Comprehensive Annual Financial Report City of Temple, Texas

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Comprehensive Annual Financial Report City of Temple, Texas Comprehensive Annual Financial Report City of Temple, Texas For the year ended September 30, 2020 Prepared by: Finance Department Traci L. Barnard, CPA Director of Finance Melissa Przybylski, CPA Assistant Director of Finance Stacey Reisner, CPA Treasury & Debt Division Director Jennifer Emerson Budget Division Director 1 2 CITY OF TEMPLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended September 30, 2020 TABLE OF CONTENTS Page INTRODUCTORY SECTION: Letter of Transmittal 9 Certificate of Achievement for Excellence in Financial Reporting 31 Organizational Structure 32 City of Temple Principal Officials 33 FINANCIAL SECTION: Independent Auditors’ Report 37 Management’s Discussion and Analysis 43 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position 58 Statement of Activities 59 Fund Financial Statements: Balance Sheet – Governmental Funds 60 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 61 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds 62 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 63 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual – General Fund 65 Statements of Net Position – Proprietary Fund 66 Statements of Revenues, Expenses and Changes in Net Position – Proprietary Fund 69 Statements of Cash Flows – Proprietary Fund 70 Notes to the Financial Statements 73 3 CITY OF TEMPLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended September 30, 2020 TABLE OF CONTENTS, Continued Page FINANCIAL SECTION, Continued: Required Supplementary Information Texas Municipal Retirement System: Schedule of Changes in Net Pension Liability and Related Ratios 136 Schedule of Employer Contributions 137 Temple Firefighters’ Relief and Retirement Fund: Schedule of Changes in Net Pension Liability and Related Ratios 138 Schedule of Employer Contributions 139 Supplemental Death Benefit: Schedule of Changes in Total OPEB Liability and Related Ratios 140 Schedule of Employer Contributions 140 Retiree Health Care Plan: Schedule of Changes in Total OPEB Liability and Related Ratios 142 Schedule of Employer Contributions 142 Combining and Individual Fund Financial Statements and Schedules Nonmajor Governmental Funds: Combining Balance Sheet – Nonmajor Governmental Funds 146 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds 147 Discretely Presented Component Unit Financial Statements- Reinvestment Zone No. 1: Comparative Balance Sheets 150 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual 151 Schedules of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: Debt Service Fund 154 Hotel/Motel Fund 155 Federal/State Grant Fund 156 Drainage Fund 157 4 CITY OF TEMPLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended September 30, 2020 TABLE OF CONTENTS, Continued Table Page Combining and Individual Fund Financial Statements and Schedules, Continued: Supplementary Individual Fund Financial Schedules – General Fund: Comparative Balance Sheets 160 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual 162 Schedule of Revenues – Budget and Actual 163 Schedule of Expenditures – Budget and Actual 165 Detailed Schedule of Expenditures – Budget and Actual 166 Supplementary Schedules: Schedule of Expenditures of Federal and State Awards 170 Notes to Schedule of Expenditures of Federal and State Awards 171 STATISTICAL SECTION (UNAUDITED): Financial Trends Net Position by Component I 174 Changes in Net Position II 175 Fund Balances of Governmental Funds III 177 Changes in Fund Balances of Governmental Funds IV 178 Revenue Capacity General Governmental Tax & Franchise Revenues by Source V 180 Assessed Value and Estimated Actual Value of Taxable Property VI 181 Property Tax Rates Direct and Overlapping Governments VII 182 Principal Property Taxpayers VIII 183 Property Tax Levies and Collections IX 184 Taxable Sales by Category X 185 Debt Capacity Ratios of Outstanding Debt by Type XI 186 Ratios of Net General Bonded Debt Outstanding XII 187 Direct and Overlapping Governmental Activities Debt XIII 188 Computation of Legal Debt Margin XIV 189 Pledged-Revenue Coverage XV 190 Demographic and Economic Information Demographic and Economic Statistics XVI 191 Principal Employers XVII 192 5 CITY OF TEMPLE, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT Year Ended September 30, 2020 TABLE OF CONTENTS, Continued Table Page STATISTICAL SECTION (UNAUDITED), Continued: Operating Information Full-time Equivalent City Government – Employees by Function/Program XVIII 193 Operating Indicators by Function/Program XIX 196 Capital Asset Statistics by Function/Program XX 198 Other Information Retirement – Analysis of Funding Progress and Contribution Rates – Texas Municipal Retirement System XXI 200 Temple Firefighters’ Relief and Retirement Fund XXII 201 Active and Retiree Health Care Costs XXIII 202 Water and Wastewater – Average Daily Treated Water vs. Average Daily Treatment Capacity XXIV 203 Annual Treated Water vs. Total Available Water XXV 204 Schedule of Water Pumped to Town vs. Water Billed XXVI 205 Schedule of Water Customers – Residential and Commercial XXVII 206 Average Daily Treated Wastewater vs. Average Daily Treatment Capacity XXVIII 207 Schedule of Wastewater Customers – Residential and Commercial XXIX 208 Schedule of Water and Wastewater Rates XXX 209 Top 10 Water and Wastewater Customers XXX I 210 Other – Insurance Coverage XXXI I 211 Fast Facts/Miscellaneous Statistical Data XXXIII 213 Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. COMPLIANCE SECTION: Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 221 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control over Compliance Required by the Uniform Guidance 223 Schedule of Findings and Questioned Costs 225 6 Introductory Section 7 8 February 18, 2021 Honorable Mayor and City Council City of Temple Temple, Texas Dear Council Members: The Comprehensive Annual Financial Report (CAFR) of the City of Temple, Texas (the City) for the fiscal year ended September 30, 2020, is submitted herewith. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City, on a Government-wide and Fund basis. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. Brockway, Gersbach, Franklin & Niemeier, P.C., Certified Public Accountants, have issued an unmodified (“clean”) opinion on the City of Temple financial statements for the year ended September 30, 2020. The independent auditors’ report is located at the front of the financial section of this report. Management’s discussion and analysis (MD&A) immediately follows the independent auditors’ report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A compliments this letter of transmittal and should be read in conjunction with it. GENERAL INFORMATION – CITY OF TEMPLE Temple is located near the geographic and population center of the State of Texas, 67 miles north of Austin, 130 miles north of San Antonio, 160 miles northwest of Houston, and 120 miles south of the Dallas-Fort Worth Metroplex. There are approximately 75 square miles in the City’s corporate boundary. 9 The City was founded on June 20, 1881, when the original town lots were sold by the Gulf, Colorado and Santa Fe Railway. It was subsequently chartered on March 27, 1907, and operates under a Council-Manager form of government. The City Council is comprised of a Mayor and four members and is responsible for enacting ordinances, resolutions, and regulations governing the City, as well as appointing members of various statutory and advisory boards, the City Manager, City Attorney, Director of Finance, City Secretary, and a Municipal Judge. The City Manager is the chief administrative officer of the government and is responsible for the enforcement of laws and ordinances, the appointment and supervision of the executive directors and heads of departments, and the performance of functions within the municipal organization. The financial reporting entity (the government) includes all the funds of the primary government (i.e., the City of Temple as legally defined), as well as all of its component units. Component units are legally separate entities for which the primary government is financially accountable.
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