The URL can be used to link to this page

R-2021-049 - 2/25/2021 RESOLUTION NO. R-2021-049 WHEREAS,the City of Round Rock's Comprehensive Annual Financial Report("Report")for the fiscal year ended September 30, 2020 has been submitted to the City Council, and WHEREAS,the City Council desires to acknowledge the receipt and acceptance of the attached Report,Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK TEXAS, That the City of Round Rock's Comprehensive Annual Financial Report for the fiscal year ended September 30, 2020, attached hereto as Exhibit "A" and incorporated herein, is hereby received and accepted. The City Council hereby finds and declares that written notice of the date,hour,place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 25th day of February, 2021. CRAIG,440RGA, Mayor City of Round Rock, Texas ATTEST: t MEAGAN SPfNKS,4De City Cl rk 0112.20202;00465569 No Text EXHIBIT „A„ ROUND ROCKTEXAS s { City of Round Rock, Texas Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2020 ELECTED OFFICIALS Craig Morgan, Mayor Writ Baese, Mayor Pro Tem Tammy Young, Council Member Rene Flores, Council Member Matthew Baker, Council Member Will Peckham, Council Member Hilda Montgomery, Council Member MANAGEMENT STAFF Laurie Hadley City Manager Bryan Williams Assistant City Manager Brooks Bennett Assistant City Manager OFFICIAL ISSUING REPORT Susan L. Morgan, CPA Chief Financial Officer mac -CAIA •� i9i TABLE OF CONTENTS INTRODUCTORY SECTION: Letter of Transmittal 1 City Organizational Chart 9 Certificate of Achievement for Excellence in Financial Reporting 10 FINANCIAL SECTION: Independent Auditors' Report 11 Management's Discussion and Analysis 15 Basic Financial Statements Government Wide Financial Statements: Statement of Net Position 32 Statement of Activities 34 Fund Financial Statements: Governmental Funds: Balance Sheet 36 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 38 Statement of Revenues, Expenditures and Changes in Fund Balances 40 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 42 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 43 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual—Round Rock Transportation and Economic Development Corporation Fund 44 Proprietary Funds: Statement of Net Position 46 Statement of Revenues, Expenses and Changes in Net Position 48 Statement of Cash Flows 49 Notes to the Financial Statements 51 Required Supplementary Information Texas Municipal Retirement System (TMRS) - Schedule of Changes in the Net Pension Liability and Related Ratios 104 Texas Municipal Retirement System (TMRS) - Schedule of Contributions 106 Supplemental Death Benefit Fund - Schedule of Changes in the Total OPEB Liability and Related Ratios 108 Self-Funded Health Insurance - Schedule of Changes in the Total OPEB Liability and Related Ratios 109 TABLE OF CONTENTS Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds 112 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 114 Schedules of Revenues, Expenditures and Changes in Fund Balances— Budget and Actual: General Fund 118 Debt Service Fund 122 Nonmajor Special Revenue Funds: Community Development Block Grant 123 Hotel-Motel Occupancy Tax 124 Hotel-Motel Occupancy Venue Tax 125 Library and Recreational 126 Public Safety 127 Public Education &Government 128 TABLE OF CONTENTS STATISTICAL SECTION (UNAUDITED): Financial Trends: Net position by Component—Last Ten Fiscal Years 130 Changes in Net Position —Last Ten Fiscal Years 132 Fund Balances of Governmental Funds—Last Ten Fiscal Years 136 Changes in Fund Balances of Governmental Funds—Last Ten Fiscal Years 138 Revenue Capacity: Actual and Taxable Assessed Value of Property—Last Ten Fiscal Years 140 Property Tax Rates—Direct and Overlapping Governments Per$100 of Assessed Value—Last Ten Fiscal Years 141 Principal Property Taxpayers—Current Year and Nine Years Ago 142 Property Tax Levies and Collections—Last Ten Fiscal Years 143 Sales Tax and Ad Valorem Tax - Last Ten Fiscal Years 144 Taxable Sales by Category—Last Ten Calendar Years 146 Hotel Taxpayers 148 Hotel Occupancy Tax Collection History by Quarter—Last Ten Fiscal Years 149 Debt Capacity: Ratios of Outstanding Debt by Type—Last Ten Fiscal Years 150 Ratios of Net General Bonded Debt Outstanding to Assessed Value and Net Bonded Debt Per Capita—Last Ten Fiscal Years 151 Computation of Direct and Overlapping Governmental Activities Debt 152 Legal Debt Margin Information —Last Ten Fiscal Years 154 Condensed Utility Statement of Operations - Last Ten Fiscal Years 156 Demographic and Economic Information: Demographic and Economic Statistics—Last Ten Fiscal Years 159 Principal Employers—Current Year and Nine Years Ago 160 Operating Information: Full-Time Equivalent City Government Employees by Function —Last Ten Fiscal Years 161 Operating Indicators by Function —Last Ten Fiscal Years 162 Capital Asset Statistics by Function—Last Ten Fiscal Years 164 Top Ten Water Customers 166 Water and Sewer Retail Rates 167 TABLE OF CONTENTS SINGLE AUDIT SECTION: Schedule of Expenditures of Federal Awards 169 Notes to Schedule of Expenditures of Federal Awards 170 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 171 Independent Auditors' Report on Compliance for each Major Program and on Internal Control Over Compliance Required by the Uniform Guidance 173 Schedule of Findings and Questioned Costs 17S Summary Schedule of Prior Audit Findings 177 Corrective Action Plan 178 �^- Mayor Councilmembers City Manager Craig Morgan Michelle Ly Laurie Hadley Matthew Baker Frank Ortega �RaOU�ND ROCK TEXAS Mayor Pro-Tern Writ Baese City Attorney Rene Flores Hilda Montgomery Stephan L. Sheets �..........._<.....__..........._......................-.....I................_. February 8, 2021 Honorable Mayor and Members of the City Council City of Round Rock,Texas The Comprehensive Annual Financial Report of the City of Round Rock, Texas for the fiscal year ended September 30,2020,is submitted herewith. This report has been prepared by the City's Finance Department and responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the City. We believe the data is accurate in all material aspects and is presented in a manner designed to clearly state the financial position and results of operations of the City as measured by the financial activity of its various funds. All disclosures have been included to enable the reader to gain the maximum understanding of the City's financial affairs. The City Charter requires an annual audit of the books of account, financial records, and transactions of all departments of the City by independent certified public accountants selected by the City Council. Whitley Penn, L.L.P., Certified Public Accountants, have issued an unmodified ("clean") opinion on the City of Round Rock's 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) can be found immediately following the report of the independent auditors. The MD&A is a narrative introduction,overview,and analysis to accompanythe basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. City of Round Rock Profile The City of Round Rock,established in 1851,is a municipal corporation incorporated under Article XI,Section 5 of the Constitution of the State of Texas (Home Rule Amendment). The City operates under a Council- Manager form of government with six council members and a mayor. The City Manager is appointed by the City Council and is responsible to them for managing and administering all City affairs. The Chief Financial Officer is appointed by the City Manager and is responsible for supervising the operations of the Finance Department. This department maintains all accounting records of the City. The financial reporting entity(the government) includes all the funds of the primary government (the City of Round Rock as legally defined) as well as its component units. Component units are legally separate entities for which the primary government is financially accountable. The City provides a full range of services which include police and fire protection, parks and library, construction, and maintenance of infrastructure, planning and community development, convention and tourism activities, and general administrative services. In addition,the City owns and operates a water,sewer and stormwater utility system and a golf course. These activities are included in the accompanying financial statements. Blended component units, although legally separate entities, are in substance part of the primary government's operations and included as part of the primary government. Accordingly, Round Rock Transportation and Economic Development Corporation (RRTEDC) revenues are reported in a special revenue fund of the City. CITY OF ROUND ROCK 221 East Main Street, Round Rock, Texas 78664 [P] 512.218,5400• [F] 512,671,2808• roundrocktexas.gov Annual budgets are legally adopted for the General Fund, Special Revenue Funds, Debt Service Fund, and the Proprietary Funds. Capital Projects Funds have no binding annual budget. Project-length financial plans are adopted for all capital projects; accordingly, no comparison of budget to actual is presented in the financial statements. Budgetary control is maintained at the department level by the encumbrance of estimated purchase amounts prior to the release of purchase orders to vendors. Purchase orders which result in an overrun of balances are not released until additional appropriations are made available. Significant Local Economic Events Strategic Goals Along with the entire Central Texas region, the City has experienced tremendous population growth over the past several years which has led to an increased demand for city services.To adequately prepare for the effect of this activity on the City, much effort goes into planning and funding infrastructure and service programs. Each January, Council reviews the City's successes and challenges and refines both the short-term and long- term strategic goals for the City. These goals set the direction for the allocation of staff and financial resources and are the basis for the development of the following year's budget. E� . s a � Financially Sound City City Infrastructure: 'Sports Capital of Texas"for Providing High Value Services Today and or Tomorrow Tourism and Residents Great Community Authentic Downtown-Exciting Sustainable Neighborhoods- to Live Community Destination Old and New The COVID-19 pandemic changed the budget process for fiscal year 2021. Rather than developing exciting new programs to expand services to our community, the City was in a challenging position with anticipated declines in revenues coupled with new and unique challenges facing our community. But because of a history of fiscal responsibility and financial policies the City had already put into place, the City was able to adopt the fiscal year 2021 budget from a position of financial strength. Specifics of the types of budgetary reductions included no new programs and reduced city-wide spending of $25 million. The General Fund budget was reduced by $5.0 million in such a way as to minimize the impact to service levels our citizens have come to expect. There were 23.75 positions strategically identified to be held vacant for all or part of the year for budgetary savings and no positions or major programs were eliminated. Economy COVID-19 has had an unprecedented impact on local economies across the nation. Despite the ongoing pandemic, Round Rock's economy has remained strong. As the largest city in Williamson County and part of the Austin Metropolitan Statistical Area (MSA), Round Rock is a key part of one of the fastest growing regions 2 in Texas and the country. From 2011 to the projected population for 2021, the City of Round Rock has experienced population growth of 19.3%over the past 10 years. Our long-range population estimates predict this increase continuing at a growth rate of around 2%per year for the foreseeable future. The strong economy, low unemployment rate, and low rate of overall taxation continues to draw new residents and businesses into Central Texas. While the State of Texas economy has been impacted by downturn in the oil and gas industry, Round Rock and Central Texas have almost no exposure to that sector and have not been affected. The population for 2030 is projected to be over 158,000 within the City limits and over 215,000 in Greater Round Rock, which includes the City limits and the City's extraterritorial jurisdiction (ETJ). While most of the long-range growth will likely occur in northeast Round Rock where there are still large tracts of land that could be developed into additional neighborhoods, population density will likely increase across the City as residential development continues for single family townhomes, multifamily apartments, and senior living facilities. The City is planning and preparing for this population growth to ensure the high-quality services Round Rock residents have come to expect are expanded to serve residents of today and of tomorrow. Round Rock's businesses have faced challenges due to COVID-19. The hotel and restaurant industries have endured the most hardships during the pandemic, but revenues have fared better than expected. The City had 3,294 hotel rooms at the end of fiscal year 2020 with another S51 in various stages. The City gained an additional 975 rooms with the opening of Kalahari on November 12, 2020. COVID-19 has impacted the City's hotel occupancy rates, which are slowly recovering. Hotel occupancy tax collections support local tourism events and debt service for the Dell Diamond/Convention Center,the home of the"Round Rock Express"Triple A Baseball team and the Round Rock Sports Center, the City's 82,800-square-foot indoor sports venue which opened in January 2014.The third year of operations of the Round Rock Multipurpose Complex—a $27 million tournament class outdoor sports complex which opened in May 2018—has contributed to the economic impact of annual visitors who attend regional and national tournaments.The Sports Center and Multipurpose Complex have been opened and hosting mostly local events through the pandemic by creating safe operating protocols. Tourism is an important component of the City's overall economic development strategy and the City is eagerly waiting to get back to welcoming a wide range of tourists for local events year-round. Round Rock continues to gain recognition for the value of the high-quality services provided to our residents. Below are a few of our most recent accolades: • Ranked number 3 by Milkeninstitute.org as one of the "Best Performing Cities" • Ranked number 2 by Money.com as one of the"Best Places to Live in America" • Ranked number 8 by Niche.com as one of the "Best Cities in America to Buy a House" • Ranked number 1 by SmartAsset.com as one of the"Best Minor League Baseball Towns of 2019" • Ranked number 5 by Homecity.com as one of the "Best Places to Live in Texas" • Recognized by Sports Events Media Group as the "Top Choice for Sports Events Planners" Economic Development The City understands that diversification of Round Rock's economy is a key to financial stability. The long- standing partnership between the City and Round Rock Chamber continues to attract new development to the City. The funding is leveraged with the Chamber Momentum Fund to create a public/private partnership for economic development priorities. This partnership continues to yield new prospects through an inspired approach to economic development for Round Rock. Round Rock's economy has become stronger and more diverse because of a variety of business relocations bringing capital investment,job opportunities, and new residents to the City. Emerson Process Management opened its $70 million, 282,000-square foot international headquarters and technology center in January 2014 for its automation systems and project services businesses which help customers operate facilities in fields like oil and gas. TECO-Westinghouse is the largest manufacturer of electric motors in North America. Houghton 3 Mifflin Harcourt(HMH) relocated its Texas regional office to Round Rock in July 2016.Their relocation brought over 270 jobs to the City and they now anchor a 100,000-square-foot Class A office building in La Frontera. ProPortion Foods LLC,a Los Angeles-based food service company relocated its office,food processing,storage, and warehouse facility to the City in 2016,bringing in at least 400 full-timejobs.Airco Mechanical,a commercial and residential heating, ventilation, and air conditioning service provider, has relocated its Central Texas headquarters to a previously vacant 47,000-square-foot building, bringing in another 400 full-timejobs. Round Rock will be welcoming two new manufacturing facilities in August 2021.Triple Temp Cold Storage LLC will operate a new 125,000-square-foot cold storage and manufacturing facility in southwest Round Rock on a 10-acre site near Bratton Lane. The facility is expected to generate 60 newjobs with salaries averaging $60,000 a year and will also serve as an incubator for entrepreneurs to create new food products and take them to market. The cold storage and incubator will be the first to market in the Austin-Round Rock area. East/West Manufacturing will be relocating and expanding to a new 43,000-square-foot facility in North Round Rock on Steam Way. They will produce high-quality Printed Circuit Board (PCB) assemblies, custom cables, and electrical/mechanical assemblies for multiple industries globally. East/West will relocate 30jobs and create 30 new jobs over five years with the average salary being $50,000 a year. The company will also invest $5 million in the new facility with an additional $650,000 in business personal property. Dell is the largest employer in Round Rock with an estimated 13,000 employees in 2020. Since Dell relocated its global headquarters to Round Rock in 1994 the economic impact to the City has been transformative. Dell remains the City's largest sales taxpayer with sales tax receipts projected to continue to grow into fiscal year 2021. Because of the company's commitment to Round Rock, the employment opportunities they offer, and the property tax and sales tax revenues they generate, Dell remains a major driver to the City's economy. United Parcel Service (UPS) opened a new facility in Round Rock in November 2018 with a new regional distribution center that provides additional operating capacity for the Austin area. The $70 million, 225,000- square-foot facility is located on fifty acres of land near SH 45 and A.W. Grimes Boulevard and employs more than 550 people with an annual salary of at least $50,000. Amazon is the newest Fortune 500 company to expand in Round Rock with a new delivery station on a 32-acre site at the Chisholm Trail Center near IH 35 and Old Settlers Boulevard.The industrial park has three buildings. The larger building is 180,550-square-feet and is used as the campus distribution center,while the two smaller buildings total 260,970-square-feet and are used as parking for employees and delivery vehicles. The delivery station created hundreds of local jobs. Kalahari Resorts selected Round Rock as the location of its fourth family resort and convention center and opened November 12, 2020. The authentically African-themed Kalahari Resorts and Convention Center features 975 well-appointed guest rooms, full-service amenities, fully equipped fitness centers, on-site restaurants, unique retail shops, a state-of-the-art 200,000-square-foot convention center, and a 223,000- square-foot indoor/outdoor water park. This opens new opportunities for Round Rock and will provide substantial property tax revenues and diversify the local economy and available employment opportunities. Its 352-acre site and proximity to Old Settlers Park and the Dell Diamond—two well-established venues that draw more than a million visitors annually—bodes well for a successful, tourism-oriented development. Over the next five years new economic development projects will reshape Round Rock's economy by diversifying the economy and bringing in new residents and visitors.The City entered into an agreement with Mark IV Capital for The District in February 2019.The planned $200 million project will be a live,work,and play community located near the intersection of IH 35 and SH 45. Initial plans for the development include 1 million square feet of office space, approximately 900 multifamily residential units, a hotel, a high-end grocery store, and retail/restaurant space.This mixed-use development will be a great opportunity for continued growth and diversification of the City's economy. 4 A new Embassy Suites Hotel and Conference Center is being built for$20 million on about 6 acres of land near the Bass Pro Shops and Round Rock Premium Outlets. The project will bring a 160-room hotel with at least 14,000-square-feet of convention and meeting space and will generate at least 60 jobs. The hotel and conference center are anticipated to open in 2021. The local major destination retail hubs broaden Round Rock's economy. The Round Rock Premium Outlets' 430,000-square-foot outlet mall and the nearby Round Rock IKEA serve as a destination for shoppers from Central Texas and beyond. Round Rock Premium Outlets IKEA and similar destination-based retail stores like y , Bass Pro Shops which opened in 2015 were intentionally targeted by the City's economic development program to locate in Round Rock. These stores generate sales tax revenues for the City, bring in shoppers to the area which benefits neighboring retail and restaurants, and place a relatively low demand on City services such as police, fire, and parks and recreation. While traditional brick and mortar retail continues to see declines, destination shopping, both in Round Rock and across the nation, continues to bring in shoppers. Round Rock continues to see growth in the medical industry. The City is home to several hospitals offering comprehensive world-class healthcare services. Post-Acute Medical Rehabilitation Hospital opened in December 2018. This 48,000-square-foot, 40-bed facility is the City's sixth hospital and is designed to treat patients who have suffered traumatic brain injuries and strokes. Baylor Scott & White recently opened a new 39,000-square-foot cancer center. The facility provides services for radiation oncology, medical oncology, surgical oncology, and hematology. This is the first cancer center in all of Williamson County and further expands the diversity and quality of healthcare services offered in the City's medical corridor. Baylor Scott & White's presence in Round Rock includes a dialysis center, a clinic, a rehabilitation institute, and a 101-bed medical center. The Baylor Scott &White Healthcare system in Round Rock is the 6tn largest employer in Round Rock with 750 employees in 2020. Round Rock also has several higher education facilities, many of which focus on healthcare disciplines. These institutions of higher learning include Texas State University, Austin Community College, and the Texas A&M Health Science Center. Texas State University opened its newest building — Willow Hall — in 2018. This new $67.5 million, 107,000-square-foot facility is home to the university's departments of communication disorders, physical therapy, and respiratory care which all moved from the university's San Marcos campus as the university continues to consolidate the College of Health Professionals in Round Rock. Austin Community College celebrated the opening of a $33 million,45,000-square-foot expansion of its Round Rock campus in 2018. The new expansion features the college's third state-of-the-art ACCelerator with more than 140 computers, advanced science labs, classrooms, and a social staircase where students can gather to relax or study.The new expansion made room for the enrollment of an additional 1,000 students. Texas A&M University College of Medicine recently announced they will be expanding their educational opportunities at the Round Rock campus. Texas A&M will allow students to choose the Round Rock campus for clinical training starting with the class of 2024. Relevant Financial Policies Accounting System and Controls The General Fund Reserve Policy remains at 25%of operating expenditures.The City's Concentration Risk Fund, a separate account to provide additional surety on the City's highest sales tax remitters, remains in place. Working capital in the Water/Wastewater Utility Fund is maintained at 33%of operating expenditures. Balances in excess of the above levels are earmarked for future uses or reduced to the target levels over an appropriate length of time. In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition and (2) 5 the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived and (2) the evaluation of costs and benefits requires estimates and judgments by management. All internal control evaluations occur within the above framework. We believe that the City's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. Long-Term Financial Planning The City uses a 5-year planning model for the General Fund which projects revenues and expenditures over a long-term period using assumptions about economic conditions and future spending scenarios.This model is developed internally and focuses on the anticipated future funding necessary to meet the City's strategic goals. The model takes a comprehensive approach to evaluating the long-term needs for property tax rates and other revenues to provide for the maintenance and operations of the General Fund. The City's General Fund relies heavily on sales tax as a revenue source. The sales tax is a less stable revenue source than the property tax but provides the taxpayers with more discretion and a lower property tax rate. Because of this revenue makeup, the City estimates sales tax revenues conservatively and introduces new programs somewhat more cautiously until projected revenue levels are attained. The City is also more attentive to the health of its economy because of the reliance upon commerce to produce the sales tax. The City's economy is expected to generate approximately $70.4 million in sales tax revenue for fiscal year 2021, net of sales tax rebates paid to Dell and Bass Pro Shops in accordance with economic development agreements in effect. This amount includes the 1/2%or$18.9 million in additional sales and use tax for roads and economic development. The remaining 1 1/2% is projected to generate $51.5 million for general operations, property tax reduction and capital projects. Dell continues to be a key driver for both the Round Rock and Central Texas region. To ensure good overall financial stability for the City, a concentration risk account has been established to mitigate the City's annual net exposure to declining sales tax from any single sales taxpayer that represents more than 5% of the City's net General Fund revenues. In fiscal year 2019, the City Council adopted new financial policies to create balanced and reliable ongoing revenues by limiting Dell sales tax revenues in the General Fund to not exceed 20% of budgeted sales tax revenues. Any revenues received above this limit will be deposited to a capital projects fund. The City sets utility rates based on the cost of service, establishing an equitable rate structure for total cost recovery. The utility rate model was last updated during 2017. The model will be updated in 2021. There were no water rate increases for fiscal year 2021 because the Utility Fund has saved money by reducing its power costs, improving operations, and lowering interest payments by refinancing its debt. The City's wastewater rates are not increasing since the model shows that the future needs of the wastewater program are adequately funded within current revenues, impact fees,and other development contributions. A new cost of service study will be performed in fiscal year 2021 taking into consideration new capital master plans and demand data. The City planned ahead to ensure its utility system will serve the future citizens of Round Rock. With multiple contracts in place with the Brazos River Authority, the City has secured its water supply through expected buildout in 2050. Water from Lake Georgetown and Stillhouse Hollow Lake in the Brazos River Basin provide water to the City's current 52 million gallons per day(MGD)water treatment plant.The City also secured water from Lake Travis in the Lower Colorado River Basin. In order to treat water from Lake Travis, the City partnered with the Cities of Cedar Park and Leander to form the Brushy Creek Regional Utility Authority (BCRUA). The BCRUA system will ultimately pump and treat 105.6 MGD which meets all three Cities' supply needs through buildout. In 2009, in order to provide the most cost-effective wastewater services, the City partnered with the Cities of Cedar Park and Austin to purchase the Brushy Creek Regional Wastewater System (BCRWWS). The 6 system is currently undergoing improvements to increase capacity to collect and treat up to 30 MGD of wastewater. The City's portion will be approximately 20.1 MGD and will serve Round Rock through 2035. The City assumed operational control of the BCRWWS effective October 1,2018.This has increased efficiencies with no net cost increase. In December 2017,the City's Utility System and BCRUA both received an upgraded rating to AAA, the highest rating of creditworthiness,from Standard and Poor's (S&P). This raised rating reflects the stability of the City's utility system. S&P also noted that the system had good financial management policies and practices. In October 2018,the City's General Obligation (GO) bonds also received an upgraded rating to AAA. Round Rock is one of only eight cities in Texas with AAA ratings for both GO and Utility debt. The upgrade "reflect[ed] Round Rock's very strong economy and maintenance of a strong financial position ... (and) very strong management,with strong financial policies and practices", according to S&P. Prospects for the Future As we look to the future, there are several key initiatives in process now that will shape the development of Round Rock for the next decade. The City is leveraging available resources to attract industries from across the globe to strengthen its property tax and sales tax bases. Significant investment in the medical industry including several state-of-the-art medical facility expansions, combined with the impact of multiple higher education centers, will provide community development and unlimited opportunities. Not only will these initiatives shape the physical development of the City, but they will also influence the knowledge base and creativity found in the community. In June 2020, the Round Rock City Council adopted Round Rock 2030 as its comprehensive plan for the next decade. Crafted over two years, the Round Rock 2030 establishes a set of land use and development policies, including a Future Land Use Map and location criteria for specific land uses.With the City's natural commercial attractiveness, a strong economic development plan and a strengthening economy, projections for the future remain positive. Awards and Acknowledgements The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Round Rock, Texas for its comprehensive annual financial report for the fiscal year ended September 30, 2019. This was the thirty-fourth consecutive year that the City has achieved this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. In addition, the City of Round Rock also received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning October 1,2019.To qualify for the Distinguished Budget Presentation Award, the government's budget document had to be judged proficient as a policy document, a financial plan, an operations guide and a communications device. Additionally,the GFOA awarded the City a Certificate of Outstanding Achievement in Popular Annual Financial Reporting for the fiscal year ended September 30, 2019. This award recognizes the City's ability to extract information from their comprehensive annual financial report to produce high quality popular annual financial reports specifically designed to be readily accessible and easily understandable to the general public and other interested parties without a background in public finance and then to recognize individual governments that are successful in achieving that goal. 7 The City's investment policy was awarded the Certificate of Distinction by the Government Treasurers' Organization of Texas (GTOT) in January 2020.This is the second consecutive period the City has received this distinction. This certification recognizes the investment policy for meeting strict criteria in safeguarding the City's investments and is good for a two-year period. The City of Round Rock has earned all five Transparency Stars from the Texas Comptroller's Office recognizing the City's efforts to make information on the City's traditional finances, debt obligations, public pensions, economic development, and contracts and procurement transparent and readily available. During fiscal year 2020,the City applied for the last remaining star:Contracts and Procurement and was awarded the final star in December 2020.The City of Round Rock is one of only 12 cities in Texas to earn all five stars. The presentation of this report on a timely basis could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Department. We would like to express our appreciation to all members of the Department who assisted and contributed to its presentation. Acknowledgement is also given to Whitley Penn, L.L.P. for their valuable assistance in production of the report. We would also like to thank the Mayor and Council members for their commitment in planning and conducting the financial operations of the City in a responsible and progressive manner. Respectfully submitted, Laurie Hadley �1 City Manager y l )- Susan L. Morgan, CPA Chief Financial Officer =�fisParencys��^ ,Varenc,,, �, garencj, �j`5parency�NF �° Varenc,,, AL nalFi�a Q� ticDeve��i ~ � tobli anti A"6 cPen5`°'~ fs&Pro4`��e� 8 Citizens of Round Rock Mayor&Council Municipal Judge City Attorney Assistant City Manager Assis#ant Gi#y Manager General Services Communications& Marketing Building Construction ounting&Treasury, nt - Artis&Culture acility Maintenance Budget SOC4 Media& IL Digital Content irhiclo Maintenance Facility Municipal Court 1tt�iea Production Purchasirlg Its 3 Wellnes " town Events& Marketing Transportation Department Utility BrBilling +,, tpleyee Services � I�� Transportation Administration Risk Management fnformatron Technology tanspcu " Manning R l IS&Records �---�- P wring Enterprise Applications 1rsit'Public Trans Cation Office et the Chief tonal Develo merit Po' P sfruGtu"e&Custozner Support tG4nstruc.tion inspection -a'r°.t services i Geographic Information Systems Project Management Training , `r St:eat Maintenance Cr-minas Investigator Librar Y rac Signs&Signals s.rpp'wt Services ita kdittintstratian fti _ Administration. Speri rl Operations � Fire Ope`at;onr Team cat Services Utilities&Environmental Homeland Security& Services Emergency RAanagernient = Planning&Development Public Services tannin9 g&En ineari Services -, Youth Services & *lNastevda#erTreatmenl Boas ACommissions- Sports ManagementTourism Adult Services tenonce P s' its Center 6;Water Conservation Current Development Parks and Recreation �.y ,- i�"'� Admiriatratrofs''. Legislative Issues { Gover nnnent Finance Officers Association Certificate of .Achievement for Excellence in Financial Reporting Presented to City of Round Rock Texas For its Comprehensive iumal Financial Report For the Fiscal Year Ended September 30. 2019 P, 2jrO `xecutice Director'CED 10 Austin Off; X)N.CaLiiai of Texas Hwy. 5%g. t:250 R,Suite w h i t!e y p e n n " .ti, X 77.�f; 71 +31..8230 h'a*n wNfl yt—1n.com INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of City Council City of Round Rock,Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Round Rock, Texas (the "City"), as of and for the year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit 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 entity'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 entity'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. A member of I I '�Nexia international To the Honorable Mayor and Members of City Council City of Round Rock,Texas Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities,the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of September 30, 2020, and the respective changes in financial position, the respective budgetary comparison statements for the General Fund and the Round Rock Transportation and Economic Development Corporation Fund, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management's discussion and analysis, pension information, and other post-employment benefit information, as listed in the table of contents, 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 the 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. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund statements and schedules, and statistical section are presented for the purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget ("OMB"); Title 2 U.S Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), and is also not a required part of the basic financial statements. The combining and individual fund statements and schedules and schedule of expenditures of federal awards are the responsibility of management and were derived from and relate 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, combining and individual fund statements and schedules and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. 12 To the Honorable Mayor and Members of City Council City of Round Rock,Texas The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 8, 2021, on our consideration of the City's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. W�,;�I,r �?-. L cP Austin,Texas February 8,2021 13 .. 1 ©: •�i If IN Ck U - 14 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 The discussion and analysis of the City of Round Rock's financial performance provides an overview and analysis of the City's financial activities for the fiscal year ended September 30, 2020. It should be read in conjunction with the accompanying transmittal letter and the accompanying basic financial statements. Financial Highlights • The assets and deferred outflows of resources of the City of Round Rock exceeded its liabilities and deferred inflows of resources at September 30, 2020, by $979,967,476 (net position). Of this amount, $737,729,572 (75.3%) is invested in capital assets. Net position restricted for specific purposes total $39,787,385 (4.1%). The remaining amount, $202,450,519 (20.6%) (unrestricted net position) may be used to meet the City's ongoing obligations to its citizens and creditors. • The City of Round Rock's total net position increased by $51,353,155. The increase can be attributed to $31.6 million of operating and capital grants and contributions and $3.1 million more in charges for services from both governmental and business-type activities, as well as increases in property and sales taxes. • As of the close of the current fiscal year,the City of Round Rock's governmental funds reported combined ending fund balances of $159,516,204, a decrease of $8,684,630 in comparison to the prior year. The decrease is due in part to fewer bonds being issued in fiscal year 2020 offset by a $9.9 million decrease in current year expenditures compared to last year. The decrease in expenditures is mostly related to capital projects. Unassigned fund balance of $59,547,303, or 37.3% of the total fund balance is available for spending at the government's discretion. • At the end of the current fiscal year, unassigned fund balance for the General Fund was $59,547,303, or 54.2% of the total General Fund expenditures. The City's fund balance policy requires the General Fund's fund balance to be a minimum of 25% of expenditures, or $27,462,923. The General Fund's total fund balance was $59,813,896,which is 29.4% more than the fund balance policy requirement. • The City of Round Rock's total debt increased by $15,895,000 during the current fiscal year. The change can be attributed to the issuance of general obligation refunding bonds and certificates of obligation bonds, along with the offset of regularly scheduled debt principal retirements as more fully described in Note IV(F) to the financial statements. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City of Round Rock's basic financial statements. The City's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the City of Round Rock's finances, in a manner similar to a private-sector business. The statement of net position presents information on all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Round Rock is improving or deteriorating. 15 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Government-wide Financial Statements (Continued) The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs,regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods(e.g.,unavailable tax revenues and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Round Rock that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the City include general government, public safety, public works and culture and recreation. The business-type activities of the City of Round Rock include water, sewer and stormwater utility and a golf course. Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Round Rock, like other local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into two categories: governmental funds and proprietary funds. Governmental funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on the near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the City's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City of Round Rock maintains 11 individual governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the General Fund, Debt Service Fund, the Round Rock Transportation and Economic Development Corporation (RRTEDC) Fund, the Debt-Financed Capital Projects Fund, and the Self- Financed Construction Fund, all of which are considered to be major funds. Data from the other six (6) governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in the report. The City adopts an annual appropriated budget for its General Fund. A budgetary comparison statement has been provided for the General Fund to demonstrate compliance with the budget. 16 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Fund Financial Statements (Continued) Proprietary funds The City of Round Rock maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, sewer and stormwater utility and for its golf course. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses an internal service fund to account for its self-funded health insurance program and funding of its other post-employment benefits(OPEB) liability as of September 30,2020.The net income of the Internal Service Fund is allocated between governmental and business-type activities. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, sewer and stormwater utility and for the golf course. The water, sewer and stormwater utility is considered a major fund of the City. Since the Golf Course Fund is the only remaining enterprise fund, it is presented separately even though it does not meet the criteria of a major fund in GASB Statement No. 34. The Internal Service Fund is a single presentation in the proprietary fund financial statements. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information The combining statements referred to earlier in connection with nonmajor governmental funds and individual fund schedules are presented immediately following the notes to the financial statements. Additional information on capital assets used in the operation of governmental funds is provided following the individual fund schedules. Required Supplementary Information In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City's progress in funding its obligation to provide pension and OPEB benefits to its employees. Required supplementary information can be found beginning on page 104 of this report. Government-wide Financial Analysis Net position is a useful indicator of a government's financial position. For the City of Round Rock, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $979,967,476 as of September 30, 2020. 17 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Government-wide Financial Analysis (Continued) The largest portion of the City's net position, $737,729,572 (75.3%) reflects its investments in capital assets (e.g., land, buildings and improvements, improvements other than buildings, machinery and equipment and construction in progress), less any debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to its citizens; consequently, these assets are not available for future spending. Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the City's net position $39,787,385 (4.1%) represents resources that are subject to external restriction on how they may be utilized. Restricted net position decreased $28.9 million, or 42.1%, compared to the prior year. The $20.9 million decrease in restricted net position for governmental activities is a direct result of the City's contribution towards the Kalahari Convention Center and onsite and offsite improvements that had not been reimbursed to the City as of fiscal year end. The City's contributions will be reimbursed from future debt proceeds. The $8.0 million decrease in restricted net position for business-type activities is a result of $1.5 million in drainage revenue bonds being liquidated on eligible projects and $6.5 million in utility impact fees used to reimburse impact fee eligible capital project costs. The remaining balance is unrestricted net position of $202,450,519 which may be used to meet the City's ongoing obligations to citizens and creditors. As of September 30, 2020, and 2019,the City was able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental and business-type activities. Net Position (in 000's) Governmental Business-Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Current and other assets $ 194,482 $ 203,560 $ 218,756 $ 189,903 $ 413,238 $ 393,463 Capital assets 685,504 634,368 365,583 356,517 1,051,087 990,885 Total assets 879,986 837,928 584,339 546,420 1,464,325 1,384,348 Deferred outflows of resources 16,692 23,893 6,044 7,146 22,736 31,039 Long term liabilities 326,622 324,713 79,542 84,651 406,164 409,364 Other liabilities 61,732 62,049 29,764 13,864 91,496 75,913 Total liabilities 388,354 386,762 109,306 98,515 497,660 485,277 Deferred inflows of resources 8,302 1,316 1,132 179 9,434 1,495 Net position: Net investment in capital assets 442,969 400,490 294,760 283,846 737,729 684,336 Restricted 23,472 44,334 16,315 24,344 39,787 68,678 Unrestricted 33,582 28,919 168,869 146,681 202,451 175,600 Total net position $ 500,023 $ 473,743 $ 479,944 $ 454,871 $ 979,967 $ 928,614 18 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Government-wide Financial Analysis (Continued) Total Net Position Governmental & Business-Type Activities (in millions) $1,200 $1,000 Unrestricted ti800 Restricted $600 `Jet investment in capital assets $400 $200 $- 2016 2017 2018 2019 2020 Analysis of Changes in Net Position The table on the following page summarizes the changes in the City's net position from its activities for the fiscal year ended September 30, 2020, with comparisons to the previous year. 19 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Analysis of Changes in Net Position (Continued) Changes in Net Position(in 000's) Governmental Business-Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Revenues: Program revenues: Charges for services $ 10,998 $ 12,485 $ 63,495 $ 58,924 $ 74,493 $ 71,409 Operating grants and contributions 3,742 2,987 - - 3,742 2,987 Capital grants and contributions 9,464 9,915 18,444 21,584 27,908 31,499 General revenues: Property taxes 64,745 57,397 - - 64,745 57,397 Franchise taxes 7,060 7,407 7,060 7,407 Sales tax 78,362 75,691 78,362 75,691 Hotel occupancy tax 4,112 6,000 4,112 6,000 Public service taxes 621 698 - - 621 698 Investment earnings and other 9,082 12,181 4,011 4,773 13,093 16,954 Total revenues 188,186 184,761 85,950 85,281 274,136 270,042 Expenses: General government 27,468 27,861 - - 27,468 27,861 Public safety 64,152 64,196 64,152 64,196 Public works 38,606 36,262 38,606 36,262 Culture and recreation 26,356 27,821 26,356 27,821 Interest on long-term debt 9,382 8,526 - - 9,382 8,526 Water and sewer utility - - 54,000 54,388 54,000 54,388 Golf course - 2,819 2,400 2,819 2,400 Total expenses 165,964 164,666 56,819 56,788 222,783 221,454 Increases in net position before Transfers 22,222 20,095 29,131 28,493 51,353 48,588 Transfers 4,058 3,698 (4,058) (3,698) - - Increase in net position 26,280 23,793 25,073 24,795 51,353 48,588 Net position-beginning 473,743 449,950 454,871 430,076 928,614 880,026 Net position-ending $ 500,023 $ 473,743 $ 479,944 $ 454,871 $ 979,967 $ 928,614 Governmental Activities During the current fiscal year, governmental activities increased the City's net position by$26,279,827 or 51.2% of the total increase in the net position of the City over the prior year. Key factors for the increase in net position are as follows: REVENUES • Amounts received for property taxes increased from last year by 12.8% due primarily to an increase in taxable assessed value from $13.6 billion for fiscal year 2019 to $14.6 billion for fiscal year 2020.The fiscal year 2020 tax rate of $0.439000 is 9.3% above the no-new-revenue rate (formerly known as the effective tax rate), $0.401615. Property tax makes up 39.5%of total general revenues. • Sales tax collections of $78.4 million increased 3.5%, compared to prior year. Dell, the City's largest sales tax payer, had fiscal year 2020 sales tax revenues 5.6%higher than collections in the prior year. This growth combined with strong underlying growth in other City businesses led to the increase in sales tax collections. 20 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Governmental Activities(Continued) • Charges for services decreased by$1.5 million due to a decrease in developer landscaping fees, municipal court collections,fire inspection fees, and recreation program fees as a result of COVID-19. • Hotel occupancy tax revenues decreased 31.5% or$1.9 million. This is the result of cancelled events and less people traveling due to COVID-19. • Grants and contribution revenues increased $304,000 over the prior year. This increase is primarily due to reimbursement of COVID-19 eligible expenses from Coronavirus Relief Funds passed down through Williamson County by the U.S. Department of Treasury. Revenues by Type - Governmental Activities S��PS taliPS Hotel occupancy tax 2.2% _ Public service %r taxes 0.3% Investment earnings a 4.8% - Chargesfor Franchise taxes J" services 3.8% 5.9% Operating grants and contributions 2.0% Property taxes `' Capital grants 34.4% and contributions 5.0% EXPENSES Expenses for governmental activities for the City totaled $165,963,706 for the year ended September 30, 2020. Significant factors are listed below. • General government costs decreased $394,400 from $27.9 million in 2019 to$27.5 million in 2020,or 1.4%. This decrease is primarily a result of decreased issuance costs offset some by additional expenses incurred to respond to COVID-19, not all of which were considered eligible for reimbursement from Coronavirus Relief Funds passed through Williamson County by the U.S. Department of Treasury. • Public safety program costs including police and fire department activities totaled about $64.2 million, or 38.7% of total expenses for governmental activities. Total costs remained relatively flat, decreasing 0.1% over the prior year. • Public works program costs increased $2.3 million, or 6.5%, compared to prior year. This increase is primarily due to an increase in economic incentive payments of$1.26 million during fiscal year 2020. • Culture and recreation decreased $1.5 million from $27.8 million in 2019 to $26.4 million, or 5.3%, in 2020. This decrease is due in part to limited operating capacity, reduced services, and budget reductions in response to COVID-19. 21 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Governmental Activities (Continued) Expenses - Governmental Activities (in thousands) S ia,000 $60,000 S 50,000 $�fap0o s" $30,0W 520,000 „ S 10,000 S- General Public safety Public works Culture and Interest on government recreation long-term debt •2020 a 2019 Business-Type Activities Business-type activities increased the City's net position by$25,073,328 or 48.8% of the total growth in the net position of the City over the prior year. This increase was due to $18.4 million in capital grants and contributions. Additionally, charges for services were up $4.6 million and expenses were relatively flat, increasing $30,235 over the prior year. Key factors for the increase in net position are as follows: REVENUES The City's water, sewer and stormwater utility continues to show increases in the number of customers and operating revenues. Scheduled uses of impact fees received have allowed current rates to remain stable while still providing adequate times coverage of utility bonded debt service. Comparative data for the past two fiscal years is presented as follows: 2020 2019 Operating revenues $ 60,389,659 $ 56,801,942 Operating income $ 9,199,641 $ 5,270,827 Income available for debt service $ 32,687,905 $ 28,347,020 Annual debt service $ 6,082,481 $ 6,102,631 Coverage 5.37 4.65 22 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Business-Type Activities (Continued) Revenues - Business-Type Activities 6'llP Capital grants a� and contributions 21.4% Charges for , services CRY 73.9% Investment earnings 4.7% EXPENSES Expenses of the business-type activities increased $30,235 from the prior year. Expenses remained relatively steady over the prior year. Expenses - Business-Type Activities (in thousands) $60,0W 550,0W 540,000 530,000 $20,000 S 10,000 5 41 Water and sewer utility Golf owse 22020 92019 Financial Analysis of the Government's Funds As noted earlier, the City of Round Rock uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. 23 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Governmental Funds The focus of the City's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. For the fiscal year ended September 30, 2020, the City's governmental funds reported combined ending fund balances of $159,516,204. This is a decrease of $8.7 million, or 5.2% over the prior year. Unassigned fund balance is $59,547,303, or approximately 37.3% of the total fund balance amount, is available for spending at the City's discretion. $1,834,073 is assigned to culture and recreation while $24,290,534 of the fund balance is committed to either capital projects or special revenue projects/programs. The remainder of fund balance is restricted or non-spendable to indicate that it is not available for new spending because it has already been committed to 1) pay debt service of $5,080,091, 2) fund authorized construction of $58,069,777, 3) other restricted purposes of$9,599,773 or 4) non-spendable of$1,094,653. Fund Balance Type - Governmental Funds Unassigned-•• ,. . Nonspendable 37.3% 0.7% y, Assigned 1.2% . . Restricted 45.6% Committed 15.2% The General Fund is the chief operating fund of the City. At the close of the current fiscal year, fund balance of the General Fund reached$59,813,896,of which$59,547,303 was unassigned. To measure the general fund's liquidity, it is useful to compare unassigned fund balance to total general fund expenditures. Unassigned fund balance represented 54.2% of total general fund expenditures. During the current fiscal year, the fund balance of the General Fund increased by $10,089,022 due to conservative budget reductions and reduced spending overall by the departments. The General Fund total revenues exceeded the budget by $10,515,276. The City continues to budget revenues conservatively but with the continued population growth and increase in property values, the property taxes and sales tax revenues continue to surpass budgeted projections. The Debt Service Fund had a total fund balance of $5,080,091 at the end of the fiscal year, all of which is restricted for the payment of debt service. The net increase in fund balance during the year was $60,716. Debt 24 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Governmental Funds (Continued) service expenditure requirements increased by $2,131,079 during the fiscal year and were adequately funded by the debt service portion of the property tax rate. The fund balance of the RRTEDC revenue fund was $9,762,034, a decrease of $19,943,654 compared to the prior year. The decrease is a result of the City contributing towards the Kalahari Convention Center and onsite and offsite improvements to accommodate the Kalahari Resort. The Kalahari Resort and Convention Center were near completion on September 30,2020. The City's contributions,totaling $70 million,will be reimbursed from future debt proceeds. The fund balance of the Debt-Financed Capital Projects Fund was $47,373,686, an increase of $6,126,615 compared to the prior year. This is a result of the issuance of certificates of obligation bonds for road improvement and expansion projects, offset by costs incurred on road and expansion projects during the fiscal year. The fund balance of the Self-Financed Construction Fund was$20,263,903, a decrease of$4,969,153 compared to the prior year. The decrease is a result of the spend down of neighborhood street maintenance funds. A targeted reduction due to the COVID-19 pandemic was to not transfer the annual $4.3 million from the General Fund to neighborhood street maintenance projects in the Self-Financed Construction Fund. The projects performed in fiscal year 2020 were funded with residual allocations from previous years. Enterprise Funds The City's enterprise fund statements provide the same type of information found in the government-wide financial statements, but in more detail. At the end of the fiscal year,total net position of the enterprise funds totaled $478,444,848, an increase of $24,651,546 over the prior year. Unrestricted net position of the funds totaled $167,368,635 at September 30,2020. The unrestricted net position represented 35.0%of the enterprise funds'total net position. The Water and Sewer Fund's net position increased $24,585,566 over the prior year due in part to an increase in charges for services, lower operating expenses, and infrastructure and impact fee contributions. Operating revenues totaled $60,389,659, compared to $56,801,942 in the prior year due to increased water and sewer service sales resulting from a drier summer and customer growth. Operating expenses were $51,190,018, a decrease of$341,097 over the prior year. The Golf Course Fund ended the year with a net position of $10,058,812. Operating revenues totaled $2,684,066, a 36.1%increase for the year compared to$1,971,887 in the prior year. Rounds of golf played were 52,053 compared to 36,303 in the prior year. Golf is an activity that can easily be played during the COVID-19 pandemic while maintaining social distancing. Operating expenses were$2,818,489, which is $418,907 higher than the previous year. The increase in golf rounds played increased the amount of maintenance costs for the course and equipment. 25 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 General Fund Budgetary Highlights Two budget amendments were taken to City Council for the General Fund for the year ended September 30, 2020. The first budget amendment was a budget reduction of$8.97 million to offset anticipated revenue loss due to COVID-19. The realized savings were a result of position vacancies and savings in both personnel and operating accounts. The amendment also allocated an additional contingency that allowed the City Manager to pay for any unanticipated COVID-19 response related expenses. The second budget amendment added budget for revenues and associated expenses related to Coronavirus Relief Funds from Williamson County for the operational impact on Fiscal Support from COVID-19. Capital Assets and Debt Administration Capital Assets The City of Round Rock's investment in capital assets for its governmental and business-type activities as of September 30, 2020, amounted to$1,051,086,635 (net of accumulated depreciation). This investment includes land, buildings and improvements, improvements other than buildings (including infrastructure), machinery and equipment, and construction in progress. Major capital asset events for the year ended September 30, 2020, included the following: Downtown Improvements • Design is underway on the Northeast Downtown Improvements project with $910,000 spent to date. • Design is underway on the new Downtown Parking Garage with $2.6 million spent to date. • Construction was substantially complete on the Downtown Streetscape Improvements project at a cost of $2.5 million. • Additional Downtown improvements were completed at a cost of$3.0 million. Facility Improvements • City facility improvements were completed at a cost of$508,000. • Information technology infrastructure upgrades were completed at a cost of$601,000. • Construction was near completion on the new Fire Station #3 with $5.9 million spent to date and an estimated cost of$6.4 million. Of the $5.9 million spent, $5.4 million was funded from the 2017 General Obligation (GO) bonds. • Design is underway for the new library with $6.1 million spent to date. Of this$6.1 million, $1.5 million was funded from the 2014 GO bonds. Kalahari Convention Center and Road Improvements • Construction was near completion on the Kalahari family resort,water park and convention center with $39.7 million spent to date on the convention center. • Construction was near completion on the onsite roadway improvements with $14.3 million spent to date. • Construction is underway on the offsite roadway improvements with $10.4 million spent to date. 26 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Capital Assets (Continued) Park Improvements and Trails • Construction was completed on the Adult Recreation Complex at a total cost of $4.7 million. Of this $4.7 million, $3.7 million was funded from the GO bonds. • Expansion of Brushy Creek Trail from A.W. Grimes to Georgetown Street was completed at a total cost of $2.7 million funded from the 2014 GO bonds. • Expansion of other citywide trails is underway at an estimated cost of$17.6 million with $4.4 million spent to date. Of this $4.4 million, $2.8 million was funded from the GO bonds. • Construction was completed on the Old Settlers Park Tennis Courts project at a total cost of$809,000. • Neighborhood park improvements, upgrades to comply with the American with Disabilities Act (ADA), and facility improvements are underway and at various stages of completion. Completed projects totaled $3.3 million while construction in progress at year-end approximated $107,000. Of the$3.3 million in completed projects, $1.2 million was funded from the GO bonds. Transportation Improvements • Major arterial,signal,and road projects for transportation are underway and at various stages of completion. Completed projects totaled $15.0 million while construction in progress at year-end approximated $16.1 million. • Various neighborhood street improvement projects were completed at a cost of$6.6 million. • Developers contributed $4.3 million for transportation infrastructure improvements. Water, Wastewater and Stormwater Improvements • The City was near completion of an updated water and wastewater masterplan at the end of the year. This plan will project the future capital needs of the Utility Department for the next five years. • Various water pump station improvements were completed at a cost of $2.7 million and similar projects were in progress with $6.4 million spent to date. • Various water and wastewater line improvement projects were completed and placed in service at a cost of $7.8 million and similar projects were in progress with $4.1 million to date. • The City completed two major stormwater projects in the Kensington neighborhood and Dry Branch areas at a cost of$3.1 million. • Various additional stormwater improvement projects are in process with $2.4 million spent to date. • Developers contributed $10.4 million for water, sewer and stormwater system infrastructure improvements. • The City has partnered with the Cities of Cedar Park, Austin and Leander on the Brushy Creek Regional Wastewater Treatment Plant Expansion project with estimated completion in 2023. Construction is underway with $3.1 million spent to date. 27 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Capital Assets(Continued) Capital Assets(in 000's) Governmental Business-Type Activities Activities Total 2020 2019 2020 2019 2020 2019 Land $ 110,451 $ 103,983 $ 8,453 $ 8,453 $ 118,904 $ 112,436 Buildings and improvements 186,200 184,555 32,102 31,099 218,302 215,654 Improvements other than buildings 726,087 692,573 519,988 496,572 1,246,075 1,189,145 Machinery and equipment 89,079 85,440 18,380 22,996 107,459 108,436 Accumulated depreciation (518,217) (489,937) (232,351) (218,920) (750,568) (708,857) Construction in progress 91,904 57,755 19,011 16,317 110,915 74,072 Total $ 685,504 $ 634,369 $ 365,583 $ 356,517 $ 1,051,087 $ 990,886 Additional information on the City of Round Rock's capital assets can be found in Note IV (E) to the financial statements. Long-Term Debt At the end of the current fiscal year, the City of Round Rock had total debt outstanding of $341,500,000. Of this amount, $233,745,000 comprises debt backed by the full faith and credit of the City. The remainder of the City's debt is secured solely by specified revenue sources(i.e., revenue bonds). During the current fiscal year, the City of Round Rock's total debt increased by $15,895,000. Regularly scheduled debt principal was retired during 2020. The City issued general obligation refunding bonds, series 2020, which resulted in reduced debt service payments of $463,661 and an economic gain of $436,000. Additionally,the City issued $30 million combination tax and revenue certificates of obligation,series 2020 and $4.5 million limited tax notes, series 2020. Details of the refunding and new bond issues can be found in Note IV(F) (4)to the financial statements. Long-Term Debt(in 000's) Governmental Business-Type Activities Activities Total 2020 2019 2020 2019 2020 2019 General obligation bonds $ 141,220 $ 151,405 $ $ $ 141,220 $ 151,405 Certificates of obligation 88,025 58,870 88,025 58,870 Limited tax notes 4,500 - 4,500 - Hotel tax revenue bonds 9,780 10,425 9,780 10,425 Sales tax revenue bonds 27,785 31,535 27,785 31,535 Water and wastewater revenue bonds - - 70,190 73,370 70,190 73,370 Total $ 271,310 $ 252,235 $ 70,190 $ 73,370 $ 341,500 $ 325,605 The City of Round Rock benefits substantially in reduced interest costs resulting from the bond rating by Standard & Poor's of AAA for both General Obligation and the Utility Revenue bonds. There is no direct debt limitation in the City Charter or under state law. The City operates under a Home Rule Charter (Article XI, Section 5, Texas Constitution), approved by the voters, that limits the maximum 28 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Long-Term Debt (Continued) tax rate, for all City purposes to $2.50 per $100 assessed valuation. Administratively, the Attorney General of the State of Texas will permit allocation of up to $1.50 of the $2.50 maximum tax rate for general obligation debt service. The revenues from this maximum tax rate would be sufficient to cover the debt service on over $2.5 billion of bonds. Of the maximum tax rate for debt service of $1.50, the City uses $0.1255, or 8.4%. Of $64,708,293 levied in property taxes for the fiscal year ended September 30, 2020, 99.59%of taxes levied were collected during the fiscal year. The City is conservative in how it issues debt and has adopted a "pay as you go" philosophy by using excess cash funds to fund current projects and issuing debt only when deemed necessary. Additional information on the City's long-term debt can be found in Note IV(F)to the financial statements. Economic Factors and Next Year's Budgets and Rates The development of the City's budget is guided by several factors including the Council's Strategic Goals, prevailing economic conditions and the continuing need to provide basic and improved customer services for a growing population. The fiscal year 2020-2021 budget adopted by the City Council adheres to the City's financial policies and preserves the City's strong financial position while maintaining levels of service. During the creation of the 2020-2021 budget process the City Manager and Executive team focused on various budget drivers in the decision-making process. • Addressing Council's Strategic Goals • Recovering from the COVID-19 pandemic from a position of financial strength • Meeting the demands of growth with additions to maintain service levels • Biennial citizen survey results • Debt payments for new programs • Competitive employee compensation and benefits • Maintenance of parks, facilities, and streets • Compliance with financial policies The City's economy is expected to generate approximately $70.4 million in sales tax revenue for fiscal year 2021. This amount includes the 1/2% or $18.9 million in additional sales and use tax for roads and economic development. The remaining 1 1/2% is projected to generate $51.5 million for general operations, property tax reduction, and capital projects. The fiscal year 2021 certified taxable property value for Round Rock is $15.4 billion, an increase of 5.5% from last year's $14.6 billion. The adopted property tax rate for fiscal year 2021 is $0.439000 per $100 of valuation. The tax rate is an increase of 1.3 cents over the no new revenue rate of $0.425550, and well below the voter approval rate of$0.460650. The 1.3 cent increase over the no new revenue tax rate allows the City to provide additional funding for roads. With an adopted rate of$0.439000,the City continues to have one of the lowest tax rates in Central Texas and is among the lowest rates in the state for medium-sized cities. The Water and Wastewater Utility operations are funded primarily through user fees. The City's utility infrastructure and service delivery systems have been carefully planned and have sufficiently met demand for 29 CITY OF ROUND ROCK, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2020 Economic Factors and Next Year's Budgets and Rates(Continued) a growing customer base. Water sales are conservatively estimated using customer base projections, while at the same time taking into account changing weather conditions. Water conservation and drought contingency programs continue to help the City conserve existing water sources. There are no utility rate increases budgeted for fiscal year 2021. A cost-of-service study will be performed in fiscal year 2021 taking into consideration new capital master plans and demand data. Requests for Information This financial report is designed to provide citizens,taxpayers,customers,investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Chief Financial Officer, City of Round Rock, 221 East Main Street, Round Rock,Texas 78664. 30 BASIC FINANCIAL STATEMENTS 31 CITY OF ROUND ROCK, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2020 Governmental Business-Type Activities Activities Total ASSETS Cash and cash equivalents $ 19,547,468 $ 26,073,321 $ 45,620,789 Investments 93,448,868 132,106,648 225,555,516 Receivables (net of allowance for uncollectibles)- Property taxes 419,655 - 419,655 Accounts &other 8,301,428 18,767,457 27,068,885 Accrued interest 154,688 1,374,877 1,529,565 Intergovernmental - 3,236,495 3,236,495 Grants 3,037,689 - 3,037,689 Interfund (1,499,972) 1,499,972 - Inventories 226,303 426,585 652,888 Other current assets 955,850 427,014 1,382,864 Restricted assets - Cash and cash equivalents 32,955,491 4,952,216 37,907,707 Investments 35,224,091 13,025,369 48,249,460 Property tax receivable 233,517 - 233,517 Accounts and other 1,395,689 - 1,395,689 Accrued interest 81,237 18,843 100,080 Investment in joint venture - 16,847,463 16,847,463 Capital assets - Land and construction in progress 202,354,980 27,463,492 229,818,472 Capital asset, net of accumulated depreciation 483,148,921 338,119,242 821,268,163 Total assets 879,985,903 584,338,994 1,464,324,897 DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refundings 3,036,965 4,217,952 7,254,917 Deferred outflows related to pensions 11,780,660 1,570,648 13,351,308 Deferred outflows related to OPEB 1,874,779 255,653 2,130,432 Total deferred outflows of resources 16,692,404 6,044,253 22,736,657 The accompanying notes are an integral part of this financial statement. 32 Governmental Business-Type Activities Activities Total LIABILITIES Accounts payable 1 1 23,061,423 41 1 ccou spy $ 8, 99,935 $ $ ,26 ,358 Accrued payroll 2,315,150 310,341 2,625,491 Unearned revenue 12,230,798 - 12,230,798 Accrued interest payable 1,487,789 458,097 1,945,886 Customer deposits - 1,718,267 1,718,267 Due within one year Bonds, notes, leases, compensated absences 27,498,331 4,216,350 31,714,681 Due in more than one year Net pension liability 35,323,270 4,816,810 40,140,080 Total OPEB liability 16,377,380 2,233,279 18,610,659 Bonds, notes, leases, compensated absences 274,921,424 72,491,827 347,413,251 Total liabilities 388,354,077 109,306,394 497,660,471 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 7,552,515 1,029,888 8,582,403 Deferred inflows related to OPEB 749,059 102,145 851,204 Total deferred inflows of resources 8,301,574 1,132,033 9,433,607 NET POSITION Net investment in capital assets 442,969,195 294,760,377 737,729,572 Restricted for- Debt service 3,825,819 208,878 4,034,697 Capital projects 10,045,957 16,106,958 26,152,915 Hotel-motel tax 7,440,558 - 7,440,558 Public safety 757,284 - 757,284 General government 1,401,931 - 1,401,931 Unrestricted 33,581,912 168,868,607 202,450,519 Total net position $ 500,022,656 $ 479,944,820 $ 979,967,476 33 CITY OF ROUND ROCK, TEXAS STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2020 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities: General government $ 27,467,722 $ 4,529,682 $ 3,359,309 $ 4,300 Public safety 64,151,715 1,684,921 10,918 5,375 Public works 38,606,348 700,442 - 9,376,694 Culture and recreation 26,355,801 4,082,796 371,933 77,720 Interest on long-term debt 9,382,120 - - - Total governmental activities 165,963,706 10,997,841 3,742,160 9,464,089 Business-type activities: Water and sewer utility 53,999,588 60,811,441 - 18,443,560 Golf course 2,818,489 2,684,066 - - Total business-type activities 56,818,077 63,495,507 - 18,443,560 Total primary government $ 222,781,783 $ 74,493,348 $ 3,742,160 $ 27,907,649 The accompanying notes are an integral part of this financial statement. 34 Net(Expense) Revenue and Changes in Net Position Primary Government Governmental Business-Type Functions/Programs Activities Activities Total Governmental activities: General government $ (19,574,431) $ $ (19,574,431) Public safety (62,450,501) (62,450,501) Public works (28,529,212) (28,529,212) Culture and recreation (21,823,352) - (21,823,352) Interest on long-term debt (9,382,120) (9,382,120) Total governmental activities (141,759,616) - (141,759,616) Business-type activities: Water and sewer utility - 25,255,413 25,255,413 Golf course (134,423) (134,423) Total business-type activities 25,120,990 25,120,990 Total primary government (141,759,616) 25,120,990 (116,638,626) General revenues: Taxes: Property taxes, levied for general purpose 42,009,003 42,009,003 Property taxes, levied for debt service 22,735,620 - 22,735,620 Franchise taxes 7,060,026 - 7,060,026 Sales taxes 78,361,955 - 78,361,955 Hotel occupancy tax 4,111,858 - 4,111,858 Public service taxes 620,996 - 620,996 Unrestricted investment earnings and other 9,081,735 4,010,588 13,092,323 Transfers 4,058,250 (4,058,250) - Total general revenues and transfers 168,039,443 (47,662) 167,991,781 Change in net position 26,279,827 25,073,328 51,353,155 Net position-beginning 473,742,829 454,871,492 928,614,321 Net position-ending $ 500,022,656 $ 479,944,820 $ 979,967,476 35 CITY OF ROUND ROCK, TEXAS GOVERNMENTAL FUNDS BALANCE SHEET SEPTEMBER 30, 2020 Round Rock Transportation and Economic General Development Fund Debt Service Fund Corporation Fund ASSETS Cash and cash equivalents $ 10,709,610 $ $ 128,818 Investments 51,186,425 632,257 Receivables(net of allowance for uncollectibles)- Property taxes,including interest and penalties 419,655 - Accounts and other 5,302,934 119,015 Accrued interest 89,738 1,042 Interfund - 10,706 - Grants 737,562 - 2,035,468 Inventories 226,303 - Other current assets 40,290 - - Restricted assets- Cash and cash equivalents - 5,069,385 2,311,990 Investments - 11,057,480 Receivables- Property taxes,including interest and penalties 233,517 - Sales tax - 1,395,689 Accrued interest - - 66,684 Total assets $ 68,712,517 $ 5,313,608 $ 17,748,443 LIABILITIES,DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities- Accounts payable $ 6,217,367 $ $ 7,986,409 Accrued payroll 2,256,796 - Interfund payables 10,706 Unearned revenue - - Total liabilities 8,484,869 7,986,409 Deferred inflows of resources- Unavailable revenue-property taxes 413,752 233,517 - Total deferred inflows of resources 413,752 233,517 Fund balances- Nonspendable 266,593 - Restricted-debt service - 5,080,091 - Restricted-authorized construction - 8,996,542 Restricted-hotel-motel tax - Restricted-public safety Restricted-general government Committed-general government - Committed-capital projects funds 765,492 Assigned-culture and recreation - - Unassigned 59,547,303 - - Total fund balances 59,813,896 5,080,091 9,762,034 Total liabilities,deferred inflows of resources and fund balances $ 68,712,517 $ 5,313,608 $ 17,748,443 The accompanying notes are an integral part of this financial statement. 36 Debt-Financed Other Total Capital Projects Self-Financed Governmental Governmental Fund Construction Fund Funds Funds $ - $ 3,859,471 $ 2,861,252 $ 17,559,151 18,458,561 13,662,168 83,939,411 - - 419,655 - 296,079 5,718,028 25,412 23,930 140,122 - - 10,706 264,659 3,037,689 - - 226,303 828,060 - 868,350 25,274,797 - 299,319 32,955,491 22,735,072 1,431,539 35,224,091 - - 233,517 - - 1,395,689 13,951 602 81,237 $ 48,023,820 $ 23,171,504 $ 18,839,548 $ 181,809,440 $ 650,134 $ 2,674,472 $ 482,960 $ 18,011,342 - - 58,354 2,315,150 - - 10,706 - 233,129 1,075,640 1,308,769 650,134 2,907,601 1,616,954 21,645,967 - - - 647,269 647,269 828,060 1,094,653 - - - 5,080,091 47,373,686 - 1,699,549 58,069,777 - - 7,440,558 7,440,558 - 757,284 757,284 - 1,401,931 1,401,931 - 1,030,812 1,030,812 19,435,843 3,058,387 23,259,722 - 1,834,073 1,834,073 - - - 59,547,303 47,373,686 20,263,903 17,222,594 159,516,204 $ 48,023,820 $ 23,171,504 $ 18,839,548 $ 181,809,440 37 CITY OF ROUND ROCK, TEXAS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION YEAR ENDED SEPTEMBER 30, 2020 Total Fund Balances- Governmental Funds $ 159,516,204 Amounts reported for Governmental Activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and,therefore, are not reported in the funds. These assets consist of: Land $ 110,451,124 Construction in progress 91,903,856 Building and improvements 912,286,412 Equipment 89,079,498 Accumulated depreciation (518,216,989) Total capital assets $ 685,503,901 685,503,901 Deferred amounts on refundings are deferred outflows of resources and,therefore,are not reported in the funds. 3,036,965 Contributions to the pension plan after the measurement date are deferred outflows of resources and,therefore, are not reported in the funds. 7,373,405 Pension actuarial losses (gains) are deferred outflows (inflows) of resources and, therefore,are not reported in the funds. (3,145,260) Contributions to the OPEB plan after the measurement date are deferred outflows of resources and,therefore, are not reported in the funds. 423,621 OPEB actuarial losses (gains) are deferred outflows (inflows) of resources and, therefore, are not reported in the funds. 702,099 Property tax revenues collected in advance of the fiscal year to which they apply are recorded as deferred inflows of resources in the funds and recognized as revenue of the period to which they apply. 647,269 Internal service funds are used by management to charge the costs of self-funded insurance to individual funds. The assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 9,964,675 Unearned revenue associated with long-term economic development agreements are not a current financial resource and,therefore,are not reported in the funds. (10,922,029) Long-term receivable from the Crow Group Series, LLC for a forgivable loan associated with an economic development project is not a current financial resource and, therefore,was reported in the funds as an expenditure, and not as a receivable. 2,530,000 Accrued interest payable in the governmental funds are not recognized because they are not paid within the prescribed time period after year end. (1,487,789) Some long-term liabilities are not due and payable in the current period and,therefore, are not reported in the funds. They are detailed in Note III (A). (354,120,405) Net Position of Governmental Activities $ 500,022,656 The accompanying notes are an integral part of this financial statement. 38 39 CITY OF ROUND ROCK,TEXAS GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 2020 Round Rock Transportation and Economic Debt Development General Service Corporation Fund Fund Fund Revenues- Taxes and franchise, including interest and penalties $ 103,643,156 $ 22,710,737 $ 21,999,048 Licenses, permits and fees 1,640,692 - - Charges for services 3,523,118 - - Fines and forfeitures 1,454,794 - - Grants 2,317,254 - 2,164,202 Hotel occupancy tax - - Contributions - - 2,908,982 Investment and other 6,247,650 159,587 1,208,919 Total revenues 118,826,664 22,870,324 28,281,151 Expenditures- Current- General government 23,688,228 Public safety 56,318,222 - Public works 14,830,655 2,460,070 Culture and recreation 15,014,586 - - Debt service- Principal retirement - 18,296,526 - interest and fiscal charges 10,243,591 - Payment to refunding agent 7,010,563 - Issuance costs 80,383 - Capital projects - 54,994,266 Total expenditures 109,851,691 35,631,063 57,454,336 Excess(deficiency)of revenues over expenditures 8,974,973 (12,760,739) (29,173,185) Other financing sources(uses) - Issuance of debt - - Issuance of refunding bonds - 6,980,000 - Transfers in 5,061,250 5,841,455 18,135,532 Transfers out (3,947,201) - (8,906,001) Total other financing sources(uses) 1,114,049 12,821,455 9,229,531 Net change in fund balances 10,089,022 60,716 (19,943,654) Fund balances,October 1,2019 49,724,874 5,019,375 29,705,688 Fund balances,September 30,2020 $ 59,813,896 $ 5,080,091 $ 9,762,034 The accompanying notes are an integral part of this financial statement. 40 Debt-Financed Self-Financed Other Total Capital Projects Construction Governmental Governmental Fund Fund Funds Funds $ $ 2,153,396 $ 211,144 $ 150,717,481 193,619 1,834,311 1,751,857 5,274,975 169,182 1,623,976 - 1,058,707 5,540,163 4,111,858 4,111,858 4,300 56,555 366,199 3,336,036 683,522 453,147 412,642 9,165,467 687,822 2,663,098 8,275,208 181,604,267 - - 1,153,434 24,841,662 176,380 56,494,602 - - 17,290,725 4,008,261 19,022,847 - 18,296,526 10,243,591 - - 7,010,563 142,650 53,025 - 276,058 8,975,475 16,917,934 1,462,898 82,350,573 9,118,125 16,970,959 6,800,973 235,827,147 (8,430,303) (14,307,861) 1,474,235 (54,222,880) 30,000,000 4,500,000 - 34,500,000 - - - 6,980,000 2,583,599 7,198,501 675,000 39,495,337 (18,026,681) (2,359,793) (2,197,411) (35,437,087) 14,556,918 9,338,708 (1,522,411) 45,538,250 6,126,615 (4,969,153) (48,176) (8,684,630) 41,247,071 25,233,056 17,270,770 168,200,834 $ 47,373,686 $ 20,263,903 $ 17,222,594 $ 159,516,204 41 CITY OF ROUND ROCK, TEXAS RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED SEPTEMBER 30, 2020 Amounts reported for governmental activities in the statement of activities are different because: Net Change in Fund Balances-Total Governmental Funds $ (8,684,630) Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation. They are detailed in Note III (B). 46,889,362 The net effect of various miscellaneous transactions involving capital assets(i.e. sales, disposals, and donations) is to increase net position. They are detailed in Note III (B). 4,246,319 Property tax revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 70,119 The issuance of long-term debt (i.e. bonds, leases) provides current financial resources to the governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. They are detailed in Note III (B). (16,337,919) Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. These are detailed in Note III (B) and include: Pension costs, net (1,407,033) OPEB costs, net (888,482) Interest and employee expense 127,512 Internal service funds are used to charge the costs of self-funded insurance to the individual funds. The net revenue of certain activities of the internal service fund is reported with governmental activities. 2,264,579 Change in Net Position of Governmental Activities $ 26,279,827 The accompanying notes are an integral part of this financial statement. 42 CITY OF ROUND ROCK, TEXAS GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE—BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2020 Variance - Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Taxes and franchise, including interest and penalties $ 101,976,250 $ 96,391,250 $ 103,643,156 $ 7,251,906 Licenses, permits and fees 1,702,400 1,402,400 1,640,692 238,292 Charges for services 4,837,900 2,772,900 3,523,118 750,218 Fines and forfeitures 1,395,000 950,000 1,454,794 504,794 Grants 1,083,538 1,640,538 2,317,254 676,716 Investment and other 5,704,300 5,154,300 6,247,650 1,093,350 Total revenues 116,699,388 108,311,388 118,826,664 10,515,276 Expenditures - Current - General government 27,122,006 24,422,672 23,688,228 734,444 Public safety 57,293,889 56,528,952 56,318,222 210,730 Public works 20,466,769 15,772,576 14,830,655 941,921 Culture and recreation 15,874,973 15,745,060 15,014,586 730,474 Total expenditures 120,757,637 112,469,260 109,851,691 2,617,569 Excess(deficiency) of revenues over expenditures (4,058,249) (4,157,872) 8,974,973 13,132,845 Other financing sources(uses) - Transfers in 5,061,250 5,061,250 5,061,250 - Transfers out (200,000) (3,947,201) (3,947,201) - Total other financing sources (uses), net 4,861,250 1,114,049 1,114,049 - Net change in fund balances $ 803,001 $ (3,043,823) 10,089,022 $ 13,132,845 Fund balance, October 1, 2019 49,724,874 Fund balance, September 30, 2020 $ 59,813,896 The accompanying notes are an integral part of this financial statement. 43 CITY OF ROUND ROCK, TEXAS ROUND ROCK TRANSPORTATION AND ECONOMIC DEVELOPMENT CORPORATION FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE—BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2020 Variance - Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Sales tax $ 19,890,000 $ 19,890,000 $ 21,999,048 $ 2,109,048 Grants 7,818,874 7,818,874 2,164,202 (5,654,672) Contributions 1,420,000 1,420,000 2,908,982 1,488,982 Investment and other 350,000 350,000 1,208,919 858,919 Total revenues 29,478,874 29,478,874 28,281,151 (1,197,723) Expenditures - Public works 14,691,741 14,691,741 2,460,070 12,231,671 Capital projects 54,994,266 54,994,266 54,994,266 - Total expenditures 69,686,007 69,686,007 57,454,336 12,231,671 Excess(deficiency) of revenues over expenditures (40,207,133) (40,207,133) (29,173,185) 11,033,948 Other financing sources(uses) - Transfers in 27,000,000 27,000,000 18,135,532 (8,864,468) Transfers out (803,000) (8,906,001) (8,906,001) - Total other financing sources(uses) 26,197,000 18,093,999 9,229,531 (8,864,468) Net change in fund balances $ (14,010,133) $ (22,113,134) (19,943,654) $ 2,169,480 Fund balance, October 1, 2019 29,705,688 Fund balance, September 30, 2020 $ 9,762,034 The accompanying notes are an integral part of this financial statement. 44 45 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF NET POSITION YEAR ENDED SEPTEMBER 30, 2020 Business-Type Activities Enterprise Funds Water and Golf Course Other Internal Sewer Fund Fund Total Service Fund ASSETS Current assets: Cash and cash equivalents $ 25,846,447 $ 226,874 $ 26,073,321 $ 1,988,317 Investments 131,643,041 463,607 132,106,648 9,509,457 Receivables(net of allowance for uncollectibles of$743,752) - Accounts 18,692,457 75,000 18,767,457 53,400 Accrued interest 1,374,575 302 1,374,877 14,566 Intergovernmental 3,236,495 - 3,236,495 - Inventories 426,585 426,585 - Other current assets 427,014 - 427,014 87,500 Total current assets 181,646,614 765,783 182,412,397 11,653,240 Noncurrent assets: Restricted cash,cash equivalents, and investments: Impact fees 8,217,035 - 8,217,035 - Construction 7,871,080 - 7,871,080 - Customer deposits 1,680,592 - 1,680,592 - Revenue bond covenant accounts 208,878 - 208,878 - Restricted accounts and accrued interest receivable: Restricted accrued interest 18,843 - 18,843 - investment in joint venture 16,847,463 - 16,847,463 - Capital assets: Land and construction in progress 25,572,317 1,891,175 27,463,492 - Capital assets being depreciated 330,542,836 7,576,406 338,119,242 - Total capital assets(net of accumulated depreciation of$232,351,401) 356,115,153 9,467,581 365,582,734 - Total noncurrent assets 390,959,044 9,467,581 400,426,625 - Total assets 572,605,658 10,233,364 582,839,022 11,653,240 DEFERRED OUTFLOWS OF RESOURCES Deferred charges on refunding 4,217,952 - 4,217,952 - Deferred outflows related to pensions 1,570,648 - 1,570,648 - Deferred outflows related to OPEB 255,653 - 255,653 - Total deferred outflows of resources 6,044,253 - 6,044,253 - The accompanying notes are an integral part of this financial statement. 46 Business-Type Activities Enterprise Funds Water and Golf Course Other Internal Sewer Fund Fund Total Service Fund LIABILITIES Current liabilities: Accounts payable $ 22,886,871 $ 174,552 $ 23,061,423 $ 188,593 Accrued payroll 310,341 - 310,341 - Accrued benefit obligations 559,942 SS9,942 - Accrued interest 458,097 458,097 - Customer deposits 1,718,267 1,718,267 - Bonds payable 3,656,408 3,656,408 - Total current liabilities 29,589,926 174,552 29,764,478 188,593 Noncurrent liabilities: Net pension liability 4,816,810 - 4,816,810 - Total OPEB liability 2,233,279 - 2,233,279 Accrued benefit obligations 148,846 - 148,846 Bonds payable 72,342,981 - 72,342,981 Total noncurrent liabilities 79,541,916 79,541,916 - Total liabilities 109,131,842 174,552 109,306,394 188,593 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 1,029,888 - 1,029,888 - Deferred inflows related to OPEB 102,145 102,145 Total deferred inflows of resources 1,132,033 - 1,132,033 NET POSITION Net investment in capital assets 285,292,796 9,467,581 294,760,377 - Restricted for: Debt service 208,878 - 208,878 - Capital projects 16,106,958 - 16,106,958 - Unrestricted 166,777,404 591,231 167,368,635 11,464,647 Total net position $ 468,386,036 $ 10,058,812 478,444,848 $ 11,464,647 Reconciliation to government-wide statement of net position: Adjustment to reflect the cumulative net profit of the internal service fund that was allocated to enterprise fund functions. 1,499,972 Net position of business-type activities $ 479,944,820 47 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED SEPTEMBER 30, 2020 Business-Type Activities Enterprise Funds Water and Golf Course Other Internal Sewer Fund Fund Total Service Fund Operating revenues- Charges for services $ 55,695,939 $ 2,684,066 $ 58,380,005 $ 15,132,362 Licenses, permits,and fees 4,693,720 - 4,693,720 - Total revenues 60,389,659 2,684,066 63,073,725 15,132,362 Operating expenses- Personnel services 12,751,829 - 12,751,829 - Contractual services 13,759,401 2,286,452 16,045,853 2,874,289 Supplies 1,039,638 127 1,039,765 - Materials 1,708,224 5,284 1,713,508 6,598 Heat, light and power 2,452,847 52,400 2,505,247 6,769 Claims expense - - - 9,899,294 Depreciation 19,478,079 474,226 19,952,305 - Total operating expenses 51,190,018 2,818,489 54,008,507 12,786,950 Operating income(loss) 9,199,641 (134,423) 9,065,218 2,345,412 Nonoperating revenues(expenses) - Investment and other revenues 4,010,185 403 4,010,588 340,949 Interest and fiscal charges (2,809,570) - (2,809,570) - Total nonoperating revenues(expenses) 1,200,615 403 1,201,018 340,949 Income before contributions and transfers 10,400,256 (134,020) 10,266,236 2,686,361 Contributions and transfers- Contributions- impact fees 6,454,447 6,454,447 - Contributions- infrastructure 10,380,855 10,380,855 - Contributions-other 1,608,258 - 1,608,258 - Transfers in - 200,000 200,000 - Transfers out (4,258,250) - (4,258,250) - Total contributions and transfers 14,185,310 200,000 14,385,310 - Change in net position 24,585,566 65,980 24,651,546 2,686,361 Net position,October 1,2019 443,800,470 9,992,832 8,778,286 Net position,September 30,2020 $ 468,386,036 $ 10,058,812 $ 11,464,647 Reconciliation to government-wide statement of activities: Adjustment to reflect the net profit of the internal service fund that was allocated to enterprise fund functions 421,782 Change in net position of business-type activities $ 25,073,328 The accompanying notes are an integral part of this financial statement. 48 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 2020 Business Type Activities Governmental Enterprise Funds Activities Water and Golf Course Internal Sewer Fund Fund Total Service Fund Cash flows from operating activities: Cash received from customers $ 62,385,187 $ 2,684,066 $ 65,069,253 $ 1,155,710 Cash received from other funds for services provided - - - 13,946,892 Cash payments to suppliers for goods and services (4,050,215) (2,237,960) (6,288,175) (13,183,808) Cash payments to employees for services (12,251,121) (12,2S1,121) - Net cash provided (used) by operating activities 46,083,851 446,106 46,529,957 1,918,794 Cash flows from noncapital financing activities: Transfers from other funds - 200,000 200,000 - Transfers to other funds (4,258,250) - (4,258,250)Net cash provided (used) by noncapital financing activities (4,258,250) 200,000 (4,058,250) - Cash flows from capital and related financing activities: Proceeds from sale of capital assets 232,881 - 232,881 - Acquisition and construction of capital assets (18,976,780) (18,976,780) - Investment in joint venture (1,826,133) (1,826,133) - Principal paid on revenue bonds (3,511,408) (3,511,408) - Contributions 1,608,258 1,608,258 - Impact fees 6,454,447 6,454,447 - Interest and fiscal charges paid (2,522,023) (2,522,023) - Net cash provided (used) by capital and related financing activities (18,540,758) - (18,540,758) - Cash flows from investing activities: Sale(purchase)of investments (12,813,317) (463,607) (13,276,924) (1,302,680) Investment and other income 3,815,768 101 3,815,869 352,076 Net cash provided (used) by investing activities (8,997,549) (463,506) (9,461,055) (950,604) Net increase(decrease) in cash and cash equivalents 14,287,294 182,600 14,469,894 968,190 Cash and cash equivalents at beginning of year 16,511,369 44,274 16,555,643 1,020,127 Cash and cash equivalents at end of year $ 30,798,663 $ 226,874 $ 31,025,537 $ 1,988,317 (CONTINUED) The accompanying notes are an integral part of this financial statement. 49 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS (CONTINUED) YEAR ENDED SEPTEMBER 30, 2020 Business-Type Activities Governmental Enterprise Funds Activities Water and Golf Course Internal Sewer Fund Fund Total Service Fund Reconciliation of Cash and Cash Equivalents to Proprietary Fund Statement of Net Position Cash and cash equivalents $ 25,846,447 $ 226,874 $ 26,073,321 $ 1,988,317 Restricted assets - Cash and cash equivalents 4,952,216 - 4,952,216 - Cash and cash equivalents $ 30,798,663 $ 226,874 $ 31,025,537 $ 1,988,317 Reconciliation of operating income(loss)to net cash provided (used) by operating activities Operating income(loss) $ 9,199,641 $ (134,423) $ 9,065,218 $ 2,345,412 Adjustments to reconcile operating income (loss)to net cash provided by operating activities: Depreciation 19,478,079 474,226 19,952,305 Provision for bad debts 120,266 - 120,266 (Increase)decrease in: Receivables 1,645,902 1,645,902 (29,760) Customer deposits (247,468) (247,468) Inventory (131,130) (131,130) Other assets 22,401 22,401 Pension related deferred outflows 977,077 977,077 OPEB related deferred outflows (137,376) - (137,376) - Increase(decrease) in: Accounts payable 15,266,092 106,303 15,372,395 (396,858) Customer deposits 229,360 - 229,360 - Compensated absences 187,685 187,685 - Pension related deferred inflows 946,300 946,300 - OPEB related deferred inflows 6,271 6,271 - Net pension liability (1,731,509) (1,731,509) - Total OPEB liability 252,260 - 252,260 - Total adjustments 36,884,210 580,529 37,464,739 (426,618) Net cash provided (used) by operations $ 46,083,851 $ 446,106 $ 46,529,957 $ 1,918,794 NOTES: Noncash capital and related financing activities: In fiscal year 2020,the Water and Sewer Fund had $10,380,855 in capital assets contributed, recognized a change of($140,460) in fair value of investments, and a change of$764,519 in joint venture net position. The accompanying notes are an integral part of this financial statement. 50 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Round Rock, Texas (the City) is a municipal corporation incorporated under Article Xl, Section S of the Constitution of the State of Texas(Home Rule Amendment). The City operates under a Council-Manager form of government. The financial statements of the City have been prepared in accordance with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The GASB periodically updates its codification of the existing Governmental Accounting and Financial Reporting Standards which, along with subsequent GASB pronouncements (Statements and Interpretations), constitutes GAAP for governmental units. The more significant of these accounting policies are described below, and where appropriate,subsequent pronouncements will be referenced. A. REPORTING ENTITY The City provides various services and performs many different functions. These include a police force, a fire fighting and protection force, emergency medical services, a park and recreation system, a municipal golf course, a public library, convention and tourism support, planning and zoning, and a waterworks and sewer utility system. The City's staff provides the necessary support for the services provided. All are responsible to the Citizens of Round Rock and are therefore included within the reporting entity. As required by generally accepted accounting principles, these financial statements present the City and its component unit,an entity for which the City is considered to be financially accountable. Blended component units,although legally separate entities,are, in substance, part of the City's operations and so data from these units are combined with data of the City. Blended Component Unit The Round Rock Transportation and Economic Development Corporation (RRTEDC), an entity legally separate from the City, is governed by a seven-member board appointed by the City Council. The City Council maintains budgetary control of the RRTEDC. For financial reporting purposes, the RRTEDC is presented as a part of the City's operations because its purpose is to utilize sales tax revenues for the improvement of the City's transportation system and for economic development purposes, covered under local government code. The revenues of the RRTEDC,its administrative expenditures,and capital projects are accounted for in a special revenue fund. A five-year project spending plan is presented and adopted at least annually to ensure adequate funds are available for transportation, economic development and other allowed uses of RRTEDC funds. This five-year plan is reviewed by staff at least quarterly and updates are presented to the RRTEDC board as needed for transportation capital improvements programs,economic incentive programs,and other legally allowable projects approved by the RRTEDC board and ratified by Council. 51 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIS OF PRESENTATION —GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS The basic financial statements include both government-wide(based on the City as a whole) and fund financial statements. GASB Statement No. 34 requires certain supplementary information. Management's Discussion and Analysis includes an analytical overview of the City's financial activities. In addition,budgetary comparison statements are presented that compare the adopted and amended budgets of the General Fund and the Round Rock Transportation and Economic Development Corporation Fund with their actual results. Government-wide Statements: The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all non-fiduciary activities of the primary government and its component unit. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which are funded by fees and charges for services. The City's statement of net position reports all assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position. The government-wide statement of activities demonstrates the degree to which the direct expenses of a functional category(police,fire, public works, etc.) are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, 2) grants and contributions that are restricted to meeting the operational requirements of a particular function or segment, and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. In addition, the government-wide statement of activities reflects depreciation expense on the City's capital assets, including infrastructure. The net cost (by function or business-type activity) is normally covered by general revenue (property, sales or franchise taxes, intergovernmental revenues, interest income, etc.). The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from financial activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business-type categories and the component unit. Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. Fund Financial Statements: Separate fund based financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. An emphasis is placed on major funds within the 52 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. BASIS OF PRESENTATION—GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) governmental and proprietary rycategories. GASB Statement No. 34 sets forth minim um criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category for the governmental and enterprise combined) for the determination of major funds. The major governmental funds are the General Fund, the Debt Service Fund, the Round Rock Transportation and Economic Development Corporation Fund, the Debt-Financed Capital Projects Fund, and the Self- Financed Construction Fund. The nonma'or funds are combined in a separate column in the fund J financial statements. The Internal Service Fund, which provides services to the other funds of the government, is presented as part of the proprietary fund financial statements. The net income(loss)of the Internal Service Fund is allocated between governmental and business-type activities. Because the principal users are the City's governmental activities, financial statements of the Internal Service Fund are consolidated into the governmental column when presented at the government-wide level. The costs of these services are reflected in the appropriate functional activity (general government, public safety, public works, etc.). C. GOVERNMENTAL FUND TYPES Governmental funds are those through which most governmental functions of the City are financed. The acquisition, use and balances of the City's expendable financial resources and the related liabilities (except those, if any, which should be accounted for in proprietary funds) are accounted for through governmental funds. The measurement focus is upon determination of financial position and changes in financial position, rather than upon net income determination. The City maintains the following governmental fund types: The General Fund accounts for financial resources in use for general types of operations, which are not encompassed within other funds. The General Fund is considered a major fund in the fund financial statements. The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes. There are seven groups of funds within the Special Revenue Funds which account for the activities related to grant programs, hotel-motel room taxes,transportation system improvement and economic development sales tax and funds designated for specific service programs. They are as follows: Major Fund • Round Rock Transportation and Economic Development Corporation Fund Nonmajor Funds • Community Development Block Grant Fund • Hotel-Motel Occupancy Tax Fund • Hotel-Motel Occupancy Venue Tax Fund • Library&Recreational Fund 53 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. GOVERNMENTAL FUND TYPES (CONTINUED) • Public Safety Fund • Public Education&Government Fund The Round Rock Transportation and Economic Development Corporation Fund is considered a major fund in the fund financial statements. It accounts for sales tax monies and donations/developer contributions received for economic development and streets, stormwater and other transportation system improvements, including maintenance and capital costs associated with such authorized projects. The Debt Service Fund is used to account for the accumulation of resources for, and the payment of, governmental long-term debt principal,interest and related costs. The Debt Service Fund is considered a major fund in the fund financial statements. The Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of capital facilities (other than those financed by proprietary funds). There are two groups of funds within the Capital Projects Fund which account for the activities related to various capital improvements projects as follows: Major Funds • Debt-Financed Capital Projects Fund • Self-Financed Construction Fund The Self-Financed Construction Fund and the Debt-Financed Capital Projects Fund are considered major funds in the fund financial statements. The Self-Financed Construction Fund accounts for the costs of authorized general capital improvements is and facilities. Financing is provided by general government resources, such as sales tax. Dell sales tax receipts, net of rebate, are not to exceed 20% of budgeted sales tax revenues in the General Fund.Any funds in excess of expected or realized sales tax in excess of 20%will be budgeted and deposited in the Self-Financed Construction Fund for pay- as-you go one-time capital expenditures or projects. The Debt-Financed Capital Projects Fund accounts for projects related to fire department facilities, parks and recreational purposes, library facilities, police and fire training facilities, street maintenance and road construction. Financing is provided by general obligation bonds and certificates of obligation. D. PROPRIETARY FUND TYPES The Proprietary Funds are used to account for the City's ongoing organizations and activities that are similar to those found in the private sector. These funds are accounted for using the economic resources measurement focus and the accrual basis of accounting. The accounting objectives are the determination of income before contributions and transfers, net position and cash flows. The City maintains the following Proprietary Fund types: 54 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED D. PROPRIETARY FUND TYPES (CONTINUED) The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses including depreciation)of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. The City's Enterprise Funds consists of the Water and Sewer Fund, which includes the City's stormwater program, and the Golf Course Fund. These funds are primarily supported by user charges. The Internal Service Fund is used to account for the financing of goods or services provided by one department or agency to other City departments or agencies on a cost-plus basis. The City's Internal Service Fund is the Self-Funded Health Insurance Fund, which is used to account for the activities of the City's self-funded health insurance program. E. NON-CURRENT GOVERNMENTAL ASSETS/LIABILITIES GASB Statement No. 34 eliminated the presentation of the general fixed assets and general long-term debt account groups but provides for these records to be maintained and incorporates the information into the governmental activities column in the government-wide statement of net position. F. BASIS OF ACCOUNTING Government-wide Statements The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Fund Financial Statements In the fund financial statements, all governmental funds are accounted for using a modified accrual basis of accounting. Governmental funds use the current financial resources measurement focus. Under this basis, revenues are recognized in the accounting period in which they become measurable and available. Expenditures are recognized in the accounting period in which the fund liability is incurred, if measurable. 55 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. BASIS OF ACCOUNTING (CONTINUED) Governmental Funds Revenue Recognition In applying the susceptible to accrual concept under the modified accrual basis of accounting,revenues are recorded when deemed both measurable and available. Measurable means that the amount of the transaction can be determined. Available means the amount of the transaction is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose,the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal year. Property tax revenues are recognized when they become available. In this case,available means when due, or past due and receivable within the current period and collected within the current period or soon enough thereafter to be used to pay liabilities of the current period. Such time thereafter shall not exceed 60 days. Hotel taxes, franchise fees, and special assessments are recorded when susceptible to accrual, both measurable and available. Sales taxes collected and held by the State at year-end on behalf of the City are also recognized as revenue. Licenses and permits, charges for services, fines and forfeitures and other revenues (except earnings on investments) are recorded as revenues when received in cash because they are generally not measurable until actually received. Earnings on investments are recorded on the accrual basis in all funds. Unrealized gains or losses on investments are also recognized in accordance with GASB Statement No. 31. In applying the susceptible to accrual concept to grant revenues, the legal and contractual requirements of the individual grant programs are used for guidance. Monies received are generally unrestricted as to purpose of expenditure and are revocable only for failure to comply with prescribed compliance requirements. These resources are recognized as revenues at the time of receipt, or sooner, if the susceptible to accrual criteria are met. The City reports unavailable revenue on its fund financial statements. Unavailable revenues arise when potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues arise when the City receives resources before it has a legal claim to them, as when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods,when both revenue recognition criteria are met or when the City has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet and revenue is recognized. Expenditure Recognition The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Most expenditures are measurable and are recorded when the related fund liability is incurred except for unmatured principal and interest on governmental long- S6 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. BASIS OF ACCOUNTING (CONTINUED) term debt which are recognized when aid. Allocations of costs, such as depreciation and 9 P P amortization, are not recognized in the governmental funds' fund financial statements. Proprietary Funds In the fund financial statements and the government-wide statements, proprietary and agency funds utilize the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the accounting period in which they are earned and become measurable. Expenses are recorded in the accounting period incurred, if measurable. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the Water and Sewer Fund, the Golf Course Fund and the Internal Service Fund are charges to customers for sales and services. Operating expenses for the Enterprise Funds and Internal Service Fund include the cost of sales and service, administrative expenses and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as non-operating revenues and expenses. G. CASH AND CASH EQUIVALENTS In accordance with GASB Statement No. 9, for reporting purposes, the City has developed a definition of cash equivalents. Cash equivalents are demand deposit account balances, investments with the State Investment Pool, repurchase agreements, obligations of the United States government and its agencies, commercial paper and certificates of deposit with original maturities of three months or less. H. INVESTMENTS All investments are presented at fair value. The fair value of U.S. Government Securities is based upon discounted future cash flows. The fair value of the positions in the state investment pools is the same as the value of the pool shares. The City pools excess cash of the various individual funds to purchase these investments. These pooled investments are reported in the combined balance sheet as investments in each fund based on each fund's share of the pooled investments. Interest income is allocated to each respective individual fund, monthly, based on their respective share of investments in the pooled investments. The City's local government investment pools are recorded at amortized costs as permitted by GASB Statement No. 79, Certain Investment Pools and Pool Participants. 57 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. INVENTORIES AND PREPAID ITEMS Inventories of supplies for all funds are valued at cost. The consumption method is used to account for inventories. Under the consumption method, an expenditure is recognized when inventory items are used. Cost is determined for inventories of supplies on the first-in,first-out method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items (other current assets) in both the government-wide and fund financial statements. J. JOINT VENTURE Joint venture represents the City's equity interest calculated in accordance with the agreement for the Brushy Creek Regional Utility Authority(BCRUA). The City's initial investment in this joint venture was recorded at cost. The City shares in the operating results in this joint venture, so the City adjusts its equity interest by the amount of its participating share of the joint venture's change in net position. K. CAPITAL ASSETS Capital assets are stated at historical cost. Maintenance and repairs are charged to operations as incurred. Improvements and betterments, which extend the useful lives of assets, are capitalized. The accounting and reporting treatment applied to the capital assets associated with a fund are determined by the fund's measurement focus. The minimum capitalization threshold is any individual item with a total cost greater than $5,000 and a useful life of at least five (5) years. Donated capital assets, donated works of art, and similar items are reported at acquisition value rather than fair value. Public domain capital assets (infrastructure) have been capitalized. Infrastructure consists of certain improvements other than buildings, including roads, curbing, gutters, streets and sidewalks and stormwater systems. In the government-wide statements, depreciation of plant and equipment classified by functional components is provided by the straight-line method over their estimated useful lives. Estimated useful lives are as follows: Buildings 40 years Improvements to buildings 70 years Improvements other than buildings 70-30 years Machinery and equipment 5- 7 years When capital assets are retired or otherwise disposed of, a gain or loss on disposal of assets is recognized. 58 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. CAPITAL ASSETS (CONTINUED) In the fund financial statements, because of the application of the current financial resources focus and the use of modified accrual accounting for governmental funds, depreciation is only recognized for the Enterprise Funds. L. LONG-TERM DEBT In the government-wide financial statements, and proprietary fund types in the fund financial statements,long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable is reported net of the applicable bond premium or discount. Deferred amounts related to refundings are reported as deferred outflow of resources and amortized over the shorter of the refunded or refunding debt. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Limited Tax Notes have been issued for the purpose of purchasing City vehicles. The notes are to be repaid from ad valorem taxes. Hotel Occupancy Tax Revenue Bonds were issued to fund the City's portion of the construction of a convention center complex. The project costs were shared with a private corporation in accordance with the Master Agreement Regarding Convention Center Development. Venue Tax and Hotel Occupancy Revenue Bonds were issued to fund a portion of the construction of a sports center. The Hotel Occupancy Tax Revenue Bonds and Venue Tax and Hotel Occupancy Tax Revenue Bonds are to be repaid from the hotel tax revenues. Revenue bonds, which have been issued to fund capital projects of the Enterprise Fund, are to be repaid from net revenues of the utility systems. Sales tax revenue bonds have been issued to fund transportation improvements. The bonds are to be repaid from revenues of the Round Rock Transportation and Economic Development Corporation. Taxable sales tax revenue bonds have been issued to fund the City's portion of the construction of a convention center facility located at Kalahari Resorts. The bonds are to be repaid from sales tax,venue tax and ad valorem tax generated by Kalahari Resorts. 59 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) M. ACCRUED BENEFIT OBLIGATIONS Unpaid Compensated Absences Regular full-time employees and regular part-time employees who are normally scheduled to work at least twenty (20) hours per week are eligible to accrue vacation leave. Public service employees, including the police department, can accrue a maximum of 320 hours. Regular, full-time suppression firefighters have a maximum accrual of 656 hours, while regular, full-time administration firefighters can earn a maximum of 437 hours. Employees are paid for the accumulated vacation upon termination. Effective January 1, 1994, sick pay does not vest for non-Civil Service employees; therefore, a liability is only recorded for sick leave relating to Civil Service employees. The City accrues a liability for accumulated vacation and sick leave benefits, which meet the following criteria: • The City's obligation to fund accumulated vacation and sick leave benefits is attributable to employees'services already rendered. • The obligation relates to rights that vest or accumulate. • Payment of the compensation is probable. • The amount can be reasonably estimated. All vacation pay is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Other Post-Employment Benefits The City provides its retirees the opportunity to maintain health insurance coverage by participating in the City's self-insurance plan. The City reports the total liability for this plan on the government-wide and proprietary fund financial statements. The actual cost recorded in the governmental fund financial statements is the cost of the health benefits incurred on behalf of the retirees less the premiums collected from the retirees. Information regarding the City's total liability for this plan is obtained through a report prepared by Holmes Murphy & Associates, the City's third-party actuary, in compliance with GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Additionally, the City participates in a defined benefit group-term life insurance plan, both for current and retired employees, administered by the Texas Municipal Retirement System (TMRS). The City reports the total liability for this plan on the government-wide and proprietary fund financial statements. Information regarding the City's total OPEB liability is obtained from TMRS through a report prepared for the City by TMRS' consulting actuary, Gabriel Roeder Smith & Company, in compliance with GASB Statement No. 75. The governmental funds typically used to liquidate other post-employment benefit liabilities are the General Fund, Hotel-Motel Occupancy Tax Fund, and Multipurpose Complex Fund. 60 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. TRANSACTIONS BETWEEN FUNDS Short-term advances between funds are accounted for in the appropriate interfund receivable and payable accounts. All legally authorized transfers are appropriately treated as transfers and are included in the results of operations of both governmental and proprietary funds. Nonrecurring or non-routine transfers of equity between funds — for example, contribution of capital assets to a proprietary fund or transfers of residual balances of discontinued funds to other funds -are accounted for as transfers. As a rule,the effect of interfund activity has been eliminated from the government-wide statement of net position. Exceptions to this rule are cost reimbursement transactions between the enterprise fund and various other functions of the government for utilities and for reimbursement of personnel costs for employees administering grant programs. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. O. NET POSITION Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets, restricted, and unrestricted. Net investment in capital assets consists of capital assets net of accumulated depreciation, outstanding balances of capital-related borrowings, and capital-related deferred outflows (inflows) of resources. Net position classified as restricted are balances with constraints on resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through state statute. Certain bond proceeds, as well as resources set aside for their repayment, are classified as restricted assets because their use is limited by bond covenants. Other assets are restricted due to City Ordinance restrictions on their use. Net position has been restricted for the excess of restricted assets over related liabilities to the extent such restricted assets were accumulated from revenues (i.e., in some cases, restricted assets were obtained in total or in part from the proceeds of bond sales or grants). When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. P. CLASSIFICATION OF FUND EQUITY Governmental funds' fund balance classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used: Nonspendable fund balance— Nonspendable fund balances are amounts that are not in spendable form or are required to be maintained intact. Restricted fund balance — Restricted fund balances are amounts that are constrained to specific purposes by creditors, grantors, contributors, or laws or regulations of other governments. 61 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) P. CLASSIFICATION OF FUND EQUITY(CONTINUED) Committed fund balance — Committed fund balances are amounts that are committed to specific purposes by City Council through an ordinance. Amounts cannot be used for other purposes unless the City Council takes the same action to remove or change the constraint. The most significant commitments are for general government in the special revenue funds and for park improvements in the capital projects funds. Assigned fund balance — Assigned fund balances are amounts that the City intends to use for a specific purpose but are neither restricted nor committed. Assignments are made by City management based on City Council direction. Unassigned fund balance — Unassigned fund balances are amounts that are available for any legal purposes. The General Fund is the only fund that reports a positive unassigned fund balance amount. Other governmental funds may report a negative unassigned fund balance if expenditures incurred for specific purposes exceeded the amounts restricted, committed, or assigned to these purposes. For the classification of governmental fund balances, the City considers the expenditure to be made from the most restrictive first when more than one classification is available. Q. MINIMUM FUND BALANCE POLICY It is the desire of the City to maintain an adequate fund balance in the General Fund to maintain liquidity and in anticipation of economic downturns or natural disasters.The City Council has adopted a financial standard to maintain a General Fund minimum fund balance of 90 days or 25% of annual budgeted expenditures. R. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the statement of net position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The items that qualify for reporting in this category by the City include the following: • Deferred charges on refundings — A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The deferred charge on refundings is reported in the government-wide statement of net position. • OPEB and pension contributions after measurement date — These contributions are deferred and recognized in the following fiscal year. 62 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING COU TING POLICIES (CONTINUED) R. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES (CONTINUED) • Difference between projected and actual investment earnings on pension assets, difference between expected and actual economic experience on pension and OPEB assets, and changes in actuarial assumptions used to determine the net pension and total OPEB liabilities. In addition to liabilities, the statement of net position and/or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element,deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources(revenue)until that time. Reported as a deferred inflow for the City both for OPEB and pension are the difference in expected and actual experience and the difference arising from changes in assumptions (both are deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date). For the governmental funds, the property tax receivable is offset by unavailable revenue and reported as deferred inflows because this receivable will not be received within 60 days after fiscal year end. S. TAP-IN (CONNECTION FEES) AND IMPACT FEES Water and sewer tap-in fees (connection fees) represent reimbursement of the costs incurred to perform the connection of the respective utilities. These fees are recorded as operating revenue at the time of service. The impact fee substantially exceeds the cost of connection to the water and sewer system and is therefore viewed as a contribution. Effective with the implementation of GASB Statement No. 33, impact fees are recorded as contributions in the Enterprise Fund. The City adopted a roadway impact fee ordinance in March 2019. Roadway impact fees are intended to recover the incremental cost of each new unit of development on the arterial and collector roadway infrastructure. Effective January 1, 2020, assessment of roadway impact fees began but no roadway impact fees were charged for any building permit application dated before January 1, 2021. The roadway impact fees will be charged effective January 1, 2021. There are three phases in the roadway impact fee schedule. Phase 1 of the roadway impact fees are for final plat dates prior to January 1, 2022; phase 2 is for final plat dates between January 1, 2022, and December 31, 2023; and phase 3 is for final plat dates on or after January 1, 2024. T. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Specifically, the actuarial calculations to determine the net pension liability and total OPEB liability are based on assumptions about events far into the future. Accordingly, actual results could differ from those estimates. U. PENSIONS For purposes of measuring the net pension liability, pension related deferred outflows and inflows of resources, and pension expense, City specific information about its fiduciary net position in TMRS and 63 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) U. PENSIONS (CONTINUED) additions to/deductions from the City's fiduciary net position have been determined on the same basis as they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Information regarding the City's total pension liability is obtained from TMRS through a report prepared for the City by TMRS' consulting actuary, Gabriel Roeder Smith&Company(GRS),in compliance with GASB Statement No.68,Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27. The governmental funds typically used to liquidate pension liabilities are the General Fund, Hotel- Motel Occupancy Tax Fund, and Multipurpose Complex Fund. V. NEW AND FUTURE FINANCIAL REPORTING REQUIREMENTS The GASB has issued the following statements which became effective for fiscal year 2020. In light of the COVID-19 pandemic, the GASB issued Statement No. 95, "Postponement of the Effective Dates of Certain Authoritative Guidance" in May 2020. The primary objective of this statement is to provide temporary relief to municipalities and other stakeholders. This statement postpones the effective dates of certain Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, or later. The GASB has issued the following statements which will become effective for fiscal year 2021. Statement No.84, "Fiduciary Activities"—This statement will enhance consistency and comparability by establishing specific criteria for identifying activities that should be reported as fiduciary activities and clarifying whether and how business-type activities should report their fiduciary activities. Established criteria for identifying fiduciary activities is focused on whether a government is controlling the assets of the fiduciary activity and the beneficiaries with whom a fiduciary relationship exists. Statement No. 90, "Majority Equity Interests—an amendment of GASB Statements No. 14 and No. 61" —This statement will improve financial reporting by providing financial statement users with essential information presented for majority equity interests in legally separate organizations. A majority equity interest in a legally separate organization should be reported as an investment if the government's holding of the equity interest meets the definition of an investment. The statement also provides for improved relevance of financial statement information for certain component units. If a government has a 100 percent equity interest, it must account for its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the government acquired a 100 percent equity interest. Statement No. 93, Replacement of Interbank Offered Rates" — This statement will enhance the comparability of accounting and financial reporting requirements and improve consistency of 64 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V. NEW AND FUTURE FINANCIAL REPORTING REQUIREMENTS (CONTINUED) authoritative literature. This will improve the usefulness of information for users of state and local government financial statements. The London Interbank Offered Rate (LIBOR) is expected to cease to exist at the end of 2021. Some governments have agreements with variable payments dependent on an Interbank Offered Rate(IBOR)—most notably, LIBOR. This is prompting governments to amend or replace financial instruments for the purpose of replacing LIBOR with other reference rates. II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. BUDGETARY ACCOUNTING The City follows these procedures in establishing the appropriated budget as reflected in the accompanying financial statements: (1) At least sixty days prior to the beginning of each fiscal year,the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget, which represents the financial plan for the ensuing fiscal year, includes proposed expenditures and the means of financing them. (2) Public hearings are conducted at which all interested persons' comments concerning the budget may be heard. (3) The budget is legally enacted by the City Council through passage of an appropriation ordinance and tax-levying ordinance not later than the final day of the last month of the fiscal year. (4) Formal budgetary integration is employed as a management control device during the year for the General Fund, Special Revenue Funds, Debt Service Fund and Proprietary Funds. Management control for the operating budget is maintained at the individual office, department, or agency level. (5) Annual budgets are legally adopted for the General Fund, Special Revenue Funds, Debt Service Fund and the Proprietary Funds. Capital Projects Funds have no binding annual budget.Project-length financial plans are adopted for all capital projects; accordingly, no comparison of budget to actual is presented in the financial statements. (6) Amendments that alter total expenditures of any fund must be approved by the City Council. Although costs are monitored on a departmental basis, the level of control at which expenditures may not exceed the budget is at the fund level. The reported budgetary data has been revised for amendments authorized. (7) Any appropriation balances lapse or revert to the undesignated fund balances at the close of each fiscal year. 65 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 I1. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (CONTINUED) A. BUDGETARY ACCOUNTING (CONTINUED) The budgets of the various funds are prepared on a basis consistent with generally accepted accounting principles as described above. The table on the following page compares original to final budgets for the General Fund. Amendments Original Increase Final Budget (Decrease) Budget Revenues- Taxes and franchise, including interest and penalties $ 101,976,250 $ (5,585,000) $ 96,391,250 Licenses, permits and fees 1,702,400 (300,000) 1,402,400 Charges for services 4,837,900 (2,065,000) 2,772,900 Fines and forfeitures 1,395,000 (445,000) 950,000 Grants 1,083,538 557,000 1,640,538 Investment and other 5,704,300 (550,000) 5,154,300 Total revenues 116,699,388 (8,388,000) 108,311,388 Expenditures- Current- General government 27,122,006 (2,699,334) 24,422,672 Public safety 57,293,889 (764,937) 56,528,952 Public works 20,466,769 (4,694,193) 15,772,576 Culture and recreation 15,874,973 (129,913) 15,745,060 Total expenditures 120,757,637 (8,288,377) 112,469,260 Excess(deficiency)of revenues over expenditures (4,058,249) (99,623) (4,157,872) Other financing sources(uses) - Transfers in 5,061,250 5,061,250 Transfers out (200,000) (3,747,201) (3,947,201) Total other financing sources(uses) 4,861,250 (3,747,201) 1,114,049 Net change in fund balances $ 803,001 $ (3,846,824) $ (3,043,823) B. ENCUMBRANCES Encumbrances represent commitments related to unperformed (executory) contracts for goods or services. For budgetary purposes, encumbrances lapse at fiscal year-end. In accordance with the City Charter, Part I, Article 8, Section 8.03 (a)(10)—Finance Administration, a capital improvement program may be revised and extended each year to indicate capital improvements pending or in process of construction or acquisition. Therefore, purchase orders and contracts associated with capital improvement programs roll at the end of the fiscal year. The encumbrances and significant commitments at September 30, 2020, associated with capital improvements for governmental funds, not proprietary funds, in accordance with GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions,"are summarized on the following page. 66 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 II. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (CONTINUED) B. ENCUMBRANCES (CONTINUED) Major Funds Round Rock Transportation and Economic Development Corporation Fund $ 11,681,000 Self-Financed Construction Fund 3,001,000 Debt-Financed Capital Projects Fund 8,917,000 Nonmajor Funds Special revenue funds $ 429,000 III. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS BALANCE SHEET AND THE GOVERNMENT-WIDE STATEMENT OF NET POSITION The governmental fund balance sheet includes a reconciliation between fund balance-total governmental funds and net position-governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that"some long-term liabilities are not due and payable in the current period and therefore are not reported in the funds."The details of this difference are as follows: Bonds and certificates payable - public placement $ 223,355,000 Plus: Issuance premium (amortized against interest expense) 15,952,285 Less: Issuance discount(amortized against interest expense) (61,032) Bonds and certificates payable - private placement 47,955,000 Capital leases payable 6,394,238 Net pension liability 35,323,270 Compensated absences 8,824,264 Total OPEB liability 16,377,380 Net adjustment to reduce fund balance - total governmental funds to arrive at net position - governmental activities $ 354,120,405 B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation of net changes in fund balances —total governmental funds to changes in net position of governmental activities as reported in the government-wide statement of activities.One element of that reconciliation explains that"Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense."The details of this difference are summarized on the following page. 67 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 III. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES (CONTINUED) Capital outlay $ 80,820,915 Depreciation expense (33,931,553) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 46,889,362 Another element of the reconciliation states that"The net effect of various miscellaneous transactions involving capital assets (i.e. sales, disposals, and donations) is to increase net position." The details of this difference are as follows: Donations $ 4,330,050 Reclassifications, disposals, and transfers (83,731) Net adjustment to increase net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ 4,246,319 Another element of the reconciliation states that "The issuance of long-term debt (i.e., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities." The details of this difference are as follows: Issuance of debt - private placement $ (41,480,000) Debt payments/refundings - public placement 18,655,000 Debt payments/refundings - private placement 3,750,000 Deferred amount on refunding - public placement 522,516 Deferred amount on refunding - private placement (386,954) Capital lease payments 2,601,519 Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (16,337,919) Another element of the reconciliation states that "Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of these differences are summarized on the following page. 68 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 III. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (CONTINUED) B. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,AND CHANGES IN FUND BALANCES AND THE GOVERNMENT-WIDE STATEMENT OF ACTIVITIES (CONTINUED) Decrease in net pension liability $ 12,697,733 Decrease in deferred outflows related to pensions (7,165,231) Increase in deferred inflows related to pensions (6,939,535) Net adjustment to decrease net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ (1,407,033) Increase in total OPEB liability $ (1,849,913) Increase in deferred outflows related to OPEB 1,007,417 Increase in deferred inflows related to OPEB (45,986) Net adjustment to decrease net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ (888,482) Change in compensated absences $ (898,966) Amortization of bond premium/discount - public placement 1,560,907 Change in accrued interest - public placement 337,945 Change in accrued interest - private placement (216,015) Amortization of deferred amount on refunding - public placement (638,489) Amortization of deferred amount on refunding - private placement (17,870) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 127,512 IV. DETAILED NOTES ON ALL FUNDS A. CASH AND INVESTMENTS Cash and investments at September 30, 2020, reconciled to the statement of net position amounts for cash and cash equivalents and investments is as follows: Cash in banks $ 64,305,557 Investments 293,027,915 Total cash and investments $ 357,333,472 Statement of net position presentation: Cash and cash equivalents $ 45,620,789 Investments 225,555,516 Restricted assets - Cash and cash equivalents 37,907,707 Investments 48,249,460 Total cash and cash equivalents and investments $ 357,333,472 69 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) A. CASH AND INVESTMENTS (CONTINUED) At September 30, 2020,the carrying amount of deposits was a debit balance of$64,305,557, including $447,914 in outstanding checks,and the respective bank balances totaled $63,857,643. The City's bank balances were fully insured or collateralized with securities held by the City's agent in the City's name and/or letters of credit. Investments— All investments are presented at fair value. The fair value of U.S.Government Securities is based upon discounted future cash flows. The fair value of the positions in the state investment pools is the same as the value of the pool shares. Weighted Average Carrying Fair Maturity Amount Value (Days) U. S. Government Securities $ 6,006,319 $ 6,006,319 15 Municipal Bonds 16,339,160 16,339,160 275 Certificates of Deposit 251,459,497 251,459,497 283 State Investment Pools 19,222,939 19,222,939 41 $ 293,027,915 $ 293,027,915 Portfolio weighted average maturity 261 Following GASB Statement No. 72, "Fair Value Measurement and Application,"the City categorizes its fair value measurements within the hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. As of September 30, 2020, the City has the recurring fair value measurements for U.S. Government securities of$6,006,319 valued using quoted prices for similar assets in active markets (level 2 inputs). Legal and Contractual Provisions Governing Deposits and Investments The Public Funds Investment Act (PFIA) (Government Code Chapter 2256) contains specific provisions in the areas of investment practices, management reports and establishment of appropriate policies. Among other things, it requires the City to adopt, implement,and publicize an investment policy. That policy must address the following areas:(1)safety of principal and liquidity,(2) portfolio diversification, (3)allowable investments,(4)acceptable risk levels,(5)expected rates of return,(6)maximum allowable stated maturity of portfolio investments,(7)maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio, (8) investment staff quality and capabilities, and (9) bid solicitation preferences for certificates of deposit. Statutes authorize the City to invest in(1)obligations of the U.S. Treasury, certain U.S. agencies, and the State of Texas, (2) certificates of deposit, 70 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) A. CASH AND INVESTMENTS (CONTINUED) (3) certain municipal securities, (4) money market savings accounts, (5) repurchase agreements, (6) banker's acceptances,(7) mutual funds,(8)investment pools, (9)guaranteed investment contracts,and (10) common trust funds. The Act also requires the City to have independent auditors perform test procedures related to investment practices as provided by the Act. The City is in substantial compliance with the requirements of the Act and with local policies. In addition, the funds of the City must be deposited and invested under the terms of a contract, contents of which are set out in the Depository Contract Law. The depository bank places approved pledged securities for safekeeping and trust with the City's agent bank in an amount sufficient to protect City funds on a day-to-day basis during the period of the contract. The pledge of approved securities is waived only to the extent of the depository bank's dollar amount of Federal Deposit Insurance Corporation (FDIC) insurance and any letters of credit that are pledged. Policies Governing Deposits and Investments Foreign Currency Risk—The City's deposits and investments are not exposed to foreign currency risk. Custodial Credit Risk—The City's policy is to be collateralized. The City was fully collateralized during the year. Interest Rate Risk—In compliance with the City's Investment Policy, as of September 30, 2020,the City minimized its interest rate risk in the portfolio by limiting the weighted average maturity to 540 days, structuring the portfolio so that maturities meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the secondary market prior to maturity,monitoring credit ratings of portfolio positions to assure compliance with rating requirements imposed by PFIA, and investing operating funds primarily in short-term securities, money market mutual funds, money market accounts, or government investment pools. Credit Risk — In compliance with the City's Investment Policy, as of September 30, 2020, the City minimized credit risk losses due to default of security issuer or backer by limiting investments to the safest rated securities, using a registered investment advisor to provide investment and market advice, and diversifying the investment portfolio so that potential losses on individual securities were minimized. All the City's purchased investments in U. S.Agencies were rated AA+ by Standard &Poor's and Moody's respectively. Concentration Risk—The City invests in pools, certificates of deposit, money market funds, municipal bonds and U.S. Government Securities. State law authorizes the City to invest in obligations of the United States government and its agencies, commercial paper, money market funds, certificates of deposit of any state or federally chartered bank, obligations of states, agencies, counties, cities and other political subdivisions of any state not rated less than A or equivalent. All investments made in fiscal year 2020 were in the aforementioned categories. 71 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) A. CASH AND INVESTMENTS (CONTINUED) Local Government Investment Pools As of September 30, 2020, the City's investments included TexPool, TexSTAR, and Texas Term TexasDAILY Investment Pools. The investment pools' investments are not evidenced by securities that exist in physical or book entry form and, accordingly, do not have custodial risk. The City had $16,015,454 invested in TexPool, $200,452 invested in TexSTAR, and $3,007,033 in TexasDAILY at September 30, 2020. TexPool is a public funds investment pool created by the Texas Treasury Safekeeping Trust Company to provide a safe environment for the placement of local government funds in authorized short-term, fully collateralized investments,authorized by the PFIA.The Texas State Comptroller of Public Accounts has oversight responsibility for TexPool. Oversight includes the ability to significantly influence operations, designation of management, and accountability for fiscal matters. TexPool uses amortized cost rather than fair value to report net position to compute share prices. The fair value of the position in TexPool is the same as the value of TexPool shares. Accordingly, the City's investments in TexPool are stated at cost, which approximates fair value. TexPool is currently rated AAAm by Standard and Poor's. This rating indicates excellent safety and superior capacity to maintain principal value and limit exposure to loss. The City is invested in Texas Short Term Asset Reserve program (TexSTAR), a local government investment cooperative created under the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code and the PFIA, specifically tailored to meet state and local government investment objectives of preservation of principal, daily liquidity and competitive yield. TexSTAR is co-administered by J.P. Morgan Investment Management Inc. and Hilltop Securities Inc. and is overseen by a five-member government board made up of three participants and one of each of the program's co-administrator or an affiliate. The responsibility of the board includes the ability to influence operations, designation of management, and accountability for fiscal matters. TexSTAR uses amortized cost rather than fair value to report net assets to compute share price. The fair value of the City's position in TexSTAR is the same as the value of TexSTAR shares. The City is also invested in TexasDAILY, a portfolio of TexasTERM Local Government Investment Pool (Pool). The Pool was established by the Texas TERM Common Investment Contract, in conformity with Chapters 791 (Interlocal Cooperation Act) and PFIA. An elected Advisory Board is responsible for the overall management of the Pool, including formation and implementation of its investment and operating policies. The Pool's investment advisor and administrator is PFM Asset Management, LLC. TexasDAILY is a money market portfolio with daily liquidity that is rated AAAm by Standard & Poor's. TexasDAILY's investment objectives are to provide shareholders with as high a level of current income as is consistent with stability, safety of principal, and liquidity, and to maintain a stable net asset value (NAV) of$1.00 per share. 72 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) A. CASH AND INVESTMENTS (CONTINUED) In accordance with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, the Local Government Investment Pools do not have any limitations and restrictions on withdrawals such as notice periods or maximum transaction amounts. These pools do not impose any liquidity fees or redemption gates. B. PROPERTY TAXES AND RECEIVABLES Property taxes attach as an enforceable lien on January 1. Taxes are levied on or about October 1, are due on November 1, and are past due the following February 1. The Williamson and Travis Central Appraisal Districts established appraisal values in accordance with requirements of the Texas Legislature. The City Council levies taxes based upon the appraised values. Williamson County and Travis County bills and collects the City's property taxes. The property tax rates, established in accordance with state law, were based on 100% of the net assessed valuation of real and personal property within the City on the 2019 tax roll. The tax rate, based on total taxable assessed valuation of $14,647,779,369 was $0.439000 on each $100 valuation and was allocated to the General Fund and Debt Service Fund at $0.313509 and $0.125491, respectively. General Debt Service Fund Fund Total Current year levy $ 176,152 $ 83,854 $ 260,006 Prior years' levies 247,682 152,022 399,704 423,834 235,876 659,710 Less - allowance for uncollectible taxes (4,179) (2,359) (6,538) $ 419,655 $ 233,517 $ 653,172 Allowances for uncollectible taxes are based upon historical experience in collecting property taxes. The City is prohibited from writing off real property taxes without specific statutory authority from the Texas Legislature. C. INTERFUND, RECEIVABLES, PAYABLES AND TRANSFERS Interfund receivables and payables as of September 30, 2020,were as follows: Receivable Fund Payable Fund Receivable Payable Debt Service Fund General Fund $ 10,706 $ 10,706 Governmental Funds $ 10,706 $ 10,706 Remaining balances resulted from the time lag between the dates that(1)interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, and (3) payments between funds are made. The City reports interfund transfers between 73 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) C. INTERFUND RECEIVABLES, PAYABLES AND TRANSFERS (CONTINUED) many of its funds.These routine transfers are consistent with the activities of the funds. Transfers are used to (1) move revenues from the fund that statute or budget requires to collect them to the fund that statute or budget requires to expend them,(2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due, and (3) use unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations. A summary of transfers between funds is shown below. Governmental Funds Transfers In Transfers Out General Fund- Water and Sewer Fund $ 4,258,250 $ - Self-Financed Construction Fund - 3,947,201 Round Rock Transportation and Economic Development Corporation Fund 803,000 - 5,061,250 3,947,201 Debt Service Fund- Round Rock Transportation and Economic Development Corporation Fund 4,569,000 - Nonmajor Governmental Funds 1,272,455 5,841,455 Round Rock Transportation and Economic Development Corporation Fund- General Fund 803,000 Debt Service Fund - 4,569,000 Self-Financed Construction Fund 108,851 3,001,344 Debt-Financed Capital Projects Fund - 532,657 Transportation Co's 18,026,681 - 18,135,532 8,906,001 Debt-Financed Capital Projects Fund- Round Rock Transportation and Economic Development Corporation Fund 532,657 18,026,681 Self-Financed Construction Fund 2,050,942 - 2,583,599 18,026,681 Self-Financed Construction Fund- General Fund 3,947,201 - Golf Course Fund - 200,000 Round Rock Transportation and Economic Development Corporation Fund 3,001,344 108,851 Debt-Financed Capital Projects Fund - 2,050,942 Nonmajor Governmental Funds 249,956 - 7,198,501 2,359,793 Governmental Funds- Debt Service Fund - 1,272,455 Self-Financed Construction Fund - 249,956 Nonmajor Governmental Funds 675,000 675,000 675,000 2,197,411 Subtotal of Governmental Funds 39,495,337 35,437,087 Proprietary Funds Water and Sewer Fund- General Fund - 4,258,250 - 4,258,250 Golf Course Fund- Self-Financed Construction Fund 200,000 - 200,000 Subtotal of Proprietary Funds 200,000 4,258,250 Total Transfers $ 39,695,337 $ 39,695,337 74 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) D. JOINT VENTURE Thei n City entered into a partnership with the cities of Leander and Cedar Park and formed Brushy Creek Regional Utility Authority(BCRUA). The BCRUA has the responsibility to provide reliable, cost effective sources of water. The City accounts for this partnership as a joint venture. Condensed financial statements for BCRUA are shown below. Financial statements may be obtained at the BCRUA,221 East Main Street, Round Rock, Texas, 78664. STATEMENT OF NET POSITION As of September 30, 2020 Total City's Interest ASSETS Cash and cash equivalents $ 2,877,545 $ 1,329,1S0 Restricted investments 28,961,124 11,198,963 Capital assets 175,702,053 60,805,566 Total assets 207,540,722 73,333,679 DEFERRED OUTFLOWS OF RESOURCES 13,317,027 5,189,249 LIABILITIES Accounts payable 2,191,690 553,447 Retainage payable 676,707 180,478 Due to partner cities 638,665 49,145 Current portion of bonds payable 6,345,000 2,095,000 Accrued bond interest payable 1,025,965 349,012 Total current liabilities 10,878,027 3,227,082 Noncurrent portion of bonds payable 177,998,971 58,448,383 Total liabilities 188,876,998 61,675,465 NET POSITION $ 31,980,751 $ 16,847,463 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the Year Ended September 30,2020 Total City's Interest Operating revenues $ 1,137,397 $ 218,734 Interest expense (5,592,805) (1,762,236) Other operating expenses (6,815,864) (2,060,024) Other income 483,746 151,789 Changes in Net Position (10,787,526) (3,451,737) Net position,October 1, 2019, as restated (1) 30,187,401 16,082,944 Contribution of capital, net 12,580,876 4,216,256 Net position, September 30, 2020 $ 31,980,751 $ 16,847,463 (1) Restatement of beginning net position is the result of a change in accounting policy for amortization of bond premiums and discounts using the effective interest rate method. 75 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) E. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2020,was as follows: October 1, Additions/ Retirements/ September 30, 2019 Completions Adjustments 2020 Governmental Activities: Capital assets not being depreciated: Land $ 103,983,047 $ 6,468,077 $ $ 110,451,124 Construction in progress 57,754,782 76,813,458 (42,664,384) 91,903,856 Total capital assets not being depreciated 161,737,829 83,281,535 (42,664,384) 202,354,980 Capital assets being depreciated: Buildings and improvements 877,127,315 36,011,914 (852,817) 912,286,412 Equipment 85,439,959 8,647,156 (5,007,617) 89,079,498 Total capital assets being depreciated 962,567,274 44,659,070 (5,860,434) 1,001,365,910 Less accumulated depreciation for: Buildings and improvements 426,392,303 25,888,149 (852,817) 451,427,635 Equipment 63,544,580 8,043,404 (4,798,630) 66,789,354 Total accumulated depreciation 489,936,883 33,931,553 (5,651,447) 518,216,989 Total capital assets being depreciated, net 472,630,391 10,727,517 (208,987) 483,148,921 Governmental activities capital assets, net $ 634,368,220 $ 94,009,052 $ (42,873,371) $ 685,503,901 Business-Type Activities: Capital assets not being depreciated: Land $ 8,452,956 $ - $ - $ 8,452,956 Construction in progress 16,317,089 18,454,913 (15,761,466) 19,010,536 Total capital assets not being depreciated 24,770,045 18,454,913 (15,761,466) 27,463,492 Capital assets being depreciated: Buildings and improvements 527,670,625 24,419,776 - 552,090,401 Equipment 22,996,276 1,891,931 (6,507,965) 18,380,242 Total capital assets being depreciated 550,666,901 26,311,707 (6,507,965) 570,470,643 Less accumulated depreciation for: Building and improvements 202,426,693 17,597,592 - 220,024,285 Equipment 16,492,973 2,354,713 (6,520,570) 12,327,116 Total accumulated depreciation 218,919,666 19,952,305 (6,520,570) 232,351,401 Total capital assets being depreciated, net 331,747,235 6,359,402 12,605 338,119,242 Business-type activities capital assets, net $ 356,517,280 $ 24,814,315 $ (15,748,861) $ 365,582,734 76 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) E. CAPITAL ASSETS (CONTINUED) Depreciation expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government $ 2,054,801 Public safety 5,516,064 Public works 19,636,118 n Culture a d recreation 6,724,570 Total depreciation expense - governmental activities $ 33,931,553 Business-Type Activities: Water and sewer utility $ 19,478,079 Golf course 474,226 Total depreciation expense - business-type activities $ 19,952,305 Net Investment in Capital Assets Detailed reconciliation of net investment in capital assets on the Government-wide Statement of Net Position for September 30, 2020, follows: Governmental Business-Type Activities Activities Total Net investment in capital assets: Total capital assets (net of accumulated depreciation) $ 685,503,901 $ 365,582,734 $ 1,051,086,635 Plus capital-related deferred outflows of resources 3,036,965 4,217,952 7,254,917 Less long-term debt (293,595,491) (75,999,389) (369,594,880) Plus unspent bond proceeds 48,023,820 959,080 48,982,900 Net investment in capital assets (net of related debt) $ 442,969,195 $ 294,760,377 $ 737,729,572 77 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT The following is a summary of long-term debt transactions, including current portion, of the City for the year ended September 30, 2020: Balance Balance October 1, Refundings/ September 30, Due within 2019 Additions Retirements 2020 one year Governmental Activities Public Placement: General obligation bonds $ 151,405,000 $ $ (17,165,000) $ 134,240,000 $ 7,660,000 Certificates of obligation 58,870,000 (845,000) 58,025,000 1,850,000 Hotel tax revenue bonds 10,425,000 (645,000) 9,780,000 665,000 Sales tax revenue bonds 21,310,000 21,310,000 - Plus deferred amount: For issuance premium 18,049,387 (2,097,102) 15,952,285 1,574,586 For issuance discount (74,711) 13,679 (61,032) (13,679) Total Public Placement 259,984,676 (20,738,423) 239,246,253 11,735,907 Private Placement: General obligation bonds - 6,980,000 6,980,000 2,005,000 Certificates of obligation 30,000,000 30,000,000 940,000 Limited tax notes 4,500,000 4,500,000 870,000 Sales tax revenue bonds 10,225,000 - (3,750,000) 6,475,000 3,810,000 Total Private Placement 10,225,000 41,480,000 (3,750,000) 47,955,000 7,625,000 Lease purchase payable 8,995,757 - (2,601,519) 6,394,238 2,225,167 Compensated absences 7,925,298 6,208,916 (5,309,950) 8,824,264 5,912,257 Total governmental activities 287,130,731 47,688,916 (32,399,892) 302,419,755 27,498,331 Business-Type Activities Public Placement: Revenue bonds 73,370,000 - (3,180,000) 70,190,000 3,325,000 Plus deferred amount: For issuance premium 6,140,797 - (331,408) 5,809,389 331,408 Compensated absences 584,738 585,992 (461,942) 708,788 559,942 Total Public Placement 80,095,535 585,992 (3,973,350) 76,708,177 4,216,350 Total business-type activities 80,095,535 585,992 (3,973,350) 76,708,177 4,216,350 Total government $ 367,226,266 $ 48,274,908 $ (36,373,242) $ 379,127,932 $ 31,714,681 The General Fund and Hotel/Motel Fund are responsible for liquidating the liability for compensated absences in the governmental activities and the Water and Sewer Fund and Stormwater Fund are responsible for liquidating the liability for compensated absences in the business-type activities. 78 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT (CONTINUED) Long-term debt at September 30, 2020, is comprised of the following: Business- Governmental Governmental Type Activities- Activities- Activities- Public Private Public Placement Placement Placement General Obligation Bonds: $8,615,000 2013 refunding bonds due in annual installments of $455,000 to$925,000 through 2024;interest at 1.00%to 1.65% $ 2,320,000 $ - $ $10,465,000 2014A refunding bonds due in annual installments of $270,000 to$1,740,000 through 2021;interest at 2.0%to 5.0% 270,000 $66,885,000 2014 GO bonds due in annual installments of $-0-to$4,790,000 through 2039;interest at 3.0%to 5.0% 62,845,000 $32,465,000 2015 refunding bonds due in annual installments of $-0-to $3,445,000 through 2032;interest at 4.0%to 5.0% 24,335,000 $6,995,000 2016 refunding bonds due in annual installments of $-0- to $1,755,000 through 2032;interest at 2.0%to 4.0% 5,005,000 $28,585,000 2017 refunding bonds due in annual installments of $-0-to $1,945,000 through 2042;interest at 3.0%to 5.0% 28,585,000 - $12,210,000 2019 refunding bonds due in annual installments of $1,330,000 to$1,775,000 through 2027;interest at 3.0%to 5.0% 10,880,000 $6,980,000 2020 refunding bonds due in annual installments of $375,000 to $2,005,000 through 2027;interest at 1.21% - 6,980,000 Total General Obligation Bonds 134,240,000 6,980,000 Certificates of Obligation: $27,270,000 2014 Combination tax and limited revenue certificates of obligation due in installments of$175,000 to$1,700,000 through 2039;interest at 2.0%to 4.0% 23,860,000 - - $6,915,000 2018 Combination tax and limited revenue certificates of obligation due in installments of$-0-to $510,000 through 2038;interest at 3.0%to 5.0% 6,915,000 $27,250,000 2019 Combination tax and revenue certificates of obligation due in installments of$-0-to$1,740,000 through 2044;interest 2.0%to 5.0% 27,250,000 - $30,000,000 2020 Combination tax and limited revenue certificates of obligation due in installments of$940,000 to$3,480,000 through 2032;interest at 1.81% - 30,000,000 - Total Certificates of Obligation 58,025,000 30,000,000 Limited Tax Notes: $4,500,000 2020 Limited tax notes due in annual installments of $870,000 to $925,000 through 2025;interest at 1.15% - 4,500,000 Total Limited Tax Notes 4,500,000 79 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT(CONTINUED) Business- Governmental Governmental Type Activities- Activities- Activities- Public Private Public Placement Placement Placement Hotel Tax Revenue Bonds: $7,715,000 2012 venue tax and hotel bonds due in annual installments of$10,000 to $590,000 through 2037;interest at 2.0%to 4.0% 6,875,000 $4,455,000 2016 refunding bonds due in annual installments of$30,000 to$630,000 through 2024;interest at 2.0%to 4.0% 2,905,000 Total Hotel Tax Revenue Bonds 9,780,000 - Sales Tax Revenue Bonds: $10,930,000 2015 refunding bonds due in annual installments of$1.75 to $1.89 million through 2021 including interest at 1.56% 1,890,000 $10,140,000 2017 refunding bonds due in annual installments of$1.32 to $1.92 million through 2023 including interest at 1.78% - 4,585,000 - $21,310,000 2019 taxable bonds due in annual installments of$-0- to $1.22 million through 2044; interest at 2.15%to 3.68% 21,310,000 - - Total Sales Tax Revenue Bonds 21,310,000 6,475,000 - Utility System Revenue Bonds: $8,000,000 2014 bonds due in annual installments of$-0-to $585,000 through 2034;interest at 2.0 to 4.0% 6,350,000 $35,185,000 2016 refunding bonds due in annual installments of$155,000 to $3,400,000 through 2035;interest at 2.0 to 5.0% - 34,540,000 $32,785,000 2017 refunding bonds due in annual installments of$360,000 to$4,265,000 through 2039;interest at 3.0%to 5.0% 29,300,000 Total Utility System Revenue Bonds 70,190,000 Issuance premium 15,952,285 - 5,809,389 Issuance discount (61,032) - - Lease purchases payable: $13,131,044 leases due in semi-annual installments including interest ranging from 1.325%- 2.9474%due in 2024.The lease obligation is funded with general revenue sources. 6,394,238 - - Compensated absences 8,824,264 - 708,788 Total Primary Government Debt $254,464,755 $ 47,955,000 $ 76,708,177 80 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT(CONTINUED) The annual requirements to amortize bonded, certificates of obligation, loan and lease debt at September 30, 2020, including interest are as follows: Governmental Activities: General Obligation Bonds&Certificates of Obligation Year Ending Sept.30, Public Placement Private Placement Principal Interest Total Principal Interest Total 2021 $ 9,510,000 $ 8,185,731 $ 17,695,731 $ 2,945,000 $ 754,158 $ 3,699,158 2022 10,730,000 7,830,712 18,560,712 2,380,000 586,184 2,966,184 2023 11,325,000 7,363,706 18,688,706 2,420,000 550,726 2,970,726 2024 9,900,000 6,882,150 16,782,150 3,285,000 514,634 3,799,634 2025 9,880,000 6,427,081 16,307,081 2,395,000 463,005 2,858,005 2026-2030 45,760,000 25,789,669 71,549,669 16,675,000 1,514,042 18,189,042 2031-2035 43,630,000 15,951,675 59,581,675 6,880,000 187,516 7,067,516 2036-2040 41,140,000 6,655,406 47,795,406 - - - 2041-2045 10,390,000 900,600 11,290,600 - - $192,265,000 $ 85,986,730 $278,251,730 $ 36,980,000 $ 4,570,265 $ 41,550,265 Year Ending Sept.30, Limited Tax Notes- Private Placement Principal Interest Total 2021 $ 870,000 $ 63,825 $ 933,825 2022 890,000 41,745 931,745 2023 900,000 31,510 931,510 2024 915,000 21,160 936,160 2025 925,000 10,638 935,638 $ 4,500,000 $ 168,878 $ 4,668,878 Year Ending Sept.30, Hotel Tax Revenue Bonds- Public Placement Principal Interest Total 2021 $ 665,000 $ 343,280 $ 1,008,280 2022 690,000 317,505 1,007,505 2023 720,000 290,680 1,010,680 2024 745,000 262,780 1,007,780 2025 775,000 233,805 1,008,805 2026-2030 2,060,000 944,100 3,004,100 2031-2035 2,425,000 582,295 3,007,295 2036-2040 1,700,000 103,800 1,803,800 $ 9,780,000 $ 3,078,245 $ 12,858,245 81 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT (CONTINUED) Sales Tax Revenue Bonds Year Ending Sept.30, Public Placement Private Placement Principal Interest Total Principal Interest Total 2021 $ - $ 657,279 $ 657,279 $ 3,810,000 $ 111,097 $ 3,921,097 2022 1,030,000 657,279 1,687,279 1,320,000 47,437 1,367,437 2023 1,050,000 635,103 1,685,103 1,345,000 23,941 1,368,941 2024 1,075,000 611,709 1,686,709 - - - 2025 1,100,000 587,221 1,687,221 - 2026-2030 5,345,000 2,485,242 7,830,242 - 2031-2035 3,555,000 1,843,950 5,398,950 - 2036-2040 4,200,000 1,194,040 5,394,040 - - 2041-2045 3,955,000 370,576 4,325,576 - - $ 21,310,000 $ 9,042,399 $ 30,352,399 $ 6,475,000 $ 182,475 $ 6,657,475 Year Ending September 30, Lease Purchases Principal Interest Total 2021 $ 2,225,169 $ 123,333 $ 2,348,502 2022 2,037,029 78,193 2,115,222 2023 1,531,203 36,703 1,567,906 2024 600,837 8,675 609,512 $ 6,394,238 $ 246,904 $ 6,641,142 Business-Type Activities: Year Ending September 30, Utility System Revenue Bonds- Public Placement Principal Interest Total 2021 $ 3,325,000 $ 2,748,581 $ 6,073,581 2022 3,475,000 2,587,631 6,062,631 2023 3,530,000 2,426,631 5,956,631 2024 3,685,000 2,263,181 5,948,181 2025 3,860,000 2,092,331 5,952,331 2026-2030 18,005,000 8,234,463 26,239,463 2031-2035 18,260,000 5,465,256 23,725,256 2036-2040 16,050,000 1,740,801 17,790,801 $ 70,190,000 $ 27,558,875 $ 97,748,875 In prior years,the City defeased certain revenue and general obligation bonds by placing the proceeds of new bonds in an irrevocable trust to provide all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's financial statements. At September 30, 2020, there are no bonds outstanding which have been reported as defeased. 82 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT(CONTINUED) Bond ordinances also provide for other limitations and restrictions. The City is in compliance with all significant limitations and restrictions contained in the various bond ordinances. In November 2013, the voters authorized the issuance of general obligation bonds to fund capital assets of the general government. The full faith and credit of the City as well as the City's ad valorem taxing authority back general obligation bonds. Date Amount Amount Unissued Purpose Authorized Authorized Issued (*) Balance Fire Department 11/5/2013 $ 16,500,000 $ 16,500,000 $ - Parks &Recreation 11/S/2013 56,500,000 56,500,000 - Library 11/5/2013 23,200,000 1,500,000 21,700,000 Police & Fire 11/5/2013 27,400,000 27,400,000 - $ 123,600,000 $ 101,900,000 $ 21,700,000 (*) "Amount issued" column is adjusted pursuant to rules used by the Texas Attorney General. The City may incur non-voted debt payments from or secured by its levy and collection of ad valorem taxes and other sources of revenue, including tax notes, public property finance contractual obligations, and leases for various purposes. (1) UTILITY REVENUE BONDS Utility revenue bonds are used to finance the acquisition and construction of major capital improvements to the City's water and sewer systems. The City is required by bond ordinances to pledge the net revenues of the waterworks and sewer system for the retirement of its outstanding revenue bonds, including interest thereon, and is required for such purposes to maintain debt service funds and bond reserve funds for all outstanding revenue bonds. The debt service funds are restricted within the Enterprise Fund and require that net revenues of the City's waterworks and sewer system, after operating and maintenance expenses are deducted, be irrevocably pledged by providing equal monthly installments which will accumulate to the semi-annual principal and interest requirements as they become due. For fiscal year 2020, net revenues available for debt service were 5.37 times the average annual debt service requirement. The bond reserve funds for revenue bond retirement are also restricted within the Enterprise Fund. The City is in compliance with the requirement to maintain a combined reserve fund containing cash and investments in an amount equal to the average annual principal and interest requirements of all bonds then outstanding. The City also covenants under the bond indentures that reserve funds shall 83 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT (CONTINUED) be invested in time deposits, certificates of deposit and direct or guaranteed obligations of the United States of America. (2) HOTEL TAX REVENUE BONDS Hotel occupancy tax revenue bonds were issued to fund the City's portion of the convention center complex. The debt service fund for the hotel tax revenue bonds, aggregating $736,968 at September 30, 2020, is reported in the governmental funds. Bond covenants require that the hotel tax revenues be irrevocably pledged by providing quarterly installments, which will accumulate to the semi-annual principal and interest requirements as they become due. The bond reserve fund for hotel tax revenue bond retirement aggregates $862,929 at September 30, 2020. This amount is in compliance with the requirements contained in the bond's Indenture Agreement.This agreement requires '/2 of the average annual debt service requirements of the bonds in the reserve fund be deposited upon issuance of the bonds, with quarterly installments until the required reserve is attained. (3) SALES TAX REVENUE BONDS Sales tax revenue bonds have been issued to fund transportation improvements. The Round Rock Transportation and Economic Development Corporation (RRTEDC) issued the sales tax revenue bonds. RRTEDC is a blended component unit of the City of Round Rock, which collects '/2 of 1% of the sales tax collected by the State on its behalf. Although RRTEDC is presented as a blended component unit, none of the City's assets are pledged to payment of the bonds. The bonds are secured solely by a pledge of the revenues of the RRTEDC. The debt service fund for the sales tax revenue bonds, aggregating $329,794 at September 30, 2020, is reported in the governmental funds. Bond covenants require that RRTEDC's share of the sales tax is pledged as security for the bonds. RRTEDC provides monthly installments that accumulate to the semi- annual principal and interest requirements as they become due. A reserve fund was not established for these bonds. RRTEDC purchased bond insurance to provide for payment of the principal and interest requirements in the event that pledged revenues are not sufficient. (4) 2020 REFUNDING/ISSUANCE In May 2020, the City issued $30,000,000 Combination Tax and Revenue Certificates of Obligation, Series 2020. Proceeds from the private placement sale of the Certificates will be used for public improvements. The bonds were issued with an interest rate of 1.81% and mature through 2032. 84 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) F. LONG-TERM DEBT(CONTINUED) Additionally, in May 2020, the City issued $4,500,000 Limited Tax Notes, Series 2020. The proceeds from the private placement sale will be used to purchase vehicles and equipment. The notes were issued with an interest rate of 1.15% and mature through 2025. The City also issued $6,980,000 General Obligation Refunding Bonds, Series 2020. This private placement debt was issued to refund $6,875,000 of Series 2011 General Obligation Refunding Bonds. The bonds were issued with an interest rate of 1.21% and mature through 2027. The refunded bonds are considered defeased, and the debt for these bonds has been removed from the City's financial statements. This is a current refunding and was recorded as an expenditure on the Statement of Revenues, Expenditures, and Change in Fund Balance. This refunding reduced the total debt service payments over the next eight years by $463,661 and resulted in an economic gain (i.e., the difference between the present value of the debt service payments of the refunded debt and the refunding bonds) of$436,002. G. ACCRUED COMPENSATED ABSENCES I Changes to accrued compensated absences for the year ended September 30, 2020,were as follows:Y p Governmental Business-Type Activities Activities Balance, October 1, 2019 $ 7,925,298 $ 584,738 Additions 6,208,916 585,992 Reductions (5,309,950) (461,942) Balance, September 30, 2020 $ 8,824,264 $ 708,788 Accrued compensated absences due within one year were $5,912,257 for governmental activities and $559,942 for business-type activities. Liabilities for accrued compensated absences are funded from General Fund and Hotel/Motel Fund revenues for the governmental activities and Water and Sewer Fund program revenues for the business-type activities. 85 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 IV. DETAILED NOTES ON ALL FUNDS (CONTINUED) H. RESTRICTED ASSETS The following summarizes restricted assets by purpose at September 30, 2020: Cash& Property Sales Accrued Cash Taxes Tax Interest Equivalents Investments Receivable Receivable Receivable Governmental Activities: Debt Service Fund $ 5,069,385 $ - $ 233,517 $ - $ - Restricted by debt covenants- Round Rock Transportation and Economic Development Corporation Fund 2,311,990 11,057,480 1,395,689 66,684 Debt-Financed Capital Projects Fund 25,274,797 22,735,072 - 13,951 Other Governmental funds 299,319 1,431,539 - 602 Total Governmental Activities $ 32,955,491 $ 35,224,091 $ 233,517 $ 1,395,689 $ 81,237 Cash& Accrued Cash Interest Equivalents Investments Receivable Business-Type Activities: Water and Sewer Fund - Impact fees $ 1,420,976 $ 6,796,059 $ - Construction 1,641,770 6,229,310 Customer deposits 1,680,592 - Revenue bond debt service 208,878 - Accrued interest receivable - - 18,843 Total Business-Type Activities $ 4,952,216 $ 13,025,369 $ 18,843 V. OTHER INFORMATION A. COMMITMENTS AND CONTINGENCIES Tax Collections The Cityhas a contract with the tax offices of Williamson and Travis counties to collect City taxes and Y deposit monies to the City's accounts. For this service, Williamson County was paid $9,886 and Travis County was paid $911 for the fiscal year ended September 30, 2020. Commitments for Road Construction The City's component unit, the Round Rock Transportation and Economic Development Corporation has entered into various commitments with the State of Texas, Department of Transportation and neighboring cities/counties relative to the construction of roadways. 86 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) A. COMMITMENTS AND CONTINGENCIES (CONTINUED) Water Supply Agreements On May 2, 1978, the City entered into the "Water Supply Contract" with the Brazos River Authority (BRA), providing the City the right to purchase 6,720 acre-feet of water per year from Lake Georgetown. A new agreement, "System Water Availability Agreement for Lake Georgetown" dated September 1, 2001,replaced that agreement.The new agreement revised the rate methodology from a tiered system rate, wherein rates change based upon the City's consumption, to a level system rate. For the fiscal year ended September 30, 2020, the City's cost under this contract was $530,880. On September 12, 1991, the City entered into the "Replacement Water Supply Agreement" with the BRA,wherein it received the right to purchase 8,134 acre-feet of water per year from Stillhouse Hollow Lake. Rights for an additional 10,000 acre-feet of water were acquired in the November 13, 1996, "System Water Supply Agreement". These agreements were replaced with the"System Water for Lake Stillhouse Hollow" dated September 1, 2001. Under this agreement, the City purchases 18,134 acre- feet per year at the new system rate. For the fiscal year ended September 30, 2020, the City's cost under this contract was $1,432,586. Effective September 1,2001,the City entered into a"System Water Availability Agreement for Colorado River Basin Water"with the BRA,wherein it received reserved water rights for an additional 6,944 acre- feet of water. Two subsequent agreements granted Round Rock rights to 13,984 additional acre-feet of water per year from the Colorado River Basin. For the fiscal year ended September 30, 2020, the City's cost under these contracts was $1,6S6,530. Future annual charges under the Water Supply Agreements will be based upon the system rate periodically set by the BRA. Regional Wastewater Project In December 2009, the Cities of Round Rock, Austin and Cedar Park purchased the Brushy Creek Regional Wastewater System (BCRWWS) assets from the Lower Colorado River Authority and entered into a Master Contract for the Financing,Construction,Ownership and Operation of the BCRWWS. The Master Contract provided for the terms and conditions by which the cities would jointly own and operate the BCRWWS. In June 2010, the Cities of Round Rock, Austin and Cedar Park sold a share of the BCRWWS assets to the City of Leander, and all parties entered into the Amended and Restated Master Contract for the Financing, Construction, Ownership and Operation of the Brushy Creek Regional Wastewater System. The BCRWWS treatment plant ownership is allocated based on the amount of reserved capacity each city has in the system. The system currently has a total treatment capacity of 24.5 MGD which is sufficient to meet future projected flows through 2023. The City of Round Rock's current reserved capacity in the system is 20.1 MGD, or 81.96%, of total treatment capacity. The BCRWWS East Plant is currently undergoing a 10 MGD expansion project of which 1.2 MGD will be allocated to the City of 87 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) A. COMMITMENTS AND CONTINGENCIES (CONTINUED) Round Rock. Construction was underway as of September 30, 2020, and is estimated for completion in July 2023. The Cities of Round Rock,Austin, Cedar Park and Leander entered into an interlocal agreement in July 2018 for the City of Round Rock to take over operations and maintenance of the BCRWWS effective October 1,2018.The BCRWWS had operated by the Brazos River Authority since 1997 on behalf of the cities. The cost of the BCRWWS operation and maintenance expenses are allocated based on each city's annual flow percentage into the system. For fiscal year ended September 30, 2020, the City of Round Rock's allocated share of operation and maintenance expenses was 69.82%. Other The City is a defendant in a number of lawsuits arising principally from claims against the City for alleged improper actions by City employees. Total damages claimed are substantial; however, it has been the City's experience that such actions are usually dismissed or settled for amounts substantially less than the claimed amounts. The City Attorney estimates that the potential claims against the City not covered by various insurance policies would not materially affect the financial condition of the City. Arbitrage Rebate Due to requirements of the Tax Reform Act of 1986, the City annually contracts for the computations of arbitrage rebate requirements for the City's various bond issues. At September 30, 2020, the potential rebate was calculated at $0. Deferred Compensation Plan The City offers its employees a deferred compensation plan that permits them to defer a portion of their current salary until future years. Any contributions made to the deferred compensation plan, in compliance with Section 457 of the Internal Revenue Code (IRC), are not available to employees until termination of employment, retirement, death or an unforeseen emergency. A third-party administrator, Nationwide Retirement Solutions, administers contributions to the plan. Effective January 1997, and in compliance with the provisions of the IRC Section 457(g), the plan assets are in custodial accounts for the exclusive benefit of the plans' participants and beneficiaries. In accordance with GASB Statement No. 32, the City provides neither administrative services nor investment advice to the plans and therefore, no fiduciary relationship exists between the City and the deferred compensation plan. 88 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) A. COMMITMENTS AND CONTINGENCIES (CONTINUED) Tax Abatements The City of Round Rock negotiates property tax abatement agreements, property tax rebates, hotel occupancy tax rebates, and sales tax rebates on an individual basis. Each agreement was negotiated under the Texas Property Redevelopment and Tax Abatement Act, Chapter 312,Tax Code,V.A.T.S as amended, allowing localities to abate property taxes for economic development purposes which include business relocation, retention and expansion. Property must be located within a reinvestment zone to be eligible for a tax abatement, and agreements are limited to ten years in length. The abatement value can only be to the extent its value for that year exceeds its value for the year in which the agreement is executed. The City has an Abatement Recapture clause in all Tax Abatement Agreements in the event that the recipient does not fulfill the requirements of the agreement.The tax rebate program is for a period greater than ten years,and taxes paid are reimbursed back to the owner. Amounts paid for the tax abatement and tax rebate programs for the year ended September 30, 2020, are summarized below: Amount of Tax Abatement Program Taxes Abated Property Tax $ 105,387 Amount of Tax Rebate Program Taxes Rebated Hotel Occupancy Tax $ 45,640 Property Tax 1,614,116 Sales Tax 9,789,9S4 In addition to reduced taxes,the City has some agreements that include economic incentive payments. The City is not subject to any tax abatement agreements entered into by other governmental entities. B. RISK MANAGEMENT The City is a member of the Texas Municipal League's Intergovernmental Risk Pool (Pool). The Pool was created for the purpose of providing coverage against risks, which are inherent in operating a political subdivision. The City pays annual premiums to the Pool for liability, property and workers' compensation coverage and all billed premiums upon the coverage have been paid. The City's agreement with the Pool provides that the Pool will be self-sustaining through member premiums and will provide reinsurance contracts through commercial companies. The Pool agrees to handle all liability, property and workers'compensation claims and provide any defense as is necessary. The Pool makes available to the City loss control services to assist the City in following a plan of loss control that may result in reduced losses. The City agrees that it will cooperate in instituting any and all reasonable loss control recommendations made by the Pool. The City has experienced no significant reductions in coverage through the Pool over the past year. There have been no insurance settlements exceeding Pool coverage for any of the past three years. 89 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) B. RISK MANAGEMENT (CONTINUED) Self-Funded Health Insurance Fund The City is self-insured for medical and dental claims. The self-insurance program is maintained in the Self-Funded Health Insurance Internal Service Fund. This program provides health benefit coverage in accordance with a pre-approved plan that establishes coverage limits per employee per year with unlimited health coverage benefits. The City purchases commercial insurance for claims in excess of a contractual City liability limit. Additionally, commercial insurance covers claims in excess of an aggregate amount for the City up to $1,000,000 per plan year. Settled claims have not exceeded the commercial coverage in any of the past three fiscal years. The liability is estimated based upon claims settled within the next month. An analysis of claims activities is presented below: Claims and Beginning Changes in Actual Claim Ending Fiscal Year Liability Estimates Payments Liability 2018 $ 747,066 $ 9,755,3S5 $ 10,015,639 $ 486,782 2019 486,782 11,412,211 11,313,542 585,451 2020 585,451 9,899,294 10,296,152 188,593 C. EMPLOYEE RETIREMENT PLAN Plan Description The City participates as one of 888 plans in the non-traditional, joint contributory, hybrid defined benefit plan administered by TMRS. TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor,with the advice and consent of the Senate,appoints the Board,TMRS is not fiscally dependent on the State of Texas. TMRS' defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report(CAFR)that can be obtained at www.tmrs.com. All eligible employees of the City are required to participate in TMRS. Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. 90 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) C. EMPLOYEE RETIREMENT PLAN (CONTINUED) At retirement,the benefit is calculated as if the sum of the employee's contributions,with interest,and the city-financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payment options. Members may also choose to receive a portion of their benefit as a partial lump sum distribution in an amount equal to 12,24, or 36 monthly payments, which cannot exceed 75%of the member's deposits and interest A summary of plan provisions for the City is as follows: Employee deposit rate 7% Matching ratio (City to employee) 2 to 1 Years required for vesting 5 Service retirement eligibility 20 years and any age, vested and age 60 Updated Service Credit 100% Repeating, Transfers Annuity increase (to retirees) 70%of CPI Repeating Supplemental death benefits for employees and retirees Yes Employees Covered by Benefit Terms At the December 31, 2019, valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 357 Inactive employees entitled to but not yet receiving benefits 427 Active employees 980 Total 1,764 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%,or 200%,both as adopted by the governing body of the city. Under the state law governing TMRS,the contribution rate for each city is determined annually by the actuary, using the entry age normal actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Since the City needs to know its contribution rates in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. 91 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) C. EMPLOYEE RETIREMENT PLAN (CONTINUED) Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The City elected to contribute for calendar years 2019 and 2020 as follows: 2019 2020 Total Retirement Rate 15.33% 15.35% Supplemental Death Benefit 0.14 0.14 Total Combined Contribution 15.47% 15.49% Accordingly, contributions to TMRS for the year ended September 30, 2020, were $10,635,298 and were equal to the required contributions. Net Pension Liability The City's net pension liability (NPL) was measured as of December 31, 2019, and the total pension liability(TPL) used to calculate the NPL was determined by an actuarial valuation as of that date. Actuarial Assumptions The TPL in the December 31, 2019, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 2.75% per year Investment rate of return 6.75%, net of pension plan investment expense, including inflation Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB (10) mortality tables with the Public Safety table used for males and the General Employee table used for females. Mortality rates for healthy retirees and beneficiaries are based on the Gender- distinct 2019 Municipal Retirees of Texas mortality tables. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by Scale UMP to account for future mortality improvements. For disabled annuitants,the same mortality tables for healthy retirees is used with a 4- year set-forward for males and a 3-year set-forward for females. In addition,a 3.5%and 3.0%minimum mortality rate is applied, for males and females respectively, to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31,2014,to December 31,2018. They were adopted in 2019 and first used in the December 31, 2019, actuarial valuation. The post-retirement mortality 92 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) C. EMPLOYEE RETIREMENT PLAN (CONTINUED) assumption for annuity purchase rates is based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31,2013. 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. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive)without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and best estimates of real rates of return for each major asset class in fiscal year 2020 are summarized in the table below: Long-Term Expected Target Real Rate of Return Asset Class Allocation (Arithmetic) Domestic Equity 17.5% 4.30% International Equity 17.5% 6.10% Core Fixed Income 10.0% 1.00% Non-Core Fixed Income 20.0% 3.39% Real Return 10.0% 3.78% Real Estate 10.0% 4.44% Absolute Return 10.0% 3.56% Private Equity 5.0% 7.75% Total 100.0% Single Discount Rate 0 The discount rate used to measure the TPL was 6.75/o. 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 Ian investments was applied to all 9 P P P PP periods of projected benefit payments to determine the TPL. 93 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) C. EMPLOYEE RETIREMENT PLAN (CONTINUED) Changes in the Net Pension Liability Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a) - (b) Balance at December 31, 2018 $ 283,486,711 $ 228,917,389 $ 54,569,322 Changes for the year: Service cost 12,125,301 - 12,125,301 Interest 19,262,844 - 19,262,844 Difference between expected and actual 4,071,075 - 4,071,075 experience Changes of assumptions 608,160 - 608,160 Contributions - employer - 10,471,204 (10,471,204) Contributions - employee - 4,793,245 (4,793,245) Net investment income - 35,438,150 (35,438,150) Benefit payments, including refunds of employee contributions (8,347,798) (8,347,798) - Administrative expense - (199,970) 199,970 Other - (6,007) 6,007 Net changes 27,719,582 42,148,824 (14,429,242) Balance at December 31, 2019 $ 311,206,293 $ 271,066,213 $ 40,140,080 As previously disclosed, the assumed interest rate of return used by GRS is 6.75%.As of December 31, 2019, TMRS recognized an investment return of 14.96%. This, in turn, resulted in a net decrease of $14,429,242 in the City's NPL. The return on investments is primarily a result of unrealized gains recognized in the global equities asset class in 2019. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the NPL of the City, calculated using the discount rate of 6.75%, as well as what the City's NPL 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: Current Discount 1% Decrease Rate 1% Increase 5.75% 6.75% 7.75% City's Net Pension Liability $ 90,392,058 $ 40,140,080 $ (656,789) 94 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) C. EMPLOYEE RETIREMENT PLAN (CONTINUED) Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in a separately issued TMRS financial report.That report may be obtained on the Internet at www.tmrs.com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the year ended September 30, 2020, the City recognized pension expense of $12,234,199. At September 30,2020,the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience $ 4,470,118 $ 141,652 Difference between projected and actual investment earnings - 8,189,946 Changes in actuarial assumptions used to determine pension liability S01,652 250,805 Pension contributions after measurement date 8,379,538 - Total $ 13,351,308 $ 8,582,403 Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date of $8,379,538 will be recognized as a reduction of the NPL for the measurement year ending December 31, 2020(i.e., recognized in the City's financial statements September 30,2021). Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Net Deferred Year Ended Outflows (Inflows) December 31, of Resources 2020 $ (1,459,484) 2021 (1,246,621) 2022 1,557,973 2023 (3,044,331) 2024 581,830 Thereafter - Total $ (3,610,633) 95 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS The City participates in funding two OPEB plans. One plan is the Supplemental Death Benefits Fund (SDBF)administered by TMRS. The other is medical and prescription drug coverage offered to retirees and their dependents and is a self-funded health insurance plan. SDBF: TMRS administers a defined benefit group-term life insurance Ian known as the Supplemental 9 p p PP Death Benefits Fund (SDBF). This is a voluntary program in which the City has elected, by ordinance, to provide group-term life insurance coverage (supplemental death benefits) to both current and retired employees. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year,to be effective the following January 1. The retiree portion of the SDBF is considered a single-employer plan. Self-Funded Health Insurance: The City offers its retirees and their dependents medical, dental and vision insurance until age 65. Medical insurance includes prescription drug. The plans are the same as the active plans. The retirees are required to make significantly higher contributions than the actives. However, these higher contributions still do not fully cover the cost of the retirees on a stand-alone basis, thus generating a retiree medical liability. Once a retiree or dependent becomes eligible for Medicare at age 65, he/she is no longer eligible for benefits.Also, retirees are no longer eligible if they have insurance or are eligible for insurance through another employer. This significantly limits the number of retirees on the plan, the benefits paid during the life of a retiree and consequently, the liability.This plan is considered a single-employer defined benefit OPEB plan. Benefits Provided SDBF: Payments from this fund are similar to group-term life insurance benefits and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit 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). Retired employees are insured for $7,500; this coverage is an "other post- employment benefit," or OPEB. The City offers supplemental death benefits to both active employees and retirees. 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). Self-Funded Health Insurance: All retirees who are eligible to receive pension benefits under the City's pension system are eligible for OPEB. Retirees may also enroll eligible dependents under the medical, dental, and vision plan(s) in which they participate. Eligible dependents of the retiree include a legally married spouse,children under age 26,and eligible disabled children beyond 26 years of age,if covered prior to age 26. A surviving spouse of a deceased retiree is ineligible to continue retiree medical,dental, and/or vision coverage. However, a surviving spouse may elect COBRA coverage for no more than 36 months and are required to pay the entire COBRA premium plus a 2 percent administrative fee. 96 CITY OF ROUND*ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Employees Covered by Benefit Terms At the December 31, 2019, valuation and measurement date, the following employees were covered by the benefit terms: SDBF: Inactive employees currently receiving benefits 288 Inactive employees entitled to but not yet receiving benefits 135 Active employees 980 Total 1,403 Self-Funded Health Insurance: Inactive employees (retirees) 36 Active employees 941 Total 977 Contributions SDBF: The City contributes to 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 and represents 0.14%of required contributions. The City's contributions to SDBF for the years ended 2020, 2019, and 2018 were $14,889, $14,528, and $13,337, respectively, which equaled the required contributions each year. The funding policy for 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 during employees' entire careers. The retiree-only portion of the SDBF rate was 0.02%for the years ended 2020 —2018. Self-Funded Health Insurance: OPEB are funded on a pay-as-you-go basis. The City recognizes the cost of providing these benefits as an expense and corresponding revenue in the Internal Service Fund (self-funded health insurance). Medical,dental,vision, and life insurance premiums are reported in this fund. The City is under no obligation, statutory or otherwise, to offer OPEB or to pay any portion of the cost of OPEB to any retirees or their dependents. Allocation of City funds to pay OPEB or to make OPEB available is determined on an annual basis by the City Council as part of the budget approval process. Total OPEB Liability For the fiscal year ended September 30, 2020, the City recognized a total OPEB liability of$18,610,659, $2,468,900 of which was for the SDBF,and $16,141,759 for the Self-Funded Health Insurance plan. Both were measured as of December 31, 2019, and were determined by an actuarial valuation as of that date. 97 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS CONTINUED Actuarial Assumptions The total OPEB liability in the December 31, 2019, actuarial valuation was determined using the following actuarial assumptions: SDBF Self-Funded Health Insurance Inflation 2.5% 2.5% Salary increases 3.5%to 11.5%including inflation 3.0% Discount rate** 2.75% 2.75% Healthcare cost trend rate None Getzen model(6.86%to 4.29%) Retirees' share of benefit- Varies based on plan elected and related costs $0 years of service Actuarial cost method*** Entry Age Normal Cost Method Entry Age Normal Cost Method Mortality For service retirees: 2019 Municipal Mortality rates were based on the RP- Retirees of Texas Mortality Tables. The 2014 Dynamic Table projected using rates are projected on a fully MP-2017 generational basis with scale UMP. For disabled retirees: 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set-forward for males and 3 year set-forward for females. In addition, a 3.5% and 3% minimum 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. Development of claims None Retiree medical and pharmacy claims were projected to the following fiscal year and age-adjusted to age 65. A composite retiree contribution was netted out. That net age-65 cost was then average with the trended,age-65 cost from the prior valuation to smooth out any fluctuations. That average then was allocated to all pre- 65 ages using the same age factors. ** Because this plan is considered an unfunded trust under GASB Statement No. 75, the relevant discount rate for calculating the total OPEB liability is based on the Fidelity Index's "20-Year Municipal GO AA Index" rate as of December 31, 2019. ***This method develops the annual cost of the plan in two parts: that attributable to benefits accruing in the current year, known as the normal cost, and that due to service earned prior to the 98 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) current year, known as the amortization of the unfunded actuarial accrued liability. The normal cost and the actuarial accrued liability is calculated individually for each member. The normal cost rate for an employee is the contribution rate which, if applied to a member's compensation throughout their period of anticipated covered service with the municipality, would be sufficient to meet all benefits payable on their behalf. The normal cost is calculated using an entry age based on benefit service with the current city. If a member has additional time-only vesting service through service with other TMRS cities or other public agencies, they retain this for determination of benefit eligibility and decrement rates. The salary-weighted average of these rates is the total normal cost rate. The unfunded actuarial accrued liability reflects the difference between the portion of projected benefits attributable to service credited prior to the valuation date and assets already accumulated. Specific to the self-funded health insurance plan, at the time the employee enters the plan (usually at date of hire), the present value of future benefits is set equal to the present value of future normal costs. Instead of the normal costs being a level dollar amount,they are set as a level percent of salary. The accrued liability then is just the present value of past normal costs brought forward from the entry date to the measurement date. SDBF: The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the period December 31, 2014, to December 31, 2018. They were adopted in 2019 and first used in the December 31, 2019, actuarial valuation. Changes in the Total OPEB Liability Self-Funded Health SDBF Insurance Total Balance at December 31, 2018 $ 1,906,330 $ 14,602,156 $ 16,508,486 Changes for the year: Service cost 102,294 919,177 1,021,471 Interest 72,369 532,239 604,608 Differences between expected and actual experience (36,755) (196,828) (233,583) Changes in assumptions or other inputs 438,301 882,735 1,321,036 Benefit payments (13,639) (597,720) (611,359) Net changes 562,570 1,539,603 2,102,173 Balance at December 31, 2019 $ 2,468,900 $ 16,141,759 $ 18,610,659 99 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Sensitivity of the Total OPES Liability to Changes in the Discount Rate The following table presents the total OPEB liability of the City, calculated using the discount rate of 2.75%for each plan, as well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (1.75%) or 1-percentage-point higher (3.75%) than the current discount rate: Current Discount 1% Decrease Rate 1% Increase 1.75% 2.75% 3.75% SDBF $ 3,066,600 $ 2,468,900 $ 2,015,599 Self-Funded Health Insurance 17,082,023 16,141,759 15,222,712 The following table presents the total OPEB liability of the City, calculated using the healthcare trend rate of 6.86%to 4.29%,as well as what the City's total OPEB liability would be if it were calculated using a healthcare trend rate that is 1-percentage-point lower(5.86%to 3.29%)or 1-percentage-point higher (7.86%to 5.29%) than the current healthcare trend rate: Healthcare Trend 1% Decrease Rate 1% Increase Self-Funded Health Insurance $ 14,540,463 $ 16,141,759 $ 17,987,404 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the fiscal year ended September 30, 2020, the City recognized total OPEB expense of $1,009,637, $212,928 of which was for the SDBF, and $796,709 for the Self-Funded Health Insurance plan. At September 30,2020,the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources Self- Self- Funded Funded Health Health SDBF Insurance Total SDBF Insurance Total Difference between expected and actual economic experience $ - $ - $ - $ 61,977 $ 226,052 $ 288,029 Changes in assumptions and other inputs 481,425 1,167,618 1,649,043 116,415 446,760 563,175 OPEB contributions after measurement date 10,725 470,664 481,389 - - - Total $ 492,150 $ 1,638,282 $ 2,130,432 $ 178,392 $ 672,812 $ 851,204 100 CITY OF ROUND ROCK, TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) D. OTHER POST-EMPLOYMENT BENEFITS (CONTINUED) Deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date of$481,389 will be recognized as a reduction of the total OPEB for the measurement year ending December 31,2020(i.e., recognized in the City's financial statements September 30,2021). Other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Net Deferred Outflows (Inflows) of Resources Measurement Year Ended Self-Funded Health December 31, SDBF Insurance 2020 $ 52,350 $ 120,425 2021 52,350 120,425 2022 52,350 120,425 2023 52,350 72,350 2024 36,519 61,181 Thereafter 57,114 - Total $ 303,033 $ 494,806 E. MUNICIPAL GOLF COURSE Management Agreement Management of the City's golf course has been performed by a private operator in accordance with the terms of a Management Agreement since 1989. The current Management Agreement had an initial term of three years that shall automatically renew for two additional 1-year terms. The agreement began on January 1, 2017, with the first 1-year renewal period beginning on January 1, 2020. The contract will continue automatic 1-year renewal terms unless one of the parties chooses to terminate. Under conditions set forth in the Management Agreement, the operator shall be paid a monthly base management fee. Additionally, the operator may earn an annual incentive management fee based upon gross receipts of the golf course. F. SUBSEQUENT EVENTS COVID-19 On January 31, 2020, the Secretary of the United States Health and Human Services Department declared a public health emergency for the United States and on March 13, 2020, the President of the United States declared the outbreak of COVID-19 in the United States a national emergency. On March 13, 2020, the Governor of Texas declared a state of disaster for all counties in Texas in response to the COVID-19 pandemic, a disaster declaration he has subsequently extended. In addition, certain local officials, including the County Judge of Travis and Williamson County, also declared a local state of disaster. 101 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2020 V. OTHER INFORMATION (CONTINUED) F. SUBSEQUENT EVENTS (CONTINUED) The full extent of the ongoing impact of COVID-19 on the City's fiscal year 2021 and longer-term operational and financial performance will depend on future developments, many of which are outside of its control, including the effectiveness of the mitigation strategies related to COVID-19,the duration and spread of COVID-19,and future governmental actions,all of which are highly uncertain and cannot be predicted. Crow Group Series, LLC On July 26, 2018, the City entered into an Economic Development Program Agreement with Crow Group Series, LLC (Crow) to promote economic development. Crow intended to construct, develop and operate three Class A office buildings containing a total of approximately 125,000 square feet of office, parking, and related space(the"project"). Crow is required to invest approximately$24 million in improvements to the property and the City provided funding through an economic development loan for$2.2 million to defray a portion of the Project's costs. The loan is secured by a first lien on a portion of the land to be developed. The project consists of three phases. As of December 31, 2020, Crow is in default on the agreement as Phase 2 has not been completed by the date specified in the agreement. The City and Crow Group are in negotiations to resolve the default. 102 •• /CIS 103 CITY OF ROUND ROCK, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2020 (UNAUDITED) Texas Municipal Retirement System Plan (TMRS) Schedule of Changes in the Net Pension Liability and Related Ratios Measurement period ending December 31, 2014 2015 2016 Total Pension Liability Service cost $ 8,066,254 $ 8,990,916 $ 9,609,823 Interest(on the Total Pension Liability) 13,330,143 14,481,391 15,065,206 Difference between expected and actual experience (50,055) (662,530) 704,655 Change of assumptions - (1,208,085) - Benefit payments, including refunds of employee contributions (5,231,094) (5,493,451) (5,706,408) Net Change in Total Pension Liability 16,115,248 16,108,241 19,673,276 Total Pension Liability- Beginning 189,013,034 205,128,282 221,236,523 Total Pension Liability- Ending (a) $ 205,128,282 $ 221,236,523 $ 240,909,799 Plan Fiduciary Net Position Contributions - Employer $ 7,787,328 $ 8,195,714 $ 8,302,118 Contributions - Employee 3,423,287 3,644,800 3,779,341 Net investment income 8,955,552 252,867 12,021,503 Benefit payments, including refunds of employee contributions (5,231,094) (5,493,451) (5,706,408) Administrative expense (93,479) (154,001) (135,695) Other (7,685) (7,607) (7,311) Net Change in Plan Fiduciary Net Position 14,833,909 6,438,322 18,253,548 Plan Fiduciary Net Position - Beginning 156,512,946 171,346,855 177,785,177 Plan Fiduciary Net Position - Ending (b) 171,346,855 177,785,177 196,038,725 Net Pension Liability- Ending (a) - (b) $ 33,781,427 $ 43,451,346 $ 44,871,074 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 83.53% 80.36% 81.37% Covered Payroll $ 48,839,040 $ 51,731,390 $ 53,776,289 Net Pension Liability as a Percentage of Covered Payroll 69.17% 83.99% 83.44% Notes to Schedule: 1) No significant factors noted to disclose. 2) No significant methods and assumptions to disclose. 3) Schedule will be built out to 10 years. See Independent Auditors' Report. 104 2017 2018 2019 $ 10,430,650 $ 11,165,127 $ 12,125,301 16,360,878 17,747,611 19,262,844 671,908 773,706 4,071,075 - - 608,160 (7,483,495) (7,089,473) (8,347,798) 19,979,941 22,596,971 27,719,582 240,909,799 260,889,740 283,486,711 $ 260,889,740 $ 283,486,711 $ 311,206,293 $ 9,138,705 $ 9,753,253 $ 10,471,204 4,113,985 4,406,956 4,793,245 27,187,574 (6,861,490) 35,438,150 (7,483,495) (7,089,473) (8,347,798) (140,808) (132,486) (199,970) (7,136) (6,921) (6,007) 32,808,825 69,839 42,148,824 196,038,725 228,847,550 228,917,389 228,847,550 228,917,389 271,066,213 $ 32,042,190 $ 54,569,322 $ 40,140,080 87.72% 80.75% 87.10% $ 58,533,388 $ 62,831,331 $ 68,196,291 54.74% 86.85% 58.86% 105 CITY OF ROUND ROCK,TEXAS REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2020 (UNAUDITED) Texas Municipal Retirement System Plan (TMRS) Schedule of Contributions Fiscal year ending September 30, 2015 2016 2017 Actuarially Determined Contribution $ 8,077,742 $ 8,507,987 $ 8,897,294 Contributions in relation to the actuarially determined contribution 8,193,478 8,739,633 9,059,953 Contribution deficiency(excess) $ (115,736) $ (231,646) $ (162,659) Covered payroll $ 51,159,783 $ 54,924,766 $ 57,346,696 Contributions as a percentage of covered payroll 16.02% 15.91% 15.80% Notes to Schedule of Contributions Valuation Date: Actuarially determined contribution rates are calculated as of December 31 and become effective in January, 13 months and a day later. 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; 15% soft corridor Inflation 2.5% 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 City'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: There were no benefit changes during the year. Schedule will be built out to ten years. See Independent Auditors' Report. 106 2018 2019 2020 $ 9,582,199 $ 10,313,421 $ 10,806,103 9,618,245 10,377,168 10,635,298 $ (36,046) $ (63,747) 170,805 $ 61,743,107 $ 67,091,746 $ 68,196,291 15.57% 15.46% 15.60% 107 CITY OF ROUND ROCK, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2020 (UNAUDITED) Supplemental Death Benefit Fund Schedule of Changes in the Total OPEB Liability and Related Ratios Measurement period ending December 31, Supplemental Death Benefit Fund Total OPEB Liability 2017 2018 2019 Service Cost $ 87,800 $ 106,813 $ 102,294 Interest 63,146 66,031 72,369 Changes in assumptions or other inputs 176,033 (160,017) 438,301 Differences between expected and actual experience - (41,694) (36,755) Benefit payments (11,707) (12,566) (13,639) Net change in total OPEB liability 315,272 (41,433) 562,570 Total OPEB liability - beginning 1,632,491 1,947,763 1,906,330 Total OPEB liability - ending $ 1,947,763 $ 1,906,330 $ 2,468,900 Covered payroll $ 58,533,338 $ 62,831,331 $ 68,196,291 Total OPEB liability as a percentage of covered payroll 3.33% 3.03% 3.62% Notes to Schedule: 1) No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. 2) No significant methods and assumptions to disclose. 3) Schedule will be built out to 10 years. See Independent Auditors' Report. 108 CITY OF ROUND ROCK, TEXAS REQUIRED SUPPLEMENTARY INFORMATION SEPTEMBER 30, 2020 (UNAUDITED) Self-Funded Health Insurance Schedule of Changes in the Total OPEB Liability and Related Ratios Measurement period ending December 31, Self-Funded Health Insurance Total OPEB Liability 2017 2018 2019 Service Cost $ 837,881 $ 886,296 $ 919,177 Interest 477,714 498,983 532,239 Changes in assumptions or other inputs 798,106 (643,572) 882,735 Differences between expected and actual experience (114,595) - (196,828) Benefit payments (431,570) (465,610) (597,720) Net change in total OPEB liability 1,567,536 276,097 1,539,603 Total OPEB liability - beginning 12,758,523 14,326,059 14,602,156 Total OPEB liability- ending $ 14,326,059 $ 14,602,156 $ 16,141,759 Covered payroll $ 58,533,338 $ 62,831,331 $ 68,196,291 Total OPEB liability as a percentage of covered payroll 24.5% 23.2% 23.7% Notes to Schedule: 1) No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. 2 No assumptions significant methods and to disclose. 9 3) Schedule will be built out to 10 years. See Independent Auditors' Report. 109 y v� 41 1 TVA � 110 NONMAJOR GOVERNMENTAL FUNDS Nonmajor Governmental Funds account for specific resources, other than major capital projects that are restricted to expenditures for specified purposes. Community Development Block Grant Fund — To account for grant monies received for programs benefiting persons of low to moderate income. Hotel — Motel Occupancy Tax Fund —To account for the levy and use of the 7% hotel — motel bed tax received. Proceeds from this tax are to be used toward tourism,community events, cultural enhancements, ongoing repairs, maintenance and capital improvements to the City-owned Dell Diamond, a minor league baseball stadium and conference center, and for promotion of the City. Hotel—Motel Occupancy Venue Tax Fund—To account for the levy and use of the 2% hotel —motel bed venue tax received. Proceeds from this tax are to be used toward the construction and maintenance of the sports center that prompts tourism and promotion of the City. Library and Recreational Fund—To account for amounts received through the City's landscape ordinance, contributions and general government resources designated for library and recreational programs of the City. Public Safety Fund — To account for amounts received through child safety fines, court security, court technology fees, and drug enforcement actions, some of which promote traffic safety programs. Public Education&Government Fund—To account for amounts received for programs to provide public education in government. 111 CITY OF ROUND ROCK, TEXAS NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2020 Community Hotel-Motel Hotel-Motel Development Occupancy Occupancy Library and Block Grant Tax Venue Tax Recreational ASSETS Cash and cash equivalents $ - $ 311,492 $ 949,615 $ 1,222,513 Investments - 1,489,763 4,526,621 5,839,692 Receivables - Accounts and other - 231,791 62,865 - Accrued interest - 4,076 7,435 9,611 Grants 264,659 - - - Restricted cash - 299,319 - - Restricted investments - 1,431,539 - - Restricted accrued interest - 602 - - Total assets $ 264,659 $ 3,768,582 $ 5,546,536 $ 7,071,816 LIABILITIES AND FUND BALANCES Liabilities - Accounts payable $ 264,659 $ 91,447 $ 39,994 $ 58,120 Accrued payroll - 13,539 30,031 14,784 Unearned revenue - - - 1,075,640 Total liabilities 264,659 104,986 70,025 1,148,544 Fund balances - Restricted —authorized construction - 1,699,549 - - Restricted —hotel-motel tax - 1,964,047 5,476,511 - Restricted —public safety - - - - Restricted—general government - - - - Committed —general government - - - 1,030,812 Committed —capital projects funds - - - 3,058,387 Assigned —culture and recreation - - - 1,834,073 Total fund balances - 3,663,596 5,476,511 5,923,272 Total liabilities and fund balances $ 264,659 $ 3,768,582 $ 5,546,536 $ 7,071,816 112 Total Public Nonmajor Education & Governmental Public Safety Government Funds $ 130,809 $ 246,823 $ 2,861,252 625,621 1,180,471 13,662,168 - 1,423 296,079 857 1,951 23,930 - - 264,659 - - 299,319 - - 1,431,539 - - 602 $ 757,287 $ 1,430,668 $ 18,839,548 $ 3 $ 28,737 $ 482,960 - - 58,354 - 1,075,640 3 28,737 1,616,954 - - 1,699,549 - - 7,440,558 757,284 - 757,284 - 1,401,931 1,401,931 - 1,030,812 - - 3,058,387 - 1,834,073 757,284 1,401,931 17,222,594 $ 757,287 $ 1,430,668 $ 18,839,548 113 CITY OF ROUND ROCK, TEXAS NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 2020 Community Hotel-Motel Hotel-Motel Development Occupancy Occupancy Library and Block Grant Tax Venue Tax Recreational Revenues- Taxes and franchise $ - $ - $ - $ - Licenses, permits and fees - - - 193,619 Charges for services - - 1,144,135 607,722 Fines and forfeitures - - - - Grants 1,052,973 361 5,373 - Hotel occupancy tax - 3,198,127 913,731 - Contributions - - - 366,199 Investment and other - 109,760 108,324 127,830 Total revenues 1,052,973 3,308,248 2,171,563 1,295,370 Expenditures - Current - General government 762,575 - - 63,449 Public safety - - - - Culture and recreation - 1,285,131 1,617,182 1,105,948 Capital projects 290,398 787,089 - 385,411 Total expenditures 1,052,973 2,072,220 1,617,182 1,554,808 Excess(deficiency) of revenues over expenditures - 1,236,028 554,381 (259,438) Other financing sources(uses) - Transfers in - - - 675,000 Transfers out - (1,576,425) (371,030) (1,029) Total other financing sources(uses) - (1,576,425) (371,030) 673,971 Net change in fund balances - (340,397) 183,351 414,533 Fund balances, October 1, 2019 - 4,003,993 5,293,160 5,508,739 Fund balances, September 30, 2020 $ - $ 3,663,596 $ 5,476,511 $ 5,923,272 114 Total Public Nonmajor Education & Governmental Public Safety Government Funds $ $ 211,144 $ 211,144 - 193,619 - - 1,751,857 169,182 - 169,182 - - 1,058,707 - 4,111,858 - - 366,199 40,960 25,768 412,642 210,142 236,912 8,275,208 53,052 274,358 1,153,434 176,380 - 176,380 - - 4,008,261 - - 1,462,898 229,432 274,358 6,800,973 (19,290) (37,446) 1,474,235 - - 675,000 (248,927) - (2,197,411) (248,927) (1,522,411) (268,217) (37,446) (48,176) 1,025,501 1,439,377 17,270,770 $ 757,284 $ 1,401,931 $ 17,222,594 115 9U SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL, DEBT SERVICE AND NONMAJOR SPECIAL REVENUE FUNDS 117 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2020 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30 2019 Variance- Budgeted Amounts Positive 2019 Original Final Actual (Negative) Actual Revenues- Taxes and franchise- Property tax $ 42,066,250 $ 42,066,250 $ 41,849,470 $ (216,780) $ 37,631,725 Penalty and interest 70,000 70,000 114,297 44,297 92,609 Sales tax 52,600,000 47,280,000 54,209,511 6,929,511 52,802,373 Franchise 6,610,000 6,610,000 6,848,882 238,882 7,188,438 Bingo tax 30,000 25,000 49,074 24,074 37,287 Mixed drink tax 600,000 340,000 571,922 231,922 660,548 Total taxes and franchise 101,976,250 96,391,250 103,643,156 7,251,906 98,412,980 Licenses, permits and fees- Building permits 720,000 550,000 651,520 101,520 819,618 Other permits 50,900 45,900 46,008 108 55,273 Fees 931,500 806,500 943,164 136,664 1,152,852 Total licenses, permits,and fees 1,702,400 1,402,400 1,640,692 238,292 2,027,743 Charges for services- Trash collection fees 1,260,000 1,215,000 1,262,420 47,420 1,257,873 Swimming pool fees 1,265,000 160,000 768,091 608,091 1,143,192 Recreation program fees 2,247,400 1,356,400 1,451,340 94,940 2,274,643 Filing and reproduction fees 25,000 10,000 16,524 6,524 26,540 Other 40,500 31,500 24,743 (6,757) 134,858 Total charges for services 4,837,900 2,772,900 3,523,118 750,218 4,837,106 Fines and forfeitures 1,395,000 950,000 1,454,794 504,794 1,763,981 Grants 1,083,538 1,640,538 2,317,254 676,716 2,171,405 Investment and other- Investment income 900,000 725,000 1,220,377 495,377 1,433,232 Other 4,804,300 4,429,300 5,027,273 597,973 4,963,960 Total investment and other 5,704,300 5,154,300 6,247,650 1,093,350 6,397,192 Total revenues 116,699,388 108,311,388 118,826,664 10,515,276 115,610,407 118 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL(CONTINUED) YEAR ENDED SEPTEMBER 30, 2020 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2019 Variance- Budgeted Amounts Positive 2019 Original Final Actual (Negative) Actual Expenditures- Current- General government Executive- Personnel services $ 16,595,964 $ 14,032,917 $ 13,902,636 $ 130,281 $ 13,161,816 Contractual services S,790,738 5,497,976 5,033,985 463,991 4,813,044 Supplies and materials 792,768 1,133,580 1,064,534 69,046 763,828 Other services and charges 2,797,715 2,590,008 2,518,887 71,121 2,127,194 Capital outlay 75,000 75,000 75,000 - 75,720 Total executive 26,052,185 23,329,481 22,595,042 734,439 20,941,602 Judicial- Personnel services 986,908 1,006,338 1,006,336 2 860,827 Contractual services S5,023 71,953 71,950 3 86,053 Supplies and materials 15,465 8,742 8,742 - 10,507 Other services and charges 12,425 6,158 6,158 8,284 Total judicial 1,069,821 1,093,191 1,093,186 S 965,671 Total general government 27,122,006 24,422,672 23,688,228 734,444 21,907,273 Public safety Police- Personnel services 29,552,600 29,441,975 29,336,746 105,229 28,572,067 Contractual services 982,367 943,415 912,212 31,203 869,521 Supplies and materials 1,523,800 1,490,192 1,453,891 36,301 1,466,238 Other services and charges 1,312,796 1,135,427 1,135,392 35 1,326,150 Capital outlay 50,432 36,304 1,431 34,873 46,209 Total police 33,421,995 33,047,313 32,839,672 207,641 32,280,185 Fire- Personnel services 21,831,551 21,640,596 21,640,594 2 20,945,352 Contractual services 580,875 467,875 467,871 4 545,887 Supplies and materials 1,220,268 1,210,438 1,210,436 2 1,453,568 Other services and charges 239,200 162,730 159,649 3,081 739,990 Capital outlay - - - - 16,896 Total fire 23,871,894 23,481,639 23,478,550 3,089 23,701,693 Total public safety 57,293,889 56,528,952 56,318,222 210,730 55,981,878 (CONTINUED) 119 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (CONTINUED) YEAR ENDED SEPTEMBER 30, 2020 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2019 Variance- Budgeted Amounts Positive 2019 Original Final Actual (Negative) Actual Expenditures- (cont'd) Current-(cont'd) Public works Administration- Personnel services $ 4,609,182 $ 4,813,353 $ 4,813,350 $ 3 $ 3,974,951 Contractual services 330,1SS 261,155 215,562 4S,593 159,259 Supplies and materials 961,746 920,646 760,S74 160,072 937,392 Other services and charges 2,173,264 2,080,954 1,892,350 188,604 1,989,006 Capital outlay - 44,700 28,152 16,548 - Total administration 8,074,347 8,120,808 7,709,988 410,820 7,060,608 Streets- Personnel services 2,806,651 2,791,618 2,602,792 188,826 2,426,689 Contractual services 6,752,047 2,396,147 2,154,S70 241,577 1,997,296 Supplies and materials 832,303 651,773 596,687 55,086 627,321 Other services and charges 46,672 25,042 9,102 15,940 7,919 Capital outlay 186,000 65,530 65,522 8 143,194 Total streets 10,623,673 5,930,110 5,428,673 501,437 5,202,419 Maintenance shop- Personnel services 1,453,284 1,493,073 1,473,580 19,493 1,410,180 Contractual services 56,196 56,196 46,747 9,449 37,044 Supplies and materials 218,534 128,064 128,059 5 118,791 Other services and charges 20,735 24,325 24,318 7 28,562 Capital outlay 20,000 20,000 19,290 710 18,828 Total maintenance shop 1,768,749 1,721,658 1,691,994 29,664 1,613,405 Total public works 20,466,769 15,772,576 14,830,655 941,921 13,876,432 120 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (CONTINUED) YEAR ENDED SEPTEMBER 30, 2020 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2019 Variance- Budgeted Amounts Positive 2019 Original Final Actual (Negative) Actual Expenditures- (cont'd) Current-(cont'd) Culture and recreation Library- Personnel services $ 2,421,122 $ 2,432,940 $ 2,396,599 $ 36,341 $ 2,261,141 Contractual services 150,522 137,966 135,768 2,198 125,377 Supplies and materials 367,016 325,866 301,873 23,993 331,743 Other services and charges 210,714 230,120 223,702 6,418 207,318 Total library 3,149,374 3,126,892 3,057,942 68,950 2,925,579 Parks and recreation- Personnel services 8,846,252 8,892,971 8,892,957 14 8,812,967 Contractual services 1,815,049 1,764,689 1,348,341 416,348 1,690,709 Supplies and materials 1,641,833 1,558,333 1,362,493 195,840 1,646,811 Other services and charges 325,465 303,465 254,187 49,278 392,289 Capital outlay 97,000 98,710 98,666 44 80,379 Total parks and recreation 12,725,599 12,618,168 11,956,644 661,524 12,623,155 Total culture and recreation 15,874,973 15,745,060 15,014,586 730,474 15,548,734 Total expenditures 120,757,637 112,469,260 109,851,691 2,617,569 107,314,317 Excess(deficiency)of revenues over expenditures (4,058,249) (4,157,872) 8,974,973 13,132,845 8,296,090 Other financing sources(uses) - Transfers in 5,061,250 5,061,250 5,061,250 - 4,555,000 Transfers out (200,000) (3,947,201) (3,947,201) - (16,938,728) Total other financing sources(uses) 4,861,250 1,114,049 1,114,049 - (12,383,728) Net change in fund balances $ 803,001 $ (3,043,823) 10,089,022 $ 13,132,845 (4,087,638) Fund balance, October 1,2019 49,724,874 53,812,512 Fund balance,September 30,2020 $ 59,813,896 $ 49,724,874 121 CITY OF ROUND ROCK, TEXAS DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2020 Variance - Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Taxes and franchise $ 19,267,893 $ 19,267,893 $ 22,710,737 $ 3,442,844 Investment and other 50,000 50,000 159,587 109,587 Total revenues 19,317,893 19,317,893 22,870,324 3,552,431 Expenditures - Debt service - Principal retirement 20,043,305 20,043,305 18,296,526 1,746,779 Interest and fiscal charges 8,970,041 10,243,591 10,243,591 - Payment to refunding agent - 7,010,563 7,010,563 - Issuance costs 350,000 350,000 80,383 269,617 Total expenditures 29,363,346 37,647,459 35,631,063 2,016,396 Excess(deficiency) of revenues over expenditures (10,045,453) (18,329,566) (12,760,739) 5,568,827 Other financing sources(uses) - Issuance of refunding bonds - 6,980,000 6,980,000 - Transfers in - 5,841,455 5,841,455 - Total other financing sources (uses) - 12,821,455 12,821,455 - Net change in fund balances $ (10,045,453) $ (5,508,111) 60,716 $ 5,568,827 Fund balance, October 1, 2019 5,019,375 Fund balance, September 30, 2020 $ 5,080,091 122 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY DEVELOPMENT BLOCK GRANT YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Grants $ 1,052,973 $ 1,052,973 $ 1,052,973 $ - Total revenues 1,052,973 1,052,973 1,052,973 - Expenditures - Current - General government- Supplies and materials 58,254 58,254 58,254 - Other services and charges 704,321 704,321 704,321 - Capital outlay 290,398 290,398 290,398 - Total expenditures 1,052,973 1,052,973 1,052,973 - Net change in fund balances $ - $ - - $ - Fund balance, October 1, 2019 - Fund balance, September 30, 2020 $ - 123 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL HOTEL-MOTEL OCCUPANCY TAX FUND YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Grants $ - $ - $ 361 $ 361 Hotel occupancy tax 4,300,000 2,340,000 3,198,127 858,127 Investment and other 125,000 94,000 109,760 15,760 Total revenues 4,425,000 2,434,000 3,308,248 874,248 Expenditures - Current - Culture and recreation- Personnel services 480,131 481,131 481,077 54 Contractual services 841,250 527,584 404,343 123,241 Supplies and materials 30,176 136,396 69,815 66,581 Other services and charges 933,026 497,855 378,334 119,521 Capital outlay - 1,844,513 738,651 1,105,862 Total expenditures 2,284,583 3,487,479 2,072,220 1,415,259 Excess (deficiency) of revenues over expenditures 2,140,417 (1,053,479) 1,236,028 2,289,507 Other financing sources(uses) - Transfers out (937,500) (1,576,425) (1,576,425) - Total other financing sources (uses) (937,500) (1,576,425) (1,576,425) - Net change in fund balances $ 1,202,917 $ (2,629,904) (340,397) $ 2,289,507 Fund balance, October 1, 2019 4,003,993 Fund balance, September 30, 2020 $ 3,663,596 124 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL HOTEL-MOTEL OCCUPANCY VENUE TAX FUND YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Charges for services $ 1,275,000 $ 720,000 $ 1,144,135 $ 424,135 Grants - - 5,373 5,373 Hotel occupancy tax 1,230,000 685,000 913,731 228,731 Investment and other 90,000 75,000 108,324 33,324 Total revenues 2,595,000 1,480,000 2,171,563 691,563 Expenditures - Current - Culture and recreation- Personnel services 1,115,196 1,009,796 1,009,796 - Contractual services 284,767 227,302 227,301 1 Supplies and materials 296,352 328,632 326,146 2,486 Other services and charges 59,218 50,188 50,185 3 Capital outlay 50,000 9,699 3,754 5,945 Total expenditures 1,805,533 1,625,617 1,617,182 8,435 Excess(deficiency) of revenues over expenditures 789,467 (145,617) 554,381 699,998 Other financing sources(uses) - Transfers out (371,030) (371,030) (371,030) - Total other financing sources (uses) (371,030) (371,030) (371,030) - Net change in fund balances $ 418,437 $ (516,647) 183,351 $ 699,998 Fund balance, October 1, 2019 5,293,160 Fund balance, September 30, 2020 $ 5,476,511 125 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL LIBRARY AND RECREATIONAL YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Licenses, permits and fees $ 35,000 $ 35,000 $ 193,619 $ 158,619 Charges for services 605,000 370,000 607,722 237,722 Contributions 4,000 4,000 366,199 362,199 Investment and other 147,664 142,664 127,830 (14,834) Total revenues 791,664 551,664 1,295,370 743,706 Expenditures - Current- General Government- Supplies and materials 182,545 182,545 63,449 119,096 Total general government 182,545 182,545 63,449 119,096 Culture and recreation- Personnel services 627,871 549,271 520,670 28,601 Contractual services 186,811 170,811 161,199 9,612 Supplies and materials 413,500 388,465 352,081 36,384 Other services and charges 29,348 30,473 30,470 3 Capital outlay 506,588 2,195,130 426,939 1,768,191 Total culture and recreation 1,764,118 3,334,150 1,491,359 1,842,791 Total expenditures 1,946,663 3,516,695 1,554,808 1,961,887 Excess(deficiency) of revenues over expenditures (1,154,999) (2,965,031) (259,438) 2,705,593 Other financing sources (uses) - Transfers in 675,000 675,000 675,000 - Transfers out - (1,029) (1,029) - Total other financing sources(uses) 675,000 673,971 673,971 - Net change in fund balances $ (479,999) $ (2,291,060) 414,533 $ 2,705,593 Fund balance, October 1, 2019 5,508,739 Fund balance, September 30, 2020 $ 5,923,272 126 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL PUBLIC SAFETY YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues - Fines and forfeitures $ 107,000 $ 107,000 $ 169,182 $ 62,182 Investment and other 3,600 3,600 40,960 37,360 Total revenues 110,600 110,600 210,142 99,542 Expenditures - Current- General government- Supplies and materials 24,050 24,050 902 23,148 Other services and charges 89,946 89,946 52,150 37,796 Total general government 113,996 113,996 53,052 60,944 Public safety- Other services and charges 454,982 454,982 - 454,982 Capital outlay 198,233 203,683 176,380 27,303 Total public safety 653,215 658,665 176,380 482,285 Total expenditures 767,211 772,661 229,432 543,229 Excess(deficiency) of revenues over expenditures (656,611) (662,061) (19,290) 642,771 Other financing sources (uses) - Transfers out - (248,927) (248,927) - Total other financing sources(uses) - (248,927) (248,927) - Net change in fund balances $ (656,611) $ (910,988) (268,217) $ 642,771 Fund balance, October 1, 2019 1,025,501 Fund balance, September 30, 2020 $ 757,284 127 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL PUBLIC EDUCATION &GOVERNMENT FUND YEAR ENDED SEPTEMBER 30, 2020 Variance- Budgeted Amounts Positive Original Final Actual (Negative) Revenues- Taxes and franchise $ 220,000 $ 220,000 $ 211,144 $ (8,856) Investment and other 11,000 11,000 25,768 14,768 Total revenues 231,000 231,000 236,912 5,912 Expenditures- Current - General Government- Contractual services - 4,394 4,394 - Capital outlay 334,000 405,018 269,964 135,054 Total expenditures 334,000 409,412 274,358 135,054 Net change in fund balances $ (103,000) $ (178,412) (37,446) $ 140,966 Fund balance, October 1, 2019 1,439,377 Fund balance, September 30, 2020 $ 1,401,931 128 CITY OF ROUND ROCK, TEXAS STATISTICAL SECTION (UNAUDITED) This part of the City of Round Rock's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and supplementary information says about the City's overall financial health. This information has not been audited by the independent auditors. Contents Page Financial Trends These schedules contain trend information to help the reader understand how the 130 City's financial performance and well-being have changed over time. Revenue Capacity These schedules contain information to help the reader assess the City's significant 140 local revenue sources, the property and sales tax. Debt Capacity These schedules present information to help the reader assess the affordability of the 150 City's currently outstanding debt and the City's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader 159 Understand the environment within which the City's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand 161 how the information contained in the City's financial report relates to the services the City provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from the City's comprehensive annual financial reports for the relevant year. 129 CITY OF ROUND ROCK, TEXAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 2011 2012 2013 2014 Governmental activities- Net investment in capital assets $ 245,403,528 $ 252,984,681 $ 295,777,997 $ 303,977,353 Restricted 66,810,986 72,780,050 42,970,091 43,974,370 Unrestricted 77,864,804 76,870,782 74,833,175 44,713,408 Total governmental activities net position $ 390,079,318 $ 402,635,513 $ 413,581,263 $ 392,665,131 Business-type activities- Net investment in capital assets $ 213,536,543 $ 212,883,311 $ 214,178,908 $ 221,062,599 Restricted 11,984,130 13,994,028 6,868,062 7,764,750 Unrestricted 95,693,542 104,985,805 116,650,981 114,901,064 Total business-type activities net position $ 321,214,215 $ 331,863,144 $ 337,697,951 $ 343,728,413 Primary government- Net investment in capital assets $ 458,940,071 $ 465,867,992 $ 509,956,905 $ 525,039,952 Restricted 78,795,116 86,774,078 49,838,153 51,739,120 Unrestricted 173,558,346 181,856,587 191,484,156 159,614,472 Total primary government net position $ 711,293,533 $ 734,498,657 $ 751,279,214 $ 736,393,544 Source: Comprehensive Annual Financial Reports Notes:The City implemented GASB Statement No. 68 in 2015.As a result, net position for 2014 was restated. The City implemented GASB Statement No. 75 in 2018.As a result, net position for 2017 was restated. 130 2015 2016 2017 2018 2019 2020 $ 299,730,557 $ 310,185,706 $ 356,586,425 $ 373,007,353 $ 400,490,136 $ 442,969,195 48,019,726 51,813,118 48,954,352 48,357,161 44,334,128 23,471,549 53,355,360 52,451,939 29,054,168 28,585,838 28,918,565 33,581,912 $ 401,105,643 $ 414,450,763 $ 434,594,945 $ 449,950,352 $ 473,742,829 $ 500,022,656 $ 228,866,895 $ 234,981,264 $ 245,005,044 $ 268,467,171 $ 283,846,141 $ 294,760,377 19,215,972 15,275,659 19,800,722 22,628,600 24,343,881 16,315,836 110,519,279 126,490,054 126,634,362 138,980,320 146,681,470 168,868,607 $ 358,602,146 $ 376,746,977 $ 391,440,128 $ 430,076,091 $ 454,871,492 $ 479,944,820 $ 528,597,452 $ 545,166,970 $ 601,591,469 $ 641,474,524 $ 684,336,277 $ 737,729,572 67,235,698 67,088,777 68,755,074 70,985,761 68,678,009 39,787,385 163,874,639 178,941,993 155,688,530 167,566,158 175,600,035 202,450,519 $ 7S9,707,789 $ 791,197,740 $ 826,035,073 $ 880,026,443 $ 928,614,321 $ 979,967,476 131 CITY OF ROUND ROCK, TEXAS CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2011 2012 2013 2014 Expenses: Governmental activities- General government $ 28,487,648 $ 30,406,768 $ 27,923,780 $ 28,050,936 Public safety 39,140,352 40,944,978 41,842,363 45,283,826 Public works 36,442,333 29,295,041 31,215,489 33,537,533 Culture and recreation 14,514,561 15,069,456 15,702,435 18,024,001 Interest on long-term debt 8,608,399 7,144,755 6,915,772 8,478,700 Total governmental activities expenses 127,193,293 122,860,998 123,599,839 133,374,996 Business-type activities- Water and sewer utility 38,602,875 38,842,107 42,657,792 44,605,155 Golf course 174,149 157,135 141,153 71,090 Total business-type activities expenses 38,777,024 38,999,242 42,798,945 44,676,245 Total primary government expenses 165,970,317 161,860,240 166,398,784 178,051,241 Program revenues: Governmental activities- Charges for services- General government 3,519,857 3,104,355 2,822,715 2,559,380 Public safety 4,295,283 4,215,243 3,248,867 2,652,480 Public works 2,032,530 2,760,386 2,942,382 726,785 Culture and recreation 3,136,422 2,737,969 2,844,842 3,032,109 Operating grants and contributions 1,130,628 1,135,386 829,367 1,042,301 Capital grants and contributions 9,257,876 9,782,214 5,310,S41 5,901,038 Total governmental activities program revenues 23,372,596 23,735,553 17,998,714 15,914,093 Business-type activities- Charges for services- Water and sewer utility 44,922,715 43,327,656 43,094,185 43,705,878 Golf course 431,413 480,116 522,169 382,081 Capital grants and contributions 9,518,890 7,533,264 6,514,369 10,226,302 Total business-type activities program revenues 54,873,018 51,341,036 50,130,723 54,314,261 Total primary government program revenues 78,245,614 75,076,589 68,129,437 70,228,354 Net(expense) revenue- Governmental activities (103,820,697) (99,125,445) (105,601,125) (117,460,903) Business-type activities 16,095,994 12,341,794 7,331,778 9,638,016 Total primary government net expense (87,724,703) (86,783,651) (98,269,347) (107,822,887) 132 2015 2016 2017 2018 2019 2020 $ 28,860,077 $ 28,434,006 $ 24,864,772 $ 23,408,887 $ 27,861,595 $ 27,467,722 45,236,987 49,439,902 52,243,460 57,987,997 64,196,001 64,151,715 33,412,841 33,448,357 34,359,785 47,120,999 36,261,500 38,606,348 19,202,557 20,885,009 24,130,067 25,218,145 27,821,410 26,355,801 8,118,490 8,294,279 8,075,351 8,415,687 8,525,551 9,382,120 134,830,952 140,501,553 143,673,435 162,151,715 164,666,057 165,963,706 46,069,705 47,947,818 49,400,833 51,749,727 54,388,260 53,999,588 144,993 133,270 1,857,334 1,642,036 2,399,582 2,818,489 46,214,698 48,081,088 51,258,167 53,391,763 56,787,842 56,818,077 181,045,650 188,582,641 194,931,602 215,543,478 221,453,899 222,781,783 2,168,842 2,258,333 19,778,439 2,273,091 3,189,150 4,529,682 2,461,782 1,669,550 1,478,161 1,762,172 2,298,635 1,684,921 749,524 742,437 607,398 693,223 1,347,815 700,442 3,288,970 3,919,254 5,133,816 5,489,515 5,649,283 4,082,796 1,199,574 946,604 1,202,810 2,574,008 2,987,128 3,742,160 4,234,018 8,013,039 5,958,205 18,206,390 9,914,802 9,464,089 14,102,710 17,549,217 34,158,829 30,998,399 25,386,813 24,204,090 45,898,090 48,653,788 51,980,615 55,139,117 56,951,931 60,811,441 320,846 360,371 733,883 299,761 1,971,887 2,684,066 17,742,568 19,607,086 15,642,381 30,495,633 21,584,780 18,443,560 63,961,504 68,621,245 68,356,879 85,934,511 80,508,598 81,939,067 78,064,214 86,170,462 102,515,708 116,932,910 105,895,411 106,143,157 (120,728,242) (122,952,336) (109,514,606) (131,153,316) (139,279,244) (141,759,616) 17,746,806 20,540,157 17,098,712 32,542,748 23,720,756 25,120,990 (102,981,436) (102,412,179) (92,415,894) (98,610,568) (115,558,488) (116,638,626) (CONTINUED) 133 CITY OF ROUND ROCK, TEXAS CHANGES IN NET POSITION (CONTINUED) LAST TEN FISCAL YEARS (accrual basis of accounting) 2011 2012 2013 2014 General revenues and other changes in net position: Governmental activities- Taxes- Property $ 33,578,991 $ 34,379,529 $ 34,979,578 $ 36,502,409 Franchise 6,221,790 6,326,735 5,952,712 6,460,448 Sales 61,734,643 63,305,917 66,216,447 68,462,292 Hotel occupancy 2,684,046 3,252,542 4,140,920 4,646,208 Public service 352,159 316,320 347,846 477,606 Investment earnings and other 988,222 1,635,630 2,026,554 1,882,139 Transfers 2,193,070 2,464,967 2,882,818 1,800,895 Total governmental activities 107,752,921 111,681,640 116,546,875 120,231,997 Business-type activities- Investment earnings and other 1,294,555 772,102 1,385,847 1,397,321 Transfers (2,193,070) (2,464,967) (2,882,818) (1,800,895) Total business-type activities (898,515) (1,692,865) (1,496,971) (403,574) Total primary government 106,854,406 109,988,775 115,049,904 119,828,423 Change in net position: Governmental activities 3,932,224 12,556,195 10,945,750 2,771,094 Business-type activities 15,197,479 10,648,929 5,834,807 9,234,442 Total primary government $ 19,129,703 $ 23,205,124 $ 16,780,557 $ 12,005,536 134 2015 2016 2017 2018 2019 2020 $ 39,932,573 $ 44,239,067 $ 49,107,424 $ 54,082,288 $ 57,396,623 $ 64,744,623 7,255,212 7,175,948 7,103,548 7,140,940 7,407,178 7,060,026 67,620,848 67,340,120 64,209,719 72,861,565 75,690,767 78,361,955 5,083,556 5,407,667 5,515,163 5,714,235 6,000,447 4,111,858 515,778 566,712 627,164 647,243 697,835 620,996 5,020,786 7,957,942 8,201,944 9,024,223 12,180,534 9,081,735 3,740,000 3,610,000 3,492,871 (2,961,771) 3,698,337 4,058,250 129,168,753 136,297,456 138,257,833 146,508,723 163,071,721 168,039,443 866,927 1,214,674 2,289,777 3,131,444 4,772,982 4,010,588 (3,740,000) (3,610,000) (3,492,871) 2,961,771 (3,698,337) (4,058,250) (2,873,073) (2,395,326) (1,203,094) 6,093,215 1,074,645 (47,662) 126,295,680 133,902,130 137,054,739 152,601,938 164,146,366 167,991,781 8,440,511 13,345,120 28,743,227 15,355,407 23,792,477 26,279,827 14,873,733 18,144,831 15,895,618 38,635,963 24,795,401 25,073,328 $ 23,314,244 $ 31,489,951 $ 44,638,845 $ 53,991,370 $ 48,587,878 $ 51,353,155 135 CITY OF ROUND ROCK,TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2011 2012 2013 2014 Nonspendable- Inventories, prepaids and other $ 288,758 $ 321,044 $ 375,087 $ 397,271 Restricted for- Debt service 2,238,270 2,301,340 2,415,427 2,278,062 Authorized construction 88,021,123 81,424,206 43,630,036 106,539,802 Hotel-motel tax 8,114,729 8,927,441 9,549,082 11,173,765 Public safety 1,024,405 937,105 1,249,246 1,050,349 General government - - - - Committed to- General government 901,229 911,674 865,493 684,199 Capital projects funds 35,731,396 35,645,374 31,856,334 26,570,024 Streets and drainage 573,809 1,179,777 1,570,994 - Culture and recreation 11,239 6,625 10,530 12,438 Assigned to- Culture and recreation 542,779 248,771 283,518 264,662 Unassigned 36,238,854 36,912,381 38,604,781 38,726,365 Total governmental funds $ 173,686,591 $ 168,815,738 $ 130,410,528 $ 187,696,937 136 2015 2016 2017 2018 2019 2020 $ 430,821 $ 372,288 $ 232,004 $ 253,592 $ 226,190 $ 1,094,653 2,351,780 2,749,645 3,880,982 4,853,517 5,019,375 5,080,091 117,515,606 77,545,478 81,086,426 62,649,029 72,690,649 58,069,777 10,934,476 12,653,710 6,526,672 7,863,705 6,807,382 7,440,558 1,274,293 676,724 585,878 750,657 1,025,501 757,284 - - 1,269,075 1,268,233 1,439,377 1,401,931 856,977 1,081,159 124,703 232,243 883,883 1,030,812 24,696,122 24,865,777 28,397,665 21,934,876 28,971,259 23,259,722 1,145,826 1,152,195 - - - - 322,576 293,694 - - - - 272,666 212,080 1,004,583 1,274,658 1,638,534 1,834,073 50,277,389 52,427,796 50,090,080 53,558,920 49,498,684 59,547,303 $ 210,078,532 $ 174,030,546 $ 173,198,068 $ 154,639,430 $ 168,200,834 $ 159,516,204 137 CITY OF ROUND ROCK, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2011 2012 2013 2014 Revenues- Taxes and franchise $ 101,914,916 $ 104,318,270 $ 107,417,612 $ 111,592,909 Licenses, permits and fees 2,155,358 3,094,983 3,567,437 1,243,857 Charges for services 3,985,634 4,198,81S 4,436,779 4,645,527 Fines and forfeitures 2,492,261 2,814,987 3,208,637 2,673,670 Intergovernmental 3,302,276 2,158,621 1,225,195 3,044,095 Hotel occupancy tax 2,684,046 3,252,543 4,140,920 4,646,208 Investment and other 3,282,812 5,858,346 2,567,327 3,152,100 Contributions 3,786,134 2,635,613 3,565,842 4,783,567 Total revenues 123,603,437 128,332,178 130,129,749 13S,781,933 Expenditures- General government 24,346,515 25,332,577 23,783,735 24,375,794 Public safety 36,SS6,318 37,646,821 39,475,791 42,306,841 Public works 8,797,799 9,791,618 11,852,443 11,291,499 Culture and recreation 11,336,602 11,958,179 12,440,948 13,77S,702 Capital projects 22,981,288 39,916,082 65,523,775 38,694,239 Debt service- Principal retirement 11,815,968 13,040,604 12,852,059 14,395,697 Interest and fiscal charges 8,072,821 6,825,065 6,797,281 7,372,652 Payment to refunding agent - - - - Other charges 247,433 256,373 98,630 862,888 Total expenditures 124,154,744 144,767,319 172,824,662 153,075,312 Excess of revenues over(under)expenditures (551,307) (16,435,141) (42,694,913) (17,293,379) Other financing sources(uses)- Issuance of lease 1,372,023 500,000 1,000,000 1,450,000 Payment to borrower - - - - Issuance of debt 16,145,000 27,295,000 8,615,000 77,350,000 Premium on bonds issued 223,248 1,317,881 - 6,161,887 Payment to refunded bond escrow agent (16,083,357) (20,616,784) (8,509,756) (11,682,994) Transfers in 27,752,457 34,447,300 49,547,722 32,984,237 Transfers out (24,696,147) (31,379,109) (46,363,263) (31,683,342) Total other financing sources(uses) 4,713,224 11,564,288 4,289,703 74,579,788 Net change in fund balances $ 4,161,917 $ (4,870,853) $ (38,405,210) $ S7,286,409 Capital outlay including amounts reported under departmental current expenditures $ 23,932,697 $ 41,282,292 $ 67,059,266 $ 38,644,877 Debt service as a percentage of noncapital expenditures 19.8% 19.2% 18.6% 19.0% 138 2015 2016 2017 2018 2019 2020 $ 115,508,506 $ 119,211,433 $ 121,142,245 $ 134,637,978 $ 141,1 SO,180 $ 150,717,481 1,704,374 1,843,633 1,646,077 2,037,211 2,703,240 1,834,311 4,513,428 S,172,465 6,307,377 6,563,868 6,916,463 5,274,975 2,451,316 1,573,476 1,440,795 1,616,922 2,153,309 1,623,976 1,679,993 990,683 2,950,833 9,S11,022 3,822,463 5,540,163 S,083,556 5,407,667 5515,163 5,714,235 6,000,447 4,111,8S8 600,919 368,748 931,601 2,335,783 4,670,671 9,165,467 7,207,478 7,963,854 8,2S3,614 9,260,526 12,728,177 3,336,036 138,749,570 142,531,959 148,187,705 171,677,54E 180,144,9SO 181,604,267 23,838,520 24,394,392 21,055,932 23,744,730 22,423,018 24,841,662 43,067,272 44,388,881 47,595,884 52,839,347 56,063,867 56,494,602 12,328,284 12,062,839 12,682,503 14,748,037 15,077,947 17,290,725 14,766,040 1 S,078,964 17,219,700 18,513,216 20,213,897 19,022,847 33,476,554 65,414,999 63,268,686 59,809,511 90,837,258 82,350,573 13,919,366 13,463,922 13,287,160 14,325,970 17,792,363 18,296,526 8,597,372 9,641,498 8,306,767 9,244,645 8,616,675 10,243591 - - 10,050,443 - 13,758,972 7,010,563 942,596 229,245 423,510 - 967,009 276,OS8 1SO,936,004 184,674,740 193,890,585 193,225,456 24S,751,006 235,827,147 (12,186,434) (42,142,781) (45,702,880) (21,S47,911) (65,606,056) (54,222,880) 2,000,000 2,250,000 5,981,044 2,900,000 - 70,665,000 11,450,000 38,725,000 67,685,000 41,480,000 6,369,020 1,094,690 2,652,531 - 4,884,123 - (48,205,991) (12,309,895) - - - - 27,070,86S 30,552,126 31,908,470 22,678,818 42,110,430 39,495,337 (23,330,865) (26,942,126) (28,415,599) (25,640,589) (38,412,093) (35,437,087) 34,568,029 6,094,79S 44,870,402 3,019,273 79,167,460 45,538,250 $ 22,381,595 $ (36,047,986) $ (832,478) $ (18,528,638) $ 13,S61,404 $ (8,684,630) $ 35,385,140 $ 6S,116,395 $ 90,020,515 $ 46,896,225 $ 87,242,801 $ 80,820,915 19.5% 19.3% 20.8% 16.1% 16.7% 18.4% 139 CITY OF ROUND ROCK, TEXAS ACTUAL AND TAXABLE ASSESSED VALUE OF PROPERTY LAST TEN FISCAL YEARS Actual Assessed Value Less: Total Taxable Total Fiscal Real Personal Tax Exempt Assessed Direct Year Property Property Total Property Valuation Tax Rate 2011 $ 7,581,182,068 $ 831,489,169 $8,412,671,237 $ 395,522,799 $8,017,148,438 $ 0.4173 2012 7,654,036,144 850,976,608 8,505,012,752 408,354,355 8,096,658,397 0.4232 2013 7,837,387,397 947,316,007 8,784,703,404 493,653,067 8,291,050,337 0.4204 2014 8,195,046,631 1,062,520,327 9,257,566,958 567,914,523 8,689,652,435 0.4195 2015 5 124 1,030,331,518 10 223 366 642 589,210,2164 1 0 5 91930 3 9,63 56,4 26 0.4146 2016 10,040,964,402 1,018,628,138 11,059,592,540 567,506,618 10,492,085,922 0.4147 2017 10,935,482,664 1,031,249,775 11,966,732,439 639,556,585 11,327,175,854 0.4250 2018 12,013,959,238 1,124,094,154 13,138,053,392 686,899,632 12,451,153,760 0.4300 2019 13,176,805,756 1,160,970,549 14,337,776,305 738,356,451 13,599,419,854 0.4200 2020 14,022,511,023 1,427,644,784 15,450,155,807 802,376,438 14,647,779,369 0.4390 Source: Williamson Central Appraisal District/Travis Central Appraisal District Note- Property in the City is assessed each year. Property is assessed at actual value;therefore,the assessed values are equal to actual value. Tax rates are per$100 of assessed value. 140 CITY OF ROUND ROCK, TEXAS PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS PER$100 OF ASSESSED VALUE LAST TEN FISCAL YEARS City Direct Rates Overlapping Rates Round Rock Total Independent Direct and Fiscal Operating Debt Service Total School Williamson Special Overlapping Year Rate Rate Direct District County Districts Rates 2011 $ 0.2665 $ 0.1508 $ 0.4173 $ 1.3800 $ 0.4900 $ 0.1151 $ 2.4024 2012 0.2751 0.1481 0.4232 1.3350 0.4877 0.1148 2.3607 2013 0.2830 0.1373 0.4203 1.3800 0.4890 0.1151 2.4044 2014 0.2800 0.1395 0.4195 1.3674 0.4890 0.1149 2.3908 2015 0.2628 0.1518 0.4146 1.3375 0.4865 0.1142 2.3528 2016 0.2545 0.1602 0.4147 1.3325 0.4815 0.1205 2.3492 2017 0.2719 0.1531 0.4250 1.3325 0.4765 0.1220 2.3560 2018 0.2879 0.1421 0.4300 1.3048 0.4665 0.1208 2.3221 2019 0.2981 0.1219 0.4200 1.3048 0.4590 0.1248 2.3086 2020 0.3135 0.1255 0.4390 1.2348 0.4587 0.1249 2.2574 Source: Williamson County Tax Office 141 CITY OF ROUND ROCK, TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2020 2011 %of Total %of Total Net Net Net Net Assessed Assessed Assessed Assessed Name of Taxpayer Valuation Rank Valuation Valuation Rank Valuation Dell Computer Holdings, LP $ 406,352,490 1 2.774 % $158,924,429 1 1.982 % CPG Round Rock, LP/ Round Rock Premium Outlets 150,995,328 2 1.031 129,322,074 2 1.613 Baltgem Development Corp./ La Frontera Village 91,484,076 3 0.625 80,275,572 3 1.001 CMF 15 Portfolio, LLC/ Colonial Grand Apartments 85,887,460 4 0.586 43,050,000 6 0.537 Fisher-Rosemount Systems, Inc. 80,240,231 5 0.548 - - Dell Computer Corp. 79,790,912 6 0.545 58,199,880 5 0.726 Columbia/St. David Healthcare 78,753,860 7 0.538 58,545,926 4 0.730 2811 LA Frontera LP/ Griffis Apartments 78,086,046 8 0.533 - - BT-OH LLC/UPS 58,887,681 9 0.402 - - FST La Frontera LLC 55,686,880 10 0.380 - - Oncor Electric Delivery Co. - - 38,615,809 7 0.482 Chandler Creek, LP - - 34,754,569 8 0.434 Inland American Round Rock/ Round Rock Luxury Apartments - - 34,055,377 9 0.425 Toppan Photomasks, Inc. - - 31,171,840 10 0.389 $ 1,166,164,964 7.962 % $ 666,915,476 8.319 % Source: Williamson Central Appraisal District 142 CITY OF ROUND ROCK, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Collected within the Fiscal Year of the Levy Total Collections to Date Taxes Levied Collections Fiscal for the Percentage in Subsequent Percentage Year Fiscal Year Amount Of Levy Years Amount Of Levy 2011 $ 33,469,184 $ 33,330,239 99.58 % $ 585 $ 33,330,824 99.59 % 2012 34,255,559 34,161,567 99.73 553 34,162,120 99.73 2013 34,865,783 34,717,536 99.57 579 34,718,115 99.58 2014 36,452,223 36,281,479 99.53 1,316 36,282,795 99.54 2015 39,792,302 39,697,745 99.76 2,578 39,700,323 99.77 2016 44,063,923 43,894,949 99.62 3,728 43,898,677 99.62 2017 49,113,540 48,988,540 99.75 (10,264) 48,978,276 99.72 2018 53,890,399 53,775,618 99.79 (59,025) 53,716,593 99.68 2019 57,296,592 57,106,114 99.67 (34,385) 57,071,729 99.61 2020 64,708,293 64,443,984 99.59 - 64,443,984 99.59 143 CITY OF ROUND ROCK,TEXAS SALES TAX AND AD VALOREM TAX LAST TEN FISCAL YEARS Total 1% %of Equivalent 1% Fiscal Sales Tax Ad Valorem Ad Valorem of Ad Valorem Sales Tax Year Collected Tax Levy Tax Levy Tax Rate Population Per Capita 2011 $ 31,306,675 $ 33,469,184 93.54 % $ 0.3905 100,659 $ 311 2012 31,652,958 34,255,559 92.40 0.3909 101,702 311 2013 33,108,223 34,865,783 94.96 0.3993 102,349 323 2014 34,231,146 36,452,223 93.91 0.3939 103,107 332 2015 33,810,424 39,792,302 84.97 0.3509 105,405 321 2016 33,670,060 44,063,923 76.41 0.3209 106,591 316 2017 34,970,879 49,113,540 71.20 0.3087 108,353 323 2018 40,929,405 53,890,399 75.95 0.3287 112,201 365 2019 41,348,047 57,296,592 72.16 0.3040 116,120 356 2020 42,562,498 64,708,293 65.78 0.2906 118,024 361 Note: The City has adopted the Municipal Sales and Use Tax Act, Texas Tax Code, Chapter 321, which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City;the proceeds are credited to the General Fund and are not pledged to the payment of the bonds. Collections and enforcements are affected through the office of the Texas Comptroller of Public Accounts who remits the proceeds of the tax, after deduction of a 2%service fees,to the City monthly. The calculations above are only based on the 1% sales and use tax, not the 112% sales and use tax collected for reduction of ad valorem taxes and 112% sales and use tax collected for transportation improvements. 144 AMD • !r 145 CITY OF ROUND ROCK, TEXAS TAXABLE SALES BY CATEGORY LAST TEN CALENDAR YEARS Calendar Retail Wholesale Year Trade Manufacturing Services Trade Utilities 2010 $ 1,070,089,059 $ 1,111,487,638 $ 331,304,579 $ 117,424,010 $ 17,788,882 2011 1,107,689,836 1,095,938,383 346,422,899 85,234,726 22,224,004 2012 1,228,352,605 985,127,289 381,294,220 99,025,592 26,448,906 2013 1,399,874,606 1,103,790,424 402,483,896 131,162,463 29,351,784 2014 1,529,469,558 1,061,444,585 432,758,149 128,755,561 34,412,553 2015 1,556,013,209 951,496,554 476,798,645 123,940,513 41,822,044 2016 1,592,542,371 905,719,610 505,372,604 141,775,154 41,190,339 2017 1,582,407,350 925,729,209 521,326,342 132,124,078 38,444,682 2018 1,766,233,513 1,022,456,613 544,823,077 144,551,512 44,328,814 2019 1,806,032,459 953,019,073 570,848,600 197,736,186 42,248,207 $14,638,704,566 $10,116,209,378 $ 4,513,433,011 $ 1,301,729,795 $ 338,260,215 Source:Texas Comptroller of Public Accounts Note: Sales information is not available on a fiscal year basis. Also, due to State of Texas confidentiality rules, names of sales tax payers are not available. The categories presented provide alternative information indicative of sales tax revenue sources. 146 City Direct State Finance, Sales Tax Sales Tax Over- Construction Insurance Total Rate Rate lapping $ 46,023,961 $ 2,114,837 $ 2,696,232,966 2.00 % 6.25 % 8.25 % 61,286,941 3,006,901 2,721,803,690 2.00 6.25 8.25 70,736,973 2,846,478 2,793,832,063 2.00 6.25 8.25 90,125,307 2,368,176 3,159,156,656 2.00 6.25 8.25 95,799,482 2,497,918 3,285,137,806 2.00 6.25 8.25 110,293,477 2,600,258 3,262,964,700 2.00 6.25 8.25 135,370,923 2,951,985 3,324,922,986 2.00 6.25 8.25 144,818,546 2,773,206 3,347,623,413 2.00 6.25 8.25 162,271,653 2,449,613 3,687,114,795 2.00 6.25 8.25 175,871,253 2,898,780 3,748,654,558 2.00 6.25 8.25 $1,092,598,516 $ 26,508,152 $32,027,443,633 147 CITY OF ROUND ROCK, TEXAS HOTEL TAXPAYERS SEPTEMBER 30, 2020 Total Hotel Motel Hotel Motel Collections Number %of Occupancy Occupancy Year Ended of Total Taxpayer Tax Venue Tax Sept. 30, 2020 Rooms Collections Austin Marriott North $ 342,265 $ 97,790 $ 440,055 295 10.7 % Homewood Suites 185,392 52,969 238,361 115 5.8 Hyatt Place 185,254 52,925 238,179 138 5.8 Hilton Garden Inn 146,203 41,772 187,975 122 4.6 Holiday Inn Express N 129,967 37,134 167,101 109 4.1 Residence Inn 122,225 34,921 157,146 96 3.8 Towneplace Suites 121,689 34,768 156,457 102 3.8 Home 2 Suites 120,905 34,544 155,449 91 3.8 Springhill Suites 119,327 34,094 153,421 104 3.7 Courtyard Marriott 116,887 33,396 150,283 113 3.7 Tru by Hilton 114,541 32,726 147,267 98 3.6 Holiday Inn 109,793 31,370 141,163 116 3.4 Element 106,539 30,440 136,979 123 3.3 Wingate Inn 95,610 27,316 122,926 100 3.0 Red Roof Inn 92,600 26,456 119,056 107 2.9 Staybridge Suites 92,417 26,405 118,822 81 2.9 Microtel 87,867 25,096 112,963 82 2.7 La Quinta S 86,193 24,626 110,819 96 2.7 Aloft 85,550 24,443 109,993 120 2.7 La Quinta N 77,314 22,090 99,404 116 2.4 Hampton Inn 75,706 21,630 97,336 93 2.4 Best Western Inn 74,599 21,312 95,911 64 2.3 Sleep Inn 66,603 19,029 85,632 74 2.1 Motel 64,080 18,309 82,389 59 2.0 Candlewood Suites 59,555 17,016 76,571 98 1.9 Ruby Hotel 59,063 16,875 75,938 39 1.8 Comfort Suites 55,524 15,864 71,388 63 1.7 Quality Inn 49,313 14,089 63,402 48 1.5 Extended Stay America#6030 49,125 14,036 63,161 138 1.5 Country Inn 39,169 11,191 50,360 63 1.2 Woodspring Suites 38,684 11,053 49,737 121 1.2 Extended Stay America#6197 32,813 9,375 42,188 104 1.0 Provident Crossings Retirement 117 33 150 2 - Short Term Rentals (4,762) (1,362) (6,124) 4 - $ 3,198,127 $ 913,731 $ 4,111,858 3,294 100.0 % Note: Short term rentals total collections for the year were $5,709; however, a refund was paid out resulting in negative collections for the year. 148 CITY OF ROUND ROCK, TEXAS HOTEL OCCUPANCY TAX COLLECTION HISTORY BY QUARTER LAST TEN FISCAL YEARS Fiscal 1 st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Oct.—Dec. Jan.—Mar. Apr.—June July—Sept. Total 2011 $ 684,430 $ 678,090 $ 716,629 $ 604,897 $ 2,684,046 2012 610,280 835,331 1,004,705 802,227 3,252,543 2013 964,181 1,091,350 1,152,982 932,407 4,140,920 2014 1,071,926 1,217,483 1,271,649 1,085,150 4,646,208 2015 1,114,213 1,274,209 1,437,121 1,258,012 5,083,5SS 2016 1,214,093 1,354,383 1,570,064 1,269,127 5,407,667 2017 1,249,406 1,411,265 1,509,276 1,345,218 5,515,165 2018 1,365,737 1,429,006 1,637,645 1,281,847 5,714,235 2019 1,365,684 1,546,937 1,661,651 1,426,175 6,000,447 2020 1,574,968 1,289,910 483,480 763,500 4,111,858 149 CITY OF ROUND ROCK, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business- Type Governmental Activities Activities General Total Percentage Fiscal Obligation Certificates of Other Debt Revenue Primary of Personal Per Year Bonds Obligation Obligations Bonds Government Income Capita 2011 $105,980,000 $ 12,965,000 $ 60,691,660 $ 89,888,648 $ 269,525,308 8.63 % $ 2,678 2012 101,185,000 12,380,000 62,571,173 87,765,660 263,901,833 8.27 2,595 2013 96,340,000 11,770,000 56,131,110 85,392,673 249,633,783 7.56 2,439 2014 155,780,000 11,135,000 55,963,734 90,799,894 313,678,628 9.12 3,042 2015 154,925,000 29,675,000 56,701,818 87,827,948 329,129,766 10.00 3,123 2016 149,540,000 27,095,000 52,746,502 89,364,624 318,746,126 6.43 2,990 2017 170,615,000 26,315,000 49,477,613 86,027,443 332,435,056 6.87 3,068 2018 162,820,000 25,520,000 48,520,464 82,997,070 319,857,534 5.93 2,851 2019 151,405,000 58,870,000 68,930,433 79,510,797 358,716,230 6.08 3,089 2020 141,220,000 88,025,000 64,350,491 75,999,389 369,594,880 5.89 3,132 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See the Schedule of Demographic and Economic Statistics for personal income and population data. 150 CITY OF ROUND ROCK, TEXAS RATIOS OF NET GENERAL BONDED DEBT OUTSTANDING TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS Amount Ratio Net Available Of Net Assessed in Bonded Net Fiscal Value Gross Debt Net Debt to Bonded (1) (in Bonded Service Bonded Assessed Debt Per Year Population thousands) Debt Fund Debt Value Capita 2011 100,659 $ 8,017,148 $118,122,822 $ 2,238,270 $ 115,884,552 1.45 % $ 1,151 2012 101,702 8,096,658 114,268,570 2,301,340 111,967,230 1.38 1,101 2013 102,349 8,291,050 108,241,436 2,415,427 105,826,009 1.28 1,034 2014 103,107 8,689,652 172,890,871 2,278,062 170,612,809 1.96 1,655 2015 105,405 9,634,156 203,112,523 2,351,780 200,760,743 2.08 1,905 2016 106,591 10,492,086 195,911,354 2,749,645 193,161,709 1.84 1,812 2017 108,353 11,327,176 216,797,444 3,880,982 212,916,462 1.88 1,965 2018 112,201 12,451,154 211,532,890 4,853,517 206,679,373 1.66 1,842 2019 116,120 13,599,420 236,945,452 5,019,375 231,926,077 1.71 1,997 2020 118,024 14,647,779 255,778,105 5,080,091 250,698,014 1.71 2,124 Note: Includes Certificates of Obligation, General Obligation Bonds, Limited Tax Notes, and Capital Leases, net of related premiums and discounts. (1) Source: Planning Department, City of Round Rock 151 CITY OF ROUND ROCK, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT SEPTEMBER 30, 2020 Total ** Estimated General Estimated Share of Debt Percentage Overlapping Name of Governmental Unit Outstanding Applicable Debt Debt repaid with property taxes- Williamson County $ 1,010,794,956 * 20.08% $ 202,967,627 Round Rock Independent School District 936,655,000 * 37.19 348,341,995 Travis County 1,081,470,000 * 0.25 2,703,675 Austin Community College 386,625,000 * 5.86 22,656,225 Georgetown ISD 417,470,000 * 0.19 793,193 Travis County Healthcare District 7,285,000 * 0.25 18,213 Subtotal, overlapping debt 577,480,928 City direct debt 293,595,491 Total direct and overlapping debt $ 871,076,419 * Gross Debt as of September 30, 2020 **The percentage of overlapping debt applicable is estimated using taxable assessed property values. Source: City of Round Rock Finance Department and Texas Municipal Reports Note:Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Round Rock, Texas. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 152 ESl CITY OF ROUND ROCK, TEXAS LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2011 2012 2013 2014 Debt limit $ 1,437,119,854 $ 1,451,372,470 $ 1,486,218,341 $ 1,557,670,054 Total net debt applicable to limit 112,406,730 107,568,660 101,824,573 161,006,938 Legal debt margin $ 1,324,713,124 $ 1,343,803,810 $ 1,384,393,768 $ 1,396,663,116 Total net debt applicable to the limit as a percentage of debt limit 7.82% 7.41% 6.85% 10.34% Legal Debt Margin Calculation for Fiscal Year 2020 Total assessed value $ 14,647,779,369 Debt limit - Maximum serviceable at permitted allocation of$1.50 per$100 of assessed value $ 2,494,413,566 Amount of debt applicable to debt limit: Total General Obligation Debt $ 229,245,000 Less: Amount available in Debt Service Fund (5,080,091) Total net debt applicable to debt limit 224,164,909 Legal debt margin $ 2,270,248,657 There is no direct debt limitation in the City Charter or under state law. The City operates under a Home Rule Charter(Article XI, Section 5,Texas Constitution), approved by voters in August 1977,that limits the maximum tax rate, for all City purposes, to $2.50 per $100 assessed valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for general obligation debt service. Assuming the maximum tax rate for debt service of $1.50 on January 1, 2019, assessed valuation of $14,647,779,369 at 100% collection, tax revenue of $219,716,691 would be produced. This revenue could service the debt on $2,494,413,566 issued as 20-year serial bonds at 5.50%(with level debt service payment). Interest and Sinking Fund Budget Projection General Obligation Debt Service Requirements, Fiscal Year 2021 $ 21,394,889 Tax Year 2020 Interest and Sinking Fund Tax Levy @ 99% Collection $ 24,294,717 Interest and Sinking Fund Balance as of September 30, 2020 S,080,091 29,374,808 Estimated Balance, September 30, 2021 $ 7,979,919 154 2015 2016 2017 2018 2019 2020 $ 1,640,628,922 $ 1,786,728,268 $ 1,928,938,196 $ 2,120,343,710 $ 2,315,885,331 $ 2,494,413,566 178,893,220 170,530,355 193,049,018 183,486,483 205,255,625 224,164,909 $ 1,461,735,702 $ 1,616,197,913 $ 1,735,889,178 $ 1,936,857,227 $ 2,110,629,706 $ 2,270,248,657 10.90% 9.54% 10.01% 8.65% 8.86% 8.99% 155 CITY OF ROUND ROCK, TEXAS CONDENSED UTILITY STATEMENT OF OPERATIONS LAST TEN FISCAL YEARS 2011 2012 2013 2014 Gross Revenue (1) Charges for services $ 44,922,715 $ 43,327,656 $ 43,094,185 $ 40,762,523 Licenses, permits and fees 1,114,142 1,921,789 1,941,121 2,943,355 Interest income and other 1,292,672 770,977 1,385,965 1,397,259 Total 47,329,529 46,020,422 46,421,271 45,103,137 Direct Operating Expense (2) Personnel services 8,576,547 8,599,771 8,634,094 8,939,263 Contracted services 9,839,091 9,913,713 14,335,824 14,200,624 Materials and supplies 2,055,399 2,106,220 1,890,480 2,163,731 Heat, light and power 2,474,391 1,966,864 1,951,428 1,829,036 Total 22,945,428 22,586,568 26,811,826 27,132,654 Net available for Debt Service $ 24,384,101 $ 23,433,854 $ 19,609,445 $ 17,970,483 Debt Service Requirements(P&I) $ 5,081,298 $ 5,893,953 $ 6,101,113 $ 6,347,632 Revenue Bond Coverage 4.79 3.98 3.21 2.83 Metered Water Customers 30,676 30,989 31,431 32,012 Metered Sewer Customers 30,061 30,359 30,766 31,133 Average Annual Principal and Interest Requirements, FY 2021-2039 $ 5,144,678 Coverage of Average Requirements by FY 2020 Net Revenue 6.87 times Estimated Maximum Principal and Interest Requirements, FY 2021 $ 6,073,581 Estimated Coverage of Maximum Requirements by FY 2020 Net Revenue 5.82 times Parity Debt Outstanding at FY 2020 $ 70,190,000 (1) Water and Sewer Fund operating and non-operating revenues (2) Water and Sewer Fund operating expenses, excluding depreciation 156 2015 2016 2017 2018 2019 2020 $ 41,880,906 $ 44,406,721 $ 47,769,478 $ 50,715,034 $ 51,973,150 $ 55,695,939 4,017,184 4,247,067 4,211,137 4,226,721 4,828,792 4,693,720 863,900 1,211,532 2,284,171 3,122,041 4,772,982 4,010,185 46,761,990 49,865,320 54,264,786 58,063,796 61,574,924 64,399,844 9,228,272 9,742,128 11,871,681 10,940,702 12,809,236 12,751,829 14,500,269 15,222,355 14,854,212 16,695,290 14,844,774 13,759,401 1,837,026 2,091,331 2,504,640 2,392,415 3,385,739 2,747,862 1,783,408 1,662,779 1,618,297 1,578,540 2,188,155 2,452,847 27,348,975 28,718,593 30,848,830 31,606,947 33,227,904 31,711,939 $ 19,413,015 $ 21,146,727 $ 23,415,956 $ 26,456,849 $ 28,347,020 $ 32,687,905 $ 6,894,788 $ 5,994,842 $ 6,352,459 $ 5,444,927 $ 6,102,631 $ 6,082,481 2.82 3.53 3.67 4.86 4.65 5.37 32,447 32,930 33,602 34,581 35,397 35,998 31,531 31,984 32,614 33,277 34,085 35,299 157 04,1 .totfir! 158 CITY OF ROUND ROCK, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (4) Per (2) (3) (2) Fiscal (1) Personal Capita Median School Unemployment Year Population Income Income Age Enrollment Rate 2011 100,659 3,096,874,794 30,766 31.6 44,331 6.1 % 2012 101,702 3,164,864,538 31,119 32.0 45,000 5.9 2013 102,349 3,221,434,775 31,475 32.0 45,361 5.0 2014 103,107 3,282,514,452 31,836 31.7 45,924 4.2 2015 105,405 4,104,259,890 38,938 33.5 47,093 3.2 2016 106,591 4,636,495,318 43,498 33.9 47,580 3.3 2017 108,353 4,841,103,687 44,679 34.4 48,121 3.0 2018 112,201 5,395,858,291 48,091 34.2 48,888 2.9 2019 116,120 5,896,109,120 50,776 33.7 50,345 2.6 2020 118,024 6,272,385,480 53,145 33.7 50,966 5.4 Sources: (1) Planning Department, City of Round Rock (2) Round Rock Chamber of Commerce (3) Round Rock Independent School District (4) U.S. Dept. of Commerce/Bureau of Economic Development; data is for Williamson County, which is representative of the City; data for City not available. 159 CITY OF ROUND ROCK,TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2020 2011 %of Total %of Total City City Name of Employer Employees Rank Employment Employees Rank Employment Dell Technologies 13,000 1 18.88 % 8,500 1 16.55 % Round Rock Independent School District 6,955 2 10.10 5,400 2 10.52 City of Round Rock,Texas 1,019 3 1.48 820 4 1.60 Round Rock Premium Outlets 800 4 1.16 Seton Medical Center Williamson 750 5 1.09 450 9 0.88 Baylor Scott &White Healthcare 750 5 1.09 750 5 1.46 St. David's Round Rock Medical Center 689 6 1.00 710 6 1.38 Emerson Automation Solutions 682 7 0.99 Amazon 600 8 0.87 United Parcel Services 563 9 0.82 Shop LC 475 10 0.69 AirCo Mechanical 475 10 0.69 Sears TeleServe 1,300 3 2.53 Texas Guaranteed Student Loan 700 7 1.36 Wayne Fueling Systems LLC 600 8 1.17 Michael Angelo's Gourmet Food 350 10 .68 26,758 38.86 % 19,580 38.13 % Source: City of Round Rock Finance Department/Round Rock Chamber of Commerce 160 CITY OF ROUND ROCK, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Function: General government 165 147 149 157 159 163 179 194 202 205 Public safety- Police- Officers 152 152 153 159 167 168 174 176 176 180 Civilians 67 67 68 64 67 72 74 75 78 78 Fire- Firefighters &officers 124 124 124 129 129 132 134 149 152 153 Civilians 5 5 6 8 8 8 8 9 10 10 Public works- Street &Stormwater 48 64 70 70 69 76 73 77 81 82 Shop 15 15 15 16 18 19 18 18 19 19 Culture & Recreation- Library 29 29 30 31 31 31 31 31 32 33 Parks & Recreation 94 94 91 91 91 106 102 105 107 108 Water&Sewer Utility 125 127 126 128 129 128 128 131 151 151 Total 824 824 832 853 868 903 921 965 1,008 1,019 Source: City of Round Rock Finance Department 161 CITY OF ROUND ROCK, TEXAS OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2011 2012 2013 2014 Function: Police- Arrests 4,521 6,715 6,182 5,773 Accident reports 2,747 4,485 4,845 6,383 Index crimes reported 3,154 2,777 2,632 2,338 Crimes per thousand residents 31.30 27.10 25.10 21.70 Officers per thousand of population 1.48 1.49 1.46 1.42 Fire- Incident volume 8,141 8,350 8,749 9,027 Priority calls answered 5,916 3,475 3,728 3,713 Non-emergency calls answered 2,225 4,875 5,021 5,314 Priority calls-response less than 6 minutes 65% 60% 60% 63% Public Works- Street- Street resurfacing(lane miles) 45 60 80 80 Potholes repaired annually 4,000 4,000 4,000 4,000 Signals maintained 68 76 79 83 Shop- Work orders 4,609 5,336 4,447 4,178 Number of departments served 12 12 12 12 Culture and Recreation- Library- Number of items circulated 854,000 903,219 940,135 975,291 Number of card holders 59,000 55,336 81,620 74,192 Number of library visits 292,000 294,768 323,384 309,167 Parks&Recreation- Total park acres maintained 1,935 2,035 2,035 2,045 Number of athletic fields maintained 46 49 49 49 Number of trees planted 345 558 163 165 *Number of recreation enrollees 420,000 420,000 487,455 490,704 Number of recreation participants - - - - Water- New connections 335 313 442 360 Line maintenance work orders 3,185 3,279 5,500 6,734 Average monthly consumption 655,615,475 560,281,041 549,154,150 491,936,100 Sewer- Average monthly treatment 475,482,100 457,967,400 409,000,000 394,000,000 Line feet reviewed for infiltration&inflow 317,789 361,784 377,783 459,128 Source: City of Round Rock Finance Department *Note:Parks and Recreation started recording all participants in all programs in Fiscal Year 2015 162 2015 2016 2017 2018 2019 2020 4,600 4,476 4,600 4,152 4,272 3,592 2,249 2,370 2,370 2,762 2,698 2,636 2,329 2,383 2,383 2,870 2,648 2,400 22.00 22.50 22.50 26.50 23.40 21.00 1.53 1.43 1.48 1.56 1.53 1.53 9,928 9,346 10,777 11,328 11,813 12,189 2,780 3,735 2,548 5,083 4,078 3,248 7,148 5,611 8,229 6,245 7,735 6,905 56% 61% 58% 53% 79% 73% 40 60 60 60 121 183 1,500 400 300 300 280 250 84 83 89 90 93 100 4,399 4,761 4,620 4,733 4,936 4,980 12 12 12 12 12 12 972,094 1,080,312 1,188,757 1,229,141 1,315,186 986,686 99,822 77,818 79,415 81,181 83,507 80,656 388,625 391,256 389,930 388,732 416,391 219,736 2,045 2,045 2,270 2,270 2,285 2,285 49 49 49 49 49 51 110 195 408 43 74 98 832,184 988,337 1,080,853 1,140,094 892,870 332,895 402 480 665 911 789 534 3,317 3,512 3,346 3,013 1,778 2,366 505,251,158 536,082,308 571,062,558 612,026,451 543,547,232 620,080,709 385,611,068 416,357,161 425,631,471 426,330,521 410,300,487 440,156,307 187,464 189,418 206,675 169,579 133,098 109,080 163 CITY OF ROUND ROCK, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS 2011 2012 2013 2014 Function: Police- Number of stations 1 1 1 1 Number of units 199 199 201 229 Fire- Number of stations 7 7 7 7 Number of fire trucks 16 16 16 14 Public Works- Street- Lane miles 1,200 1,200 1,250 1,250 Drainage miles 100 100 150 150 Number of street lights 5,119 5,312 6,000 6,800 Number of traffic signals 68 76 79 83 Shop- Repair facilities 1 1 1 1 Number of bays 19 19 19 19 Culture and Recreation- Library- Number of library books 183,000 195,000 150,211 154,278 Number of library facilities 1 1 1 1 Parks & Recreation- Total park acres 2,274 2,035 2,035 2,035 Number of athletic fields 47 49 49 49 Number of parks 85 62 62 62 Number of tennis courts 23 23 23 25 Number of pools 4 4 4 4 Water- Number of miles of water lines 584 585 587 601 Pumping stations 10 10 10 10 Tanks 20 20 20 19 Treatment capacity(millions of gallons/day) 52 52 52 52 Sewer- Number of miles of sewer mains 422 422 424 432 Wastewater lift stations 12 12 12 12 Source: City of Round Rock Finance Department 164 2015 2016 2017 2018 2019 2020 1 1 1 1 1 1 240 259 256 261 241 252 7 7 9 9 9 9 16 15 16 16 17 17 1,250 1,200 1,200 1,300 1,350 1,450 150 150 151 200 200 333 5,400 5,433 5,604 5,674 5,733 5,771 84 83 89 90 93 100 1 1 1 1 1 2 19 13 18 18 18 21 156,277 257,667 213,381 225,903 230,094 227,880 1 1 1 1 1 1 2,035 2,035 2,270 2,270 2,285 2,285 49 49 59 59 61 61 62 62 61 61 61 61 25 25 22 21 21 21 4 4 4 4 4 4 608 615 614 651 636 667 10 10 10 10 11 11 19 19 19 19 19 19 52 52 52 52 52 61 424 427 428 461 445 467 12 12 12 12 11 11 16S CITY OF ROUND ROCK, TEXAS TOP TEN WATER CUSTOMERS SEPTEMBER 30, 2020 %of Total Water Water Consumption Consumption Name of Customer Type of Business in Gallons in Gallons Fern Bluff Municipal Utility District Municipal Utility District 274,588,000 3.810 % Paloma Lake Municipal Utility District#1 &#2 Municipal Utility District 260,840,500 3.619 Williamson County Municipal Utility District#11 Municipal Utility District 213,844,200 2.967 City of Georgetown, Texas Municipality 193,336,000 2.682 Williamson County Municipal Utility District#10 Municipal Utility District 183,513,000 2.546 Chandler Creek Municipal Utility District Municipal Utility District 166,341,800 2.308 Vista Oaks Municipal Utility District Municipal Utility District 130,240,400 1.807 Dell, Inc. Electronic Equipment 76,620,500 1.063 Round Rock Independent School District Public Schools 75,816,000 1.052 Mid America Apartments, LP Property Management 74,418,000 1.032 1,649,558,400 22.886 % Source: City of Round Rock Finance Department 166 CITY OF ROUND ROCK TEXAS WATER AND SEWER RETAIL RATES SEPTEMBER 30, 2020 Water rates for retail customers inside the city limits are as follows: Volume Rate MonthlyService Charge 9 Non-peak billing periods: Meter Size Base Monthly Water Four block structure for use in excess of predetermined amounts set by Serving meter size - Customer Service Charge Block 1: $2.56 5/8 inch $ 16.52 Block 2: $3.20 3/4 inch 23.00 Block 3: $3.85 1 inch 36.32 Block 4: $5.77 1 1/2 inch 69.59 2 inch 109.51 Billing periods for commercial: 3 inch 202.68 $2.80 per 1,000 gallons of water used by all customers 4 inch 335.79 6 inch 1,046.86 Billing periods for irrigation: 8 inch 1,829.77 Four block structure for use in excess of predetermined amounts set by meter size - 10 inch 2,873.67 Block 1: $3.20 12 inch 3,526.11 Block 2: $3.85 Block 3: $5.77 Sewer rates for retail customers inside the city limits are as follows: Volume Rate Monthly Service Charge $3.39 per 1,000 gallons of water used by all customers* Meter Size Base Monthly Sewer Serving Customer Service Charge 5/8 inch $ 13.27 3/4 inch 17.31 1 inch 24.82 1 1/2 inch 45.26 2 inch 69.79 3 inch 127.01 4 inch 208.75 6 inch 615.27 8 inch 1,073.67 10 inch 1,684.85 12 inch 2,066.84 * Sewer customers' volume is measured as the rate per 1,000 gallons of the lesser of a three-month winter average or actual water use. Source:City of Round Rock Chapter 44, Section 44-32, Code of Ordinances (2018 Edition) amended with ordinance No. 0-2019-0379. 167 168 CITY OF ROUND ROCK, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS SEPTEMBER 30, 2020 Pass-Through Federal Grantor/Pass-Through Entity CFDA Grant or to Non-State Direct Total Program Title Number Identifying Number Entities Expenditures Expenditures Institute of Museum and Library Services Pass-Through from Texas State Library and Archives Commission Grants to States 45.310 LS-00-19-0044-19 $ $ 9,917 $ 9,917 Total Institute of Museum and Library Services 9,917 9,917 U.S.Department of Housing&Urban Development Community Development Block Grants/Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants 14.218 B13MC480514 907 - 907 Community Development Block Grants/Entitlement Grants 14.218 B15MC480514 55,010 - 55,010 Community Development Block Grants/Entitlement Grants 14.218 B16MC480514 56,257 43,069 99,326 Community Development Block Grants/Entitlement Grants 14.218 B17MC480514 - 231,115 231,115 Community Development Block Grants/Entitlement Grants 14.218 B18MC480514 36,213 16,214 52,427 Community Development Block Grants/Entitlement Grants 14.218 B19MC480514 92,500 139,680 232,180 Community Development Block Grants/Entitlement Grants (Covid-19) 14.218 B20MW480514 - 382,008 382,008 Total Community Development Block Grants/Entitlement Grants Cluster 240,887 812,086 1,052,973 Total U.S.Department of Housing&Urban Development 240,887 812,086 1,052,973 U.S.Department of Justice Equitable Sharing Program 16.922 TX2460500 - 189,277 189,277 Pass-Through from Texas Office of the Governor,Criminal Justice Division 2017-VA-GX-0006; Crime Victim Assistance 16.575 3756801 98,326 98,326 Total U.S.Department of Justice - 287,603 287,603 U.S.Department of The Treasury Pass-Through from Williamson County, Texas CARES Act Coronavirus Relief fund(Covid 19) Wilco Forward Phase II 21.019 Covid-19 45,000 512,060 557,060 Total U.S.Department of The Treasury 4S,000 S12,060 557,060 U.S.Department of Transportation Federal Transit Cluster Federal Transit Formula Grants 20.507 TX-2018-055-00 193,289 193,289 Federal Transit Formula Grants 20.507 TX-2019-053-00 189,792 189,792 Federal Transit Formula Grants(Covid-19) 20.507 TX-2020-164-00 1,090,787 1,090,787 Total Federal Transit Cluster 1,473,868 1,473,868 Highway Planning and Construction Cluster Pass-Through from Texas Department of Transportation Quiet Zone Project 20.205 CSJ 0914-05-164 301,950 301,950 CSJ 0914-05-165 - - RM 620 Right of Way Acquisitions Project 20.205 CSJ 0683-01-056 798,309 798,309 RCSJ 0683-01-092 - - Total Highway Planning and Construction Cluster 1,100,259 1,100,259 Total U.S.Department of Transportation - 2,574,127 2,574,127 Total Expenditures of Federal Awards $ 285,887 $ 4,195,793 $ 4,481,680 169 CITY OF ROUND ROCK, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS SEPTEMBER 30, 2020 1. BASIS OF PRESENTATION The Schedule of Expenditures of Federal Awards(SEFA)presents the activity of all applicable federal awards of the City of Round Rock, Texas. The City's reporting entity is defined in the notes of the basic financial statements. Federal financial assistance received directly from federal agencies as well as federal financial assistance passed through other governmental agencies is included on the Schedule of Expenditures of Federal Awards. The information on this schedule is presented in accordance with the requirements of Uniform Guidance, Audits of States, Local Governments and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. 2. BASIS OF ACCOUNTING The Schedule of Expenditures of Federal Awards is prepared on the modified accrual basis of accounting. Expenditures are recognized when the related fund liability is incurred. Federal grants are considered to be earned to the extent of expenditures made under the provision of the grant and are received on a reimbursement basis. 3. INDIRECT COST RATE The City of Round Rock has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. 170 Austin Offa 3500 N.C.: ;;.a of':'exas Hvvy. `,i;g.8,Suit 250 w h i t l e y p e n n : stir Tx;87afs 73"r.'?'.A..r 200 Miin .ihirley f,en€,.,core, 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 AUDITINGSTANDARDS To the Honorable Mayor and Members of City Council City of Round Rock,Texas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Round Rock,Texas(the"City"),as of and for the year ended September 30,2020,and the related notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our report thereon dated February 8,2021. Internal Control over Financial Reporting In planning and performing our audit of the financial statements,we considered the City's internal control over financial reporting(internal control)as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. A member of 171 Nexia International To the Honorable Mayor and Members of City Council City of Round Rock,Texas Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. WA W. I.L� Austin,Texas February 8,2021 172 A; At. 00 N.Caspitai of Texas Hwy, P; Bldl&B,SuRe wn'--- itleypenn" Auhn,TX 78746 7?7.9".31.8200 Ma INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Honorable Mayor and Members of City Council City of Round Rock,Texas Report on Compliance for Each Major Federal Program We have audited City of Round Rock, Texas' (the "City") compliance with the types of requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City's major federal programs for the year ended September 30,2020. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management's Responsibility Management is responsible for compliance with federal statues, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for each of the City's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America;the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However,our audit does not provide a legal determination of the City's compliance. A member of 173 Nexia International To the Honorable Mayor and Members of City Council City of Round Rock,Texas Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30,2020. Report on Internal Control Over Compliance Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency,or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.Accordingly,this report is not suitable for any other purpose. WA;-tic W." L LP Austin,Texas February 8,2021 174 CITY OF ROUND ROCK,TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30,2020 I. Summary of Auditor's Results Financial Statements Type of auditor's report issued Unmodified Internal control over financial reporting: Material weakness(es)identified? No Significant deficiency(ies)identified that are not considered to be material weaknesses? None reported Noncompliance material to the financial statements noted? No Federal Awards Internal controls over major programs: Material weakness(es)identified? No Significant deficiency(ies)identified that are not considered to be material weaknesses? None reported Type of auditor's report issued on compliance for major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? None Identification of Major Programs: Name of Federal Program or Cluster CFDA Number Highway Planning and Construction Cluster 20.205 Federal Transit Cluster 20.507 CARES Act(Coronavirus Relief Fund)—COVID-19 21.019 Dollar threshold used to distinguish Between Type A and Type B federal programs: $750,000 Auditee qualified as low-risk auditee? No 175 CITY OF ROUND ROCK,TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30,2020 II. Financial Statement Findings None Noted III. Federal Award Findings and Questioned Costs None Noted 176 CITY OF ROUND ROCK,TEXAS SUMMAR Y SCHED ULE OF PRIOR AUDIT FINDINGS For the Year Ended September 30,2020 Federal regulations,Title 2 U.S. Code of Federal Regulations §200.511 states,"The auditee is responsible for follow-up and corrective action on all audit findings. As part of this responsibility, the auditee must prepare a summary schedule of prior audit findings."The summary schedule of prior audit findings must report the status of the following: • All audit findings included in the prior audit's schedule of findings and questioned costs and • All audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed as corrected. I. Prior Audit Findings Finding #2019-001 - Federal Transit Formula Grant CFDA 20.507 TX-2017-035-00, TX-2018-055- 00,TX-2019-053-00 The corrective action plan was completed during fiscal year 2020. 177 CITY OF ROUND ROCK,TEXAS CORRECTIVE ACTION PLAN For the Year Ended September 30,2020 Federal regulations, Title 2 U.S. Code of Federal Regulations §200.511 states, "At the completion of the audit, the auditee must prepare, in a document separate from the auditor's findings described in §200.516 Audit findings,a corrective action plan to address each audit finding included in the current year auditor's reports." The Corrective Action Plan for the year ended September 30, 2020 has been prepared to address these requirements. I. Corrective Action Plan Not applicable 178