benefits Fund) by the applicable payroll amount. The Pool contributes to the TMRS Plan at the actuarially determined Full Retirement Rate. The difference between the ADC and Pool contributions equals the contribution deficiency/excess.
2015 2016 2017 2018 2019 2020 Actuarially Determined Contribution$ 2,904,530 $ 2,153,514 $ 2,742,274 $ 2,622,539 $ 2,586,137 $ 2,709,744 Contributions in relation to the actuarially determined contribution$ 2,908,414 $ 2,535,600 $ 2,679,841 $ 2,818,177 $ 2,711,241 $ 2,800,443 Contribution deficiency (excess)$ (3,884) $ (382,086) $ 62,433 $ (195,638) $ (125,104) $ (90,699) Covered employee payroll$ 22,308,219 $ 23,007,631 $ 24,097,309 $ 24,764,299 $ 24,890,637 $ 25,782,528 Contributions as a percentage of covered employee payroll 13.04% 11.02% 11.12% 11.38% 10.89% 10.86%
Actuarially Determined Contribution Rate 13.02% 9.36% 11.38% 10.59% 10.39% 10.51%
Notes to Schedule Methods and assumptions used to determine the contribution rates for the 12/31/19 valuation date can be found at Note 10.
72 REQUIRED SUPPLEMENTARY INFORMATION
September 30, 2020
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS
The schedule below shows the changes in the Net OPEB Liability.
Schedule of Changes in Total OPEB Liability December 31 Measurement Date
Changes in the Total OPEB Liability 2017 2018 2019 Total OPEB Liability - beginning of year $ 555,284 $ 652,046 $ 668,120 Changes for the year: Service Cost 21,761 27,380 25,783 Interest on Total OPEB Liability 21,355 21,995 25,218 Changes in benefit terms - - - Differences between expected and actual experience - 19,783 (47,505) Changes in assumptions or other inputs 56,064 (50,595) 141,877 Benefit payments (2,418) (2,489) (2,578) Net Changes 96,762 16,074 142,795 Total OPEB Liability - end of year$ 652,046 $ 668,120 $ 810,915
Covered Payroll $ 24,179,194 $ 24,890,637 $ 25,782,528
Total OPEB Liability as a Percentage of Covered Payroll 2.70% 2.68% 3.15%
73 REQUIRED SUPPLEMENTARY INFORMATION
September 30, 2020
SCHEDULE OF EMPLOYER OPEB CONTRIBUTIONS
The schedule below shows the Pool’s required annual contributions from the actuarial valuation, compared with the actual contributions remitted. The schedule is based on the Pool’s respective fiscal year-end, not the valuation/measurement date.
The Actuarially Determined Contribution (ADC) dollar amount is calculated by multiplying the Pool’s Supplemental Death Benefits Fund rate by the applicable payroll amount. The Pool contributes to the TMRS Plan at the actuarially determined Supplemental Rate. The difference between the ADC and Pool contributions equals the contribution deficiency/excess.
Schedule of Contributions (fiscal year end)
2018 2019 2020 Actuarially Determined Contribution$ 48,358 $ 52,270 $ 54,143 Contributions in relation to the actuarially$ 52,005 $ 52,842 $ 55,897 determined contribution Contribution deficiency (excess)$ (3,647) $ (572) $ (1,754) Covered employee payroll$ 24,179,194 $ 24,890,637 25,782,528 Contributions as a percentage of covered employee payroll 0.22% 0.21% 0.22%
Actuarially Determined Contribution Rate 0.20% 0.21% 0.21%
Notes to Schedule Methods and assumptions used to determine the contribution rates for the 12/31/19 valuation date can be found at Note 11.
74 TML INTERGOVERNMENTAL RISK POOL
Members
Board of Trustees
General Counsel
Executive Director 75
Chief Chief Associate Director Director of Assistant Assistant Financial & Information Legal Services Director Director Officer & Chief Employment Officer Investment Counsel Officer Member Services OfficeOfficeOffice ofof LiabilityLiability Human Workers' Information ProjectProjectProject Finance & Legal Resources Compensation Technology ManagementManagementManagementt Loss PropertyProperty && AnalyticsAnAnalyticsala yty iccs Prevention
Subrogation Underwriting Communications
POOL MEMBERSHIP AS OF OCTOBER 1, 2020
76 0HPEHU 0HPEHU 0HPEHU Abbott Angelina County/City Health District Austin - Neighborhood Partnering Program Abernathy Angleton Austin - Rosewood Community Development Abilene Angleton Drainage District Austin CAD Abilene City of/Transit Mgmt of Abilene Angus Austin County ESD #2 Abilene Housing Authority Anna Austin County ESD #3 Ables Springs SUD Annetta Austin Housing Authority Ackerly Annetta North Austwell Addison Town of Annetta South Avery Adrian Annona Avery Housing Authority Agua Dulce Anson Avinger Airline Improvement District Anson Housing Authority Avinger Housing Authority Alamo Anthony Housing Authority Azle Alamo Area COG Anthony Town of Bacliff MUD Alamo Heights Anton Bailey Alamo Housing Authority Appleby Bailey Central Appraisal District Alamo Regional Mobility Authority Aquilla Water Supply District Bailey's Prairie Village of Alamo SWCD #330 Aransas CAD Baird Alba Aransas County Navigation District #1 Baird Housing Authority Alba Housing Authority Aransas Pass Balch Springs Albany Aransas Pass Housing Authority Balcones Heights Aledo Archer CAD Balcones Heights Crime CPD Alice Archer City Ballinger Alice Housing Authority Archer City Housing Authority Ballinger Housing Authority Allen Arcola Balmorhea Alliance Regional Water Authority Argyle Balmorhea Housing Authority Alma Ark-Tex COG Bandera Alpine Arlington Entertainment AMD Bandera County Central Appraisal Dist Alpine Housing Authority Arlington Housing Authority Bandera County FWSD #1 Altessa MUD Arp Bandera County River Authority & GWD Alto Asherton Bandera SWCD Alto Housing Authority Aspermont Bangs Alton Aspermont Housing Authority Bangs Housing Authority Alvarado Atascocita Joint Operations Board Bardwell Alvin Atascosa Central Appraisal District Barry City of Alvord Athens Municipal Water Auth Barstow Ames Atlanta Bartlett Amherst Atlanta Property Management Bartlett Housing Authority Anahuac Aubrey Barton Springs/Edwards Aquifer Anderson Aud's Creek Watershed Improvement Dist Bartonville Anderson CAD Aurora Bastrop Anderson County Housing Authority Austin - 505 Barton Springs Road Bastrop Central Appraisal District Anderson Mill Limited District Austin - City Hall Bastrop County ESD #1 Andrews Austin - Convention Center Bastrop County MUD #1 Andrews CAD Austin - Economic & Redevelopment Svcs Bastrop County SWCD #340 Angelina County WCID #4 Austin - Housing Finance Bastrop County WCID #2
77 0HPEHU 0HPEHU 0HPEHU Bastrop County WCID #3 Benbrook Water Authority Bonney Village of Bastrop Housing Authority Benjamin Booker Bay City Berry Creek Highlands MUD Booker-Booker Housing Foundation Bay City Gas Co/City of Bay City Berryville Borger Bay City Housing Authority Bertram Borger Housing Authority Baylor CAD Bethany SUD Bosque County Central Appraisal District Bayou Vista Beverly Hills Bovina Bayside Town of Bevil Oaks Bovina Housing Authority Baytown Bexar Appraisal District Bowie Baytown Housing Authority Bexar County ESD #11 Bowie County ESD #1 Bayview Irrigation District #11 Bexar County Housing Authority Bowie County ESD #2 Bayview MUD Bexar County WCID #10 Bowie County ESD #6 Bayview Town of Bexar Metro 911 District Bowie County Housing Authority Beach City Bexar-Medina-Atascosa Counties WCID #1 Bowie County SWCD Bear Creek Village of Big Bend SWCD #227 Boyd Beasley Big Lake Brackettville Beaumont Housing Authority Big Oaks MUD Brackettville Housing Authority Becker-Jiba SUD Big Sandy Brady Beckville Big Sandy Housing Authority Brady Housing Authority Beckville Housing Authority Big Spring Brazoria Bedford Big Spring Housing Authority Brazoria CAD Bedias Big Wells Brazoria County Cons/Recl Dist #3 Bee CAD Bishop Brazoria County Drainage District #5 Bee Cave Bishop Hills Village of Brazoria County FWSD #1 Bee Development Authority Bistone MWSD Brazoria County FWSD #2 Bee GCD Blackwell Brazoria County MUD #23 Beeville Blanco Brazoria County MUD #24 Beeville Housing Authority Blanco Co North Lib Dist/Johnson City Brazoria County MUD #25 Beeville Water Supply District Blanco County South Library Dist/Blanco Brazoria County MUD #35 Bell CAD Blanco-Pedernales GCD Brazoria County MUD #44 Bell County MUD #1 Blanket Brazoria County MUD #61 Bell County MUD #2 Block House MUD Brazoria County MUD #66 Bell County Public Health District Bloomburg Brazoria-Fort Bend County MUD #1 Bell County WCID #2 Blooming Grove Brazos Central Appraisal District Bellaire Blooming Grove Housing Authority Brazos Country Bellevue Blossom Brazos County Emergency 911 Bellmead Blossom Prairie Housing Authority Brazos County ESD #1 Bells Blue Mound Brazos Regional Public Utility Agency Bellville Housing Authority Blue Ridge Brazos River Authority Belton Blum Brazos Transit District Belton Housing Authority Boerne Brazos Valley COG Belvedere MUD Bogata Brazos Valley GCD Benavides Bogata Housing Authority Brazos Valley Solid Waste Mgmt Agency Benbrook Bois D'arc MUD Brazos Valley SWCD #557 Benbrook Public Library District Bonham Breckenridge
78 0HPEHU 0HPEHU 0HPEHU Breckenridge Housing Authority Buffalo Gap Cameron Appraisal District Bremond Buffalo Housing Authority Cameron County DD #4 Bremond Housing Authority Buffalo Springs Cameron County ECD Brenham Bullard Cameron County Housing Authority Brenham Housing Authority Bulverde Cameron County Regional Mobility Auth Brewster CAD Bulverde Area Rural Library District Cameron Housing Authority Brewster Co Groundwater Cons District Bunker Hill Village Camfield MUD Briarcliff Village of Burkburnett Camino Real Regional Mobility Authority Briaroaks Burkburnett Housing Authority Camp Central Appraisal District Bridge City Burke Camp Wood Bridgeport Burleson Campbell Bridgeport Housing Authority Burleson CAD Canadian Bright Star-Salem SUD Burleson County MUD #1 Caney City Briscoe CAD Burnet Caney Creek MUD Broaddus Burnet Central Appraisal District Canton Brock Burnet County ESD #1 Canyon Bronte Burnet Housing Authority Canyon Falls MUD #1 Bronte Housing Authority Burney Road MUD Canyon Falls WCID #2 Brookesmith SUD Burton Canyon Housing Authority Brookshire Byers Canyon Lake Comm Library District Brookshire Municipal Water District Bynum Canyon Regional Water Authority Brookside Village Cactus Cape Royale Utility District Brownfield Caddo Basin SUD Capital Area COG Brownfield Housing Authority Caddo Mills Capital Area Metropolitan Planning Org Brownsboro Caddo Mills Housing Authority Capital Area Rural Transportation System Brownsville Caldwell Capital Metro Transportation Authority Brownsville Housing Authority Caldwell CAD Caprock Hospital Dist & Floydada EMS Brownsville Metro Caldwell County MUD #1 Carbon Brownsville Navigation District Caldwell Housing Authority Carmine Brownsville Public Utilities Board Caldwell Valley MUD #1 Carrizo Springs Brownwood Caldwell-Travis SWCD #304 Carrizo Springs Housing Authority Brownwood Housing Authority Calhoun CAD Carrollton Bruceville-Eddy Calhoun County DD #11 Carson CAD Brush Country GCD Calhoun County E911 ECD Carthage Brushy Creek MUD Calhoun County GCD Cash SUD Brushy Creek Reg Wastewater Treatment Calhoun County MUD #1 Cashion Community Brushy Creek Regional Utility Authority Calhoun County WCID #1 Cass CAD Bryan Calhoun Port Authority Cass County ESD #1 Bryan Housing Authority Callahan CAD Castle Hills Bryson Callahan County Nutrition Project Castlewood MUD Bryson Housing Authority Callahan Divide SWCD #552 Castro CAD Buckholts Callisburg Castroville Buda Calvert Cedar Bayou Park Utility District Buena Vista-Bethel SUD Calvert Housing Authority Cedar Hill Buffalo Cameron Cedar Park
79 0HPEHU 0HPEHU 0HPEHU Celeste Cisco Housing Authority Colorado City Celina City Park Redevelopment Auth TIRZ #12 Colorado City Housing Authority Center Clarendon Colorado County CAD Center Housing Authority Clarendon Housing Authority Colorado County WCID #2 Centerville Clarksville Colorado Valley Transit District Centerville Housing Authority Clarksville City Columbus Central Harris County Region Water Auth Clarksville Housing Authority Comal CAD Central Texas COG Claude Comal Co Water Oriented Recreation Dist Central Texas GCD Clay CAD Comal County ESD #7 Central Texas Housing Consortium Clear Brook City MUD Comal County WCID #6 Central Texas Regional Mobility Auth Clear Creek Watershed Authority Comal Trinity GCD Central Texas Rural Transit District Clear Fork GCD Comanche Central WCID Clear Lake City Water Authority Comanche Central Appraisal District Chalk Hill SUD Clear Lake Shores Comanche Housing Authority Chambers CAD Clearwater Ranch MUD #1 Combes Chandler Clearwater UWCD Combine Channing Cleburne Combined Consumers SUD Charlotte Cleveland Commerce Chateau Woods MUD Cleveland Housing Authority Commerce Housing Authority Cherokee CAD Clifton Commodore Cove Improvement District Chico Clifton Housing Authority Como Childress Clint Town of Como Housing Authority Childress CAD CLL MUD #1 Concho CAD Childress County Hospital District Clute Concho SWCD #201 Childress Housing Authority Clyde Concho Valley COG Chillicothe CNP Utility District Concho Valley Transit District China Coahoma Conroe China Grove City of Coastal Bend COG Conroe MUD #1 Chireno Coastal Plains Community MHMR Center Cooke CAD Chisholm Trail SUD Cochran Central Appraisal District Cool Water MUD Christine Cockrell Hill Coolidge Cibolo Coffee City Coolidge Housing Authority Cibolo Creek Municipal Authority Coke County SWCD #219 Cooper Cinco MUD #1 Coke County UWCD Cooper Housing Authority Cinco MUD #12 Coldspring Coppell Cinco MUD #3 Coleman Copper Canyon Cinco MUD #6 Coleman County SUD Copperas Cove Cinco MUD #7 Coleman Housing Authority Copperas Cove Housing Authority Cinco MUD #8 College Mound SUD Corinth Cinco MUD #9 Colleyville Corinthian Point MUD #2 Cinco Southwest MUD #1 Collin Co Central Appraisal District Corpus Christi Cinco Southwest MUD #2 Collin County MUD #1 Corpus Christi Downtown Management Dist Cinco Southwest MUD #3 Collin County SWCD Corpus Christi Gas Utility Department Cinco Southwest MUD #4 Collinsville Corpus Christi Housing Authority Cisco Colmesneil Corrigan
80 0HPEHU 0HPEHU 0HPEHU Corrigan Housing Authority Cuero DeKalb Housing Authority Corsicana Cuero Community Hospital Del Rio Corsicana Housing Authority Cuero Housing Authority Del Rio Housing Authority Coryell CAD Culberson CAD Dell City Coryell City Water Supply District Culberson County GCD Delta CAD Cotton Center MUD #1 Cumby Delta County MUD Cotton Center MUD #2 Cumby Housing Authority Delta County SWCD Cottonwood Cuney Denco Area 911 District Cottonwood Creek MUD #1 Cut and Shoot Denison Cottonwood Creek WCID #3 Cypress Forest PUD Denison Housing Authority Cottonwood Shores Cypress Hill MUD #1 Dennis Cotulla Cypress Ranch WCID #1 Denton Central Appraisal District Cotulla Housing Authority Cypress Springs SUD Denton County FWSD #10 County Line SUD Cypress Waters Municipal Management Dist Denton County FWSD #4A Coupland Cypress-Klein Utility District Denton County FWSD #6 Cove Daingerfield Denton County FWSD #7 Covington Daingerfield Housing Authority Denton County Reclamation & Road Dist Cow Creek GCD Daisetta Denton County Transportation Authority Crandall Dalhart Denton Housing Authority Crane Dallam CAD Denver City Crane CAD Dallas Denver City Housing Authority Cranfills Gap Dallas Area Rapid Transit (DART) Deport Crawford Dallas CAD Deport Housing Authority Creedmoor Dallas County Flood Control Dist #1 DeSoto Cresson Dallas Housing Authority Detroit Crockett Dalworth SWCD #519 Detroit Housing Authority Crockett County GCD Dalworthington Gardens Devers Crockett County SWCD Danbury Devil's River SWCD #224 Crockett County WCID #1 Darrouzett Devine Crockett Housing Authority Darrouzett Hospital District Devine Housing Authority Crosby Central Appraisal District Dawson DeWitt CAD Crosby MUD Dawson County Central Appraisal District DFW International Airport Crosbyton Dawson Housing Authority Diboll Crosbyton Housing Authority Dayton Diboll Housing Authority Cross Plains Dayton Housing Authority Dickens Cross Plains Housing Authority Dayton Lakes Dickinson Cross Roads De Leon Dickinson Management District #1 Cross Roads SUD De Leon Housing Authority Dilley Cross Timber Deaf Smith CAD Dilley Housing Authority Cross Timbers SWCD #556 Decatur Dimmit CAD Crowell Decatur Housing Authority Dimmitt Crowell Housing Authority DeCordova DISH Town of Crowley Deep East Texas COG Dodd City Crystal City Deer Park Dodson Crystal City Housing Authority DeKalb Domino
81 0HPEHU 0HPEHU 0HPEHU Donley County Hospital District Ector Elsa Donna Ector County Emergency Comm District Elsa Housing Authority Donna Housing Authority Edcouch Emerald Bay MUD Dorchester Edcouch Housing Authority Emhouse Double Horn Eden Emory Double Oak Town of Eden Housing Authority Enchanted Oaks Douglassville Edgecliff Village Town of Encinal Draper Edgewood Engelman Irrigation District Driftwood Economic Development Mgmt Dist Edgewood Housing Authority Ennis Dripping Springs Edinburg Ennis Housing Authority Dripping Springs Community Library Dist Edinburg Housing Authority Erath CAD Driscoll Edmonson Escobares Dublin Edna Escondido Creek Watershed District Dublin Housing Authority Edna Housing Authority Estelline Dumas Edom Euless Duncanville Edwards Aquifer Authority Eureka Duval CAD Edwards Central Appraisal District Eustace Duval County Cons/Recl District Edwards Plateau SWCD Evadale WCID #1 Duval County ESD #1 El Campo Evant Duval County GCD El Campo Housing Authority Everman Duval County Housing Authority El Cenizo Fair Oaks Ranch Eagle Lake El Lago Fairchilds Village of Eagle Pass El Paso Fairfield Eagle Pass Housing Authority El Paso Central Appraisal District Fairview Eagle Pass Waterworks El Paso County 911 District Falfurrias Early El Paso County Housing Authority Falfurrias Housing Authority Earth El Paso County Tornillo WID Falfurrias Housing Authority (FmHA) East Aldine Management District El Paso County WCID #4 Falls CAD East Bernard El Paso Downtown Management District Falls City East Cedar Creek FWSD El Paso Water Utilities Public Service Falls City Housing Authority East Central SUD Eldorado Falls County WCID #1 East Downtown Management District Eldorado Housing Authority Fannin CAD East Downtown Redev Auth/Reinv Zone #15 Electra Fannin County SWCD East End District Electra Housing Authority Fannin County Water Supply Agency East Fork SUD Elgin Fannin Rural Rail Transportation Dist East Medina County SUD Elgin Housing Authority Farmers Branch East Montgomery County Improvement Dist Elkhart Farmersville East Mountain Ellis Appraisal District Farwell East Tawakoni Ellis County ESD #3 Fate East Texas COG Ellis County ESD #9 Fayette CAD East Texas MUD Ellis County Rural Rail District Fayette County GCD East Travis Gateway Library District Ellis-Prairie SWCD Fayette County WCID Eastland Elm Creek Water Control District Fayetteville Easton Elm Creek Watershed Authority Fern Bluff MUD Ecleto Creek Watershed District Elmendorf Ferris
82 0HPEHU 0HPEHU 0HPEHU Ferris Housing Authority Fort Bend Grand Parkway Toll Road Auth Galveston County MUD #15 First Colony LID Fort Clark MUD Galveston County MUD #30 First Colony LID #2 Fort Hancock WCID Galveston County MUD #39 First Colony Management District Fort Stockton Galveston County MUD #43 Fisher County Hospital District Fort Worth Galveston County MUD #44 Five Corners Improvement District Fort Worth - AA Galveston County MUD #46 Flamingo Isles MUD Fort Worth Housing Solutions Galveston County MUD #52 Flatonia Fort Worth Transportation Authority Galveston County MUD #66 Flatonia Housing Authority Four Way SUD Galveston County MUD #68 Florence Fourth Ward Redevelopment Authority Galveston County WCID #1 Floresville Franklin Galveston County WCID #12 Floresville Electric Light/Power System Franklin CAD Galveston County WCID #19 Floresville Housing Authority Franklin Housing Authority Galveston Housing Authority Flower Mound Town of Frankston Ganado Floyd CAD Fredericksburg Garden Ridge Floydada Fredericksburg Hospital Authority Garrett Floydada Housing Authority Freeport Garrison Flying L Public Utility District Freer Gary Foard CAD Freer WCID Gatesville Foard County Hospital District Freestone Central Appraisal District Gatesville Housing Authority Follett Friendswood Gateway GCD Forest Hill Frio CAD George West Forest Hill Library District Friona Georgetown Forney Frisco Georgetown Housing Authority Forsan Frisco Housing Authority Gholson Fort Bend Co Improvement District #24 Fritch Giddings Fort Bend County FWSD #1 Frog Pond Lake WCID #1 Gillespie Central Appraisal District Fort Bend County FWSD #2 Frost Gillespie County SWCD #220 Fort Bend County LID #14 Fruitvale Gillespie County WCID Fort Bend County MUD #121 Fruitvale Housing Authority Gilmer Fort Bend County MUD #124 Fulshear Gilmer Housing Authority Fort Bend County MUD #141 Fulton Gladewater Fort Bend County MUD #144 Gaines Central Appraisal District Gladewater Housing Authority Fort Bend County MUD #162 Gainesville Glasscock County SWCD Fort Bend County MUD #163 Gainesville Housing Authority Glasscock GCD Fort Bend County MUD #165 Galena Park Glen Rose Fort Bend County MUD #187 Gallatin Glenn Heights Fort Bend County MUD #189 Galveston Gober MUD Fort Bend County MUD #199 Galveston Central Appraisal District Godley Fort Bend County MUD #25 Galveston County DD #1 Golden Crescent Reg Planning Commission Fort Bend County MUD #5 Galveston County DD #2 Goldsmith Fort Bend County MUD #50 Galveston County FWSD #6 Goldthwaite Fort Bend County MUD #81 Galveston County Health District Goldthwaite Housing Authority Fort Bend County Toll Road Authority Galveston County MUD #12 Goliad Fort Bend ESD #3 Galveston County MUD #14 Goliad CAD
83 0HPEHU 0HPEHU 0HPEHU Goliad County GCD Gregg CAD Hardin County ESD #5 Goliad Housing Authority Gregory Hardin County WCID #1 Golinda Gregory Housing Authority Hardy/Near Northside RDA/TIRZ #21 Gonzales Grey Forest Harker Heights Gonzales Central Appraisal District Grimes CAD Harlingen Gonzales County SWCD #338 Groesbeck Harlingen Housing Authority Gonzales County UWCD Groesbeck Housing Authority Harris CAD Gonzales Housing Authority Groom Harris Co Imp Dist 3-Upper Kirby Mgt Dist Goodlow Groves Harris Co Road Improvement District #1 Goodrich Groveton Harris County ESD #12 Gordon Groveton Housing Authority Harris County ESD #25 Goree Gruver Harris County ESD #6 Gorman Gulf Coast Water Authority Harris County FWSD #27 Gorman Housing Authority Gulfgate Redevelopment Authority TIRZ #8 Harris County FWSD #45 Graford Gun Barrel City Harris County FWSD #47 Graham Gunter Harris County FWSD #48 Graham Regional Medical Center Gustine Harris County FWSD #58 Granbury Haciendas Del Norte WID Harris County FWSD 1A Granbury Housing Authority Hackberry Harris County Housing Authority Grand Prairie Hale CAD Harris County ID #25 Grand Saline Hale Center Harris County Improvement Dist #1 Grand Saline Housing Authority Hale Center Housing Authority Harris County Improvement Dist #4 Grandfalls Hale County Housing Authority Harris County Improvement District #12 Grandfalls Housing Authority Hale County SWCD #132 Harris County Improvement District #17 Grandview Hall CAD Harris County Improvement District #24 Grandview Housing Authority Hall County Hospital District Harris County Improvement District #5 Granger Hall-Childress SWCD #109 Harris County MUD #106 Granger Housing Authority Hallettsville Harris County MUD #11 Granite Shoals Hallettsville Housing Authority Harris County MUD #130 Granjeno Hallsburg Harris County MUD #151 Grapeland Hallsville Harris County MUD #152 Grapeland Housing Authority Haltom City Harris County MUD #153 Grapevine Haltom City Housing Authority Harris County MUD #154 Grapevine Housing Authority Hamilton Harris County MUD #156 Gray CAD Hamilton CAD Harris County MUD #163 Grayson Central Appraisal District Hamilton Housing Authority Harris County MUD #189 Grayson County Housing Authority Hamilton/Coryell SWCD Harris County MUD #205 Grayson County Regional Mobility Auth Hamlin Harris County MUD #217 Greater Northside Management District Hamlin Housing Authority Harris County MUD #222 Green Valley SUD Hamlin Memorial Hospital Harris County MUD #264 Greenbelt Municipal & Industrial WA Hansford CAD Harris County MUD #286 Greenhawe WCID #2 Hansford SWCD #148 Harris County MUD #290 Greenville Happy Harris County MUD #321 Greenville Electric Utility Hardin Harris County MUD #322 Greenville Housing Authority Hardin County ESD #2 Harris County MUD #345
84 0HPEHU 0HPEHU 0HPEHU Harris County MUD #354 Hays Hidalgo Housing Authority Harris County MUD #355 Hays Central Appraisal District Hideaway Harris County MUD #358 Hays County ESD #6 Higgins Harris County MUD #359 Hays County MUD #5 Higgins/Lipscomb Hospital District Harris County MUD #361 Hays County SWCD #351 High Point SWCD #230 Harris County MUD #367 Hays Trinity GCD Highland Haven Harris County MUD #372 Hays WCID #1 Highland Park Town of Harris County MUD #373 Hays WCID #2 Highland SWCD #210 Harris County MUD #391 Headwaters GCD Highland Village Harris County MUD #396 Hearne Highlands at Mayfield Ranch MUD Harris County MUD #397 Hearne Housing Authority Hill CAD Harris County MUD #399 Heart of Texas COG Hill Country Community MHMR Center Harris County MUD #407 Heath Hill Country Transit District Harris County MUD #411 Heatherloch MUD Hill Country UWCD Harris County MUD #44 Hedley Hill Country Village Harris County MUD #450 Hedwig Village Hill County Blackland SWCD Harris County MUD #46 Helotes Hillcrest Village Harris County MUD #468 Hemphill Hillsboro Harris County MUD #473 Hemphill Housing Authority Hilshire Village Harris County MUD #48 Hempstead Hiram Clarke/Fort Bend Redevelopment Auth Harris County MUD #480 Henderson Hitchcock Harris County Municipal Mgmt Dist #1 Henderson Co Levee Improvement Dist #3 Hobby Area District Harris County Municipal Utility District #316 Henderson County 911 District Hobby Area Improvement Corporation Harris County Utility District #15 Henderson County ESD #1 Hockley CAD Harris County WCID #1 Henderson County ESD #4 Holiday Lakes Town of Harris County WCID #132 Henderson County ESD #6 Holland Harris County WCID #145 Henderson County ESD #7 Holliday Harris County WCID #155 Henderson County Hospital Authority Hollywood Park Harris County WCID #156 Henderson Housing Authority Hondo Harris County WCID #21 Henrietta Hondo Creek Watershed Improvement Dist Harris County WCID #36 Henrietta Housing Authority Honey Grove Harris County WCID #50 Hereford Hood Central Appraisal District Harris County WCID #91 Hewitt Hooks Harris County WCID #92 Hickory Creek SUD Hopkins CAD Harrison Central Appraisal District Hickory Creek Town of Hopkins County Hospital District Harrison County SWCD Hickory UWCD #1 Hopkins County SWCD Hart Hico Horizon City Hartley CAD Hico Housing Authority Horizon Regional MUD Haskell Hidalgo CAD Horseshoe Bay Haskell CAD Hidalgo City of Houston Haskell Housing Authority Hidalgo County Drainage District #1 Houston CAD Haslet Hidalgo County ESD #3 Houston Downtown Management District Hawk Cove Hidalgo County Housing Authority/Weslaco Houston Forensic Science Center Inc Hawkins Hidalgo County Irrigation District #6 Houston Housing Authority Hawley Hidalgo County Regional Mobility Auth Houston TIRZ #24
85 0HPEHU 0HPEHU 0HPEHU Houston/Galveston Area COG Iraan General Hospital District Jones CAD Howard CAD Iredell Jones Creek Village of Howard County 911 Irion CAD Jonestown Howard SWCD #243 Irion County Water Conservation District Josephine Howardwick Irving Joshua Howe Irving Flood Control Dist Section I Jourdanton Hubbard Irving Flood Control Dist Section III Jourdanton Housing Authority Hubbard Housing Authority Isaacson MUD Junction Hudson Italy Junction Housing Authority Hudson Oaks Itasca Justin Hudspeth County Cons/Recl Dist #1 Ivanhoe City of Karnes CAD Hudspeth County ESD #1 Jacinto City Karnes City Hudspeth County UWCD #1 Jack CAD Karnes County SWCD #343 Hudspeth County WCID #1 Jack County WCID #1 Katy Hughes Springs Jackrabbit Road PUD Kaufman Hughes Springs Housing Authority Jacksboro Kaufman CAD Hull FWSD Jackson CAD Kaufman-Van Zandt Rockwall County SWCD Humble Jackson County ESD #1 Keene Hungerford MUD Jackson County ESD #3 Keller Hunt CAD Jackson County Hospital District Kelly Lane WCID #1 Hunters Creek Village Jackson County WCID #2 Kelly Lane WCID #2 Huntington Jacksonville Kemah Huntington Housing Authority Jacksonville Housing Authority Kemp Huntsville Jamaica Beach Kemp Housing Authority Huntsville Housing Authority Jarrell Kempner Hurst Jasper Kendall Appraisal District Hutchins Jasper CAD Kendall County WCID #1 Hutchinson CAD Jasper Housing Authority Kendall Lakes TIRZ Redevelopment Auth Hutto Jayton Kendall SWCD #216 Huxley Jefferson Kendleton Idalou Jefferson CAD Kenedy Idlewood WCID #1 Jefferson County Drainage District #6 Kenedy Housing Authority Impact Jefferson Housing Authority Kenefick Indian Lake Jersey Village Kennard Industry Jewett Kennedale Ingleside Jim Hogg County Housing Authority Kerens Ingleside Housing Authority Jim Hogg County WCID #2 Kerens Housing Authority Ingleside on the Bay Jim Wells County FWSD #1 Kermit Ingram Johnson City Kerr Central Appraisal District International Management District Johnson City Housing Authority Kerr County SWCD #217 Inverness Forest Improvement District Johnson County Central Appraisal Dist Kerr Emergency 911 Network Iola Johnson County ESD #1 Kerrville Iowa Colony Village of Johnson County SUD Kerrville Public Utility Board Iowa Park Johnson County SWCD #541 Kilgore Iraan Jonah Water SUD Killeen
86 0HPEHU 0HPEHU 0HPEHU Killeen Housing Authority Lake Amanda WCID #1 Laredo Transit Kimble Central Appraisal District Lake Bridgeport Latexo Kingsbury Lake Cities MUA Lavaca County Central Appraisal District Kingsland MUD Lake City Lavaca-Navidad River Authority Kingsville Lake Dallas Lavon Kingsville Housing Authority Lake Dunlap WCID Lazy Nine MUD #1A Kinney CAD Lake Forest Plant Advisory Council Lazy Nine MUD #1B Kinney County GCD Lake Forest UD Lazy Nine MUD #1C Kirby Lake Houston Redevelopment Authority Lazy Nine MUD #1D Kirbyville Lake Houston TIRZ 10 Lazy Nine MUD #1E Kirbyville Housing Authority Lake Jackson Lazy River Improvement District Kleberg CAD Lake LBJ WCID #1 League City Klein PUD Lake Placid WCID #1 Leakey Knollwood Lake Pointe MUD Leander Knox City Lake Proctor Irrigation Authority Leander MUD #1 Knox City Housing Authority Lake Tanglewood Leander MUD #2 Knox County Rural SUD Lake Travis Community Library District Leander MUD #3 Kosse Lake Worth Leary Kountze Lakeport Lee CAD Kress Lakeside (San Patricio Co) Lee-Fayette Counties Cummins Creek WCID Krugerville Lakeside (Tarrant Co) Lefors Krum Lakeside City Leland Woods Redevelopment Authority Kurten Lakeside MUD #3 Leland Woods Redevelopment Authority #2 Kyle Lakeside Water Supply District Leon CAD Kyle Housing Authority Lakeside WCID #1 Leon Valley La Coste Lakeside WCID #2A Leona La Feria Lakeside WCID #2B Leonard La Feria Irrigation District #3 Lakeside WCID #2C Leroy La Grange Lakeside WCID #2D Levelland La Grange Housing Authority Lakeview Levelland Housing Authority La Grulla Lakeview Police Department Lewisville La Joya Lakeway Lexington La Joya Housing Authority Lakeway MUD Liberty La Marque Lakewood Village Liberty County Central Appraisal Dist La Porte Lamar CAD Liberty County DD #2 La Salle CAD Lamar SWCD Liberty County DD #4 La Salle WCID #1A Lamb CAD Liberty County WCID #5 La Vernia Lamesa Liberty Hill La Villa Lampasas Liberty Hill Public Library District La Ward Lampasas CAD Limestone CAD Lacy-Lakeview Lampasas County WCID #1 Limestone County Senior Services Project Ladonia Lancaster Limestone-Falls SWCD Lago Vista Laredo Lindale Laguna Madre Water District Laredo Center for Urban Agriculture and SustainabilityLinden Laguna Vista Laredo Housing Authority Linden Housing Authority
87 0HPEHU 0HPEHU 0HPEHU Lindsay Lower Brushy Creek WCID Marfa Lipan Lower Clear Fork/Brazos SWCD #551 Marfa Housing Authority Lipan-Kickapoo WCD Lower Kirby Pearland Mgmt District Marietta Lipscomb Co Central Appraisal District Lower Rio Grande Valley Dev Council Marion Little Elm Town of Lower Trinity GCD Marion Cass SWCD Little River Academy Lower Valley Water District Marion Central Appraisal District Little River-San Gabriel SWCD #508 Lowry Crossing Marion County Hospital District Littlefield Lubbock Marlin Live Oak Lubbock Central Appraisal District Marlin Housing Authority Live Oak UWCD Lubbock County WCID #1 Marquez Liverpool Lubbock Emergency Communication District Marshall Livingston Lubbock Housing Authority Marshall Harrison County Health District Livingston Housing Authority Lubbock-Citibus Marshall Housing Authority Llano Lubbock/Reese Redevelopment Authority Mart Llano Central Appraisal District Lucas Mart Housing Authority Llano County ESD #1 Luce Bayou PUD Martin County Fresh Water District Llano County MUD #1 Lueders Martindale Llano County SWCD #233 Luella SUD Mason Llano Estacado UWCD Lufkin Mason Housing Authority Llano Housing Authority Luling Mason SWCD #223 Lockhart Luling Housing Authority Matador Lockhart Housing Authority Lumberton Matador Housing Authority Lockney Lumberton MUD Matador Water District Lockney Housing Authority Lyford Matagorda CAD Log Cabin Lynn CAD Matagorda County WCID #6 Logan Slough WID Lytle Mathis Lometa Lytle Lake WCID Mathis Housing Authority Lometa Housing Authority Mabank Maud Lone Oak Mabank Housing Authority Maud Housing Authority Lone Star MacBee SUD Mauriceville MUD Lone Star Regional Water Authority Macedonia Eylau MUD Maverick CAD Lone Wolf GCD Mackenzie Municipal Water Authority Maverick County SWCD #253 Longview Madison CAD Maverick County WCID #1 Loraine Madisonville Maypearl Loraine Housing Authority Madisonville Housing Authority McAllen Lorena Magnolia McAllen Housing Authority Lorenzo Magnolia East MUD McCamey Los Fresnos Malakoff McCulloch CAD Los Fresnos Housing Authority Malakoff Housing Authority McCulloch SWCD #249 Los Indios Malone McGregor Lost Creek Limited District Manor McGregor Housing Authority Lost Pines GCD Mansfield McKinney Lott Manvel McKinney Housing Authority Lott Housing Authority Marble Falls McLean Lovelady Marble Falls Housing Authority McLean Housing Authority
88 0HPEHU 0HPEHU 0HPEHU McLendon-Chisholm Middle Rio Grande COG Montrose Redevelopment Auth/TIRZ #27 McLennan CAD Middle Trinity GCD Moody McLennan County Rural Transit District Midland Moody Housing Authority McLennan County WCID #2 Midland Central Appraisal District Moore CAD McMullen County WCID #1 Midland County Housing Authority Moore's Crossing MUD McMullen County WCID #2 Midland County Utility District Moran McMullen GCD Midland Emergency Commission District Morgan Meadow Midland Housing Authority Morgan's Point Meadowlakes Midland SWCD Morgan's Point Resort Meadows Place Midland-Odessa Urban Transit District Morris CAD Medina CAD Midlothian/Waxahachie Airport Morton Medina County 911 Midway Motley CAD Medina County WCID #2 Milam Appraisal District Motley County Hospital District Medina Valley SWCD Milano Moulton Meeker Municipal Water District Mildred Mount Calm Megargel Miles Mount Enterprise Melissa Milford Mount Pleasant Melvin Mills CAD Mount Pleasant Housing Authority Memorial City Redevelopment Authority Millsap Mount Vernon Memorial Heights Redevelop Auth TIRZ #5 Mineola Mount Vernon Housing Authority Memorial Hills UD Mineola Housing Authority Mountain City Memorial Point UD Mineral Wells Mountain Peak SUD Memorial Villages Police Department Mineral Wells Housing Authority Muenster Memorial Villages Water Authority Mingus Muleshoe Memphis Mission Muleshoe Housing Authority Memphis Housing Authority Mission Housing Authority Munday Menard Missouri City Munday Housing Authority Menard County SWCD #215 Mitchell County Appraisal District Murchison Mercedes Mitchell County SWCD Murphy Mercedes Housing Authority Mobeetie Mustang Ridge Meridian Mobile City Nacogdoches Meridian Housing Authority Monahans Nacogdoches County ESD #4 Merkel Monahans Housing Authority Nacogdoches Housing Authority Merkel Housing Authority Mont Belvieu Nacogdoches SWCD Mertens Montague County Tax Appraisal District Naples Mertzon Montgomery Naples Housing Authority Mesa UWCD Montgomery County ECD NASA Area Management District Mesquite Montgomery County ESD #14 Nash Mesquite Groundwater Conservation Dist Montgomery County ESD #2 Nassau Bay Metropolitan Area EMS Authority Montgomery County Housing Authority Nassau Bay Redevelopment Authority Mexia Montgomery County MUD #126 Natalia Mexia Housing Authority Montgomery County MUD #89 Navarro Central Appraisal District Meyer Ranch MUD of Comal County Montgomery County MUD #90 Navarro County ESD #1 Miami Montgomery County WCID #1 Navarro SWCD Middle Concho SWCD Montrose Management District Navasota
89 0HPEHU 0HPEHU 0HPEHU Navasota Housing Authority North Central Texas MWA Oak Ridge (Kaufman Co) Nazareth North Channel Water Authority Oak Ridge North Near Northwest Management District North Concho River SWCD Oakwood Neches/Trinity Valley GCD North Green MUD Ochiltree SWCD #142 Nederland North Houston District Odem Needville North Richland Hills Odem Housing Authority Nevada North San Gabriel MUD #1 Odessa New Berlin North San Gabriel MUD #2 Odessa Housing Authority New Boston Property Management North Texas ECC Office of Urban Redevelopment-OUR SA New Braunfels North Texas Tollway Authority Oglesby New Braunfels Housing Authority North Zulch MUD Oglesby Housing Authority New Braunfels Utilities Northeast Gaines County ESD #1 Old River-Winfree New Deal Northeast Harris County MUD #1 Old Sixth Ward Redevelopment Authority New Fairview Northeast Police Department Oldham CAD New Home Northeast Texas MWD Olmos Park New Hope Northeast Texas Public Health District Olney New Hope SUD Northeast Travis County UD Olney Housing Authority New London Northeast TX Regional Mobility Authority Olton New Summerfield Northlake Olton Housing Authority New Sweden MUD #1 Northtown MUD Omaha New Waverly Northwest Grayson County WCID #1 Omaha Housing Authority Newark Northwest Harris County MUD #22 Onalaska Newcastle Northwest Harris County MUD #29 Orange Newcastle Housing Authority Northwest Leon County ESD #3 Orange CAD Newport MUD Northwest Park MUD Orange Co ESD #2/Bridge City VFD Newton Northwest Williamson County MUD #1 Orange County ESD #1 Newton Central Appraisal District Northwest Williamson County MUD #2 Orange County ESD #3 Newton County ESD #5 Northwood MUD #1 Orange County ESD #4 Newton Housing Authority Novice Orange County Navigation/Port District Niederwald Nueces CAD Orange County WCID #1 Nixon Nueces County DD #2 Orange County WCID #2 Nixon Housing Authority Nueces County ESD #1 Orange Grove Nocona Nueces County ESD #4 Orange Housing Authority Nocona Housing Authority Nueces County ESD #6 Orchard Nolan CAD Nueces County WCID #3 Ore City Nolan County Fresh Water District Nueces County WCID #4 OST/Almeda Corridors Redevelopment Auth Nolanville Nueces County WCID #5 Overton Nome Nueces/Jim Wells Counties ESD #5 Overton Housing Authority Noonday O'Brien Ovilla Nordheim O'Donnell Oyster Creek Normangee O'Donnell Housing Authority Paducah Nortex Regional Planning Commission Oak Grove Paducah Housing Authority North Austin MUD #1 Oak Leaf Paint Rock North Central Texas 911 District Oak Point Palacios North Central Texas COG Oak Ridge (Cooke Co) Palacios Housing Authority
90 0HPEHU 0HPEHU 0HPEHU Palestine Paseo del Este MUD #9 Pittsburg Palisades Village Pattison Pittsburg Housing Authority Palm Valley Patton Village Plains Palmer Payne Springs Plainview Palmera Ridge MUD of Williamson County Pearland Plainview Housing Authority Palmhurst Pearsall Plainview/Hale County Airport Palmview Pearsall Housing Authority Plano Housing Authority Palo Duro River Authority Peaster Plateau UWCSD Palo Pinto Appraisal District Pecan Bayou SWCD #553 Pleak Palo Pinto County MWD #1 Pecan Gap Pleasant Valley Palo Pinto SWCD #518 Pecan Hill Pleasanton Paloma Lake MUD #1 Pecan Valley GCD Pleasanton Housing Authority Paloma Lake MUD #2 Pecos Point Pampa Pecos CAD Point Aquarius MUD Panhandle Pecos County WCID #1 Point Blank Panhandle Regional Planning Commission Pecos County WID #2 Point Comfort Panola CAD Pecos County WID #3 Point Housing Authority Panola County ESD #1 Pecos Housing Authority Point Venture Panola County FWD #1 Pedernales SWCD #218 Political Subdivision WC Alliance Panola SWCD #448 Pelican Bay Polk Central Appraisal District Panorama Village Penelope Ponder Pantego Penitas Ponderosa Forest Utility District Paradise Permian Basin Regional Planning Comm Ponderosa Joint Powers Agency Paris Permian Basin UWCD Port Aransas Paris Housing Authority Perryton Port Arthur Paris-Lamar Co Pub Health Department Petersburg Housing Authority Port Arthur Housing Authority Park Board of Trustees of Galveston Petrolia Port Authority of San Antonio Parker Petronila Port Isabel Parker CAD Pettus MUD Port Isabel Housing Authority Parker County SWCD #558 Pflugerville Port Isabel/San Benito Navigation Dist Parklands MUD #1 Pharr Port Lavaca Parkside at Mayfield Ranch MUD Pharr Housing Authority Port Lavaca Housing Authority Parkside on the River MUD #1 Phelps SUD Port Neches Parmer CAD Pilot Knob MUD #1 Port O'Connor Improvement District Pasadena Pilot Knob MUD #2 Port of Corpus Christi Authority Paseo del Este MUD #1 Pilot Knob MUD #3 Port of Harlingen Authority Paseo del Este MUD #10 Pilot Knob MUD #4 Port of Liberty Commission Paseo del Este MUD #11 Pilot Knob MUD #5 Porter SUD Paseo del Este MUD #2 Pilot Point Portland Paseo del Este MUD #3 Pine Creek WID Post Paseo del Este MUD #4 Pine Forest Post Housing Authority Paseo del Este MUD #5 Pine Island Post Oak Bend Paseo del Este MUD #6 Pinehurst Post Oak Savannah GCD Paseo del Este MUD #7 Pineland Housing Authority Post Oak SUD Paseo del Este MUD #8 Piney Point Village Poteet
91 0HPEHU 0HPEHU 0HPEHU Poteet Housing Authority Real CAD Riverside Poth Real Edwards Cons/Recl District Riverside SUD Potter-Randall Appraisal District Red Bluff Water Power Control District Riviera WCID Potter-Randall County ECD Red Lick Roanoke Pottsboro Red Oak Roaring Springs Poynor Red River Authority of Texas Robert Lee Prairie View Red River CAD Robert Lee Housing Authority Premont Red River County WCID #1 Robertson CAD Presidential Glen MUD Red River SWCD Robinson Presidio CAD Red Sands GCD Robstown Presidio County UWCD Redwater Robstown Housing Authority Primera Reeves CAD Robstown Utility Systems Princeton Reeves County ESD #1 Roby Progreso Reeves County ESD #2 Roby Housing Authority Progreso Lakes Reeves County GCD Rochester Prosper Town of Reeves County WID #1 Rockdale Providence Village Town of Reeves County WID #2 Rockdale Housing Authority Public Employee Benefit Alliance Refugio Rockett SUD Public Transit Services Refugio County WCID #1 Rockport Putnam Refugio GCD Rocksprings Pyote Regional Transportation Authority Rockwall Quail Creek MUD Reklaw Rockwall Housing Authority Quail Valley UD Reno Rocky Mound Quanah Reno (Parker County) Rogers Quanah Housing Authority Retreat Rogers Housing Authority Queen City Rhome Rolling Plains GCD Quinlan Rice Rolling Plains Memorial Hospital Dist Quintana Richland Rollingwood Quitaque Richland Hills Roma Quitman Richland Springs Roma Housing Authority Rains CAD Richland SUD Roman Forest Ralls Richmond Roman Forest PUD #3 Ralls Housing Authority Richwood Ropesville Ranch at Clear Fork Creek MUD #1 Riesel Roscoe Ranch at Clear Fork Creek MUD #2 Rio Bravo Rose City Ranch at Cypress Creek MUD #1 Rio Grande City Rose Hill Acres Rancho Viejo Rio Grande COG Rose Hill SUD Ranger Rio Grande Regional Water Authority Rosebud Ranger Housing Authority Rio Hondo Rosebud Housing Authority Rankin Rio Vista Rosenberg Rankin Housing Authority Rising Star Rosenberg Housing Authority Ransom Canyon Rising Star Housing Authority Ross Rayburn Country MUD River Oaks Rosser Raymondville River Place Limited District Rotan Reagan CAD River Plantation MUD Rotan Housing Authority
92 0HPEHU 0HPEHU 0HPEHU Round Mountain San Benito Schulenburg Housing Authority Round Rock San Benito Housing Authority Scotland Round Rock Housing Authority San Diego Scurry Round Rock MUD #2 San Diego MUD #1 Scurry CAD Round Top Town of San Elizario Seabrook Rowlett San Felipe Seadrift Roxton San Jacinto CAD Seagoville Royalwood MUD San Jacinto County ESD Seagraves Royse City San Jacinto SUD Seagraves Housing Authority Royse City Housing Authority San Juan Sealy Rule San Juan Housing Authority Sebastian MUD Runaway Bay San Leanna Seguin Runge San Leon MUD Seguin Housing Authority Runge Housing Authority San Marcos Seis Lagos UD Runnels CAD San Marcos Housing Authority Selma Runnels County ESD #1 San Patricio Seminole Runnels SWCD #232 San Patricio CAD Senna Hills MUD Rural Economic Asst League Inc San Patricio County GWCD Seven Oaks Rural Taylor County Aging Service San Patricio County Navigation Dist #1 Seven Points Rusk San Patricio MWD Seymour Rusk County GCD San Perlita Seymour Housing Authority Rusk County Rural Rail District San Saba Shackelford CAD Rusk Housing Authority San Saba CAD Shady Grove SUD Rusk SWCD #447 San Saba Housing Authority Shady Hollow MUD Sabinal San Saba SWCD #250 Shady Shores Sabine/Neches Navigation District Sanctuary Shallowater Sachse Sandhills SWCD #241 Shamrock Sadler Sandy Oaks Shavano Park Sagemeadow Utility District Sandy Point Shelby CAD Saginaw Sanford Shelby County FWSD #1 Saint George Pl Redev Auth Reinvest Z#1 Sanger Shelby County SWCD Saint Hedwig Sansom Park Sheldon Road MUD Saint Jo Santa Anna Shell Road MUD Saint Paul Santa Anna Housing Authority Shenandoah Salado Santa Clara Shepherd Salado Public Library District Santa Fe Sherman Salt Fork SWCD #133 Santa Rita UWCD Sherman CAD Sam Rayburn Mun Power Agency Santa Rosa Sherman Housing Authority San Angelo Saratoga UWCD Shiner San Angelo Housing Authority Savoy Shoreacres San Antonio Schertz Siena MUD #1 San Antonio MUD #1 Schertz Housing Authority Siena MUD #2 San Augustine Schertz-Seguin Local Gov Corporation Siesta Shores WCID San Augustine CAD Schleicher County Hospital District Silsbee San Augustine Housing Authority Schulenburg Silverton
93 0HPEHU 0HPEHU 0HPEHU Simonton Southern Montgomery County MUD Stinnett Sinton Southern Trinity GCD Stockdale Sinton Housing Authority Southlake Stockdale Housing Authority Skellytown Southmayd Stockton Bend Slaton Southmost Regional Water Authority Stonewall County Ambulance Service Slaton Housing Authority Southside Place Stonewall Memorial Hospital District Smiley Southwest Area Regional Transit District Stonewall Ranch MUD Smiley Housing Authority Southwest Fannin SUD Stonewall SWCD #167 Smith CAD Southwest Houston Redevelopment Auth Stratford Smith County 911 Commisson District Southwest Management District Strawn Smith County ESD #1 Southwest Travis County GCD Strawn Housing Authority Smithville SPAN Inc Streetman Smithville Housing Authority Spearman Sudan Smyer Spearman Housing Authority Sugar Land Snook Spencer Road PUD Sullivan City Snyder Splendora Sulphur Springs Socorro Spring Branch Sulphur-Cypress SWCD Somerset Spring Branch Mgmt District Sun Metro Somervell Central Appraisal District Spring Valley Sunbelt FWSD Somervell County Hospital District Springhollow MUD Sundown Somervell County Water District Springlake Sunnyvale Somerville Springtown Sunray Sonora Spur Sunrise Beach Village Sonterra MUD Spur Housing Authority Sunset Valley Sour Lake Spurger ESD #2 Surfside Beach South Central Calhoun County WCID St George Place Management District Sutton CAD South East Texas RPC ST PST Water Supply Sutton County UWCD South Houston Stadium Park Redevelopment Authority Sweeny South Padre Island Stafford Sweetwater South Plains Association of Governments Stagecoach Sweetwater Housing Authority South Plains Public Health District Stamford Swisher CAD South Plains Regional Housing Authority Stamford Hospital District Taft South Plains UWCD Stamford Housing Authority Taft Housing Authority South Post Oak Redev Auth/TIRZ #9 Stanton Tahoka South Rains SUD Stanton Housing Authority Tahoka Housing Authority South Texas Development Council Staples Talco South Texas Water Authority Star Harbor Talco Housing Authority South Texas Weather Modification Assoc STAR Transit Talty City of Southeast Leon County ESD #1 Starr CAD Talty SUD Southeast Texas Groundwater Cons Dist Starr County Housing Authority Tanglewood Forest Limited District Southeast Travis County MUD #1 Stephens CAD Tara Glen MUD Southeast Travis County MUD #2 Stephenville Tarkington SUD Southeast Travis County MUD #3 Sterling City Tarrant County 911 District Southeast Travis County MUD #4 Sterling County Appraisal District Tarrant County ESD #1 Southeast Williamson County MUD #1 Sterling County UWCD Tarrant County Hospital Dist-JPS Health
94 0HPEHU 0HPEHU 0HPEHU Tatum The Colony MUD #1D Travis County MUD #12 Tatum Housing Authority The Colony MUD #1E Travis County MUD #13 Tax Increment Reinvestment Zone #11 The Colony MUD #1F Travis County MUD #14 Tax Increment Reinvestment Zone #25 The Colony MUD #1G Travis County MUD #17 Taylor The Woodlands Township Travis County MUD #2 Taylor CAD Thompsons Travis County MUD #23 Taylor Housing Authority Thorndale Travis County MUD #24 Taylor Lake Village Thorndale Housing Authority Travis County MUD #3 Taylor Landing Thornton Travis County MUD #4 Teague Thorntonville Travis County MUD #5 Teague Housing Authority Thrall Travis County MUD #6 Tehuacana Three Rivers Travis County MUD #7 Temple Three Rivers Housing Authority Travis County MUD #8 Temple Housing Authority Throckmorton Travis County MUD #9 Tenaha Throckmorton Central Appraisal District Travis County WCID #10 Tenaha Housing Authority Throckmorton Housing Authority Travis County WCID #17 Terranova West MUD Throckmorton SWCD #543 Travis County WCID #18 Terrell Tiki Island Travis County WCID #19 Terrell Hills Timber Lane UD Travis County WCID #20 Terry CAD Timbercreek Canyon Village of Travis County WCID-Point Venture Terry Memorial Hospital District Timpson Travis-Creedmoor MUD Texana Groundwater Conservation District Timpson Housing Authority Treasure Island MUD Texana MHMR Center Timpson Public Library Dist Trent Texarkana Tioga Trenton Texarkana Housing Authority Titus CAD Tres Lagos Public Improvement District Texarkana Urban Transit District TML TRI SUD Texarkana Water Utilities TML MultiState IEBP Trinidad Texarkana-Bowie County Fam Health Clinic TMLIRP Trinidad Housing Authority Texas Association of Regional Councils TMLIRP & TMLIEBP Trinity Texas City Toco Trinity Glen Rose GCD Texas City Housing Authority Todd Mission Trinity River Authority Texas City TIRZ #1/Lago Mar Dev Auth Tolar Trophy Club Texas Housing Foundation Tom Bean Trophy Club MUD #1 Texas Municipal Power Agency Tom Green CAD Troup Texas Municipal Retirement System Tom Green County FWD #3 a MUD Troy Texas Panhandle Centers Tom Green SWCD Tulia Texhoma Tomball Tulia Housing Authority Texline Tool Turkey Texoma Area Solid Waste Authority Towne Lake Management District Tuscola Texoma COG Toyah Two Way SUD Texoma Housing Partners Toyah-Limpia SWCD Tye The Colony Travis Central Appraisal District Tyler CAD The Colony MUD #1A Travis County Fire/Rescue ESD #11 Tyler County ESD #1 The Colony MUD #1B Travis County Housing Authority Tyler County ESD #3 The Colony MUD #1C Travis County MUD #11 Tyler County ESD #4
95 0HPEHU 0HPEHU 0HPEHU Tyler County ESD #5 Van Zandt County ESD #4 Waxahachie Housing Authority Tyler County ESD #7 Varner Creek UD Weatherford Tyler County SUD Vega Weatherford Housing Authority Uhland Velasco Drainage District Webb CAD Uncertain Venus Webberville Union Grove Vernon Webster Union Valley Vernon Housing Authority Weimar Universal City Via Metropolitan Transit Weinert University Park Victoria Weir Upper Brushy Creek WCID Victoria Central Appraisal District Wellington Upper Clear Fork SWCD Victoria County GCD Wellington Housing Authority Upper Guadalupe River Authority Victoria County WCID #2 Wellman Upper Kirby Redev Auth TIRZ #19 Houston Victoria Housing Authority Wells Upper Leon River MWD Victoria SWCD #346 Wells Branch Community Library Upper Leon SWCD #525 Vidor Wes-Tex GCD Upper Llanos SWCD Village of The Hills Weslaco Upper Nueces Frio SWCD #238 Vinton Weslaco Housing Authority Upper Pecos SWCD Vista MUD West Upper Sabine SWCD Vista Oaks MUD West Brazoria County DD #11 Upper Trinity Regional Water District Volente West Cedar Creek MUD Upshur CAD Von Ormy West Central Texas COG Upshur County ESD #1 Waco West Columbia Upshur-Gregg County SWCD Waco Housing Authority West Cypress Hills WCID #1 Upton CAD Waelder West Gregg SUD Upton County ESD #1 Waelder Housing Authority West Harris County MUD #10 Upton County ESD #2 Wake Village West Harris County MUD #16 Upton County Water District #1 Walker CAD West Keegans Bayou Improvement District Urban Renewal Agency of City of Austin Walker County ESD #2 West Lake Hills Uvalde Walker County Housing Authority West Nueces-Las Moras SWCD Uvalde CAD Walker County SUD West Orange Uvalde County UWCD Waller West Pecos Management District Uvalde Housing Authority Waller County RID #1 West Tawakoni Val Verde CAD Waller Creek Local Gov't Corp West Texas Weather Modification Assoc Valentine Wallis West Travis County MUD #6 Valley International Airport Walnut Creek SUD West Travis County MUD #7 Valley Mills Walnut Springs West Travis County MUD #8 Valley MUD #2 Walsh Ranch MUD West Travis County Public Utility Agency Valley View Ward CAD West University Place Van Ward County WID #2 West Williamson County MUD #1 Van Alstyne Warren City West Wise SUD Van Horn Washington CAD Westador MUD Van Horn Housing Authority Waskom Westbank Comm Library District Van Housing Authority Watauga Westbrook Van Zandt CAD Waterwood MUD #1 Westchase District Van Zandt County ESD #2 Waxahachie Westchase District Comm Fund
96 0HPEHU 0HPEHU 0HPEHU Westlake Williamson County MUD #17 Wood County SWCD Westminster SUD Williamson County MUD #19 Wood Trace MUD #1 Weston Williamson County MUD #19A Woodbine SUD Weston Lakes Williamson County MUD #19B Woodbranch Village Weston MUD Williamson County MUD #19C Woodcreek Westover Hills Williamson County MUD #21 Woodcreek Reserve MUD Westwood Shores MUD Williamson County MUD #22 Woodloch Westworth Village Williamson County MUD #30 Woodridge MUD Wharton Williamson County MUD #31 Woodsboro Wharton County ESD #3 Williamson County MUD #32 Woodville Wheeler Williamson County MUD #34 Woodville Housing Authority Wheeler CAD Williamson County WCID #2 Woodway White Deer Williamson County WSIDD #3 Workforce Solutions for H O T White Oak Williamson County/Cities Health District Wortham White Oak Bayou Joint Powers Williamson/Travis County MUD #1 Wortham Housing Authority White River Municipal Water District Willis Wylie White Rock SUD Willow Creek WCD Wylie Northeast SUD White Settlement Willow Park XS Ranch MUD Whiteface Wills Point Yantis Whitehouse Wills Point Housing Authority Yoakum Whitesboro Wilmer Yoakum CAD Whitesboro Housing Authority Wilson Yoakum Housing Authority Whitewright Wilson CAD York Creek Improvement District Whitney Wimberley Yorktown Whitney Housing Authority Wimberley Village Library District Yorktown Housing Authority Wichita Appraisal District Windcrest Young County SWCD Wichita Falls Windom Zapata CAD Wichita Falls Housing Authority Windthorst Zapata County WCID Wichita-Wilbarger 911 Dist Winfield Zavala CAD Wickett Wink Zavala County WCID #1
Wickson Creek SUD Wink Housing Authority Zavalla Wilbarger Creek MUD #1 Winkler CAD Wilbarger Creek MUD #2 Winnsboro Housing Authority Willacy CAD Winona Willacy Co Nav Dist/Port Mans PUD Wintergarden GCD Willacy County Drainage District #1 Winters Willacy County Housing Authority Winters Housing Authority Williamson CAD Wise CAD Williamson County ESD #1 Wise County WCID #1 Williamson County ESD #4 Wise SWCD #548 Williamson County MUD #10 Wixon Valley Williamson County MUD #11 Wolfe City Williamson County MUD #12 Wolfe City Housing Authority Williamson County MUD #15 Wolfforth Williamson County MUD #16 Wood CAD
97 AMDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ PUDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ CADǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ RA ǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ CCPDǤǤǤǤǤǤǤǤǤǤǤǤǤƬ RFPDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ COGǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ RMAǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ DDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ RPCǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ ECDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ RSAǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ EMSǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ SUDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ ESDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ SWCDǤǤǤǤǤǤǤǤǤǤǤǤǤǤƬ FWDǤǤǤǤǤǤǤǤǤǤǤǤǤǤ SWMAǤǤǤǤǤǤǤǤǤǤǤǤǤ FWSDǤǤǤǤǤǤǤǤǤǤǤǤ TIRZǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ GCDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ UWCDǤǤǤǤǤǤǤǤǤǤǤǤǤ GWDǤǤǤǤǤǤǤǤǤǤǤǤǤǤ UWCSDǤǤǤǤǤǤǤǤǤǤǤƬ IDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ VFDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ LIDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ WAǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ MDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ WCDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ MHMRǤǤǤǤǤǤǤǤǤǤ Ȁ WCIDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤƬ MPECǤǤǤǤǤǤǤǤǤǤǤǤǤǦ WIDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ MUDǤǤǤǤǤǤǤǤǤǤǤǤǤǤ WORDǤǤǤǤǤǤǤǤǤǤǤǤǤ MWAǤǤǤǤǤǤǤǤǤǤǤǤǤ WSDǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤǤ MWDǤǤǤǤǤǤǤǤǤǤǤǤǤ WSIDDǤǤǤǤǤǤǤǤǤǤǤǤǡǡ Ƭ MWSDǤǤǤǤǤǤǤǤǤǤǤ
98 'HSDUWPHQW)D[1XPEHUV(0DLOV Austin Headquarters Finance & Accounting: 512-491-2316 Loss Prevention: 512-491-2388 1821 Rutherford Lane Executive: 512-491-3324 Information Technology: 512-491-3319 First Floor Member Services: 512-491-2311 Human Resources: 512-491-3330 Austin, Texas 78754 Legal: 512-491-3326 Underwriting: 512-491-2404 512-491-2300 Liability & Property Claims: 512-491-2366 Workers’ Comp Claims: 512-491-2481 Toll Free: 800-537-6655 [email protected] [email protected]
)LHOG2IILFHV
99