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Contract - Finance - 2/26/2026 ROUND ROCK TEXAS City of Round Rock, Texas Annual Comprehensive Financial Report Fiscal Year Ended September 30, 2025 ELECTED OFFICIALS Craig Morgan, Mayor Kristin Stevens, Mayor Pro - Tem Michelle Ly, Council Member Rene Flores, Council Member Frank Ortega, Council Member Hilda Montgomery, Council Member Melissa Fleming, Council Member MANAGEMENT STAFF Brooks Bennett City Manager Brad Wiseman Assistant City Manager OFFICIAL ISSUING REPORT Kevin Klosterboer Chief Financial Officer �� *^ �"�� ,�* �� pM � � " 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 30 Statement of Activities 32 Fund Financial Statements: Governmental Funds: Balance Sheet 34 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 36 Statement of Revenues, Expenditures and Changes in Fund Balances 38 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 40 Proprietary Funds: Statement of Net Position 42 Statement of Revenues, Expenses and Changes in Net Position 44 Statement of Cash Flows 46 Notes to the Financial Statements 49 Required Supplementary Information Texas Municipal Retirement System (TMRS) Plan -Schedule of Changes in the Net Pension Liability and Related Ratios 100 Texas Municipal Retirement System (TMRS) Plan -Schedule of Contributions 102 Schedule of Changes in the Total OPEB Liability and Related Ratios 104 Statement of Revenues, Expenditures and Changes in Fund Balance— Budget and Actual—General Fund 106 Statement of Revenues, Expenditures and Changes in Fund Balance— Budget and Actual—Round Rock Transportation and Economic Development Corporation Fund 107 Statement of Revenues, Expenditures and Changes in Fund Balance— Budget and Actual - Roadway Impact Fees 108 TABLE OF CONTENTS Combining and Individual Fund Statements and Schedules Nonmajor Governmental Funds: Combining Balance Sheet-Nonmajor Governmental Funds 110 Combining Statement of Revenues, Expenditures and Changes in Fund Balances-Nonmajor Governmental Funds 112 Schedules of Revenues, Expenditures and Changes in Fund Balances— Budget and Actual: General Fund 116 Debt Service Fund 120 Nonmajor Special Revenue Funds: Community Development Block Grant 121 Hotel-Motel Occupancy Tax 122 Hotel-Motel Occupancy Venue Tax 123 Innovation and Development 124 Library and Recreational 125 Public Safety 126 Public Education &Government 127 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 TABLE OF CONTENTS 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 Wastewater Retail Rates 167 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 171 Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditors' Report on Compliance for Each Major Federal Program 173 and on Internal Control Over Compliance Required by the Uniform Guidance Schedule of Findings and Questioned Cost 176 Summary Schedule of Prior Audit Findings 177 Corrective Action Plan 178 C- Mayor CouncUmembers City �Manager Craig Morgan Michelle Ly Brooks Bennett Rene Flores Melissa Fleming !R Frank Ortega ,�)�UNnD ROCKI-EXAS Mayor Pro.-Tem City Attorney ADMINISTRATION Kristin Stevens Hilda Montgomery Stephan�e L. Sandre February 9, 2026 Tothe Honorable Mayor, Members ofCity Council, and Citizens City ofRound Rock,Texas The Annual Comprehensive Financial Report of the City of Round Rock Texan for the fiscal year ended September 30, 2025' in submitted herein.This report has been prepared by the [i4/n 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 in accurate in all material aspects and in 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' LLP, Certified Public Accountants, have issued an unmodified ("clean") opinion on the City ofRound Rock's financial statements for the year ended September 30, 2025. The independent auditors' report in located at the front ofthe financial section ofthis report. Management's discussion and analysis (K4D&/Q can be found immediately following the report of the independent auditors. The K4D&Ain a narrative introduction, overview, and analysis to accompany the 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 A Section 5 of the Constitution of the State of Texas (Home Rule Amendment). The City operates under [ounci|'K4anagerform of government with nix council members and a mayor. The City Manager in appointed by the City Council and in responsible tothem for managing and administering all City affairs. The Chief Financial Officer is appointed by the City Manager and in responsible for supervising the operations of the Finance Department.This department maintains all accounting econ]n of the City. The financial reporting entity (the government) includes all the funds of the primary government (the City of Round Rock an legally defined) an well an its component units. Component units are legally separate entities for which the primary government infinancially accountable. The City provides a full range ofservices which include police and fie 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, wastewater, and ntormwater 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 an part of the primary government. Accordingly, Round Rock Transportation and Economic Development Corporation (RRTEDQ revenues are reported in a special revenue fund of the City. 1 CITY OF ROUND ROCK 221 East Main Sheet Round Rock, Texas 78664 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 monitored at the department level by the encumbrance of estimated purchase amounts prior to the release of purchase orders to vendors; however, the level of control at which expenditures may not exceed the budget is at the fund level. 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. The goals and objectives identified by Council most recently are: Financially Sound City Providing High Value Services Diversify City revenues to support defined City services and service levels Expand the City commercial tax base through economic expansion and diversity Maintain responsible financial reserves consistent with City financial policies and national ° standards I Maintain and upgrade City facilities, equipment,and apparatus • Develop, update, and use long-range organization and strategic master planning Hire and retain top quality, diverse City workforce dedicated to serving the Round Rock community Be recognized as a financially responsible City by maintaining a "AAA" bond rating City Infrastructure:Today and For Tomorrow • Maintain responsible potable water used by City customers,City facilities and parks • Invest in City infrastructure to support future community growth and economic development • Expand water reuse throughout the City where feasible JAN, �� a • Improve mobility throughout the City and the region "0 • Upgrade and expand roads / • Upgrade and expand drainage and stormwater system • Maintain, upgrade and expand regional wastewater system Maintain road infrastructure Great Community to Live oil • Expand and diversify the local business and job opportunities for residents • Redevelop older commercial areas and corridors • Have expanding job opportunities for residents • Expand and maintain quality-of-life amenities for residents • Maintain community where people prefer to live and work • Diversify housing opportunities and ownership opportunities • Have connecting trails, shared use path system,throughout the community 2 Authentic Downtown - Exciting Community Destination • Increase public and commercial use of Brushy Creek • Expand retail business and day-time foot traffic • Have a quality restaurant with entertainment venues that are "family friendly" • Expand housing opportunities:townhomes, apartments,condos • Have a beautiful Downtown -a sense of place attracting residents and guests • Have adequate,convenient parking Sustainable Neighborhoods loll • Be a safe community • Upgrade older housing stock:exterior and interior • Upgrade neighborhood parks and open spaces • Increase neighborhood connectivity through streets and trails • Maintain positive working relationships with homeowner associations/neighborhood associations • Repair and upgrade neighborhood infrastructure: streets, sidewalks, utilities, fences, and streetscapes • Have water-wise landscaping in neighborhoods "The Sports Capital of Texas"for Tourism and Residents • Expand sports facilities (Sports Center/Multipurpose Complex) to support tourism • Increase number of tournaments: regional and national • Develop and maintain additional sports fields - practice, games,and sports tourism • Upgrade the quality and maintenance of current City sports facilities • Increase revenues from sports tourism/convention for the benefit of residents and the local economy • Expand conventions/conferences The budget adopted for fiscal year 2026 reflects a fiscally responsible approach to improving the City's infrastructure and meets current demands while maintaining the City's strong financial position. Economy Round Rock has experienced robust economic growth in recent years.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 in Texas and the country. From 2016 to the projected population for 2026, the City of Round Rock will have experienced 10-year population growth of 36%. Our long-range population estimates predict this increase continuing at a growth rate of around 2.5% per year for the foreseeable future. The state's strong economy, low unemployment rate, and low rate of overall taxation continues to draw new residents and businesses into Central Texas. The population for 2030 is projected to be over 161,000 within the City limits and over 228,000 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. 3 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 10 by GOBankingrates.com as one of the " Most Affordable Fast-Growing Cities" • Ranked number 10 by Livability as one of the"Best Places to Live" • Ranked number 15 by Coworking Cafe as one of their"Top Small Cities for Economic Growth" • Ranked number 18 by Niche as one the"Best Cities to Raise a Family in America" • Ranked number 26 by MoneyGeeks as one of the"Safest Cities in the USA" • Awarded the "Leading the Way Award" for the third year in a row, by ETC Institute, an award that recognizes local governments for outstanding achievement in the delivery of services to residents 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 the Round Rock Chamber of Commerce 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. Strong Local Base Round Rock continues to experience robust economic growth. As the largest city in Williamson County and part of the Round Rock-Austin-San Marcos Metropolitan Statistical Area (MSA), Round Rock is integral to one of the fastest growing regions in Texas and the country.The state's strong economy, low unemployment rate, and low overall taxation continues to draw new residents and businesses into Central Texas. Round Rock will continue its strong but manageable 2.5% annual population growth into the foreseeable future. The City has a large, diverse and growing business, higher education and medical base that continues to bring new residents and businesses as highlighted in these pages. Technology and Business Round Rock is home to Dell's global headquarters and it is the largest employer in Round Rock with an estimated 10,000 employees in 2025. Since Dell relocated to Round Rock in 1994, their economic impact on the City has been transformative.The City and Dell's partnership has spanned over thirty years and has transformed Round Rock into a hub of economic and technological development. Dell remains the City's largest property and sales taxpayer. In September 2025, Dell announced a $25 million expansion to its Round Rock Campus which could support up to an additional 500 jobs. On April 25, 2024, the City extended their existing economic development agreement with Dell from 2053 to 2099, lengthening Dell's commitment to Round Rock and the corresponding economic benefits for an additional 46 years. Tekscend Photomasks (formerly Toppan), first established its U.S. presence in Round Rock in 1986 and is an advanced manufacturer of photomasks, which is a key component in the process of creating a semiconductor chip that is used by global companies such as Samsung, Texas Instruments, and others. Tekscend selected Round Rock as its site for a $200 million expansion project aimed at modernizing and growing its operations to meet the demands of the rapidly evolving global semiconductor industry. KoMiCo, is a semiconductor equipment parts cleaning, coating, and repair company based in Round Rock,completed a new 40,000 square-foot expansion created additional jobs. Switch, Inc., the exascale technology infrastructure corporation, is building its 1.5 million-square-foot Fifth Prime data center campus, "The Rock,"in Round Rock next to Dell. Powered entirely by renewable energy,the Tier 50 facility reflects Switch's commitment to sustainability.The company also plans to open a second nearby data center less than a mile from the current site. Sabey Data Centers (SDC), a premier colocation data center provider, has completed the first 430,000-square-foot building on its new 40-acre Round Rock campus, offering up to 84 megawatts of power.The Texas Advanced Computing Center (TACC) at University of Texas at Austin announced in August 2024 that Sabey will be home to its Horizon supercomputer. Horizon is part of the nation's National Science Foundation-funded leadership class computing program that is expected to revolutionize US computational research. In July 2025, Sabey began work on a second building,which will add 54 megawatts,with the first phase expected online by late 2027. 4 On July 31, 2024, Mars Auto announced they will relocate their US operations from Dallas to Round Rock. Mars Auto leads the way in autonomous vehicle technology and has been the only commercial long-haul autonomous freight shipper in Korea. They are dedicated to developing safe, reliable, and efficient transportation solutions powered by artificial intelligence. Mars Auto focuses on innovation and sustainability to transform the way people and goods move around the world. Amazon's delivery station opened in Round Rock in 2021. The 32-acre campus is comprised of three industrial buildings totaling over 440,000 square feet. Amazon is expanding its Round Rock presence, building a distribution center, data center, and electrical substation on a 149-acre site on the City's southwestern side. Site work and construction have started and the facility is expected to be operational in 2026.This new facility is expected to create 200 jobs. Kalahari Resorts and Conventions made their debut in Round Rock in November 2020 and has over 1,800 employees. The Round Rock location represents its fourth family resort and convention center. The authentically African-themed Kalahari Resorts and Convention Center features 975 guest rooms, full-service amenities, fully equipped fitness centers, on-site restaurants, 150,000 square-foot conference center, and a 223,000-square-foot indoor/outdoor water park with a recent outdoor waterpark expansion. This resort provides Round Rock with substantial property, sales and hotel occupancy tax revenues,as well as diversifying the local economy and available employment opportunities. The Round Rock Chamber of Commerce has recently partnered with gener8tor,a nationally ranked venture capital firm and accelerator network, to launch a new program which helps local entrepreneurs excel. This program supports early-stage start ups in Greater Round Rock and helps builds a stronger community together. The District, a $525 million mixed-use development spanning 65.5 acres of retail, residential, office, and green space, broke ground in March 2025. Originally proposed in 2017 with a 1 million-square-foot plan, the project has expanded to at least 3 million square feet, with full buildout expected by 2039. The plan for the District is to bring shops and restaurants not already available in Round Rock, walkable and low vehicular traffic streets, multifamily high rises, townhomes, condos, and 5,000 jobs in staffing office, hospitality, restaurant and retail businesses. The first building to go vertical will be seven-story multifamily residential building with 316 units. Higher Education and Healthcare Round Rock also has several higher education facilities, many of which focus on healthcare disciplines. These institutions of higher learning include the Texas State University, Austin Community College, and Texas A&M Health Science Center. On December 4, 2024, Texas State University held a groundbreaking ceremony for Esperanza Hall, the first new academic building since Willow Hall opened in 2018, and the fourth academic building for the College of Health Professions on the Round Rock Campus. The hall will be 81,650 square feet with an estimated total project cost of $52.4 million. The first phase of construction will feature completed classrooms, study areas, and lounge space on the ground floor, while the second and third floors will remain unfinished and reserved for future development. Esperanza hall is expected to be completed in July 2026. Austin Community College continues to expand its presence in Round Rock with two new buildings and facility upgrades, following a 2022 bond approval. The expansion, which broke ground in November 2024, will support Skilled Trades,Advanced Manufacturing, and Health Sciences programs.This new addition complements the 2018 completion of a $33 million, 45,000-square-foot expansion featuring the college's third ACCelerator with advanced science labs and classrooms. In January 2023, Baylor Scott&White broke ground on a $220 million expansion of their already extensive Round Rock facilities to include a neonatal intensive care unit, expanded labor and delivery department, additional operating rooms, cardiac cauterization, interventional radiology and testing laboratories, expended emergency department, and other facility support,as well as more patient beds.The expansion is expected to be completed in 2026. In September 2024, Ascension Seton Williamson broke ground on a $230 million expansion to their Round Rock campus. The expansion features a six-story tower totaling 216,000 square feet with 160 patient rooms, two operating 5 rooms, more department space, a build-out of nearby medical plaza to add outpatient and rehab care and add over 400 positions.The expansion is expected to be completed in 2026. 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) 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 revenues 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. Sales tax is a less stable revenue source than 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 sales tax. The City's economy is expected to generate approximately $111.5 million in sales tax revenue for fiscal year 2026, net of sales tax incentives paid to Dell, Switch, and Kalahari Resorts and Conventions in accordance with economic development agreements in effect.This amount includes the 0.5%in additional sales and use tax for roads and economic development. The remaining 1.5% is projected to generate $79.5 million for general operations, property tax reduction and capital projects. Dell continues to be a key driver for both Round Rock and the Central Texas region. To ensure good overall financial stability for the City, a concentration risk fund has been established to mitigate the City's annual net exposure to declining sales tax from any single sales taxpayer. Therefore, any single taxpayer that represents more than 15% of total budgeted sales tax revenue, net of incentives, is limited to 15%from FY 2024 and thereafter in the General Fund,with excess being recognized in the General Self-Financed Construction Fund. In fiscal year 2022, the City Council adopted new financial policies to cap the sales tax reliance in the General Fund. Any expected or realized sales tax in the General Fund will not exceed 45% of the operating budget. Any amount above 45% will be recognized in the General Self-Financed Construction Fund for pay-as-you-go one-time capital expenditures of projects. 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 updated during 2024 and the results showed a retail water and wastewater rate increase was needed for the next several years. The City's water and wastewater new retail rates went into effect November 1, 2025. This is the second of three planned increases. 6 The City continues to plan 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. A deep-water intake and underground raw waterline tunnel contract was awarded in the summer of 2022 is on schedule to start construction and projected to be completed in 2027.The City's cost share in the project is budgeted at$84.7 million. In April 2025, the City's AAA bond rating on its general obligation debt was affirmed by S&P Global (S&P), the highest rating of creditworthiness. The City also maintains its AAA rating on its utility systems revenue debt and its BCRUA obligations.The City is one of only eight(8) cities in Texas with AAA bond ratings on both its general obligation and utility revenue debt. S&P notes these ratings "reflect[ed] a strong economy and maintenance of a strong financial position...(and) very strong management,with strong financial policies and practices." Additionally, in October 2024, S&P Global upgraded Round Rock's Hotel Occupancy Tax bond rating from A+ to AA-. This rating reflects Round Rock's local economy's strength and ongoing expansion, including a growing hospitality sector. 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. The nationally recognized award-winning plan was crafted over two years with extensive community input. 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 Acknowledgments 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 annual comprehensive financial report for the fiscal year ended September 30, 2024. This was the thirty-ninth 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 annual comprehensive 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 annual comprehensive 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, 2024, for the thirty-second year. 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. The GFOA also awarded the City a Certificate of Outstanding Achievement in Popular Annual Financial Reporting for the fiscal year ended September 30, 2024. This award recognizes the City's ability to extract information from their annual comprehensive 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 During fiscal year 2024, GFOA awarded the City the "Triple Crown" award which recognized Round Rock for receiving all three GFOA awards for fiscal year 2023: the Certificate of Achievement for Excellence in Financial Reporting Award; the Distinguished Budget Presentation Award; and the Certificate of Outstanding Achievement in Popular Annual Financial Reporting. The City's investment policy was awarded the Certificate of Distinction by the Government Treasurers' Organization of Texas (GTOT) in June 2024. This is the fourth 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 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. In 2024, the Texas Comptroller introduced a new transparency star Open Government and Compliance, and the City was awarded the 6th and final star in January 2025. Round Rock's Chief Financial Officer, Susan Morgan, retired February 2025, after leading the City for 10 years. Prior to her retirement, City Council and City Management announced Kevin Klosterboer as the new Chief Financial Office to oversee the City's financial operations and to continue Round Rock's commitment to fiscal responsibility and strategic growth. 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. Acknowledgment is also given to Whitley Penn, L.L.P. for their valuable assistance in the 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, Brooks Bennett City Manager Kevin Klosterboer Chief Financial Officer o� wu >1,10 > " �� ' V-RAINI`wII''ARpIII14R"'Y VIIYAIBJ5IhAVCIfISI6 'Y VRAIN' PARPN¢_'Y IRkAlelTlI'ARl kw,1� N IRANSPARILN1C:Y I"RAI'TdWI'hIZVI',J�'Y if A R SIA I P I"A R 'ti-en Q`enoaupftoUem Taaxa,s C`aaaroptr¢vHer Texas co nlpw'Gn°0er Texas(ouwwj.gsOer '4xms T.o mryrfl'a"a lkw "tl'a Xau co+rarpfiv°aroVer TR TYtiNM_F !niNC GS OPi di'l YYI IfM1k(iI VF Ni',!v 44:iti'it..N01 611.f+tlYY O'.n'Y pr oFHl t.PI V}0€'�'w C fl N.TVtiM1,9.,&P fR[.WEWP —d1,114Y w.2 A41IdNC 8 CITY OF ROUND ROCK, TEXAS CITY ORGANIZATIONAL CHART Citizens of Pound Roc:k Municipal Judge Mayor& Councill City Attorney F-City Manager's Office I w 9 Goverurnent Firimice Officers Association Certificate of' Achievement for Excellence ill F.11111CAUC1,91 Reportilig Presented to ,C t-17 of Round Rock Texas For its Animal Compreliensille Financial Report For tht Fiscal Year Ended September M), 2,024 Executive DirectorICE0 10 Bdg SU"& wl e Ny Jj le i INDEPENDENT AUDITORS'IRE PORT To the Hbncrable Mayor and Mem I of City Council City Gif Round j,RDck,Texas Report on the Audit of the Financial Statements 43phlions We,I BUdited the flinancial stajtemoenn of the governmental activities,the business-type anvitiIes,each major fund, and the aggregate remaining fund information of City of Ro#und Rock,Texas",e"City"),.as of and for the year ended September 30,202 5,and the related notes to the financiial statements,which collectively compI the City's basic financial'statements, as listed in,the table of contents- in our opin ion,the accompanying financial statements referred to above present fairly,in all material respects,the respective financial positiion of the governmental activities,the tiu5ines5-type actiI each major flund, and theaggregate.remaining fund iinformatibn of the,City,as of'septembler 30,202:5,and the re!spectiive chail ii n finandial position and,where applicable, cash flows tIl for the year then,ended in accordance with aCCOUnting Ipriinciples generaffy accepted in the United States ofArnerica. Basis for Opinions We,condw-ted our au dlit in accordance with aUditing standards generally accepted in the United States ofArnerica (GAAS) and the standards applicable to,finainciall audits contaiIned in Goveniment Audling Standards, issued by the Comptroller Genelral of the United States..Our responsibilities undierthose standards are fUrther described in the ALIchtor'51IResponsibilities for the Auditcif the Financial Slaternents section of:our report. We are irequired to,be Independent of the City,and to meet our other ethnical responsilidities,,lin accolrdaince with,the relevant ethicall irequJirelrnents relating to our audit.We beNeve that the audit evidence we have obtained iiis suffticient aind appropriate to provide a basis for Our audit opiriion�s. ,Respons,Vill of Monggenienz for the Finandbfstweffwnts, Management is iresponsiublle for the Ipreparatiron and fair presentation of the, financial statements in accordance with accounting priinciples generally accepted in, the, United States of Arnerical, and for the, design, limp,le mentation, aind maintenance of internal control relevant to the preparation and fair presentation of finaincial statements that are free frorn material misstaternent,whether due to,fraud or error. in preparing the financial statements, management iis required to evaluate whether there are conditions or events, considered lin thile,aggregate,that raise substantial dDUbt about.the City's abdity to continue as a going concern for twelve months Ibeiond the finl staternent date, iincluudiing anycurrently known iinformoation that may raise Substantial doubt shortly thereafter Hid 8 To the Honorable MaVorand Members of City Council City of Round Rock,Texas for time.Audft of the Finandof Statements Our objectives are to obtain,ireasorobdeassurance,abOUt whether the financial statements as a wtiolt,are free,from materiiiall irnisstatement, wohether Clore to fraud or eirror, and to i,55Ue an auditors report thi HICIU,des our oplinions.. Reasonable assurance is a high level of assurance(but.!is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with�GAAS and Government Auditing,Standards will always detert aimaterial misstaternent when it exists.The risk of not detectiing a material misstaternent reSU111thIg from fraUld is higher than for one resulting f rorn error, as fraud may involve,CO I 111U Si1O 11,forgery, inteentiGnall omissionSir misrepresentations,or the override,of internal control-Ilwulisstatierrments are con,s[dered material if there !is a substantial 1111kelihood that, iindliVICILIallY or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements- In perform ing airy audit in accordance with GAAS and Gavenunent A utfiringStondards,we: # Exercise prafessional jUdgment a nid maintain professiona I skepticism throughout the aur it. Identify and assess line risks of material misstatement of the financial statements, whether ClUe to fralLid air error, andi design and perform audit procedUires responsive to those risks. Such procedures iinclUde examining,ona test basis,evVdence rega rdhig the amounts and diSCIOSUres!in the flina ncial stateni,enits. ■ Obtain an understanding of irnternal control relevant to the alldit in order to design aUdit procedures that are appropriate in the CilrClUrnstances,but not for the purpose of expresshig an opinion on the effectrweness of the City's internal control.Accordingly,,no such opinion!is exprressed. ■ Evaluate thie a ppropriateniess,of accounting pollicier Used a rid the reasonia blen,esr.of significant accounting estj rnatess mia,de lby managernent,aswell as evaluate the,overall presentation,of the financial statemeilts. Conclude whether, !in our JILIdgment, there are conditions or events, consiidered !in the aggregate, that raise Substantial doubt about the City's albilitytocoiitiinueasagoiingconcern for a reasonable periodof thne. We are requ ireed to communlicate with those charged with governance regarding,among other matters,the planined scope and timing of the,audit,sirgnlif icant audit findings,and certain,iinterna I control-related inatters that we iidentirlfiecl Burring the audlit. Laffirenation AccOLlinting princjiples generally accepted!in the,Un�itedi States of Arneriica reqUire that ima riagernent's disaission,and ainallysis, pension!info rmatio n,other post-ernployrnent benefits information,and budigeta ry comparison information,as I iste,d in the table, of contents, be, presented to supplement the basic fmanciall stateinenits. Such� !information is the responsilbillity of mainagernient and, allithough not a part of the basic financial statements, is required lby the, Governmental Accounting Standards Board who considers it to be,an essential part of financiall reporting f`0T placing the basic finianicial stateni,ents in an appropriate operational, economic, or historical context. We. Ihave applied certain Illinmmlited procedures to the reclulirecl supplementary information!in accordance with aldd iting standards generally accepted!in the Unite,d States,of', merica,which consiisted&inquiirjes of management about the,methods of prepairing the iinforrm,ation and comparing the information for consiistency,i management's responses to oUr illiClUiries,the basic financial staternentss,and other knowledge we obtainiecl during our audit of lhe basic finaincia I statements.We do not express,a,n,ciplinion or provide airy assurance on the information because,the Himitecl procedures do not provide LIS'Wifthi SUffidient evidence to express an opinion or pravide,any assurance. 12 To tlme HonoraWe MaVor and Mem bers of City Counci] Orty of ROUind Rock,Texas OLJIF aUdit was candUcted for the PUrpOSke of formingopinions on the financial 5taternents-that coffective-1V comprise the City's �Basic:financial statements.,The combining and iindivicluaf fUnd statements and schedules and schedUle�of expenclitUres of fdederalll awarcls, as reClUired by Tide 2 U.S Code of FederaReguiations IPa rt 2100, Uniform Adir,inistrative Requiremerns,Cost Pnncip;es and AudJT Requirements for Federai Awards, are presented for puirposes Gf additional ainalysis and are, not a reclU ired part of the,basic flinairicial stater tints.Such inforrnation its the,re-sponsibitity of mana,,gemrent and was derWed frarn and relates directly to the, underlying accOlintin,g and other records Used to pTepaire the basiic financial statements. The information has been su bjected to the BlUd ifing procedUres apphed in the audit of the basic financial statjem,e nts and certain additional procedUre-sl,indlUding comparing and reconciling such iinformationi direrttyto the Underlying accounting and other record's Used to prepare the basic!financial statements or to the basic financial statements t!hemselves,and other additionall procedures in accordance with auditing standards generaIlly accepted!in the United States of America- In carr Opinion, the c=bhi,ing an,d inclividual fund statements and schedules and 5cheduleof expenditures of federal awards:are fairly stated,in al I materiall respem,!in relation to the,basic f inancia I statementsas a whole.. Other[nfornpolion Managem,ent is resporisible for the cthe,r information indiLlided iin the an nua I report. The other information comprises the introd uctory and statistical sections bUt does;not incl,ucle the basic f inancia I statements aimed our auditor's report thereo,rm.Our op in ion s on the,basic fina ncial stateniments do snot cover the other rnf orimation,and we clo not exp re5s an opinion or amid form of assurance thereon. In connection with OLUraild it Of the,basic finain,cial statements„,ouir responsibility is to read the other iinformation and consider whether a material, inconrsistericy exists between the other inforniatijon and the basic financiall statenirents, Gr the other information otherMse appears to be materia Illy misstate-d-If,Ibased on the,work performed,we conclUde that ain uncorrected iniaterial rnzsstatement of the other inf orniation exiists,we are require d to descriibe,!it in ouir ireporyt. Ordie�r Reporting Required 1YW GavemrrwntAiMi6r7g Standards In accordaince with Government Auditing Standards, we have also issued OUr ireport dated February 91, 2026, on OUr cansjcleration�of the City's internal control over firaincial reporting and ouir tests of its comphance with cerrain provisions of laws, regUlations,contracts,grant agreemerits and other matters.The pu rpose of that report is soleiy to clescrii be,the,scope of our tesfingof internal control over financial reporring and compliance and the,results sof that testing,and not to provide an opinion on the effectiveness sof the City's internall contrdi over financial irepording or ons compliance-That report !is an untegf,alll pare of an audit performed in, accordance,with Governinei?t.Audrtiilg,Stt7ndorddr lin considering the City's iinternal control over finaincial irepo^rtimgaind compl ianc!e. Austin,Texas Fe brUa ry 9.,2026 13 rill COP 14 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 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, 2025. 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, 2025, by $1,463,488,929 (net position). Of this amount, $1,024,385,061 (70.0%) is invested in capital assets. Net position restricted for specific purposes totals $165,720,148 (11.3%). The remaining amount, $273,383,720 (18.7%) (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 $129,035,315. The increase can be attributed to an increase of$136,726,092 in net investment in capital assets offset by a reduction of$10,678,360 for a prior period restatement for a change in standards recognizing compensated absences. • As of the close of the current fiscal year, the City of Round Rock's governmental funds reported combined ending fund balances of $333,354,004, a decrease of $9,386,186 in comparison to the prior year. The decrease is due to spending for planned capital projects which decreased the restricted fund balance held for authorized construction. Unassigned fund balance of $73,741,726, or 22.1% 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 $73,741,726, or 42.7%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$43,134,473. The General Fund's total fund balance, $74,508,494, is 72.7% more than the fund balance policy requirement. • The City of Round Rock's total debt increased by $91,849,435 during the current fiscal year. In May 2025 the City issued $87,520,000 in voter approved general obligation debt, $19,620,000 in certificates of obligation and $4,775,000 in limited tax note debt offset by $27,237,513 of regularly scheduled debt principal retirements (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. 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). 15 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 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,wastewater, 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 13 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, the Debt Service Fund, the Round Rock Transportation and Economic Development Corporation (RRTEDC) Fund,the Debt-Financed Capital Projects Fund, the Self-Financed Construction Fund, and Roadway Impact Fees Fund, all of which are considered to be major funds. Data from the other seven (7) 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. 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,wastewater, 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, 2025. The net income (loss) of the Internal Service Fund is allocated between governmental and business-type activities. 16 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 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,wastewater, and stormwater utility and for the golf course. The water, wastewater, 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. 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 99 of this report. 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. 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$1,463,488,929 as of September 30, 2025. The largest portion of the City's net position, $1,024,385,061 (70.0%) reflects its investments in capital assets (e.g., land, buildings and improvements, improvements other than buildings, machinery and equipment, right-to-use lease equipment, right-to-use subscriptions,and construction in progress), less any spent and outstanding debt used to acquire those assets. 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, $165,720,148 (11.3%) represents resources that are subject to external restriction on how they may be utilized. Restricted net position decreased $19.3 million, or 10.4%, compared to the prior year. Restricted net position for the governmental activities decreased $18.9 million, a result of a decrease in funds available for capital projects. The remaining balance is unrestricted net position of $273,383,720 which may be used to meet the City's ongoing obligations to citizens and creditors. As of September 30, 2025, and 2024,the City has 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. 17 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Net Position (in thousands) Governmental Business-Type Activities Activities Total 2025 2024 2025 2024 2025 2024 Current and other assets $ 406,315 $ 395,302 $ 245,690 $ 254,785 $ 652,005 $ 650,087 Capital assets 1,070,909 883,460 495,589 447,490 1,566,498 1,330,950 Total assets 1,477,223 1,278,762 741,279 702,275 2,218,503 1,981,037 Deferred outflows of resources 25,463 31,633 6,534 7,215 31,997 38,848 Current liabilities 112,099 89,376 24,455 30,379 136,554 119,755 Long term liabilities 575,200 481,182 64,320 67,743 639,520 548,925 Total liabilities 687,299 570,558 88,775 98,122 776,074 668,680 Deferred inflows of resources 8,602 5,414 1,222 660 9,824 6,074 Net position: Net investment in capital assets 582,858 499,732 441,527 389,534 1,024,385 889,266 Restricted 155,739 174,686 9,981 10,327 165,720 185,013 Unrestricted 67,075 60,005 206,308 210,848 273,383 270,853 Total net position $ 805,673 $ 734,423 $ 657,816 $ 610,709 $ 1,463,489 $ 1,345,132 Total Net Position Governmental& Business-Type Activities (in millions) $1,600 1,400 11 Unrestricted) $1,200 1,000 IIIIIIIII Restricted) ��. Net investlrnent in x$00 �� capital assets $600 $400 $200 2021 2022 2023 2024 2025 18 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Analysis of Changes in Net Position The table below summarizes the changes in the City's net position from its activities for the fiscal year ended September 30, 2025,with comparisons to the previous year. Changes in Net Position (in thousands) Governmental Business-Type Activities Activities Total 2025 2024 2025 2024 2025 2024 Revenues: Program revenues: Charges for services $ 15,029 $ 13,343 $ 78,085 $ 69,827 $ 93,114 $ 83,171 Operating grants and contributions 31635 4,045 - 2,734 3,635 6,779 Capital grants and contributions 40,276 22,421 56,711 38,165 96,987 60,586 General revenues: Property taxes 89,687 81,719 - - 89,687 81,719 Franchise taxes 7,944 7,868 7,944 7,868 Sales tax 117,538 103,712 117,538 103,712 Hotel occupancy tax 16,267 16,928 16,267 16,928 Public service taxes 1,195 1,199 - - 1,195 1,199 Investment earnings and other 31,952 36,092 5,855 11,735 37,807 47,827 Total revenues 323,523 287,327 140,651 122,461 464,174 409,789 Expenses: General government 54,392 48,574 - - 54,392 48,574 Public safety 91,088 85,294 91,088 85,294 Public works 50,685 47,492 50,685 47,492 Culture and recreation 39,865 39,500 39,865 39,500 Interest on long-term debt 13,038 10,636 13,038 10,636 Issuance costs - 731 - - - 731 Water and wastewater utility - 81,885 75,164 81,885 75,164 Golf course - - 4,185 4,390 4,185 4,390 Total expenses 249,068 232,227 86,070 79,554 335,138 311,781 Increases in net position before transfers 74,455 55,099 54,581 42,907 129,036 98,008 Transfers 6,151 5,885 (6,151) (5,885) - - Increase in net position 80,606 60,984 48,430 37,022 129,036 98,008 Net position- beginning(2025 restated) 725,067 673,439 609,386 573,687 1,334,453 1,247,126 Net position-ending $ 805,673 $ 734,423 $ 657,816 $ 610,710 $ 1,463,489 $ 1,345,134 Governmental Activities During the current fiscal year, governmental activities increased the City's net position by $80,605,255 or 62.5% 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: 19 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Revenues • Amounts received for property taxes increased from last year by 9.7% due primarily to $746 million in new taxable property and a 5.3% increase in the property tax rate. The fiscal year 2025 tax rate of $0.36 is 8.6% above the no-new-revenue rate of$0.331466. Property tax makes up 33.9%of total general revenues. • Sales tax collections of$117.5 million was a 13.3%increase compared to prior year. Dell remains one of the City's top sales taxpayers for fiscal year 2025. • Hotel occupancy tax (HOT) revenues totaled $16.3 million compared to $16.9 million in the prior year, down 3.9% from the prior year. The slight decrease is due to decreases in occupancy tax revenues from several extended stay and discount hotels in the city. • Charges for services increased $1.7 million, or 12.6%from the prior year.The increase was due to development fees, tree replacement fees, and fire inspection fees. Development fees vary from year-to-year due to timing and 2025 saw a significant increase over 2024. • Grants and contribution revenues increased $17.4 million over the prior year. The increase is due to higher intergovernmental contributions towards capital projects. • Unrestricted investment earnings and other general revenues decreased $4.1 million. The increase can be attributed to lower balances invested as funds have been spent on planned projects under construction.. Revenues by Type -Governmental Activities Sales taxes 363% Hotel occulpancytax 5,0% Puiblic service taxes 0..4% Invdestirnent earnings 9,.9% Franchise taxes . 2.5% / ,»yp Charles for services o llllll�,�� 4,6✓'© Operating co t ibugrants and Pitions l Property taxes 27,�8l , ,� /'w 1,1% Calpital 8raints and cointiribuitions 12,4% 20 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Expenses Expenses for governmental activities for the City totaled $249,068,399 for the year ended September 30, 2025. Significant factors are listed below: • General government costs increased $5.8 million (12.0%) from $48.6 million in 2024 to $54.4 million in 2025. • Public safety program costs including police and fire department activities totaled $91.1 million, or 36.6% of total expenses for governmental activities. Total costs increased 6.8% over the prior year, due largely to personnel costs from new public safety positions and public safety salary increases. • Public works program costs increased $3.2 million, or 6.7%, compared to prior year. The increase is primarily a result of increased salary expenses. • Culture and recreation increased $0.4 million (0.9%) from $39.5 million in 2024 to $39.9 million in 2025. Expenses-Governmental Activities (in thousands) X100,000 $901,000 $801,000« $701,000 601,000 50,0,00 $40,000 301,000 $20,000 10,000 General Public safety Public works Culture and Interest oin government recreation long-term debt 0,e'....: 02024 21 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Business-Type Activities Business-type activities increased the City's net position by$48,430,060 or 37.5%of the total growth in the net position of the City over the prior year. This increase can be attributed to $56.9 million in capital grants and contributions. Additionally, charges for services increased $8.3 million, due to rate increases that went into effect in November 2024 and expenses increased by$6.5 million over the prior year. Key factors for the increase in net position are as follows: Revenues Water revenues are seasonable and are impacted by weather fluctuations. Retail water, wastewater, and stormwater rate increases went into effect November 2024 which contributed to higher water revenues. Revenues- Business-Type Activities Water,Wastewater and Stormwater Capital grarnit°:s aund clorititabutilorws A03% C'Karges for se�,ryires � Illllul��lllVm� Ilc^u,�^e:��o>r��airrt-e�aurir�ir��; s ether 4.236 22 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Comparative data for the past two fiscal years of the water,wastewater, and stormwater business-type activities is presented as follows: 2025 2024 Operating revenues $ 73,292,662 $ 65,400,556 Operating income (loss) (6,032,191) (7,592,363) Income available for debt service 43,568,282 32,511,627 Annual debt service 5,952,331 5,948,181 Coverage 7.32 5.47 Expenses Expenses of the business-type activities increased $6.5 million over the prior year due to increased personnel costs related to new positions and increases to keep up with market as well as lower position vacancy rates and higher depreciation and amortization expense. Expenses- Business-Type Activities (in thousands) $00,000 ;aa,000 $70,000 600,000 $.50,000 $40,000 630,000 $,20,000 10,000 _ IIIVU�IUfIUU�lUfIUU�lUfIUU�lUfIUU1 Water an d wa stewateruti I'ity G adif'ccro�ufse 2025 lint 2024 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. 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. 23 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 For the fiscal year ended September 30, 2025,the City's governmental funds reported combined ending fund balances of $333,354,004. This is a decrease of $9.4 million, or 2.7% from the prior year. Unassigned fund balance is $73,741,726, or approximately 22.1% of the total fund balance amount, is available for spending at the City's discretion. $5,551,279 is assigned to culture and recreation while $61,417,767 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 restricted to 1) pay debt service of$4,194,434, 2) fund authorized construction of$162,939,232, 3) other restricted purposes of$21,828,573 or 4) non-spendable of$3,680,993. Fund Balance Type -Governmental Funds Coin7iniitted 18.4✓© Assigned id �pll� Restricted LPruassi inedl 56.7% 22.1% NloirrspendPalble 1,1% The General Fund is the primary operating fund of the City. At the close of the current fiscal year, fund balance of the General Fund reached $74,508,494, of which $73,741,726, or 99.0% of the total amount is 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 42.7%of total general fund expenditures. During the current fiscal year, the fund balance of the General Fund increased by $307,876. The General Fund's total revenues increased $7,459,565 and exceeded the budget by $3,550,573 primarily from higher franchise fees, increased recreation revenues due to higher demand for programs, and higher interest income due to the City's laddered investment strategy. The increase in revenues was offset by an increase in expenditures totaling $19,725,619, a result of new General Fund positions added in 2025; salary increases to keep up with market wages; and increases in overall operating costs. The Debt Service Fund had a total fund balance of$1,812,005 at the end of the fiscal year, all of which is restricted for the payment of debt service. Fund balance decreased during the year by $3,609,851 due to debt being fully paid off. Debt service expenditure requirements increased by$1,450,239 during the fiscal year and were adequately funded by the debt service portion of the property tax rate and other contributions. The fund balance of the RRTEDC Fund was $133,609,723, a decrease of $38,076,500 compared to the prior year. The decrease can be attributed to spending on capital project expenditures,as planned projects were constructed. The fund balance of the Debt-Financed Capital Projects Fund was $31,451,166, an increase of $22,021,419 compared to the prior year as debt was issued, bringing in proceeds to fund future projects. 24 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 The fund balance of the Self-Financed Construction Fund was $61,072,452, an increase of $9,260,035 compared to the prior year. Sales tax revenues contributed to the fund were $13.8 million, up from the prior year by $2.8 million. The City has policies to limit General Fund dependency on sales tax by (1) limiting the percentage of general fund expenditures paid by sales tax to 45%and (2) limiting General Fund sales tax received from Dell to 15%.The balance is deposited in the General Self-Financed Construction Fund for pay-as-you-go, one-time capital expenditures. Capital project expenditures paid by this fund decreased by$0.4 million. The fund balance of the Roadway Impact Fees Fund fluctuates based on interest earned on cash funds that represent unearned revenues. 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 $656,268,095, an increase of $48,670,017 over the prior year. Unrestricted net position of the funds totaled $204,760,162 at September 30,2025.The unrestricted net position represented 31.2%of the enterprise funds'total net position. The Water and Wastewater Fund's net position increased $48,414,570 over the prior year primarily due to an increase in contributed infrastructure. Operating revenues totaled $73,292,662, compared to $65,400,556 in the prior year due to an increase in retail water and wastewater rates that went into effect in November 2024 that resulted in higher water revenues. Operating expenses were $79,324,853, an increase of$6,331,934 over the prior year. The increase is a result of fewer personnel vacancies, as well as higher chemical costs and repairs. The Golf Course Fund ended the year with a net position of $12,000,098. Operating revenues totaled $4,675,666, a 9.8% increase for the year, compared to $4,259,813 in the prior year. Operating expenses were $4,597,385, which is $208,408 higher than the previous year. Mild weather conditions in 2025 and the popularity of golf in our region resulted in more rounds being played resulting in higher revenues and slightly higher operating costs. General Fund Budgetary Highlights One budget amendment was taken to City Council for the General Fund for the year ended September 30, 2025. The budget amendment increased funding in the Police Department to increase funding related to a public safety grant awarded to the City that was offset by the resulting increase in grant revenues. 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, 2025, amounted to $1,566,497,670 (net of accumulated depreciation/amortization). This investment includes land, buildings and improvements (including infrastructure), machinery and equipment, right-to-use lease equipment, right-to-use subscriptions and construction in progress. Major capital asset events for the year ended September 30,2025, included the following: Downtown Improvements • Construction is underway on the Griffith Building Remodel and new Paseo with $16.2 million spent to date. • Design and land acquisition is underway on the Flats Park with $4.7 million spent to date. • Design is underway on the Town Green with $415,000 spent to date. Facility Improvements • City facility improvements were completed at a cost of$1.3 million. • Information technology infrastructure upgrades were completed at a cost of$513,000. 25 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 • Design is underway on the Bob Bennett Complex Expansion with $4.6 million spent to date. • Design is underway on the Clay Madsen Recreation Center Expansion and Renovation with $1.5 million spent to date. • Construction is complete on the new Fire Station#1 at a cost of$9.6 million. • Construction is underway on Fire Station#10 with $2.2 million spent to date. • Design is underway on Fire Station#11 with 214,000 spent to date. • Design is underway on the Public Safety Training Center Driving Track and Classroom Expansion with $1.7 million spent to date. • Construction is underway on the Sports Center Expansion with $18.8 million spent to date. • Construction is complete on the Dell Diamond Renovation& Expansion at a cost of$5.4 million. • Design is under on the Multipurpose Sports Complex Expansion with $3.1 million spent to date. Park Improvements and Trails • Construction is underway on multiple Old Settlers Park Improvements projects with $44.6 million spent to date. These projects include the Lakeview Pavillion, Rock'N River Expansion, New Recreation Center,Track and Fields, Maintenance Yard,and Tennis and Pickleball Courts and are part of the 2023 voter approved bond program. • Construction is underway on improvements to Old Settlers Park's main roadway, Harrell Parkway, with $20.7 million spent to date. • Construction of Heritage Trail West was completed at a cost of$24.4 million. • Expansion of other citywide trails is underway with $7.7 million spent to date. • Additional park and facility improvements were completed at a cost of$539,000. Transportation Improvements • Major arterial, signal, and road projects for transportation are underway and at various stages of completion. Completed projects totaled $32.2 million while construction in progress at year-end approximated $100.2 million. • Various neighborhood street improvement projects were completed at a cost of$6.2 million. • Developers contributed $21.5 million for transportation infrastructure improvements. Water,Wastewater, and Stormwater Improvements • Various water and wastewater system improvement projects were completed and placed in service at a cost of $10.5 million and similar projects were in progress with $50.8 million spent to date. • Various additional stormwater improvement projects are in process with $3.2 million spent to date. • Developers contributed $34.2 million for water,wastewater, and stormwater system infrastructure improvements. Capital Assets (in thousands) Governmental Business-Type Activities Activities Total 2025 2024 2025 2024 2025 2024 Land $ 138,158 $ 136,538 $ 13,315 $ 9,523 $ 151,473 $ 146,061 Buildings and improvements 1,249,358 1,151,007 748,797 703,555 1,998,155 1,854,562 Machinery and equipment 118,933 111,299 22,628 21,819 141,561 133,118 Right-to-use lease equipment 4,404 773 702 496 5,106 1,269 Right-to-use subscription assets 15,781 9,365 - - 15,781 9,365 Accumulated depreciation/amortization (683,649) (639,119) (345,859) (318,184) (1,029,508) (957,303) Construction in progress 227,924 113,597 56,006 30,281 283,930 143,878 Total $ 1,070,909 $ 883,460 $ 495,589 $ 447,490 $ 1,566,498 $ 1,330,950 Additional information on the City of Round Rock's capital assets can be found in Note IV(E) to the financial statements. 26 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 Long-Term Debt At the end of the current fiscal year, the City of Round Rock had total debt outstanding of$554,573,029. Of this amount, $434,858,029 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 $91,849,435. Regularly scheduled debt principal was retired during 2025. The City also issued $87,520,000 in general obligation bonds, series 2025; $19,620,000 in certificates of obligation bonds, series 2025; and $4,775,000 in limited tax notes, series 2025. Details of the new bond issues can be found in Note IV(F) to the financial statements. Long-Term Financing (in thousands) Governmental Business-Type Activities Activities Total 2025 2024 2025 2024 2025 2024 General obligation bonds $ 237,350 $ 158,870 $ - $ - $ 237,350 $ 158,870 Certificates of obligation 168,580 155,955 - - 168,580 155,955 Limited tax notes 12,730 10,885 - - 12,730 10,885 Hotel tax revenue bonds 5,335 6,040 - - 5,335 6,040 Sales tax revenue bonds 35,065 37,065 - - 35,065 37,065 State infrastructure bank loan 27,000 27,000 - - 27,000 27,000 Excess sales tax liability 4,187 6,624 - - 4,187 6,624 Leases 2,902 298 503 467 3,405 765 Subscriptions 8,607 5,321 - - 8,607 5,321 Water and wastewater revenue bonds - - 52,315 56,175 52,315 56,175 Total $ 501,756 $ 408,058 $ 52,818 $ 56,642 $ 554,574 $ 464,700 See Note IV(F)for long-term debt 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 authorized by the Texas Constitution which 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 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 $5.2 billion of bonds. Of the maximum tax rate for debt service of $1.50, the City uses $0.115243, or 7.7%. Of$90,575,785 levied in property taxes for the fiscal year ended September 30, 2025, 99.68%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 2026 budget adopted by the City Council adheres to the City's financial policies and preserves 27 CITY OF ROUND ROCK,TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2025 the City's strong financial position while providing excellent levels of service. During the creation of the 2026 budget process the City Manager and Executive team focused on various budget drivers in the decision-making process. • Addressing Council's Strategic Goals • 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 Revenue assumptions,in general for fiscal year 2026, have been built based on a steady, stable economy. The City's economy is expected to generate approximately $111.5 million in sales tax revenue for fiscal year 2026. This amount includes the 0.5%, or $32.0 million, in additional sales and use tax for roads and economic development. The remaining 1.5%is projected to generate $79.5 million for general operations, property tax reduction,and capital projects. The fiscal year 2026 (tax year 2025), certified taxable property value for Round Rock is $26.7 billion, an increase of 5.5% from last year's $25.3 billion. The adopted property tax rate for fiscal year 2026 is $0.372 per $100 of valuation. The tax rate is an increase of 2.4 cents over the no-new-revenue rate of $0.348065, and below the voter approval rate of $0.372075. The 2.4 cent increase over the no-new-revenue tax rate allows the City to provide funding for debt payments for general obligation bonds issued in 2025 and approved by voters in May 2023; 17 new public safety positions to keep up with growth and staff voter approved bond projects, and additional staffing in parks and recreation related to voter approved bond projects.With an adopted rate of $0.372, the City continues to have the lowest tax rate 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 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 rate increases for retail water(5%) and wastewater(2%) budgeted for fiscal year 2026. 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. 28 BASIC FINANCIAL STATEMENTS 29 CITY OF ROUND ROCK, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Governmental Business-Type Activities Activities Total ASSETS Cash and cash equivalents $ 49,298,962 $ 53,984,178 $ 103,283,140 Investments 114,412,464 114,819,564 229,232,028 Receivables (net of allowance for uncollectibles)- Property taxes 451,964 - 451,964 Accounts and other 9,132,051 13,132,171 22,264,222 Accrued interest 645,683 682,121 1,327,804 Intergovernmental - 3,149,746 3,149,746 Grants 126,777 463,549 590,326 Internal balances (1,112,373) 1,112,373 - Inventories 1,162,568 2,233,543 3,396,111 Prepaid items 3,025,437 788,237 3,813,674 Restricted assets - Cash and cash equivalents 93,783,928 4,281,510 98,065,438 Investments 111,489,170 6,819,248 118,308,418 Property tax receivable 258,650 - 258,650 Accounts and other 2,429,698 - 2,429,698 Accrued interest 18,347,159 38,512 18,385,671 Notes receivable 1,750,000 6,800,000 8,550,000 Investment in joint venture - 37,385,598 37,385,598 Capital assets - Land and construction in progress 366,081,094 69,320,456 435,401,550 Capital assets, net of accumulated depreciation/amortization 704,827,719 426,268,401 1,131,096,120 Total assets 1,476,110,951 741,279,207 2,217,390,158 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows on refundings - 2,908,467 2,908,467 Deferred outflows related to pensions 23,438,239 3,336,938 26,775,177 Deferred outflows related to OPEB 2,024,487 288,229 2,312,716 Total deferred outflows of resources 25,462,726 6,533,634 31,996,360 The accompanying notes are an integral part of this financial statement. 30 Governmental Business-Type Activities Activities Total LIABILITIES Accounts payable $ 42,229,323 $ 12,903,074 $ 55,132,397 Accrued payroll 7,059,208 1,038,720 8,097,928 Unearned revenue 18,949,561 3,571,541 22,521,102 Accrued interest payable 2,941,797 318,159 3,259,956 Customer deposits - 1,182,070 1,182,070 Due within one year Net pension liability 2,736,880 389,654 3,126,534 Total OPEB liability 907,923 129,262 1,037,185 Bonds, notes, leases,compensated absences 37,274,662 4,921,712 42,196,374 Due in more than one year Net pension liability 52,000,722 7,403,423 59,404,145 Total OPEB liability 17,250,532 2,455,986 19,706,518 Bonds, notes, leases,compensated absences 505,949,100 54,461,029 560,410,129 Total liabilities 687,299,708 88,774,630 776,074,338 DEFERRED INFLOWS OF RESOURCES Deferred inflows on refundings 20,307 - 20,307 Deferred inflows related to pensions 4,604,103 655,494 5,259,597 Deferred inflows related to OPEB 3,977,120 566,227 4,543,347 Total deferred inflows of resources 8,601,530 1,221,721 9,823,251 NET POSITION Net investment in capital assets 582,858,078 441,526,983 1,024,385,061 Restricted for- Debt service 4,194,434 185,764 4,380,198 Capital projects 129,716,191 9,795,186 139,511,377 Hotel-motel tax 18,899,887 - 18,899,887 Public safety 1,225,291 - 1,225,291 General government 1,703,395 - 1,703,395 Unrestricted 67,075,163 206,308,557 273,383,720 Total net position $ 805,672,439 $ 657,816,490 $ 1,463,488,929 31 CITY OF ROUND ROCK,TEXAS STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2025 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities: General government $ 54,391,829 $ 3,581,349 $ 3,608,076 $ - Public safety 91,088,679 2,000,227 24,000 - Public works 50,684,509 1,437,410 - 39,497,591 Culture and recreation 39,865,413 8,009,697 2,752 778,366 Interest on long-term debt 13,037,969 - - - Total governmental activities 249,068,399 15,028,683 3,634,828 40,275,957 Business-type activities: Water and wastewater utility 81,884,591 73,409,151 - 56,527,832 Golf course 4,184,836 4,675,666 - 183,216 Total business-type activities 86,069,427 78,084,817 - 56,711,048 Total primary government $ 335,137,826 $ 93,113,500 $ 3,634,828 $ 96,987,005 The accompanying notes are an integral part of this financial statement. 32 Net(Expense) Revenue and Changes in Net Position Primary Government Governmental Business-Type Functions/Programs Activities Activities Total Governmental activities: General government $ (47,202,404) $ - $ (47,202,404) Public safety (89,064,452) - (89,064,452) Public works (9,749,508) - (9,749,508) Culture and recreation (31,074,598) - (31,074,598) Interest on long-term debt (13,037,969) - (13,037,969) Total governmental activities (190,128,931) - (190,128,931) Business-type activities: Water and wastewater utility - 48,052,392 48,052,392 Golf course - 674,046 674,046 Total business-type activities - 48,726,438 48,726,438 Total primary government (190,128,931) 48,726,438 (141,402,493) General revenues: Taxes: Property taxes, levied for general purpose 63,451,938 - 63,451,938 Property taxes, levied for debt service 26,234,746 - 26,234,746 Franchise taxes 7,944,027 - 7,944,027 Sales taxes 117,537,885 - 117,537,885 Hotel occupancy tax 16,267,328 - 16,267,328 Public service taxes 1,195,340 - 1,195,340 Unrestricted investment earnings and other 31,951,622 5,854,922 37,806,544 Transfers 6,151,300 (6,151,300) - Total general revenues and transfers 270,734,186 (296,378) 270,437,808 Change in net position 80,605,255 48,430,060 129,035,315 Net position-beginning 734,423,060 610,708,914 1,345,131,974 Restatement (9,355,876) (1,322,484) (10,678,360) Net position-beginning,as restated 725,067,184 609,386,430 1,334,453,614 Net position-ending $ 805,672,439 $ 657,816,490 $ 1,463,488,929 33 CITY OF ROUND ROCK, TEXAS GOVERNMENTAL FUNDS BALANCE SHEET SEPTEMBER 30, 2025 Round Rock Transportation and Economic General Debt Service Development Fund Fund Corporation Fund ASSETS Cash and cash equivalents $ 23,491,741 $ $ Investments 54,504,381 Receivables(net of allowance for uncollectibles) - Property taxes,including interest and penalties 451,964 Accounts and other 9,507,636 I nterfu nd - 5,497 Grants 86,867 - Inventories 485,861 Prepaid items 280,907 - - Restricted assets - Cash and cash equivalents - 1,807,905 42,747,100 Investments - 89,084,489 Receivables - Property taxes,including interest and penalties 258,650 - Sales tax - 2,429,698 Restricted accounts and other 17,110,748 Notes receivable - - 1,750,000 Total assets $ 88,809,357 $ 2,072,052 $ 153,122,035 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities- Accounts payable $ 6,669,510 $ $ 19,298,694 Accrued payroll 6,857,812 - Interfund payables 5,497 - Unearned revenue 316,080 213,618 Total liabilities 13,848,899 19,512,312 Deferred inflows of resources - Unavailable revenue- property taxes 451,964 260,047 - Total deferred inflows of resources 451,964 260,047 Fund balances- Nonspendable 766,768 - - Restricted - debt service - 1,812,005 2,382,429 Restricted - authorized construction - 131,227,294 Restricted - hotel-motel tax - Restricted - public safety Restricted - general government Committed - capital projects funds Assigned -culture and recreation - Unassigned 73,741,726 - - Total fund balances 74,508,494 1,812,005 133,609,723 Total liabilities,deferred inflows of resources and fund balances $ 88,809,357 $ 2,072,052 $ 153,122,035 The accompanying notes are an integral part of this financial statement. 34 Debt-Financed Self-Financed Other Total Capital Projects Construction Roadway Impact Governmental Governmental Fund Fund Fees Fund Funds Funds $ $ 19,663,339 $ $ 2,599,787 $ 45,754,867 45,648,516 6,031,936 106,184,833 - - 451,964 190,507 35,629 9,733,772 436,022 - 441,519 16,047 23,863 126,777 676,707 - - 1,162,568 1,636,412 567,130 33,976 2,518,425 38,573,094 - 3,144,612 7,511,217 93,783,928 - 7,300,230 15,104,451 111,489,170 - - 258,650 - - 2,429,698 41,270 1,195,141 18,347,159 - - - - 1,750,000 $ 40,886,213 $ 66,521,561 $ 10,486,112 $ 32,536,000 $ 394,433,330 $ 9,435,047 $ 5,449,109 $ - $ 301,393 $ 41,153,753 - - 200,692 7,058,504 - - 5,497 - - 9,512,511 2,107,352 12,149,561 9,435,047 5,449,109 9,512,511 2,609,437 60,367,315 - - - - 712,011 - - - 712,011 2,313,119 567,130 33,976 3,680,993 - - - - 4,194,434 29,138,047 973,601 1,600,290 162,939,232 - - 18,899,887 18,899,887 1,225,291 1,225,291 - 1,703,395 1,703,395 60,505,322 912,445 61,417,767 - 5,551,279 5,551,279 - - - - 73,741,726 31,451,166 61,072,452 973,601 29,926,563 333,354,004 $ 40,886,213 $ 66,521,561 $ 10,486,112 $ 32,536,000 $ 394,433,330 35 CITY OF ROUND ROCK,TEXAS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Total Fund Balances-Governmental Funds $ 333,354,004 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 $ 138,157,534 Construction in progress 227,923,560 Building and improvements 1,249,358,764 Equipment and right-to-use assets 139,117,817 Accumulated depreciation/amortization (683,648,862) Total capital assets $ 1,070,908,813 1,070,908,813 Deferred amounts on refundings are deferred outflows of resources and, therefore, are not reported in the funds. (20,307) Differences between expected and actual experiences, assumption changes and net differences between projected and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the statement of net position. Deferred outflows-pension related $ 23,438,239 Deferred outflows-OPEB related 2,024,487 Deferred inflows- pension related (4,604,103) Deferred inflows-OPEB related (3,977,120) $ 16,881,503 16,881,503 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. 712,011 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. 9,698,734 Unearned revenue associated with long-term economic development agreements are not a current financial resource and,therefore,are not reported in the funds. (6,800,000) Accrued interest payable in the governmental funds are not recognized because they are not paid within the prescribed time period after year end. (2,941,797) 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). (616,120,522) Net Position of Governmental Activities $ 805,672,439 The accompanying notes are an integral part of this financial statement. 36 37 CITY OF ROUND ROCK, TEXAS GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 2025 Round Rock Transportation and Economic Debt Development General Service Corporation Fund Fund Fund Revenues - Taxes and franchise, including interest and penalties $ 141,852,591 $ 26,249,446 $ 31,910,026 Licenses, permits and fees 3,114,238 - - Charges for services 6,148,801 - - Fines and forfeitures 1,246,705 - - Intergovernmental 3,131,025 - - Hotel occupancy tax - - - Contributions - - 17,982,356 Investment and other 9,697,574 754,827 7,599,942 Total revenues 165,190,934 27,004,273 57,492,324 Expenditures- Current- General government 34,339,295 - 4,842,909 Public safety 92,869,524 - - Public works 22,427,987 - 551,728 Culture and recreation 22,901,087 - - Debt service - Principal retirement - 21,670,000 - Interest and fiscal charges - 12,895,559 - Issuance costs - - - Capital projects - - 108,435,355 Total expenditures 172,537,893 34,565,559 113,829,992 Excess (deficiency) of revenues over expenditures (7,346,959) (7,561,286) (56,337,668) Other financing sources (uses) - Issuance of debt/leases/SBITA 10,482,035 - - Issuance of premium - - - Transfers in 7,954,300 6,882,124 26,338,854 Transfers out (10,781,500) (2,930,689) (8,077,686) Total other financing sources (uses) 7,654,835 3,951,435 18,261,168 Net change in fund balances 307,876 (3,609,851) (38,076,500) Fund balances,October 1,2024 74,200,618 5,421,856 171,686,223 Fund balances,September 30,2025 $ 74,508,494 $ 1,812,005 $ 133,609,723 The accompanying notes are an integral part of this financial statement. 38 Debt-Financed Self-Financed Other Total Capital Projects Construction Roadway Impact Governmental Governmental Fund Fund Fees Fund Funds Funds $ - $ 13,841,819 $ - $ 122,495 $ 213,976,377 - - - 821,513 3,935,751 - - - 3,423,701 9,572,502 - - - 273,725 1,520,430 - 776,440 - 10,061,138 13,968,603 - - - 16,250,961 16,250,961 - - - 4,678 17,987,034 2,056,488 1,964,602 352,906 1,429,116 23,855,455 2,056,488 16,582,861 352,906 32,387,327 301,067,113 - 616,272 - 378,580 40,177,056 - 1,423,663 - 56,675 94,349,862 - 53,343 - - 23,033,058 - 112,250 - 18,792,285 41,805,622 - - - - 21,670,000 362,944 - - - 13,258,503 514,947 - - - 514,947 70,658,151 26,581,692 - 2,489,461 208,164,659 71,536,042 28,787,220 - 21,717,001 442,973,707 (69,479,554) (12,204,359) 352,906 10,670,326 (141,906,594) 111,915,000 - - - 122,397,035 3,972,073 - - - 3,972,073 - 21,464,394 - 1,652,935 64,292,607 (24,386,100) - - (11,965,332) (58,141,307) 91,500,973 21,464,394 - (10,312,397) 132,520,408 22,021,419 9,260,035 352,906 357,929 (9,386,186) 9,429,747 51,812,417 620,695 29,568,634 342,740,190 $ 31,451,166 $ 61,072,452 $ 973,601 $ 29,926,563 $ 333,354,004 39 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, 2025 Net Change in Fund Balances-Total Governmental Funds $ (9,386,186) Amounts reported for governmental activities in the statement of activities are different because: 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/amortization expense. This is the amount by which capital outlays exceeded depreciation/amortization. They are detailed in Note III (B). 169,870,612 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). 17,578,249 Property tax revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. (50,461) The issuance of long-term debt (i.e. bonds) 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 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). (90,226,961) Governmental funds do not report recognition of increases to lease or subscription debt. In contrast,the Statement of Activities treats these as increases in long-term liabilities. (10,482,035) Governmental funds report repayment of leases and subscriptions principal as expenditures. In contrast,the Statement of Activities treats such repayments as a reduction in long-term liabilities. 4,591,921 Unearned revenue related to Kalahari project land acquisition was partially released for land rights transferred back to the City's business-type activities. The transaction is not a current financial resource and is not reported in the governmental funds. 3,792,029 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 (3,340,803) OPEB costs, net 421,969 Interest and employee expense (860,482) 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. (1,302,597) Change in Net Position of Governmental Activities $ 80,605,255 The accompanying notes are an integral part of this financial statement. 40 C- 41 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Business-Type Activities Governmental Enterprise Funds Activities Water and Wastewater Golf Course Internal Fund Fund Total Service Fund ASSETS Current assets: Cash and cash equivalents $ 53,372,976 $ 611,202 $ 53,984,178 $ 3,544,096 Investments 114,211,427 608,137 114,819,564 8,227,631 Receivables (net of allowance for uncollectibles of$1,458,807) - Accounts and other 13,086,408 45,763 13,132,171 - Accrued interest 680,005 2,116 682,121 43,962 Intergovernmental 3,149,746 - 3,149,746 - Grants 463,549 - 463,549 - Inventories 2,233,543 - 2,233,543 - Prepaid items 603,623 184,614 788,237 507,012 Total current assets 187,801,277 1,451,832 189,253,109 12,322,701 Noncurrent assets: Restricted cash,cash equivalents, and investments: Impact fees 1,915,509 - 1,915,509 - Construction 7,841,165 - 7,841,165 - Customer deposits 1,158,320 - 1,158,320 - Revenue bond covenant accounts 185,764 - 185,764 - Restricted accrued interest 38,512 - 38,512 - Notes receivable 6,800,000 - 6,800,000 - Investmentinjointventure 37,385,598 - 37,385,598 - Capital assets: Land and construction in progress 65,016,142 4,304,314 69,320,456 - Capital assets being depreciated/amortized 418,766,314 7,502,087 426,268,401 - Total capital assets (net of accumulated depreciation/amortization of$345,858,960) 483,782,456 11,806,401 495,588,857 - Total noncurrent assets 539,107,324 11,806,401 550,913,725 - Total assets 726,908,601 13,258,233 740,166,834 12,322,701 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows on refundings 2,908,467 - 2,908,467 - Deferred outflows related to pensions 3,336,938 - 3,336,938 - Deferred outflows related to OPEB 288,229 - 288,229 - Total deferred outflows of resources 6,533,634 - 6,533,634 - The accompanying notes are an integral part of this financial statement. 42 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS (CONTINUED) STATEMENT OF NET POSITION SEPTEMBER 30, 2025 Business-Type Activities Governmental Enterprise Funds Activities Water and Wastewater Golf Course Internal Fund Fund Total Service Fund LIABILITIES Current liabilities: Accounts payable $ 12,805,840 $ 97,234 $ 12,903,074 $ 1,075,572 Accrued payroll 984,358 54,362 1,038,720 - Accrued compensated absences 371,288 - 371,288 - Unearned revenue 3,404,018 167,523 3,571,541 - Accrued interest 318,159 - 318,159 - Customer deposits 1,182,070 - 1,182,070 - Interfund payable - 436,022 436,022 - Lease payable - 174,016 174,016 - Net pension liability 389,654 - 389,654 - Total OPEB liability 129,262 - 129,262 - Bonds payable 4,376,408 - 4,376,408 - Total current liabilities 23,961,057 929,157 24,890,214 1,075,572 Noncurrent liabilities: Net pension liability 7,403,423 - 7,403,423 - Total OPEB liability 2,455,986 - 2,455,986 - Noncurrent accrued compensated absences 2,041,112 - 2,041,112 - Lease payable - 328,978 328,978 - Bonds payable 52,090,939 - 52,090,939 - Total noncurrent liabilities 63,991,460 328,978 64,320,438 - Totalliabilities 87,952,517 1,258,135 89,210,652 1,075,572 DEFERRED INFLOWS OF RESOURCES Deferred inflows related to pensions 655,494 - 655,494 - Deferred inflows related to OPEB 566,227 - 566,227 - Total deferred inflows of resources 1,221,721 - 1,221,721 - NET POSITION Net investment in capital assets 430,223,576 11,303,407 441,526,983 - Restricted for: Debt service 185,764 - 185,764 - Capital projects 9,795,186 - 9,795,186 - Unrestricted 204,063,471 696,691 204,760,162 11,247,129 Total net position $ 644,267,997 $ 12,000,098 656,268,095 $ 11,247,129 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. 1,548,395 Net position of business-type activities $ 657,816,490 43 CITY OF ROUND ROCK, TEXAS PROPRIETARY FUNDS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION YEAR ENDED SEPTEMBER 30, 2025 Business-Type Activities Governmental Enterprise Funds Activities Water and Wastewater Golf Course Internal Fund Fund Total Service Fund Operating revenues- Charges for services $ 65,460,046 $ 4,675,666 $ 70,135,712 $ 19,973,484 Licenses, permits, and fees 7,832,616 - 7,832,616 - Total revenues 73,292,662 4,675,666 77,968,328 19,973,484 Operating expenses- Personnel services 19,201,634 - 19,201,634 - Contractual services 25,621,177 3,746,186 29,367,363 3,996,986 Supplies 2,141,878 - 2,141,878 55 Repair and maintenance 1,808,038 - 1,808,038 358 Heat, light and power 2,847,327 62,659 2,909,986 9,585 Claims expense - - - 18,455,165 Depreciation and amortization 27,704,799 788,540 28,493,339 - Total operating expenses 79,324,853 4,597,385 83,922,238 22,462,149 Operating income (loss) (6,032,191) 78,281 (5,953,910) (2,488,665) Nonoperating revenues(expenses) - Investment and other revenues 21,895,674 29,919 21,925,593 946,111 Interest and fiscal charges (1,994,731) (35,969) (2,030,700) - Total nonoperating revenues (expenses) 19,900,943 (6,050) 19,894,893 946,111 Income before contributions and transfers 13,868,752 72,231 13,940,983 (1,542,554) Contributions and transfers- Contributions -impact fees 4,868,184 - 4,868,184 - Contributions -infrastructure 34,216,696 - 34,216,696 - Contributions -other 1,612,238 183,216 1,795,454 - Transfers out (6,151,300) - (6,151,300) - Total contributions and transfers 34,545,818 183,216 34,729,034 - Change in net position 48,414,570 255,447 48,670,017 (1,542,554) Net position,October 1,2024 597,175,911 11,744,651 12,789,683 Restatement (1,322,484) - - Net position,October 1,2024,as restated 595,853,427 11,744,651 12,789,683 Net position, September 30, 2025 $ 644,267,997 $ 12,000,098 $ 11,247,129 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 (239,957) Change in net position of business-type activities $ 48,430,060 The accompanying notes are an integral part of this financial statement. 44 C- 45 CITY OF ROUND ROCK,TEXAS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS YEAR ENDED SEPTEMBER 30, 2025 Business-Type Activities- Governmental Enterprise Funds Activities Water and Wastewater Golf Course Internal Fund Fund Total Service Fund Cash flows from operating activities: Cash received from customers $ 66,880,166 $ 4,744,043 $ 71,624,209 $ 2,110,128 Cash received from other funds for services provided - - - 17,893,991 Cash payments to suppliers for goods and services (29,898,402) (4,030,437) (33,928,839) (22,603,231) Cash payments to employees for services (18,466,451) - (18,466,451) Net cash provided (used) by operating activities 18,515,313 713,606 19,228,919 (2,599,112) Cash flows from noncapital financing activities: Transfers to other funds (6,151,300) - (6,151,300) - Net cash provided (used) by noncapital financing activities (6,151,300) - (6,151,300) - Cash flows from capital and related financing activities: Proceeds from sale of capital assets 181,324 - 181,324 - Acquisition and construction of capital assets (37,801,058) (389,243) (38,190,301) - Investmentinjointventure (11,176,463) - (11,176,463) - Principal paid on revenue bonds (4,191,408) - (4,191,408) - Interest paid on revenue,certificates of obligation bonds, and leases (2,025,294) (35,969) (2,061,263) - Contributions and grant proceeds 17,442,952 - 17,442,952 - Impact fees 4,868,184 - 4,868,184 - Net cash provided (used) by capital and related financing activities (32,701,763) (425,212) (33,126,975) - Cash flows from investing activities: Purchase of investments - (288,423) (288,423) - Proceeds from sale and maturities of investments 14,810,781 - 14,810,781 2,202,921 Investment and other income 9,180,903 30,512 9,211,415 967,990 Net cash provided (used) by investing activities 23,991,684 (257,911) 23,733,773 3,170,911 Net increase (decrease) in cash and cash equivalents 3,653,934 30,483 3,684,417 571,799 Cash and cash equivalents at beginning of year 54,000,552 580,719 54,581,271 2,972,297 Cash and cash equivalents at end of year $ 57,654,486 $ 611,202 $ 58,265,688 $ 3,544,096 46 CITY OF ROUND ROCK,TEXAS PROPRIETARY FUNDS STATEMENT OF CASH FLOWS (CONTINUED) YEAR ENDED SEPTEMBER 30, 2025 Business-Type Activities- Governmental Enterprise Funds Activities Water and Wastewater Golf Course Internal Fund Fund Total Service Fund Reconciliation of Cash and Cash Equivalents to Proprietary Fund Statement of Net Position Cash and cash equivalents $ 53,372,976 $ 611,202 $ 53,984,178 $ 3,544,096 Restricted assets - Cash and cash equivalents 4,281,510 - 4,281,510 - Cash and cash equivalents $ 57,654,486 $ 611,202 $ 58,265,688 $ 3,544,096 Reconciliation of operating income (loss) to net cash provided (used) by operating activities Operating income (loss) $ (6,032,191) $ 78,281 $ (5,953,910) $ (2,488,665) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities: Depreciation&amortization 27,704,799 788,540 28,493,339 - Provision for bad debts 171,642 - 171,642 - Joint venture loss 4,519,051 - 4,519,051 - (Increase) decrease in: Receivables (1,141,557) 32,625 (1,108,932) 30,635 Inventory (1,287,499) - (1,287,499) - Other assets (132,452) 10,960 (121,492) 2,000 Pension related deferred outflows 496,051 - 496,051 - OPEB related deferred outflows (76,454) - (76,454) - Increase (decrease) in: Accounts payable (579,083) (232,552) (811,635) (143,082) Customer deposits (33,877) - (33,877) - Accrued payroll 74,470 - 74,470 - Unearned Revenue (5,408,703) 35,752 (5,372,951) - Pension related deferred inflows 655,494 - 655,494 - OPEB related deferred inflows (93,597) - (93,597) - Net pension liability (542,591) - (542,591) - Total OPEB liability 221,810 - 221,810 - Total adjustments 24,547,504 635,325 25,182,829 (110,447) Net cash provided (used) by operations $ 18,515,313 $ 713,606 $ 19,228,919 $ (2,599,112) NOTES: Noncash capital and related financing activities: In fiscal year 2025,the Water and Wastewater Fund had $34,216,696 in capital assets contributed, recognized a change of$33,353 in fair value of investments,and a change of $(4,519,051) injoint venture net position. 47 C- 48 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Round Rock,Texas (the City) is a municipal corporation incorporated under Article A Section 5 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, a transportation system, and a waterworks and wastewater 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) is a blended component unit presented as a major special revenue fund of the City and does not issue separate financial statements. The governing body of the RRTEDC consists of a seven-member board appointed by the City Council. The blended component unit provides services entirely to the City for financial and economic benefits. The purpose of the RRTEDC is to utilize sales tax revenues for economic development by the improvement of the City's transportation system and payment of economic development incentives, covered under local government code. The City Council maintains budgetary control for the RRTEDC. 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 bi-annually 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. 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, the Round Rock Transportation and Economic Development Corporation Fund, and the Roadway Impact Fees Fund with their actual results. 49 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 and amortization 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 governmental and proprietary categories. GASB Statement No. 34 sets forth minimum criteria for the determination of major funds (i.e., funds whose revenues, expenditures/expenses, assets, or liabilities are at least 10% of corresponding totals for all governmental or enterprise funds and at least 5% of the aggregate amount for all governmental and enterprise 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, Self-Financed Construction Fund, and the Roadway Impact Fees Fund. The nonmajor funds are combined in a separate column in the fund 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.). 50 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 nine (9) 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 Funds • Round Rock Transportation and Economic Development Corporation Fund • Roadway Impact Fees Fund Nonmajor Funds • Community Development Block Grant Fund • Hotel-Motel Occupancy Tax Fund • Hotel-Motel Occupancy Venue Tax Fund • Innovation&Development Fund • Library&Recreational Fund • 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 transportation system improvements, including maintenance and capital costs associated with such authorized projects. The Roadway Impact Fees Fund is considered a major fund in the fund financial statements. It accounts for fees collected from developers to pay their share of roadway improvements necessitated by and attributed to such new development. 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: 51 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Major Funds • Debt-Financed Capital Projects Fund 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. • Self-Financed Construction Fund The Self-Financed Construction Fund accounts for the costs of authorized general capital improvements and facilities. Financing is provided by general government resources, such as sales tax. To reduce reliance on any single sales tax provider or group, all are limited not to exceed 15%of total General Fund budgeted sales tax revenue, net of incentives. Sales tax receipts, net of incentives, in excess of these amounts will be budgeted and deposited in the Self-Financed Construction Fund. Secondly, expected or realized sales tax total revenue in the General Fund exceeding 45% of the operating budget will be recognized in the Self-Financed Construction Fund. All funds in the Self-Financed Construction Fund are available for pay-as-you-go one-time capital expenditures or projects. 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 both Enterprise Funds and an Internal Service Fund. 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 Wastewater Fund, which includes the City's stormwater program, and the Golf Course Fund. These funds are primarily supported by user charges.The Water and Wastewater Fund is considered a major fund. 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. 52 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 grantor/provider have been met. Fund Financial Statement 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. 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, but are not included in the budget basis. The fair value change is reported as a separate impact on fund balance below the net change in fund balance. 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. 53 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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-term debt which are recognized when paid. Allocations of costs, such as depreciation and 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 Wastewater 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/amortization 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, and other investments 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. I. INVENTORIES AND PREPAID ITEMS Inventories of supplies for all funds are valued at cost. Cost is determined on the first-in, first-out method. The consumption method is used to account for inventories. Under the consumption method, an expenditure is recognized when inventory items are used. 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. The consumption method is used to account for prepaids such as postage,while equipment is recognized as an expenditure when the equipment is placed in service 54 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 J. JOINT VENTURE The 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, except for intangible right-to-use lease equipment and right-to-use subscriptions. 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 $5,000 and greater for machinery and equipment with a useful life of at least five (5) years and $50,000 and greater with a useful life of at least ten (10) years for other asset categories. Donated capital assets, donated works of art, and similar items are reported at acquisition value rather than fair value. Intangible assets follow the same capitalization policies as tangible capital assets and are reported with tangible assets in the appropriate capital asset class. 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 and amortization of plant, equipment, and the right-to-use lease equipment and right-to-use subscriptions 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 10 years Improvements other than buildings 10-30 years Machinery and equipment 5- 7 years Right-to-use lease equipment Contract term Right-to-use subscriptions Subscription term When capital assets are retired or otherwise disposed of,a gain or loss on disposal of assets is recognized. 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 and amortization is only recognized for the Enterprise Funds. L. LONG-TERM DEBT In the government-wide financial statements, as well as the 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 refunding 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 55 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuance 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. A loan from the State Infrastructure Bank has been received to fund transportation improvements. The loan will be repaid from revenues of the Round Rock Transportation and Economic Development Corporation. Hotel Occupancy Tax Revenue Bonds were issued to fund the City's portion for 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 revenue. Revenue bonds, 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 and Conventions. The bonds are to be repaid from sales tax,venue tax and ad valorem tax generated by Kalahari Resorts and Conventions. Principal and interest expenditures on lease and subscription liabilities are recognized based on specific accounting rules applicable when payment is due. General capital asset acquisitions, including entering into contracts giving the City right-to-use lease equipment and subscriptions, are reported as expenditures while issuance of financing through leases and subscriptions are reported as other financing sources in governmental funds. M. ACCRUED BENEFIT OBLIGATIONS Compensated Absences The City recognizes a leave liability once an employee has completed the service required to earn that leave which can be paid, used, or otherwise settled in a future reporting period, provided the following criteria are met: • The City's obligation to fund accumulated vacation, sick, and personal leave benefits 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. 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. 56 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Public Service employees with unused sick leave accrued after January 1, 1994,with ten (10) years service and a current sick leave balance of at least four hundred (400) hours, will receive a lump sum payment equal to ten (10) percent of their remaining sick leave balance up to 100 hours upon voluntary separation of employment based on their current rank. Civil Service firefighters who leave the classified service are entitled to receive a lump-sum payment for accumulated sick leave not to exceed ninety(90) days (or 1,080 hours) based on their current rank. A liability for the estimated value of leaves that will be used by employees as time off is included in the liability for compensated absences. Upon termination, all applicable leave balances are paid based on the rate of pay at the time of separation. 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, Hotel-Motel Occupancy Tax,and Hotel-Motel Occupancy Venue Tax. 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 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/amortization, outstanding balances of capital-related borrowings, and capital-related deferred outflows (inflows) of resources. Net position classified as restricted is 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. 57 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 legally or contractually 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. 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 and capital projects in the special revenue funds and for capital projects in the Self-Financed Construction Fund. Assigned fund balance — Assigned fund balances are amounts that are subject to a purpose constraint that represents an intended use but are neither restricted nor committed. Assignments are made by City Council or the City Manager as defined in the Financial Policies of the City. 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 those 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 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 operating 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 assets 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: 58 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 • 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. • 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 assets 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 wastewater 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 wastewater 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 and a revised ordinance in November 2023. 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 were charged effective January 1, 2021. There are four phases in the roadway impact fee schedule. Phase 1 of the roadway impact fees are for final plat dates prior to January 1, 2023; phase 2 is for final plat dates between January 1, 2023, and December 31, 2023; phase 3 is for final plat dates between January 1, 2024, and December 31, 2024; and phase 4 is for final plat dates on or after January 1,2025. 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 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. 59 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, Hotel-Motel Occupancy Tax, and Hotel-Motel Occupancy Venue Tax. V. NEW AND FUTURE FINANCIAL REPORTING REQUIREMENTS The GASB has issued the following statements which became effective for fiscal year 2025, and have been implemented: GASB Statement No. 101, "Compensated Absences"- The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences.That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences. See Note V(G) for restatement. GASB Statement No 102, "Certain Risk Disclosures"- The objective of this statement is to provide users of government financial statement with essential information about risk related to a government's vulnerabilities due to certain concentrations or constraints, whether by an external party or formal authoritative action by the government. A government is to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. The GASB has issued the following statements which will become effective for fiscal year 2026: GASB Statement No. 103, "Financial Reporting Model Improvements"- The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government's accountability. This Statement also addresses certain application issues related to Management's Discussion and Analysis, unusual or infrequent items, Net Position of proprietary funds, Major Component Unit Information, and Budgetary Comparison Information. GASB Statement 104, "Disclosure of Certain Capital Assets"-The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets separately in the capital assets note disclosures required by Statement 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments. This Statement specifically addresses assets recognized by Statement No. 87, Leases, Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, Statement No. 96, Subscription-Based Information Technology. 60 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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) Fair value adjustments related to investments are not included in the budgetary basis due to the non-cash nature of those changes. (6) 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. (7) 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. (8) Any appropriation balances lapse or revert to the undesignated fund balances at the close of each fiscal year. 61 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 The budgets of the various funds are prepared on a basis consistent with generally accepted accounting principles, with one exception as described above. The table below compares original to final budgets for the General Fund. Amendments Original Increase Final Budget (Decrease) Budget Revenues - Taxes and franchise, including interest and penalties $ 141,412,400 $ - $ 141,412,400 Licenses, permits and fees 2,859,900 - 2,859,900 Charges for services 5,540,300 - 5,540,300 Fines and forfeitures 1,066,000 - 1,066,000 Intergovernmental 2,481,200 347,874 2,829,074 Investment and other 7,913,100 - 7,913,100 Total revenues 161,272,900 347,874 161,620,774 Expenditures- Current- General government 36,321,600 (1,478,276) 34,843,324 Public safety 84,602,500 1,341,373 85,943,873 Public works 24,068,000 217,261 24,285,261 Culture and recreation 24,177,700 267,517 24,445,217 Total expenditures 169,169,800 347,875 169,517,675 Excess (deficiency) of revenues over expenditures (7,896,900) (1) (7,896,901) Other financing sources (uses) - Transfers in 7,954,300 - 7,954,300 Transfers out - (10,500,000) (10,500,000) Total other financing sources (uses) 7,954,300 (10,500,000) (2,545,700) Net change in fund balances $ 57,400 $ (10,500,001) $ (10,442,601) 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, 2025, 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 below: Major Funds Round Rock Transportation and Economic Development Corporation Fund $ 106,287,000 Self-Financed Construction Fund 8,547,000 Debt-Financed Capital Projects Fund 42,893,000 Nonmajor Funds Special revenue funds $ 307,000 62 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, certificates, and limited tax notes payable - public placement $ 435,505,000 Plus: Issuance premium (amortized against interest expense) 20,397,925 Less: Issuance discount(amortized against interest expense) (8,375) Bonds, certificates, and limited tax notes payable - private placement 23,555,000 State infrastructure bank loan 27,000,000 Excess sales tax payable 4,186,643 Lease payable 2,901,744 Subscriptions payable 8,606,648 Net pension liability 54,737,602 Compensated absences 21,079,880 Total OPEB liability 18,158,455 Net adjustment to reduce fund balance -total governmental funds to arrive at net position -governmental activities $ 616,120,522 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/amortization expense.The details of this difference are as follows: Capital outlay $ 220,521,895 Depreciation/amortization expense (50,651,283) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 169,870,612 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 $ 21,515,235 Reclassifications,disposals, and transfers (3,936,986) Net adjustment to increase net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ 17,578,249 63 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Another element of the reconciliation states that "The issuance of long-term debt (i.e., bonds, leases and subscriptions) 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." Lastly, expenses related to accrued interest and amortization of premiums, discounts, and deferred gains/losses on refunding transactions are reported in the statement of activities, but do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. The details of this difference are as follows: Debt proceeds - public placement $ (111,915,000) Bond premium on issuance (3,972,073) Debt payments - public placement 18,350,000 Debt payments - private placement 3,320,000 Sales tax liability payments 2,438,040 Amortization of bond premium/discounts 1,707,513 Amortization of deferred amount on refunding (155,441) Net adjustment to decrease net changes in fund balances - total governmental funds to arrive at changes in net position of governmental activities $ (90,226,961) 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 as follows: Decrease in net pension liability $ 7,059,795 Decrease in deferred outflows related to pensions (6,463,606) Increase in deferred inflows related to pensions (3,936,992) Net adjustment to decrease net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ (3,340,803) Increase in total OPEB liability $ (776,408) Increase in deferred outflows related to OPEB 428,489 Decrease in deferred inflows related to OPEB 769,888 Net adjustment to decrease net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ 421,969 Change in compensated absences $ (44,576) Change in accrued interest (815,906) Net adjustment to increase net changes in fund balances -total governmental funds to arrive at changes in net position of governmental activities $ (860,482) 64 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 IV. DETAILED NOTES ON ALL FUNDS A. CASH AND INVESTMENTS Cash and investments at September 30, 2025, reconciled to the statement of net position amounts for cash and cash equivalents and investments is as follows: Cash in banks $ 89,399,029 Investments 459,489,995 Total cash and investments $ 548,889,024 Statement of net position presentation: Cash and cash equivalents $ 109,862,189 Investments 243,332,284 Restricted assets - Cash and cash equivalents 91,486,389 Investments 104,208,162 Total cash and cash equivalents and investments $ 548,889,024 At September 30,2025,the carrying amount of deposits was a debit balance of$89,399,029. including $1,257,610 net of deposits in transit and outstanding checks, meaning the respective bank balances totaled $90,656,639.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 $ 188,422,381 $ 188,422,381 184 Certificates of Deposit 159,118,068 159,118,068 312 State Investment Pools 111,949,546 111,949,546 44 $ 459,489,995 $ 459,489,995 Portfolio weighted average maturity 194 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, 2025, the City has the recurring fair value measurements for U.S. Government securities of $188,422,381 valued using quoted prices for similar assets in active markets (level 2 inputs). 65 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, (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, the 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 30,2025,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, 2025,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 2025 were in the aforementioned categories. 66 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Local Government Investment Pools As of September 30, 2025, the City's investments included TexPool, TexSTAR, and Texas Range TexasDAILY and TexasDAILY Select 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 $103,218,880 invested in TexPool, $232,692 invested in TexSTAR, $5,834,942 in TexasDAILY Select, and $2,663,032 in TexasDAILY at September 30, 2025. 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. TexSTAR is currently rated AAAm by S&P Global.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 and TexasDAILY Select of the Texas Range Investment Program (Program).Texas Range Investment Program was established by the Common Investment Contract in conformity with Chapters 791 (Interlocal Cooperation Act) and 2256 (PFIA) of the Texas Government Code. An elected Advisory Board is responsible for the overall management of the Program, including formation and implementation of its investment and operating policies. The Program's investment advisor and administrator is PFM Asset Management, LLC. TexasDAILY is a money market portfolio with daily liquidity that is rated AAAmmf by Fitch. 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. TexasDAILY Select invests in the full range of PFIA permitted investments and is rated AAAmmf by Fitch. TexasDAILY Select's investment objectives are to earn the highest income consistent with preserving principal and maintaining liquidity,and to maintain a stable NAV of$1.00 per share. 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. 67 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 B. PROPERTY TAXES AND RECEIVABLE 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 2024 tax roll. The tax rate, based on total taxable assessed valuation of $25,298,237,554 was $0.360000 on each $100 valuation and was allocated to the General Fund and Debt Service Fund at $0.254602 and $0.105398, respectively. Property taxes receivable as of September 30,2025,were as follows: General Debt Service Fund Fund Total Current year levy $ 161,864 $ 79,724 $ 241,588 Prior years' levies 294,665 182,950 477,615 456,529 262,674 719,203 Less - allowance for uncollectible taxes (4,565) (4,024) (8,589) $ 451,964 $ 258,650 $ 710,614 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, 2025,were as follows: Receivable Fund Payable Fund Receivable Payable Debt Service Fund General Fund $ 5,497 $ 5,497 Self-Financed Construction Fund 436,022 - Total Governmental Funds 441,519 5,497 Golf Course Fund - 436,022 Total Proprietary Funds - 436,022 Totallnterfund $ 441,519 $ 441,519 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 many of its funds. These routine transfers are consistent with the activities of the funds. 68 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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. In 2025, the RRTEDC Fund received $24.4 million transferred from the Debt-Financed Capital Project Fund for eligible capital road project costs and $1.9 million from the Debt Service Fund for release of sinking fund deposit on debt paid off. The Self Financed Construction Fund received $5.8 million from the RRTEDC Fund and $4.9 million from the Hotel-Motel Occupancy Tax Fund for the Griffith Building Remodel and Paseo project.The Fund also received $10.8 million from the General Fund for excess sales tax revenue and rolling encumbrances. The General Fund received $6.2 million from the Water and Wastewater Fund, and $1.6 million from the RRTEDC Fund for administrative support costs.A summary of transfers between funds is shown on the following page. 69 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Transfers In Transfers Out Governmental Funds General Fund - Water and Wastewater Fund $ 6,151,300 $ - Self-Financed Construction Fund - 10,781,500 RRTEDC Fund 1,603,000 - Nonmajor Governmental Funds 200,000 - 7,954,300 10,781,500 Debt Service Fund - RRTEDC Fund 653,200 1,952,754 Nonmajor Governmental Funds 6,228,924 977,935 6,882,124 2,930,689 RRTEDC Fund - General Fund - 1,603,000 Debt Service Fund 1,952,754 653,200 Debt-Financed Capital Projects Fund 24,386,100 - Self-Financed Construction Fund - 5,821,486 26,338,854 8,077,686 Debt-Financed Capital Projects Fund - RRTEDC Fund - 24,386,100 - 24,386,100 Self-Financed Construction Fund - General Fund 10,781,500 - RRTEDC Fund 5,821,486 - Nonmajor Governmental Funds 4,861,408 - 21,464,394 - Other Governmental Funds - General Fund - 200,000 Debt Service Fund - 6,228,924 Self-Financed Construction Fund - 4,861,408 Nonmajor Governmental Funds 1,652,935 675,000 1,652,935 11,965,332 Subtotal of Governmental Funds 64,292,607 58,141,307 Proprietary Funds Water and Wastewater Fund - General Fund - 6,151,300 Subtotal of Proprietary Funds - 6,151,300 Total Transfers $ 64,292,607 $ 64,292,607 70 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 D. JOINT VENTURE The 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 30,2025 Total City's Interest ASSETS Cash and cash equivalents $ 4,078,156 $ 1,764,763 Accounts receivable 20,900 6,918 Due from partner cities 1,120,712 261,052 Restricted investments 153,799,892 42,970,986 Capital assets 353,608,375 109,666,706 Total assets 512,628,035 154,670,425 DEFERRED OUTFLOWS OF RESOURCES 9,589,145 3,736,604 LIABILITIES Accounts payable 5,906,271 1,436,332 Retainage payable 7,746,257 2,167,213 Due to partner cities 1,820,425 1,151,511 Current portion of bonds payable 16,765,000 4,690,000 Accrued bond interest payable 1,928,832 649,536 Total current liabilities 34,166,785 10,094,592 Noncurrent portion of bonds payable 377,538,783 110,926,839 Total liabilities 411,705,568 121,021,431 NET POSITION $ 110,511,612 $ 37,385,598 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION For the Year Ended September 30, 2025 Total City's Interest Operating revenues $ 5,768,861 $ 1,996,725 Interest expense (11,684,702) (3,825,411) Other operating expenses (15,756,807) (4,884,081) Other income (expense) 10,339,330 2,193,716 Changes in Net Position (11,333,318) (4,519,051) Net position, October 1, 2024 88,587,268 30,728,186 Contribution of capital, net 33,257,662 11,176,463 Net position, September 30,2025 $ 110,511,612 $ 37,385,598 71 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 E. CAPITAL ASSETS Capital asset activity for the year ended September 30, 2025,was as follows: October 1, Additions/ Retirements/ September 30, 2024 Completions Adjustments 2025 Governmental Activities: Capital assets not being depreciated/amortized: Land $ 136,538,377 $ 5,411,186 $ (3,792,029) $ 138,157,534 Construction in progress 113,597,033 200,610,314 (86,283,787) 227,923,560 Total capital assets not being depreciated/ amortized 250,135,410 206,021,500 (90,075,816) 366,081,094 Capital assets being depreciated/amortized: Buildings and improvements 1,151,006,940 99,304,850 (953,026) 1,249,358,764 Equipment 111,298,884 12,512,532 (4,878,339) 118,933,077 Right-to-use lease equipment 773,487 3,630,413 4,403,900 Right-to-use subscription assets 9,364,531 6,851,622 (435,313) 15,780,840 Total capital assets being depreciated/ amortized 1,272,443,842 122,299,417 (6,266,678) 1,388,476,581 Less accumulated depreciation/amortization for: Buildings and improvements 550,162,426 37,193,630 (862,087) 586,493,969 Equipment 84,999,507 9,240,666 (4,824,321) 89,415,852 Right-to-use lease equipment 476,687 875,113 1,351,800 Right-to-use subscription assets 3,480,680 3,341,874 (435,313) 6,387,241 Total accumulated depreciation/amortization 639,119,300 50,651,283 (6,121,721) 683,648,862 Total capital assets being depreciated/ amortized, net 633,324,542 71,648,134 (144,957) 704,827,719 Governmental activities capital assets,net $ 883,459,952 $ 277,669,634 $ (90,220,773) $ 1,070,908,813 Business-Type Activities: Capital assets not being depreciated/amortized: Land $ 9,522,886 $ 3,792,029 $ - $ 13,314,915 Construction in progress 30,280,884 43,365,809 (17,641,152) 56,005,541 Total capital assets not being depreciated/ amortized 39,803,770 47,157,838 (17,641,152) 69,320,456 Capital assets being depreciated/amortized: Buildings and improvements 703,554,977 45,242,414 748,797,391 Equipment 21,818,530 1,870,923 (1,061,540) 22,627,913 Right-to-use lease equipment 496,441 205,616 702,057 Total capital assets being depreciated/ amortized 725,869,948 47,318,953 (1,061,540) 772,127,361 Less accumulated depreciation/amortization for: Building and improvements 302,986,360 26,016,471 329,002,831 Equipment 15,151,042 2,213,597 (818,323) 16,546,316 Right-to-use lease equipment 46,542 263,271 309,813 Total accumulated depreciation/amortization 318,183,944 28,493,339 (818,323) 345,858,960 Total capital assets being depreciated/ amortized, net 407,686,004 18,825,614 (243,217) 426,268,401 Business-type activities capital assets,net $ 447,489,774 $ 65,983,452 $ (17,884,369) $ 495,588,857 72 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Depreciation/amortization expense was charged to functions/programs of the primary government as follows: Governmental Activities: General government $ 6,002,976 Public safety 7,666,589 Public works 27,817,878 Culture and recreation 9,163,840 Total depreciation/amortization expense -governmental activities $ 50,651,283 Business-Type Activities: Water and wastewater utility $ 27,704,799 Golf course 788,540 Total depreciation/amortization expense - business-type activities $ 28,493,339 Net Investment in Capital Assets Detailed reconciliation of net investment in capital assets on the government-wide Statement of Net Position for September 30, 2025,follows: Governmental Business-Type Activities Activities Total Net investment in capital assets: Total capital assets (net of accumulated depreciation/amortization) $ 1,070,908,813 $ 495,588,857 $ 1,566,497,670 Plus capital-related deferred outflows/(inflows) of resources (20,307) 2,908,467 2,888,160 Less capital-related long-term debt (517,957,942) (56,970,341) (574,928,283) Plus unspent bond proceeds 29,927,514 - 29,927,514 Net investment in capital assets (net of related debt) $ 582,858,078 $ 441,526,983 $ 1,024,385,061 73 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, 2025: Balance Balance October 1, Refundings/ September 30, Due within 2024,Restated Additions Retirements 2025 one year Governmental Activities Public Placement General obligation bonds $ 157,755,000 $ 87,520,000 $ (8,670,000) $ 236,605,000 $ 11,065,000 Certificates of obligation 131,120,000 19,620,000 (4,970,000) 145,770,000 4,495,000 Limited tax notes 9,960,000 4,775,000 (2,005,000) 12,730,000 2,840,000 Hotel tax revenue bonds 6,040,000 - (705,000) 5,335,000 320,000 Sales tax revenue bonds 37,065,000 - (2,000,000) 35,065,000 2,040,000 Plus deferred amount: For issuance premium 18,141,738 3,972,073 (1,715,886) 20,397,925 2,193,430 For issuance discount (16,748) - 8,373 (8,375) (8,375) Total Public Placement 360,064,990 115,887,073 (20,057,513) 455,894,550 22,945,055 Private Placement General obligation bonds 1,115,000 - (370,000) 745,000 370,000 Certificates of obligation 24,835,000 (2,025,000) 22,810,000 3,045,000 Limited tax notes 925,000 (925,000) - - Total Private Placement 26,875,000 (3,320,000) 23,555,000 3,415,000 State Infrastructure Bank Loan 27,000,000 27,000,000 1,340,000 Excess sales tax liability 6,624,683 - (2,438,040) 4,186,643 2,438,040 Leases 297,692 3,630,413 (1,026,361) 2,901,744 894,942 Subscriptions 5,320,586 6,851,622 (3,565,560) 8,606,648 2,936,007 Compensated absences' 21,035,304 43,873 21,079,177 3,305,618 Total governmental activities 447,218,255 126,412,981 (30,407,474) 543,223,762 37,274,662 Business-Type Activities Public Placement Revenue bonds 56,175,000 - (3,860,000) 52,315,000 4,045,000 Plus deferred amount: For issuance premium 4,483,755 (331,408) 4,152,347 331,408 Total Public Placement 60,658,755 - (4,191,408) 56,467,347 4,376,408 Leases 466,955 205,616 (169,577) 502,994 174,016 Compensated absences' 2,413,103 - (703) 2,412,400 371,288 Total business-type activities 63,538,813 205,616 (4,361,688) 59,382,741 4,921,712 Total primary government $ 510,757,068 $ 126,618,597 $ (34,769,162) $ 602,606,503 $ 42,196,374 1 Balance October 1,2024, has been restated in accordance with GASB 101. The change in compensated absences liability is presented as a net change. 74 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Long-term debt at September 30, 2025,is comprised of the following: Business- Governmental Governmental Type Activities Activities Activities Public Private Public Placement Placement Placement General Obligation Bonds: $66,885,000 2014 GO bonds due in annual installments of$-0-to$4,790,000 through 2039;interest at 3.0%to 5.0% $ 2,675,000 $ $ $6,995,000 2016 refunding bonds due in annual installments of$-0-to$1,755,000 through 2032;interest at 2.0%to 4.0% 2,250,000 $28,585,000 2017 GO bonds due in annual installments of$-0-to$1,945,000 through 2042;interest at 3.0%to 5.0% 24,305,000 $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% 3,465,000 $6,980,000 2020 refunding bonds due in annual installments of$375,000 to$2,005,000 through 2027;interest at 1.21% - 745,000 $79,860,000 2022 Refunding bonds due in annual installments of$190,000 to$6,705,000 through 2039;interest at 1.16%to 2.97% 77,430,000 - $20,985,000 2022 GO bonds due in annual installments of$280,000 to$1,310,000 through 2047;interest at 3.63%to 5.0% 19,690,000 $19,495,000 2024 GO bonds due in annual installments of$225,000 to$1,260,000 through 2049;interest at 4.0%to 5.0% 19,270,000 $87,520,000 2025 GO bonds due in annual installments of$930,000 to$5,840,000 through 2050;interest at 4.25%to 5.0% 87,520,000 - Total General Obligation Bonds 236,605,000 745,000 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% 3,580,000 $6,915,000 2018 Combination tax and limited revenue certificates of obligation due in installments of$-0-to$510,000 through 2038;interest at 3.0%to 5.0% 5,450,000 $27,250,000 2019 Combination tax and revenue certificates of obligation due in installments of$-0-to$1,740,000 through 2044;interest at 2.0%to 5.0% 23,550,000 - $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% - 22,810,000 $27,460,000 2021A Combination tax and limited revenue certificates of obligation due in installments of $-0-to$1,510,000 through 2046;interest at 2.0%to 5.0% 12,080,000 - $13,745,000 2021 B Combination tax and limited revenue certificates of obligation due in installments of$-0-to$740,000 through 2046;interest at 2.0%to 5.0% 12,135,000 $13,810,000 2021C Combination tax and limited revenue certificates of obligation due in installments of$-0-to$715,000 through 2046;interest at 2.0%to 4.0% 25,165,000 $26,570,000 2022 Combination tax and limited revenue certificates of obligation due in installments of$350,000 to$1,675,000 through 2047;interest at 4.0%to 5.0% 24,940,000 75 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Business- Governmental Governmental Type Activities Activities Activities Public Private Public Placement Placement Placement Certificates of Obligation,continued: $19,475,000 2024 Combination tax and limited revenue certificates of obligation due in installments of$225,000 to$1,255,000 through 2049;interest at 4.0%to 5.0% $ 19,250,000 $ $ $19,620,000 2025 Combination tax and limited revenue certificates of obligations due in installments of$210,000 to$1,305,000 through 2050;interest at 4.375%to 5.0% 19,620,000 Total Certificates of Obligation 145,770,000 22,810,000 Limited Tax Notes: $2,770,000 2021 Limited tax notes due in annual installments of $495,000 to$605,000 through 2026;interest at 2.0%to 4.0% 605,000 - $1,900,000 2022 Limited tax notes due in annual installments of $325,000 to$425,000 through 2027;interest at 5.0% 825,000 $7,565,000 2024 Limited tax notes due in annual installments of $1,040,000 to$1,435,000 through 2030;interest at 5.0% 6,525,000 $4,775,000 2025 Limited tax notes due in annual installments of $655,000 to$905,000 through 2031;interest at 5.0% 4,775,000 Total Limited Tax Notes 12,730,000 Hotel Tax Revenue Bonds: $5,560,000 2021 refunding bonds due in annual installments of$75,000 to$515,000 through 2037;interest at 4.0% 5,335,000 - - Total Hotel Tax Revenue Bonds 5,335,000 Sales Tax Revenue Bonds: $21,310,000 2019 taxable bonds due in annual installments of$-0- to$1.22 million through 2044;interest at 2.15%to 3.68% 17,055,000 $20,695,000 2021 taxable bonds due in annual installments of$-0-to$1,010,000 through 2046;interest at 0.45%to 3.25% 18,010,000 Total Sales Tax Revenue Bonds 35,065,000 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% - 4,465,000 $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% 31,060,000 $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% 16,790,000 Total Utility System Revenue Bonds - 52,315,000 Issuance premium 20,397,925 4,152,347 Issuance discount (8,375) - - Total public and private placement debt $ 455,894,550 $ 23,555,000 $ 56,467,347 76 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 The annual requirements to amortize bonds, certificates of obligation, limited tax notes, loan and notes payable debt at September 30, 2025,including interest, are as follows: Governmental Activities: Year Ending General Obligation Bonds and Certificates of Obligation Sept. 30, Public Placement Private Placement Principal Interest Total Principal Interest Total 2026 $ 15,560,000 $ 15,937,254 $ 31,497,254 $ 3,415,000 $ 421,876 $ 3,836,876 2027 17,345,000 14,136,770 31,481,770 3,490,000 362,284 3,852,284 2028 15,755,000 13,487,765 29,242,765 3,185,000 301,365 3,486,365 2029 16,345,000 12,887,222 29,232,222 3,255,000 243,717 3,498,717 2030 16,995,000 12,255,938 29,250,938 3,330,000 184,801 3,514,801 2031-2035 89,810,000 51,621,013 141,431,013 3,400,000 124,528 3,524,528 2036-2040 87,560,000 34,898,413 122,458,413 3,480,000 62,988 3,542,988 2041-2045 72,225,000 19,177,150 91,402,150 - - - 2046-2050 50,780,000 6,140,038 56,920,038 - - - $ 382,375,000 $ 180,541,563 $ 562,916,563 $ 23,555,000 $ 1,701,559 $ 25,256,559 Year Ending Sept.30, Limited Tax Notes - Public Placement Principal Interest Total 2026 $ 2,840,000 $ 674,722 $ 3,514,722 2027 2,410,000 494,500 2,904,500 2028 2,085,000 374,000 2,459,000 2029 2,190,000 269,750 2,459,750 2030 2,300,000 160,250 2,460,250 2031-2035 905,000 45,250 950,250 $ 12,730,000 $ 2,018,472 $ 14,748,472 Year Ending Sept. 30, Hotel Tax Revenue Bonds - Public Placement Principal Interest Total 2026 $ 320,000 $ 207,000 $ 527,000 2027 335,000 193,900 528,900 2028 345,000 180,300 525,300 2029 360,000 166,200 526,200 2030 370,000 151,600 521,600 2031-2035 2,120,000 516,000 2,636,000 2036-2040 1,485,000 90,700 1,575,700 $ 5,335,000 $ 1,505,700 $ 6,840,700 77 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Year Ending Sept. 30, Sales Tax Revenue Bonds - Public Placement Principal Interest Total 2026 $ 2,040,000 $ 1,023,475 $ 3,063,475 2027 2,075,000 982,664 3,057,664 2028 2,125,000 937,344 3,062,344 2029 2,170,000 888,498 3,058,498 2030 1,620,000 835,093 2,455,093 2031-2035 7,350,000 3,583,004 10,933,004 2036-2040 8,140,000 2,451,753 10,591,753 2041-2045 8,535,000 989,386 9,524,386 2046-2049 1,010,000 32,825 1,042,825 $ 35,065,000 $ 11,724,042 $ 46,789,042 Year Ending Sept.30, State Infrastructure Bank Loan Principal Interest Total 2026 $ 1,340,000 $ 567,000 $ 1,907,000 2027 1,365,000 538,860 1,903,860 2028 1,395,000 510,195 1,905,195 2029 1,425,000 480,900 1,905,900 2030 1,455,000 450,975 1,905,975 2031-2035 7,745,000 1,783,635 9,528,635 2036-2040 8,585,000 935,970 9,520,970 2041-2044 3,690,000 116,655 3,806,655 $ 27,000,000 $ 5,384,190 $ 32,384,190 Business-Type Activities: Year Ending Sept.30, Utility System Revenue Bonds Principal Interest Total 2026 $ 4,045,000 $ 1,908,950 $ 5,953,950 2027 3,350,000 1,715,100 5,065,100 2028 3,440,000 1,629,175 5,069,175 2029 3,530,000 1,540,331 5,070,331 2030 3,640,000 1,440,906 5,080,906 2031-2035 18,260,000 5,465,256 23,725,256 2036-2039 16,050,000 1,740,800 17,790,800 $ 52,315,000 $ 15,440,518 $ 67,755,518 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 30,2025,there are no bonds outstanding which have been reported as defeased. 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. 78 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 In May 2023, the City of Round Rock's voters authorized the issuance of general obligation bonds to fund capital assets of the general government. Residents approved two bond propositions totaling $274 million for capital projects to improve public safety, parks, recreation, and sports. 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 Public Safety 5/6/2023 $ 44,000,000 $ 10,000,000 $ 34,000,000 Parks, Recreation, and Sports 5/6/2023 230,000,000 100,000,000 130,000,000 $ 274,000,000 $ 110,000,000 $ 164,000,000 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, leases and subscriptions for various purposes. Utility Revenue Bonds Utility revenue bonds are used to finance the acquisition and construction of major capital improvements to the City's water and wastewater systems. The City is required by bond ordinances to pledge the net revenues of the waterworks and wastewater 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 wastewater 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 2025, net revenues available for debt service were 7.32 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 be invested in time deposits, certificates of deposit and direct or guaranteed obligations of the United States of America. 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 $687,067 at September 30, 2025, 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. 79 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 half 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 $609,116 at September 30, 2025, 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. 2025 Issuances In May of 2025, the City issued $87,520,000 of General Obligation Bonds, Series 2025. The bonds were issued with an interest rate of 4.25% to 5.0% and mature through 2050. Proceeds from the sale will be used for (1) constructing, improving, extending, expanding, upgrading and/or developing City parks, recreation and sports projects and facilities, comprised of: a new recreation center building that also includes parks and recreation administration offices, an outdoor track, multi-purpose athletic fields, tennis complex relocation, Lakeview Pavilion improvements, Rock'N River Water Park expansion, Clay Madsen Recreation Center remodel, Sports Center expansion, Lawn at Brushy Creek park development, citywide trail expansion, Play For All Park improvements, and systemwide park improvements, as further set forth in Proposition A approved at the May 6, 2023 election; and (2) paying the costs of issuing the Bonds. Additionally, in May 2025, the City issued $19,620,000 of Combination Tax and Limited Revenue Certificates of Obligation, Series 2025. The certificates were issued with an interest rate of 4.375% to 5.000% and mature through 2050. Proceeds from the sale will be used for paying contractual obligations incurred or to be incurred by the City for (1) constructing, improving, extending, expanding, upgrading and/or developing streets, roads, bridges, sidewalks, intersections, traffic signalization and other transportation improvement projects including related waterworks, sewer and drainage improvements, signage, landscaping, irrigation, purchasing any necessary rights-of-way and other related transportation costs, including, but not limited to Arterial Bottleneck and Sidewalk Improvements, Chisholm Trail North and South, County Road 112, County Road 118, Deep Wood Drive, Eagles Nest, Gattis School Road Segments 2, 4, 5 and 6, Greenlawn Boulevard, Harrell Parkway, Kenney Fort Boulevard Segments 5 and 6, North Mays Gap/Widening, Old Settlers Boulevard, Red Bud North and South, Sam Bass & Hairy Man Road Intersection Improvements, US 79, and Wyoming Springs Drive; and (2) paying related professional services including for construction managers, engineers, architects, attorneys, auditors, financial advisors,fiscal agents and costs related to issuing the Certificates. The City also issued $4,775,000 Limited Tax Notes, Series 2025 in May 2025. The notes were issued with an interest rate of 5.000% and mature through 2031. The proceeds will be used for (1) purchasing City vehicles for the City's police, fire, parks, transportation, and building construction and facility maintenance departments and replacement vehicles for other City departments as needed;and (2) paying the costs of issuing the Notes. 80 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 State Infrastructure Bank Loan In September 2022, the Round Rock Transportation and Economic Development Corporation entered into an agreement with the Texas Transportation Commission to borrow $27,000,000 through the State Infrastructure Bank for utility relocation, right-of-way acquisition and construction for a non-tolled, off-system project involving various improvements to Gattis School Road in Williamson County. The loan does not bear interest for the initial three (3) years bearing interest at 2.10% per annum thereafter. Annual installments of $1,340,000 to $1,865,000 are due over twenty(20)years with a final maturity in August 2042. Excess Sales Tax Liability The City negotiated a long-term payout of excess sales tax received in prior years in the amount of approximately $9.8 million, with the State Comptroller. This amount was collected by the City and the RRTEDC during the fiscal year periods 2012 through 2017. The total negotiated payout requires a four year repayment period of equal amounts deducted monthly from City's and the RRTEDC's sales tax receipts beginning with March 2024. In May 2024, a partial reversal by the Comptroller resulted in a lump sum deduction of $1.7M against the total amount due. The $203,170 monthly payments are to remain the same but shortens the repayment period by 8 months. No interest is associated with this long-term liability. 81 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 G. LEASES To enhance the relevance and consistency of information about the City's leasing activities,the City established a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. The City is a lessee for noncancellable leases of equipment. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide and proprietary financial statements. The City recognizes lease liabilities with an initial,individual value of$5,000 or more. At September 30, 2025, the City, has 10 active leases. The leases have payments that range from $9,205 to $540,319 and interest rates that range from 0.4350%to 8.5000%.The total combined value of the lease liability is $3,404,738, and the total combined value of the short-term lease liability is $1,068,958. The combined value of the right-to-use asset of $5,105,957 with accumulated amortization of $1,661,614 is included within the Lease Class activities table found below. Amount of Lease Assets by Major Classes of Underlying Asset Accumulated Asset Class Lease Asset Value Amortization Equipment $ 5,105,957 $ 1,661,613 Total Leases $ 5,105,957 $ 1,661,613 Principal and Interest Requirements to Maturity Fiscal Year Principal Payments Interest Payments Total Payments 2026 $ 1,068,958 $ 125,856 $ 1,194,814 2027 799,407 81,619 881,026 2028 815,394 56,547 871,941 2029 720,979 29,416 750,395 Total Principal Payments 3,404,738 Cumulative Variance as of Fiscal Year-End - Total Remaining Liability $ 3,404,738 82 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 H. SUBSCRIPTIONS To enhance the relevance and consistency of information about the City's subscriptions activities, a single model for subscription accounting has been established based on the principal that subscriptions are financings of the right to use of an underlying asset. The City recognizes a subscription liability and an intangible right-to-use subscription asset in the government-wide and proprietary financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more. At September 30, 2025 the City has 27 active subscriptions. The subscriptions have payments that range from $3,400 up to $1,358,924 and interest rates that range from 2.32% to 4.08%. The total combined value of the subscription liability is $8,606,648, and the total combined value of the short-term subscription liability is $2,936,007. The combined value of the right-to-use asset of $15,780,840 with accumulated amortization of $6,387,241 is included within the Subscription Class activities table found below. Amount of Subscription Assets by Major Classes of Underlying Asset Subscription Asset Accumulated Asset Class Value Amortization Software $ 15,780,840 $ 6,387,241 Total Subscriptions $ 15,780,840 $ 6,387,241 Principal and Interest Requirements to Maturity Fiscal Year Principal Payments Interest Payments Total Payments 2026 $ 2,936,007 $ 221,666 $ 3,157,673 2027 2,895,159 143,159 3,038,318 2028 1,079,969 69,194 1,149,163 2029 946,928 42,619 989,547 2030 748,585 17,442 766,027 Total Principal Payments 8,606,648 Cumulative Variance as of Fiscal Year-End - Total Remaining Liability $ 8,606,648 83 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 J. RESTRICTED ASSETS The following summarizes restricted assets by purpose at September 30,2025: Cash Property Sales Accounts and Cash Taxes Tax and Equivalents Investments Receivable Receivable Other Governmental Activities: Debt Service Fund $ 1,807,905 $ - $ 258,650 $ - $ Restricted by debt covenants- Round Rock Transportation and Economic Development Corporation Fund 42,747,100 89,084,489 2,429,698 17,110,748 Debt-Financed Capital Projects Fund 38,573,094 - - - Roadway Impact Fees Fund 3,144,612 7,300,230 41,270 Other Governmental funds 7,511,217 15,104,451 - 1,195,141 Total Governmental Activities $ 93,783,928 $ 111,489,170 $ 258,650 $ 2,429,698 $ 18,347,159 Cash Accrued and Cash Interest Equivalents Investments Receivable Business-Type Activities: Water and Wastewater Fund- Impact fees $ 576,699 $ 1,338,810 $ Construction 2,360,727 5,480,438 Customer deposits 1,158,320 - Revenue bond debt service 185,764 - Accrued interest receivable - - 38,512 Total Business-Type Activities $ 4,281,510 $ 6,819,248 $ 38,512 V. OTHER INFORMATION A. COMMITMENTS AND CONTINGENCIES Tax Collections The City has a contract with the tax offices of Williamson and Travis counties to collect City taxes and deposit monies into the City's accounts. For this service,Williamson County was paid $18,394 and Travis County was paid $1,233 for the fiscal year ended September 30,2025. 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. 84 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, 2025, the City's cost under this contract was $668,640. 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 Availability Agreement 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 30,2025,the City's cost under this contract was $1,804,333. 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, 2025, the City's cost under these contracts was $2,184,898. 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 and September 2023, 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 33.0 MGD which is sufficient to meet future projected flows through 2030. The City of Round Rock's current reserved capacity in the system is 20.05 MGD, or 60.76%, of total treatment capacity. 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. Previously, the BCRWWS was operated by the Brazos River Authority 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, 2025, the City of Round Rock's allocated share of operation and maintenance expenses was 68.26%. 85 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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. There is no arbitrage liability at September 30, 2025, and the City estimates that future rebatable arbitrage liability(if any)will be immaterial to overall financial conditions.. 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. Economic Development The City enters into economic development agreements designed to promote development and redevelopment within the City, create primary jobs, stimulate commercial activity, generate additional sales tax, and enhance the property tax base and economic vitality of Round Rock. The City negotiates property tax, hotel occupancy tax, and sales tax rebates and incentives on an individual basis. Each agreement was negotiated under Chapter 380 of the Texas Local Government Code. Under a 380 economic development agreement,the recipient pays the total taxes due to the City and the City rebated a portion of the taxes paid based on the terms of the agreement. The City has a recapture clause in each agreement. Amounts paid for the rebate and incentive program for the year ended September 30, 2025, are summarized below. No tax abatements were made under Chapter 312, Property Redevelopment and Tax Abatement Act, of the Texas Local Government Code. Rebate and Incentive Programs Amount Hotel Occupancy Tax $ 1,631,573 Property Tax 1,205,100 Sales Tax 12,540,259 The City is not subject to any tax abatement agreements entered into by other governmental entities. However, the City may also act as a conduit for the refunding of state sales and hotel occupancy taxes generated by a qualifying project under Sections 151.429(h), 351.102(b), and 351.1022 of the Texas Tax Code Sections 2302.5055 of the Texas Government Code, and other applicable laws. 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 and numerous other coverages. All 86 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 and other claims, including the costs of 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. Self-Funded Health Insurance Fund The City is self-funded for employee medical and dental benefits 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 contributions provided by both the City and participating employees. Group medical and dental benefit claims are administered by third party insurance providers. Throughout the policy year,the excess "stop loss" insurance carrier reimburses the City for catastrophic medical claims that exceed $200,000 per insured. The minimum annual aggregate deductible is $21,785,101 or 95% of the first monthly aggregate deductible amount times 12,whichever is greater. An analysis of claims activities is presented below: Claims and Beginning Changes in Actual Claim Ending Fiscal Year Liability Estimates Payments Liability 2023 $ 514,699 $ 13,468,525 $ 12,980,217 $ 1,003,007 2024 1,003,007 15,233,470 15,017,823 1,218,654 2025 1,218,654 18,455,165 18,598,247 1,075,572 C. EMPLOYEE RETIREMENT PLAN Plan Description The City participates as one of more than 935 plans in the defined benefit cash-balance plan administered by TMRS. TMRS is a statewide public retirement plan 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 employees of Texas participating cities. The TMRS Act places the general administration and management of TMRS with a six-member, Governor-appointed Board of Trustees; however, TMRS is not fiscally dependent on the State of Texas. TMRS issues a publicly available Annual Comprehensive Financial Report (ACFR) 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. At retirement, the member's benefit is calculated based on the sum of the member's contributions,with interest, and the city-financed monetary credits with interest. The retiring member may select one of seven monthly benefit payment options. Members may also choose to receive a portion of their benefit as a lump sum distribution in an amount equal to 12, 24, or 36 monthly payments,which cannot exceed 75% of the total member contributions and interest. 87 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 Retroactive Supplemental death benefits for employees and retirees Yes Employees Covered by Benefit Terms At the December 31, 2024, valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 522 Inactive employees entitled to but not yet receiving benefits 630 Active employees 1,166 Total 2,318 Contributions Member contribution rates in TMRS are either 5%, 6%, or 7% of the member's total compensation, 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 City's contribution rate is based on the liabilities created from the benefit plan options selected by the City and any changes in benefits or actual experience over time. Employees for the City were required to contribute 7% of their total compensation during the fiscal year. The City elected to contribute for calendar years 2024 and 2025 as follows: 2024 2025 Total Retirement Rate 16.98% 17.09% Supplemental Death Benefit 0.24 0.24 Total Combined Contribution 17.22% 17.33% The City's contributions to TMRS for the year ended September 30, 2025, were $17,927,382 and were equal to the required contributions. Net Pension Liability The City's net pension liability(NPL)was measured as of December 31, 2024, 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 31,2022,actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 2.75%per year,adjusted down for population declines,if any Investment rate of return 6.75%, net of pension plan investment expense,including inflation 88 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB(10) mortality tables with 110% of the Public Safety table used for males and 100% of 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. Male rates are multiplied by 103% and female rates are multiplied by 105%. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by the most recent Scale MP-2021 to account for future mortality improvements. For disabled annuitants,the same mortality tables for healthy retirees are 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 the most recent Scale MP-2021 to account for future mortality improvements subject to the 3%floor. The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2018, to December 31, 2022. The assumptions were adopted in 2023 and first used in the December 31, 2023, actuarial valuation. The post-retirement mortality 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,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 by best estimate ranges of expected returns for each major asset class. The long-term expected rate of return is determined by weighting the expected return for each major asset class by the respective target asset allocation percentage. The target allocation and best estimates of the expected return for each major asset class in fiscal year 2024 are summarized in the table that follows: Long-Term Expected Target Real Rate of Return Asset Class Allocation (Arithmetic) Global Equity 35.0% 7.1% Core Fixed Income 6.0% 5.0% Non-Core Fixed Income 6.0% 6.8% Other Private Markets 4.0% 7.3% Real Estate 12.0% 6.7% Hedge Funds 5.0% 6.4% Private Equity 13.0% 8.5% Private Debt 13.0% 8.2% I nfrastructure 6.0% 6.0% Total 100.0% Discount Rate The discount rate used to measure the TPL was 6.75%. The projection of cash flows used to determine the discount rate assumed that member 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 members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. 89 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, 2023 $ 438,762,992 $ 368,629,927 $ 70,133,065 Changes for the year: Service cost 18,065,141 - 18,065,141 Interest 29,721,587 - 29,721,587 Difference between expected and actual experience 6,268,539 - 6,268,539 Changes in Assumptions - - - Contributions -employer - 16,661,912 (16,661,912) Contributions -employee - 6,868,875 (6,868,875) Net investment income - 38,378,257 (38,378,257) Benefit payments,including refunds of employee contributions (14,951,519) (14,951,519) - Administrative expense - (245,647) 245,647 Other - (5,745) 5,745 Net changes 39,103,748 46,706,133 (7,602,385) Balance at December 31, 2024 $ 477,866,740 $ 415,336,060 $ 62,530,680 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 1%Decrease Discount Rate 1%Increase 5.75% 6.75% 7.75% City's Net Pension Liability $ 136,013,586 $ 62,530,680 $ 2,598,654 Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the Schedule of Changes in Fiduciary Net Position by participating City.That report may be obtained at www.tmrs.com. 90 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2025, the City recognized a decrease to pension expense of $2,586,000. At September 30, 2025, 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 $ 13,756,794 $ - Difference between projected and actual investment earnings - 4,691,797 Changes in actuarial assumptions used to determine pension liability - 567,800 Pension contributions after measurement date 13,018,383 - Total $ 26,775,177 $ 5,259,597 Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date of $13,018,384 will be recognized as a reduction of the NPL for the measurement year ending December 31, 2025, (i.e., recognized in the City's financial statements September 30, 2026). 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 Ending Outflows (Inflows) December 31, of Resources 2025 $ 5,134,435 2026 8,213,964 2027 (3,212,809) 2028 (1,638,392) 2029 - Thereafter - Total $ 8,497,198 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 plan known as the Supplemental 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 coverage. 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. 91 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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). Benefit payments are treated as being equal to the employer's yearly contributions for retirees. 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. Employees Covered by Benefit Terms At the December 31, 2024, valuation and measurement date, the following employees were covered by the benefit terms: SDBF: Inactive employees currently receiving benefits 429 Inactive employees entitled to but not yet receiving benefits 177 Active employees 1,166 Total 1,772 Self-Funded Health Insurance: Inactive employees (retirees) 37 Active employees 1,006 Total 1,043 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 0.20%of required contributions. The City's contributions to SDBF for the years ended 2025, 2024, and 2023 were $61,450, $57,480, and $24,027, 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 0.06%for the years ended 2025, 2024, and 2023. 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. 92 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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, 2025, the City recognized a total OPEB liability of $20,743,703, $2,554,808 of which was for the SDBF, and $18,188,895 for the Self-Funded Health Insurance plan. Both were measured as of December 31, 2024, and were determined by an actuarial valuation as of that date. 93 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 Actuarial Assumptions The total OPEB liability in the December 31, 2024, actuarial valuation was determined using the following actuarial assumptions: SDBF Self-Funded Health Insurance Inflation 2.5% 2.5% Salary increases 3.6%to 11.85%including inflation 3.0% Discount rate** 4.08% 4.16% Healthcare cost trend rate None Getzen model(7.73%to 3.94%) Retirees'share of benefit- Varies based on plan elected and related costs $0 years of service Actuarial cost method*** Entry Age Normal Actuarial Cost Method Entry Age Normal Cost Method Mortality For service retirees: 2019 Municipal Retirees Mortality rates were based on the of Texas Mortality Tables. Male rates are PUB-2010 General Table projected using multiplied by 103% and females rates are MP-2021. The mortality table was multiplied by 105%.The rates are projected switched to the PUB-2010 as this is more on a fully generational basis by the most tailored to public entities. recent Scale MP-2021 (with immediate convergence). 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 the most recent Scale MP-2021 (with immediate convergence) to account for future mortality improvements subject to the floor. Development of claims None Retiree medical and pharmacy claims, as well as administrative fees,were projected to the following fiscal year and age-adjusted to age 65. Retiree contributions were netted out. That net cost is assumed to be of a retiree at the average age of retirees. Costs were then spread to the other ages by using the age factors developed by the Society of Actuaries Unisex model. ** 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-Bond GO Index" closest to, but not later than December 31, 2024. ***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 current year, known as the amortization of the unfunded actuarial accrued liability. The normal cost and the actuarial accrued liability are calculated individually for each member. The normal cost rate for an employee is the contribution rate which, if applied to a member's 94 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 compensation throughout their period of anticipated covered service with the City, 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 used in the December 31, 2024 valuation were based on the results of an actuarial experience study for the period ending December 31,2022. Changes in the Total OPEB Liability Self-Funded Health SDBF Insurance Total Balance at December 31,2023 $ 2,567,643 $ 17,177,841 $ 19,745,484 Changes for the year: Service cost 127,565 1,317,669 1,445,234 Interest 98,095 742,720 840,815 Differences between expected and actual experience (28,353) 540,885 512,532 Changes in assumptions or other inputs (151,266) (233,970) (385,236) Benefit payments (58,876) (1,356,252) (1,415,128) Net changes (12,835) 1,011,052 998,217 Balance at December 31,2024 $ 2,554,808 $ 18,188,893 $ 20,743,701 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following tables present the total OPEB liability of the City, calculated using the discount rate (4.08% for SDBF and 4.16% for the Self-Funded Health Insurance 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 or 1-percentage-point higher than the current discount rate: Current Discount 1%Decrease Rate 1%Increase 3.08% 4.08% 5.08% SDBF $ 3,089,523 $ 2,554,808 $ 2,141,071 Current Discount 1%Decrease Rate 1%Increase 3.16% 4.16% 5.16% Self-Funded Health Insurance $ 19,395,122 $ 18,188,893 $ 17,022,773 95 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 The following table presents the total OPEB liability of the City, calculated using the healthcare trend rate of 7.73%to 3.94%, 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 (6.73% to 2.94%) or 1-percentage-point higher (8.73% to 4.94%) than the current healthcare trend rate: Healthcare 1%Decrease Trend Rate 1%Increase Self-Funded Health Insurance $ 16,392,117 $ 18,188,893 $ 20,253,035 OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources For the fiscal year ended September 30,2025,the City recognized total OPEB expense of$1,614,215, $67,172 of which was for the SDBF, and $1,547,043 for the Self-Funded Health Insurance plan.At September 30, 2025,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 experience $ 11,125 $ 458,852 $ 469,977 $ 66,552 $ 1,876,794 $ 1,943,346 Changes in assumptions and other inputs 356,427 541,446 897,873 868,252 1,731,749 2,600,001 OPEB contributions after measurement date 44,866 900,000 944,866 - - - Total $ 412,418 $ 1,900,298 $ 2,312,716 $ 934,804 $ 3,608,543 $ 4,543,347 Deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date of $944,866 will be recognized as a reduction of the total OPEB for the measurement year ending December 31, 2025 (i.e., recognized in the City's financial statements September 30, 2026). 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 Self-Funded Year Ending Health December 31, SDBF Insurance 2025 $ (87,060) $ (620,418) 2026 (122,954) (620,418) 2027 (181,986) (673,217) 2028 (150,325) (530,954) 2029 (16,920) (190,864) Thereafter (8,007) 27,625 Total $ (567,252) $ (2,608,246) 96 CITY OF ROUND ROCK,TEXAS NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2025 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 agreement began on January 1, 2017 but at third calendar year of initial term (January 1, 2020), the term automatically renews such that the balance of the term is always two years. Either party has the option to terminate the agreement with two (2) years written notice. 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 Sales Tax A significant multi-entity sales taxpayer with an incentive agreement notified the City during FY 2025 that the Comptroller was continuing its 5-year sales tax audit, originally disclosed in FY 2023. Preliminary results indicate the sales tax was overreported and overpaid which will result in an additional one-time sales tax repayment from the City to the Comptroller of approximately $8 million. The City will recover a portion of the assessment through an adjustment to the existing incentive agreement. The City anticipates settlement of the amount during FY 2026. G.RESTATEMENT OF BEGINNING BALANCES During the current year, the City implemented GASB Statement No. 101, Compensated Absences. In addition to the value of vacation and sick time owed to employees upon separation of employment, the City now recognizes an estimated amount of sick, personal, catastrophic, and holiday leave, as applicable, earned as of year-end that will be used by employees as time off in future years as part of the liability for compensated absences. The effects of the change in accounting principle are summarized below in the "Restatement - GASB 101 implementation" column in the table below. Net position/fund Net position/fund balance 9/30/2024 as Restatement-GASB balance 9/30/2024 as previously reported 101 implementation restated Government-Wide Governmental activities $ 734,423,060 $ (9,355,876) $ 725,067,184 Business-type activities 610,708,914 (1,322,484) 609,386,430 Total government-wide $ 1,345,131,974 $ (10,678,360) $ 1,334,453,614 Enterprise funds Water and Wastewater Fund $ 598,964,263 $ (1,322,484) $ 597,641,779 Golf Course Fund 11,744,651 - 11,744,651 Total enterprise funds $ 610,708,914 $ (1,322,484) $ 609,386,430 97 log AwhF4��N*'�N M 98 REQUIRED SUPPLEMENTARY INFORMATION Required Supplementary Information Texas Municipal Retirement System (TMRS) Plan Schedule of Changes in the Net Pension Liability and Related Ratios Texas Municipal Retirement System (TMRS) Plan Schedule of Contributions Schedule of Changes in the Total OPEB Liability and Related Ratios Supplemental Death Benefit Fund General Fund:Statement of Revenues, Expenditures And Changes in Fund Balance - Budget and Actual Round Rock transportation and Economic Development Corporation Fund: Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Roadway Impact Fees: Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 99 CITY OF ROUND ROCK,TEXAS REQUIRED SUPPLEMENTARY INFORMATION - LAST TEN MEASUREMENT YEARS SEPTEMBER 30, 2025 (UNAUDITED) Texas Municipal Retirement System (TMRS) Plan Schedule of Changes in the Net Pension Liability and Related Ratios Measurement period ended December 31, 2015 2016 2017 Total Pension Liability Service cost $ 8,990,916 $ 9,609,823 $ 10,430,650 Interest(on the Total Pension Liability) 14,481,391 15,065,206 16,360,878 Difference between expected and actual experience (662,530) 704,655 671,908 Change of assumptions (1,208,085) - - Benefit payments,including refunds of employee contributions (5,493,451) (5,706,408) (7,483,495) Net Change in Total Pension Liability 16,108,241 19,673,276 19,979,941 Total Pension Liability- Beginning 205,128,282 221,236,523 240,909,799 Total Pension Liability- Ending (a) $ 221,236,523 $ 240,909,799 $ 260,889,740 Plan Fiduciary Net Position Contributions - Employer $ 8,195,714 $ 8,302,118 $ 9,138,705 Contributions - Employee 3,644,800 3,779,341 4,113,985 Net investment income 252,867 12,021,503 27,187,574 Benefit payments,including refunds of employee contributions (5,493,451) (5,706,408) (7,483,495) Administrative expense (154,001) (135,695) (140,808) Other (7,607) (7,311) (7,136) Net Change in Plan Fiduciary Net Position 6,438,322 18,253,548 32,808,825 Plan Fiduciary Net Position - Beginning 171,346,855 177,785,177 196,038,725 Plan Fiduciary Net Position - Ending (b) 177,785,177 196,038,725 228,847,550 Net Pension Liability- Ending (a) - (b) $ 43,451,346 $ 44,871,074 $ 32,042,190 Plan Fiduciary Net Position as a Percentage of Total Pension Liability 80.36% 81.37% 87.72% Covered Employee Payroll $ 51,731,390 $ 53,776,289 $ 58,533,388 Net Pension Liability as a Percentage of Covered Employee Payroll 83.99% 83.44% 54.74% Notes to Schedule: 1) No significant factors noted to disclose. 2) No significant methods and assumptions to disclose. See Independent Auditors' Report. 100 2018 2019 2020 2021 2022 2023 2024 $ 11,165,127 $ 12,125,301 $ 13,315,518 $ 13,320,453 $ 14,680,601 $ 16,203,730 $ 18,065,141 17,747,611 19,262,844 21,130,343 22,912,308 24,990,566 27,373,626 29,721,587 773,706 4,071,075 2,225,761 5,600,114 8,160,742 5,711,268 6,268,539 - 608,160 - - - (941,355) - (7,089,473) (8,347,798) (9,643,873) (10,905,346) (12,542,538) (14,035,219) (14,951,519) 22,596,971 27,719,582 27,027,749 30,927,529 35,289,371 34,312,050 39,103,748 260,889,740 283,486,711 311,206,293 338,234,042 369,161,571 404,450,942 438,762,992 $ 283,486,711 $ 311,206,293 $ 338,234,042 $ 369,161,571 $ 404,450,942 $ 438,762,992 $ 477,866,740 $ 9,753,253 $ 10,471,204 $ 11,366,407 $ 11,712,945 $ 13,046,505 $ 14,591,459 $ 16,661,912 4,406,956 4,793,245 5,184,834 5,177,300 5,728,802 6,304,954 6,868,875 (6,861,490) 35,438,150 20,602,217 38,962,631 (25,094,034) 37,622,396 38,378,257 (7,089,473) (8,347,798) (9,643,873) (10,905,346) (12,542,538) (14,035,219) (14,951,519) (132,486) (199,970) (133,140) (180,015) (216,792) (238,847) (245,647) (6,921) (6,007) (5,193) 1,233 258,697 (1,669) (5,745) 69,839 42,148,824 27,371,252 44,768,748 (18,819,360) 44,243,074 46,706,133 228,847,550 228,917,389 271,066,213 298,437,465 343,206,213 324,386,853 368,629,927 228,917,389 271,066,213 298,437,465 343,206,213 324,386,853 368,629,927 415,336,060 $ 54,569,322 $ 40,140,080 $ 39,796,577 $ 25,955,358 $ 80,064,089 $ 70,133,065 $ 62,530,680 80.75% 87.10% 88.23% 92.97% 80.20% 84.02% 86.91% $ 62,831,331 $ 68,196,291 $ 74,016,219 $ 73,961,425 $ 81,831,666 $ 90,070,764 $ 98,126,784 86.85% 58.86% 53.77% 35.09% 97.84% 77.86% 63.72% 101 CITY OF ROUND ROCK,TEXAS REQUIRED SUPPLEMENTARY INFORMATION - LAST TEN FISCAL YEARS SEPTEMBER 30, 2025 Texas Municipal Retirement System (TMRS) Plan Schedule of Contributions Fiscal year ended September 30, 2016 2017 2018 Actuarially Determined Contribution $ 8,507,987 $ 8,897,294 $ 9,582,199 Contributions in relation to the actuarially determined contribution 8,739,633 9,059,953 9,618,245 Contribution deficiency(excess) $ (231,646) $ (162,659) $ (36,046) Covered employee payroll $ 54,924,766 $ 57,346,696 $ 61,743,107 Contributions as a percentage of covered employee payroll 15.91% 15.80% 15.58% 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 20 years (longest amortization ladder) Asset Valuation Method 10-year smoothed market; 12%soft corridor Inflation 2.5% Salary Increases 3.6%to 11.85%including inflation Investment Rate of Return 6.75% Retirement Age Experience-based table of rates that vary by age. Last updated for the 2023 valuation pursuant to an experience study of the period ending 2022. Mortality Post-retirement:2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by 103%and female rates are multiplied by 105%. The rates are projected on a fully generational basis by the most recent Scale MP-2021 (with immediate convergence). Pre-retirement: PUB (10) mortality tables,with 110%of the Public Safety table used for males and 100%of the General Employee table used for females.The rates are projected on a fully generational basis by the most recent Scale MP-2021 (with immediate convergence). Other Information There were no benefit changes during the year. See Independent Auditors' Report 102 2019 2020 2021 2022 2023 2024 2025 $ 10,313,421 $ 10,806,103 $ 11,542,600 $ 12,658,167 $ 14,190,981 $ 16,069,816 $ 17,711,498 10,377,168 10,635,298 11,865,291 12,729,994 13,927,874 16,299,740 17,927,382 $ (63,747) $ 170,805 $ (322,691) $ (71,827) $ 263,107 $ (229,924) $ (215,884) $ 67,091,746 $ 70,419,948 $ 73,500,937 $ 79,542,281 $ 87,970,615 $ 95,801,929 $ 102,414,394 15.47% 15.10% 16.14% 16.00% 15.83% 17.01% 17.50% 103 CITY OF ROUND ROCK,TEXAS REQUIRED SUPPLEMENTARY INFORMATION - LAST EIGHT MEASUREMENT YEARS SEPTEMBER 30, 2025 (UNAUDITED) Schedule of Changes in the Total OPEB Liability and Related Ratios Supplemental Death Benefit Fund Measurement period ended December 31, 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 employee payroll $ 58,533,338 $ 62,831,331 $ 68,196,291 Total OPEB liability as a percentage of covered employee payroll 3.33% 3.03% 3.62% Self-Funded Health Insurance Measurement period ended December 31, 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 employee payroll $ 58,533,338 $ 62,831,331 $ 68,196,291 Total OPEB liability as a percentage of covered employee 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 significant methods and assumptions to disclose. 3) Schedule will be built out to 10 years. See Independent Auditors' Report. 104 2020 2021 2022 2023 2024 $ 148,032 $ 177,507 $ 204,579 $ 108,085 $ 127,565 69,727 63,208 63,338 93,651 98,095 461,065 115,743 (1,322,164) 135,131 (151,266) (42,783) (49,160) 20,053 (527) (28,353) (14,803) (36,981) (40,916) (54,042) (58,876) 621,238 270,317 (1,075,110) 282,298 (12,835) 2,468,900 3,090,138 3,360,455 2,285,345 2,567,643 $ 3,090,138 $ 3,360,455 $ 2,285,345 $ 2,567,643 $ 2,554,808 $ 74,016,219 $ 73,961,425 $ 81,831,666 $ 90,070,764 $ 98,126,784 4.17% 4.54% 2.79% 2.85% 2.60% 2020 2021 2022 2023 2024 $ 1,405,816 $ 1,743,411 $ 1,743,411 $ 1,373,314 $ 1,317,669 472,779 337,146 377,547 775,204 742,720 - 1,414,747 (2,275,360) (446,469) (233,970) - (756,790) (113,031) (2,191,053) 540,885 (711,164) (861,044) (709,355) (543,027) (1,356,252) 1,167,431 1,877,470 (976,788) (1,032,031) 1,011,052 16,141,759 17,309,190 19,186,660 18,209,872 17,177,841 $ 17,309,190 $ 19,186,660 $ 18,209,872 $ 17,177,841 $ 18,188,893 $ 74,016,219 $ 73,961,425 $ 81,845,996 $ 90,070,764 $ 98,126,784 23.4% 25.9% 22.2% 19.1% 18.5% 105 CITY OF ROUND ROCK, TEXAS GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Taxes and franchise, including interest and penalties $ 141,412,400 $ 141,412,400 $ 141,852,591 $ 440,191 Licenses, permits and fees 2,859,900 2,859,900 3,114,238 254,338 Charges for services 5,540,300 5,540,300 6,148,801 608,501 Fines and forfeitures 1,066,000 1,066,000 1,246,705 180,705 Intergovernmental 2,481,200 2,829,074 3,131,025 301,951 Investment and other 7,913,100 7,913,100 9,677,987 1,764,887 Total revenues 161,272,900 161,620,774 165,171,347 3,550,573 Expenditures- Current- General government 36,321,600 34,843,324 34,339,295 504,029 Public safety 84,602,500 85,943,873 92,869,524 (6,925,651) Public works 24,068,000 24,285,261 22,427,987 1,857,274 Culture and recreation 24,177,700 24,445,217 22,901,087 1,544,130 Total expenditures 169,169,800 169,517,675 172,537,893 (3,020,218) Excess (deficiency) of revenues over expenditures (7,896,900) (7,896,901) (7,366,546) 530,355 Other financing sources (uses) - Issuance of debt/leases/SBITA - - 10,482,035 10,482,035 Transfers in 7,954,300 7,954,300 7,954,300 - Transfers out - (10,500,000) (10,781,500) (281,500) Total other financing sources (uses) 7,954,300 (2,545,700) 7,654,835 10,200,535 Net change in fund balances $ 57,400 $ (10,442,601) 288,289 $ 10,730,890 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 19,587 Fund balance,October 1,2024 74,200,618 Fund balance, September 30, 2025 $ 74,508,494 The accompanying notes are an integral part of this financial statement. 106 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, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Sales tax $ 30,056,700 $ 30,056,700 $ 31,910,026 $ 1,853,326 Intergovernmental 7,440,000 7,440,000 - (7,440,000) Contributions 18,890,300 18,890,300 17,982,356 (907,944) Investment and other 6,241,000 6,241,000 7,563,895 1,322,895 Total revenues 62,628,000 62,628,000 57,456,277 (5,171,723) Expenditures- Current- General government 3,494,200 3,494,200 4,842,909 (1,348,709) Public works 678,300 678,300 551,728 126,572 Debt Service - Capital projects 116,518,500 116,518,500 108,435,355 8,083,145 Total expenditures 120,691,000 120,691,000 113,829,992 6,861,008 Excess (deficiency) of revenues over expenditures (58,063,000) (58,063,000) (56,373,715) 1,689,285 Other financing sources (uses) - Transfers in - - 26,338,854 26,338,854 Transfers out (10,064,600) (10,064,600) (8,077,686) 1,986,914 Total other financing sources (uses) (10,064,600) (10,064,600) 18,261,168 28,325,768 Net change in fund balances $ (68,127,600) $ (68,127,600) (38,112,547) $ 30,015,053 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 36,047 Fund balances,October 1,2024 171,686,223 Fund balance, September 30, 2025 $ 133,609,723 The accompanying notes are an integral part of this financial statement. 107 CITY OF ROUND ROCK, TEXAS ROADWAY IMPACT FEES STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Investment and other $ 170,000 $ 170,000 $ 351,102 $ 181,102 Total revenues 170,000 170,000 351,102 181,102 Net change in fund balances $ 170,000 $ 170,000 351,102 $ 181,102 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 1,804 Fund balances,October 1,2024 620,695 Fund balance, September 30, 2025 $ 973,601 The accompanying notes are an integral part of this financial statement. 108 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. Innovation and Development Fund—To account for the activities of select economic development and Chapter 380 agreements. 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. 109 CITY OF ROUND ROCK, TEXAS NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET SEPTEMBER 30, 2025 Community Hotel-Motel Development Hotel-Motel Occupancy Innovation and Block Grant Occupancy Tax Venue Tax Development ASSETS Cash and cash equivalents $ - $ - $ - $ Investments - - - - Receivables - Accounts and other - - - - Grants 23,863 - - - Prepaid items - - - - Restricted assets - Cash and cash equivalents - 2,851,805 3,332,679 446,501 Investments - 4,290,283 7,734,156 1,036,554 Restricted accounts and other - 881,184 287,084 15,368 Total assets $ 23,863 $ 8,023,272 $ 11,353,919 $ 1,498,423 LIABILITIES AND FUND BALANCES Liabilities - Accounts payable $ 23,863 $ 13,746 $ 186,901 $ - Accrued payroll - 50,060 124,730 - Unearned revenue - - - Total liabilities 23,863 63,806 311,631 - Fund balances - Nonspendable - - - - Restricted - authorized construction - 1,600,290 - - Restricted - hotel-motel tax - 6,359,176 11,042,288 1,498,423 Restricted - public safety - - - - Restricted - general government - - - - Committed -capital projects funds - - - - Assigned -culture and recreation - - - - Total fund balances - 7,959,466 11,042,288 1,498,423 Total liabilities and fund balances $ 23,863 $ 8,023,272 $ 11,353,919 $ 1,498,423 110 Public Total Nonmajor Library and Education& Governmental Recreational Public Safety Government Funds $ 2,599,787 $ - $ - $ 2,599,787 6,031,936 - - 6,031,936 35,629 - - 35,629 - - - 23,863 - 33,976 - 33,976 - 367,469 512,763 7,511,217 - 853,078 1,190,380 15,104,451 - 4,744 6,761 1,195,141 $ 8,667,352 $ 1,259,267 $ 1,709,904 $ 32,536,000 $ 70,374 $ - $ 6,509 $ 301,393 25,902 - - 200,692 2,107,352 - - 2,107,352 2,203,628 - 6,509 2,609,437 - 33,976 - 33,976 - - - 1,600,290 - - - 18,899,887 - 1,225,291 - 1,225,291 - - 1,703,395 1,703,395 912,445 - - 912,445 5,551,279 - - 5,551,279 6,463,724 1,259,267 1,703,395 29,926,563 $ 8,667,352 $ 1,259,267 $ 1,709,904 $ 32,536,000 111 CITY OF ROUND ROCK, TEXAS NONMAJOR GOVERNMENTAL FUNDS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED SEPTEMBER 30, 2025 Community Hotel-Motel Development Hotel-Motel Occupancy Innovation and Block Grant Occupancy Tax Venue Tax Development Revenues - Taxes and franchise $ - $ - $ - $ - Licenses, permits and fees - - - - Charges for services - - 2,394,009 - Fines and forfeitures - - - - Intergovernmental 501,051 - - 9,560,087 Hotel occupancy tax - 6,628,841 3,619,458 6,002,662 Contributions - - - - Investment and other - 488,576 398,728 113,151 Total revenues 501,051 7,117,417 6,412,195 15,675,900 Expenditures- Current- General government 317,452 - - - Public safety - - - - Culture and recreation - 3,154,992 3,580,636 10,741,281 Capital projects 183,599 1,961,314 81,225 - Total expenditures 501,051 5,116,306 3,661,861 10,741,281 Excess (deficiency) of revenues over expenditures - 2,001,111 2,750,334 4,934,619 Other financing sources (uses) - Transfers in - 977,935 - - Transfers out - (4,534,752) (2,489,900) (4,940,680) Total other financing sources (uses) - (3,556,817) (2,489,900) (4,940,680) Net change in fund balances - (1,555,706) 260,434 (6,061) Fund balances,October 1,2024 - 9,515,172 10,781,854 1,504,484 Fund balances,September 30,2025 $ - $ 7,959,466 $ 11,042,288 $ 1,498,423 112 Total Public Nonmajor Library and Education& Governmental Recreational Public Safety Government Funds $ - $ - $ 122,495 $ 122,495 821,513 - - 821,513 1,029,692 - - 3,423,701 - 273,725 - 273,725 - - - 10,061,138 - - - 16,250,961 4,678 - - 4,678 313,501 53,171 61,989 1,429,116 2,169,384 326,896 184,484 32,387,327 - - 61,128 378,580 - 56,675 - 56,675 1,315,376 - - 18,792,285 180,984 82,339 - 2,489,461 1,496,360 139,014 61,128 21,717,001 673,024 187,882 123,356 10,670,326 675,000 - - 1,652,935 - - - (11,965,332) 675,000 - - (10,312,397) 1,348,024 187,882 123,356 357,929 5,115,700 1,071,385 1,580,039 29,568,634 $ 6,463,724 $ 1,259,267 $ 1,703,395 $ 29,926,563 113 114 SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL GENERAL, DEBT SERVICE, AND NONMAJOR SPECIAL REVENUE FUNDS 115 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2025 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2024 Budgeted Amounts 2024 Original Final Actual Variance Actual Revenues - Taxes and franchise - Property tax $ 63,064,400 $ 63,064,400 $ 63,324,263 $ 259,863 $ 56,761,147 Penalty and interest 89,000 89,000 163,456 74,456 127,122 Sales tax 69,348,000 69,348,000 69,348,000 - 69,348,000 Franchise 7,761,000 7,761,000 7,821,532 60,532 7,725,652 Bingo tax 50,000 50,000 50,048 48 51,246 Mixed drink tax 1,100,000 1,100,000 1,145,292 45,292 1,147,286 Total taxes and franchise 141,412,400 141,412,400 141,852,591 440,191 135,160,453 Licenses, permits and fees - Building permits 1,300,000 1,300,000 1,708,449 408,449 1,667,119 Other permits 8,000 8,000 8,127 127 7,780 Fees 1,551,900 1,551,900 1,397,662 (154,238) 945,687 Total licenses, permits, and fees 2,859,900 2,859,900 3,114,238 254,338 2,620,586 Charges for services - Trash collection fees 1,374,000 1,374,000 1,391,064 17,064 1,411,268 Swimming pool fees 1,652,000 1,652,000 1,678,926 26,926 1,684,296 Recreation program fees 2,339,000 2,339,000 2,785,039 446,039 2,827,520 Filing and reproduction fees 18,000 18,000 38,704 20,704 33,946 Other 157,300 157,300 255,068 97,768 206,381 Total charges for services 5,540,300 5,540,300 6,148,801 608,501 6,163,411 Fines and forfeitures 1,066,000 1,066,000 1,246,705 180,705 1,062,649 Grants 2,481,200 2,829,074 3,131,025 301,951 2,951,528 Investment and other- Investment income 2,600,000 2,600,000 3,766,554 1,166,554 3,022,336 Other 5,313,100 5,313,100 5,911,433 598,333 5,507,533 Total investment and other 7,913,100 7,913,100 9,677,987 1,764,887 8,529,869 Total revenues 161,272,900 161,620,774 165,171,347 3,550,573 156,488,496 116 CITY OF ROUND ROCK,TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL(CONTINUED) YEAR ENDED SEPTEMBER 30, 2025 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30,2024 Budgeted Amounts 2024 Original Final Actual Variance Actual Expenditures- Current- General government Executive - Personnel services $ 21,324,700 $ 19,376,163 $ 18,270,135 $ 1,106,028 $ 17,197,795 Operations 13,509,100 13,887,700 14,654,073 (766,373) 14,134,199 Capital projects 75,000 75,000 74,999 1 28,290 Total executive 34,908,800 33,338,863 32,999,207 339,656 31,360,284 Judicial - Personnel services 1,330,200 1,346,861 1,178,882 167,979 1,172,630 Operations 82,600 157,600 161,206 (3,606) 80,285 Total judicial 1,412,800 1,504,461 1,340,088 164,373 1,252,915 Total general government 36,321,600 34,843,324 34,339,295 504,029 32,613,199 Public safety Police- Personnel services 40,178,900 40,836,699 40,836,698 1 38,169,196 Operations 5,969,400 5,949,800 11,641,629 (5,691,829) 5,095,483 Capital outlay 1,083,500 949,574 95,385 854,189 432,102 Total police 47,231,800 47,736,073 52,573,712 (4,837,639) 43,696,781 Fire- Personnel services 33,674,000 34,511,100 34,511,005 95 30,916,264 Operations 3,615,300 3,514,600 5,602,772 (2,088,172) 3,644,519 Capital outlay 81,400 182,100 182,035 65 118,392 Total fire 37,370,700 38,207,800 40,295,812 (2,088,012) 34,679,175 Total public safety 84,602,500 85,943,873 92,869,524 (6,925,651) 78,375,956 117 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (CONTINUED) YEAR ENDED SEPTEMBER 30, 2025 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2024 Budgeted Amounts 2024 Original Final Actual Variance Actual Expenditures- Current- Public works Administration - Personnel services $ 7,069,300 $ 7,196,159 $ 6,935,406 $ 260,753 $ 6,639,110 Operations 5,507,300 5,507,300 4,916,739 590,561 3,391,183 Total administration 12,576,600 12,703,459 11,852,145 851,314 10,030,293 Streets - Personnel services 4,530,600 4,581,431 4,184,368 397,063 3,832,428 Operations 4,340,400 4,340,400 3,826,757 513,643 3,515,912 Total streets 8,871,000 8,921,831 8,011,125 910,706 7,348,340 Maintenance shop - Personnel services 2,258,600 2,298,171 2,212,442 85,729 2,033,155 Operations 339,800 339,800 339,050 750 312,409 Capital outlay 22,000 22,000 13,225 8,775 191,481 Total maintenance shop 2,620,400 2,659,971 2,564,717 95,254 2,537,045 Total public works 24,068,000 24,285,261 22,427,987 1,857,274 19,915,678 118 CITY OF ROUND ROCK, TEXAS GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL (CONTINUED) YEAR ENDED SEPTEMBER 30, 2025 WITH COMPARATIVE TOTALS FOR YEAR ENDED SEPTEMBER 30, 2024 Budgeted Amounts 2024 Original Final Actual Variance Actual Expenditures- Current- Culture and recreation Library- Personnel services $ 4,431,000 $ 4,505,813 $ 4,068,629 $ 437,184 $ 3,910,930 Operations 990,100 990,100 899,092 91,008 844,989 Total library 5,421,100 5,495,913 4,967,721 528,192 4,755,919 Parks and recreation - Personnel services 13,836,700 14,029,403 13,043,650 985,753 12,562,476 Operations 4,812,900 4,842,901 4,843,524 (623) 4,515,297 Culture-Parks-capital projects 107,000 77,000 46,192 30,808 73,749 Total parks and recreation 18,756,600 18,949,304 17,933,366 1,015,938 17,151,522 Total culture and recreation 24,177,700 24,445,217 22,901,087 1,544,130 21,907,441 Total expenditures 169,169,800 169,517,675 172,537,893 (3,020,218) 152,812,274 Excess (deficiency) of revenues over expenditures (7,896,900) (7,896,901) (7,366,546) 530,355 3,676,222 Other financing sources (uses) - Issuance of debt/leases/SBITA - - 10,482,035 10,482,035 701,304 Transfers in 7,954,300 7,954,300 7,954,300 - 7,250,300 Transfers out - (10,500,000) (10,781,500) (281,500) (2,369,434) Total other financing sources (uses) 7,954,300 (2,545,700) 7,654,835 10,200,535 5,582,170 Net change in fund balances $ 57,400 $ (10,442,601) 288,289 $ 10,730,890 9,258,392 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 19,587 1,242,873 Fund Balance,October 1, 2024 74,200,618 63,699,353 Fund balance, September 30, 2025 $ 74,508,494 $ 74,200,618 119 CITY OF ROUND ROCK, TEXAS DEBT SERVICE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Taxes and franchise $ 28,233,400 $ 28,233,400 $ 26,249,446 $ (1,983,954) Investment and other 50,000 50,000 754,827 704,827 Total revenues 28,283,400 28,283,400 27,004,273 (1,279,127) Expenditures- Debt service - Principal retirement 20,965,000 20,965,000 21,670,000 (705,000) Interest and fiscal charges 12,661,530 12,661,530 12,895,559 (234,029) Total expenditures 33,626,530 33,626,530 34,565,559 (939,029) Excess (deficiency) of revenues over expenditures (5,343,130) (5,343,130) (7,561,286) (2,218,156) Other financing sources (uses) - Transfers in 6,884,729 6,884,729 6,882,124 (2,605) Transfers out - - (2,930,689) (2,930,689) Total other financing sources (uses) 6,884,729 6,884,729 3,951,435 (2,933,294) Net change in fund balances $ 1,541,599 $ 1,541,599 (3,609,851) $ (5,151,450) Fund balance,October 1,2024 5,421,856 Fund balance, September 30, 2025 $ 1,812,005 120 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL COMMUNITY DEVELOPMENT BLOCK GRANT FUND YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Intergovernmental $ 1,237,926 $ 1,237,926 $ 501,051 $ (736,875) Total revenues 1,237,926 1,237,926 501,051 (736,875) Expenditures- Current- General government- Operations 622,277 622,277 317,452 304,825 Capital projects 615,649 615,649 183,599 432,050 Total expenditures 1,237,926 1,237,926 501,051 736,875 Net change in fund balances $ - $ - - $ - Fund balance,October 1,2024 - Fund balance, September 30, 2025 $ - 121 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, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Hotel occupancy tax $ 8,030,400 $ 8,030,400 $ 6,628,841 $ (1,401,559) Investment and other 383,400 383,400 486,248 102,848 Total revenues 8,413,800 8,413,800 7,115,089 (1,298,711) Expenditures- Current- Culture and recreation- Personnel services 881,700 881,700 878,071 3,629 Operations 2,559,200 2,754,763 2,276,921 477,842 Capital projects - 3,175,795 1,961,314 1,214,481 Total expenditures 3,440,900 6,812,258 5,116,306 1,695,952 Excess (deficiency) of revenues over expenditures 4,972,900 1,601,542 1,998,783 397,241 Other financing sources (uses) - Transfers in 700,000 700,000 977,935 277,935 Transfers out (8,385,544) (5,029,444) (4,534,752) 494,692 Total other financing sources (uses) (7,685,544) (4,329,444) (3,556,817) 772,627 Net change in fund balances $ (2,712,644) $ (2,727,902) (1,558,034) $ 1,169,868 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 2,328 Fund balance,October 1,2024 9,515,172 Fund balance, September 30, 2025 $ 7,959,466 122 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, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Charges for services $ 2,165,000 $ 2,165,000 $ 2,394,009 $ 229,009 Hotel occupancy tax 3,960,700 3,960,700 3,619,458 (341,242) Investment and other 260,000 260,000 396,477 136,477 Total revenues 6,385,700 6,385,700 6,409,944 24,244 Expenditures- Current- Culture and recreation- Personnel services 2,023,500 2,184,900 2,184,878 22 Operations 1,358,300 1,395,800 1,395,758 42 Capital projects 1,680,000 1,481,100 81,225 1,399,875 Total expenditures 5,061,800 5,061,800 3,661,861 1,399,939 Excess (deficiency) of revenues over expenditures 1,323,900 1,323,900 2,748,083 1,424,183 Other financing sources (uses) - Transfers in 700,000 - - - Transfers out (3,189,900) (3,189,900) (2,489,900) 700,000 Total other financing sources (uses) (2,489,900) (3,189,900) (2,489,900) 700,000 Net change in fund balances $ (1,166,000) $ (1,866,000) 258,183 $ 2,124,183 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 2,251 Fund balance,October 1,2024 10,781,854 Fund balance, September 30, 2025 $ 11,042,288 123 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL INNOVATION AND DEVELOPMENT FUND YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Intergovernmental $ 9,790,603 $ 9,790,603 $ 9,560,087 $ (230,516) Hotel occupancy tax 6,131,954 6,131,954 6,002,662 (129,292) Investment and other 60,000 60,000 113,151 53,151 Total revenues 15,982,557 15,982,557 15,675,900 (306,657) Expenditures- Current- General Government- Operations 11,072,925 11,072,925 10,741,281 331,644 Total expenditures 11,072,925 11,072,925 10,741,281 331,644 Excess (deficiency) of revenues over expenditures 4,909,632 4,909,632 4,934,619 24,987 Other financing sources (uses) - Transfers out (4,940,680) (4,940,680) (4,940,680) - Total other financing sources (uses) (4,940,680) (4,940,680) (4,940,680) - Net change in fund balances $ (31,048) $ (31,048) (6,061) $ 24,987 Fund balance,October 1,2024 1,504,484 Fund balance, September 30, 2025 $ 1,498,423 124 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL LIBRARY AND RECREATIONAL FUND YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Licenses, permits and fees $ 100,000 $ 100,000 $ 821,513 $ 721,513 Charges for services 822,300 822,300 1,029,692 207,392 Contributions 176,500 176,500 4,678 (171,822) Investment and other 175,500 175,500 311,707 136,207 Total revenues 1,274,300 1,274,300 2,167,590 893,290 Expenditures- Current- Culture and recreation- Personnel services 648,100 682,500 514,891 167,609 Operations 2,120,757 2,120,757 800,485 1,320,272 Capital projects 250,000 421,556 180,984 240,572 Total culture and recreation 3,018,857 3,224,813 1,496,360 1,728,453 Total expenditures 3,018,857 3,224,813 1,496,360 1,728,453 Excess (deficiency) of revenues over expenditures (1,744,557) (1,950,513) 671,230 2,621,743 Other financing sources (uses) - Transfers in 675,000 675,000 675,000 - Total other financing sources (uses) 675,000 675,000 675,000 - Net change in fund balances $ (1,069,557) $ (1,275,513) 1,346,230 $ 2,621,743 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 1,794 Fund balance,October 1,2024 5,115,700 Fund balance, September 30, 2025 $ 6,463,724 125 CITY OF ROUND ROCK, TEXAS SPECIAL REVENUE FUND SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL PUBLIC SAFETY FUND YEAR ENDED SEPTEMBER 30, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Fines and forfeitures $ 86,000 $ 86,000 $ 273,725 $ 187,725 Investment and other 16,550 86,126 51,172 (34,954) Total revenues 102,550 172,126 324,897 152,771 Expenditures- Current- Public safety- Operations 721,931 721,931 56,675 665,256 Capital projects 116,700 186,276 82,339 103,937 Total expenditures 838,631 908,207 139,014 769,193 Net change in fund balances $ (736,081) $ (736,081) 185,883 $ 921,964 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 1,999 Fund balance,October 1,2024 1,071,385 Fund balance, September 30, 2025 $ 1,259,267 126 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, 2025 Budgeted Amounts Original Final Actual Variance Revenues - Taxes and franchise $ 150,000 $ 150,000 $ 122,495 $ (27,505) Investment and other 35,000 35,000 61,637 26,637 Total revenues 185,000 185,000 184,132 (868) Expenditures- Current- General Government- Operations 80,000 80,000 61,128 18,872 Total expenditures 80,000 80,000 61,128 18,872 Net change in fund balances $ 105,000 $ 105,000 123,004 $ 18,004 Reconciliation between budgetary basis actual and GAAP Increase (decrease) in fair value of investments 352 Fund balance,October 1,2024 1,580,039 Fund balance, September 30, 2025 $ 1,703,395 127 log AwhF4��N*'�N M 128 CITY OF ROUND ROCK,TEXAS STATISTICAL SECTION (UNAUDITED) This part of the City of Round Rock's annual comprehensive 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 annual comprehensive financial reports for the relevant year. 129 CITY OF ROUND ROCK,TEXAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 2016 2017 2018 2019 Governmental activities- Net investment in capital assets $ 310,185,706 $ 356,586,425 $ 373,007,353 $ 400,490,136 Restricted 51,813,118 48,954,352 48,357,161 44,334,128 Unrestricted 52,451,939 29,054,168 28,585,838 28,918,565 Total governmental activities net position $ 414,450,763 $ 434,594,945 $ 449,950,352 $ 473,742,829 Business-type activities- Net investment in capital assets $ 234,981,264 $ 245,005,044 $ 268,467,171 $ 283,846,141 Restricted 15,275,659 19,800,722 22,628,600 24,343,881 Unrestricted 126,490,054 126,634,362 138,980,320 146,681,470 Total business-type activities net position $ 376,746,977 $ 391,440,128 $ 430,076,091 $ 454,871,492 Primary government- Net investment in capital assets $ 545,166,970 $ 601,591,469 $ 641,474,524 $ 684,336,277 Restricted 67,088,777 68,755,074 70,985,761 68,678,009 Unrestricted 178,941,993 155,688,530 167,566,158 175,600,035 Total primary government net position $ 791,197,740 $ 826,035,073 $ 880,026,443 $ 928,614,321 Source:Annual Comprehensive Financial Reports Notes: The City implemented GASB Statement No. 75 in 2018.As a result, net position for 2017 was restated. The City implemented GASB Statement No. 96 in 2023.As a result, net position for 2022 was restated. 130 2020 2021 2022 2023 2024 2025 $ 442,969,195 $ 432,348,991 $ 402,903,584 $ 461,228,728 $ 499,732,191 $ 582,858,078 23,471,549 92,772,878 132,351,451 186,392,436 174,686,345 155,739,198 33,581,912 13,728,700 68,809,157 25,817,240 60,004,524 67,075,163 $ 500,022,656 $ 538,850,569 $ 604,064,192 $ 673,438,404 $ 734,423,060 $ 805,672,439 $ 294,760,377 $ 310,014,313 $ 333,196,242 $ 361,729,550 $ 389,534,428 $ 441,526,983 16,315,836 11,750,401 13,866,060 10,427,716 10,326,824 9,980,950 168,868,607 179,998,306 186,396,785 201,529,190 210,847,662 206,308,557 $ 479,944,820 $ 501,763,020 $ 533,459,087 $ 573,686,456 $ 610,708,914 $ 657,816,490 $ 737,729,572 $ 742,363,304 $ 736,099,826 $ 822,958,278 $ 889,266,619 $ 1,024,385,061 39,787,385 104,523,279 146,217,511 196,820,152 185,013,169 165,720,148 202,450,519 193,727,006 255,205,942 227,346,430 270,852,186 273,383,720 $ 979,967,476 $ 1,040,613,589 $ 1,137,523,279 $ 1,247,124,860 $ 1,345,131,974 $ 1,463,488,929 131 CITY OF ROUND ROCK, TEXAS CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting) 2016 2017 2018 2019 Expenses: Governmental activities- General government $ 28,434,006 $ 24,864,772 $ 23,408,887 $ 27,861,595 Public safety 49,439,902 52,243,460 57,987,997 64,196,001 Public works 33,448,357 34,359,785 47,120,999 36,261,500 Culture and recreation 20,885,009 24,130,067 25,218,145 27,821,410 Interest on long-term debt 8,294,279 8,075,351 8,415,687 8,525,551 Total governmental activities expenses 140,501,553 143,673,435 162,151,715 164,666,057 Business-type activities- Water and wastewater utility 47,947,818 49,400,833 51,749,727 54,388,260 Golf course 133,270 1,857,334 1,642,036 2,399,582 Total business-type activities expenses 48,081,088 51,258,167 53,391,763 56,787,842 Total primary government expenses 188,582,641 194,931,602 215,543,478 221,453,899 Program revenues: Governmental activities- Charges for services- General government 2,258,333 19,778,439 2,273,091 3,189,150 Public safety 1,669,550 1,478,161 1,762,172 2,298,635 Public works 742,437 607,398 693,223 1,347,815 Culture and recreation 3,919,254 5,133,816 5,489,515 5,649,283 Operating grants and contributions 946,604 1,202,810 2,574,008 2,987,128 Capital grants and contributions 8,013,039 5,958,205 18,206,390 9,914,802 Total governmental activities program revenues 17,549,217 34,158,829 30,998,399 25,386,813 Business-type activities- Charges for services- Water and wastewater utility 48,653,788 51,980,615 55,139,117 56,951,931 Golf course 360,371 733,883 299,761 1,971,887 Capital grants and contributions 19,607,086 15,642,381 30,495,633 21,584,780 Total business-type activities program revenues 68,621,245 68,356,879 85,934,511 80,508,598 Total primary government program revenues 86,170,462 102,515,708 116,932,910 105,895,411 Net(expense)revenue- Governmental activities (122,952,336) (109,514,606) (131,153,316) (139,279,244) Business-type activities 20,540,157 17,098,712 32,542,748 23,720,756 Total primary government net expense (102,412,179) (92,415,894) (98,610,568) (115,558,488) 132 2020 2021 2022 2023 2024 2025 $ 27,467,722 $ 35,906,343 $ 41,210,815 $ 48,259,094 $ 48,573,651 $ 54,391,829 64,151,715 64,975,588 67,534,584 78,793,508 85,295,488 91,088,679 38,606,348 43,588,532 40,067,607 46,224,524 47,492,344 50,684,509 26,355,801 26,874,261 30,667,820 34,898,867 39,499,859 39,865,413 9,382,120 10,264,036 11,292,992 11,000,425 11,366,844 13,037,969 165,963,706 181,608,760 190,773,818 219,176,418 232,228,186 249,068,399 53,999,588 58,063,832 63,886,112 68,229,079 75,163,447 - 2,818,489 3,699,848 4,290,895 4,104,094 4,390,104 4,184,836 56,818,077 61,763,680 68,177,007 72,333,173 79,553,551 4,184,836 222,781,783 243,372,440 258,950,825 291,509,591 311,781,737 253,253,235 4,529,682 2,824,567 2,962,085 3,619,177 3,596,694 3,581,349 1,684,921 1,396,999 1,705,859 1,626,659 1,494,261 2,000,227 700,442 970,763 873,899 1,874,377 427,679 1,437,410 4,082,796 5,807,940 6,544,740 7,318,494 7,824,051 8,009,697 3,742,160 4,261,827 4,802,100 4,949,732 4,045,133 3,634,828 9,464,089 10,054,791 23,442,401 27,815,280 22,420,807 40,275,957 24,204,090 25,316,887 40,331,084 47,203,719 39,808,625 58,939,468 60,811,441 60,618,367 67,172,508 68,399,789 65,567,096 - 2,684,066 3,506,792 3,920,614 3,765,883 4,259,813 4,675,666 18,443,560 22,288,498 34,040,331 38,995,646 40,899,755 56,711,048 81,939,067 86,413,657 105,133,453 111,161,318 110,726,664 61,386,714 106,143,157 111,730,544 145,464,537 158,365,037 150,535,289 120,326,182 (141,759,616) (156,291,873) (150,442,734) (171,972,699) (192,419,561) (190,128,931) 25,120,990 24,649,977 36,956,446 38,828,145 31,173,113 57,201,878 (116,638,626) (131,641,896) (113,486,288) (133,144,554) (161,246,448) (132,927,053) (CONTINUED) 133 CITY OF ROUND ROCK,TEXAS CHANGES IN NET POSITION (CONTINUED) LAST TEN FISCAL YEARS (accrual basis of accounting) 2016 2017 2018 2019 General revenues and other changes in net position: Governmental activities- Taxes- Property $ 44,239,067 $ 49,107,424 $ 54,082,288 $ 57,396,623 Franchise 7,175,948 7,103,548 7,140,940 7,407,178 Sales 67,340,120 64,209,719 72,861,565 75,690,767 Hotel occupancy 5,407,667 5,515,163 5,714,235 6,000,447 Public service 566,712 627,164 647,243 697,835 Investment earnings and other 7,957,942 8,201,944 9,024,223 12,180,534 Transfers 3,610,000 3,492,871 (2,961,771) 3,698,337 Total governmental activities 136,297,456 138,257,833 146,508,723 163,071,721 Business-type activities- Miscellaneous Investment earnings and other 1,214,674 2,289,777 3,131,444 4,772,982 Transfers (3,610,000) (3,492,871) 2,961,771 (3,698,337) Total business-type activities (2,395,326) (1,203,094) 6,093,215 1,074,645 Total primary government 133,902,130 137,054,739 152,601,938 164,146,366 Change in net position: Governmental activities 13,345,120 28,743,227 15,355,407 23,792,477 Business-type activities 18,144,831 15,895,618 38,635,963 24,795,401 Total primary government $ 31,489,951 $ 44,638,845 $ 53,991,370 $ 48,587,878 134 2020 2021 2022 2023 2024 2025 $ 64,744,623 $ 68,187,362 $ 70,551,060 $ 74,006,361 $ 81,719,209 $ 89,686,684 7,060,026 6,808,434 7,429,827 8,017,834 7,868,254 7,944,027 78,361,955 90,406,552 104,397,185 104,713,662 103,711,976 117,537,885 4,111,858 11,003,127 15,128,191 17,048,182 16,927,611 16,267,328 620,996 867,626 1,020,842 1,157,865 1,198,532 1,195,340 9,081,735 12,650,685 11,176,195 31,393,569 36,093,335 31,951,622 4,058,250 5,196,000 5,355,000 5,605,000 5,885,300 6,151,300 168,039,443 195,119,786 215,058,300 241,942,473 253,404,217 270,734,186 4,010,588 2,364,223 94,621 7,004,224 11,734,645 5,854,922 (4,058,250) (5,196,000) (5,355,000) (5,605,000) (5,885,300) (6,151,300) (47,662) (2,831,777) (5,260,379) 1,399,224 5,849,345 (296,378) 167,991,781 192,288,009 209,797,921 243,341,697 259,253,562 270,437,808 26,279,827 38,827,913 64,615,566 69,969,774 60,984,656 80,605,255 25,073,328 21,818,200 31,696,067 40,227,369 37,022,458 48,430,060 $ 51,353,155 $ 60,646,113 $ 96,311,633 $ 110,197,143 $ 98,007,114 $ 129,035,315 135 CITY OF ROUND ROCK,TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2016 2017 2018 2019 Nonspendable- Inventories, prepaids and other $ 372,288 $ 232,004 $ 253,592 $ 226,190 Restricted for- Debt service 2,749,645 3,880,982 4,853,517 5,019,375 Authorized construction 77,545,478 81,086,426 62,649,029 72,690,649 Hotel-motel tax 12,653,710 6,526,672 7,863,705 6,807,382 Public safety 676,724 585,878 750,657 1,025,501 General government - 1,269,075 1,268,233 1,439,377 Committed to- General government 1,081,159 124,703 232,243 883,883 Capital projects funds 24,865,777 28,397,665 21,934,876 28,971,259 Streets and drainage 1,152,195 - - - Culture and recreation 293,694 - - - Assigned to- Culture and recreation 212,080 1,004,583 1,274,658 1,638,534 Unassigned 52,427,796 50,090,080 53,558,920 49,498,684 Total governmental funds $ 174,030,546 $ 173,198,068 $ 154,639,430 $ 168,200,834 136 2020 2021 2022 2023 2024 2025 $ 1,094,653 $ 1,783,208 $ 404,179 $ 930,720 $ 406,099 $ 3,680,993 5,080,091 7,901,595 7,041,411 6,492,541 7,804,285 4,194,434 58,069,777 124,312,278 171,116,800 160,664,737 181,119,801 162,939,232 7,440,558 10,222,462 15,269,909 19,061,932 18,531,461 18,899,887 757,284 735,896 887,046 918,100 1,071,385 1,225,291 1,401,931 1,433,730 1,472,144 1,637,555 1,580,039 1,703,395 1,030,812 881,812 1,077,519 1,198,346 1,343,048 - 23,259,722 41,256,494 63,546,738 49,633,658 52,617,062 61,417,767 - 1,483,055 1,483,055 1,483,055 1,483,055 - 1,834,073 2,496,916 3,852,615 4,022,080 2,989,436 5,551,279 59,547,303 58,913,029 48,267,275 63,341,210 73,794,519 73,741,726 $ 159,516,204 $ 251,420,475 $ 314,418,691 $ 309,383,934 $ 342,740,190 $ 333,354,004 137 CITY OF ROUND ROCK,TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2016 2017 2018 2019 Revenues- Taxes and franchise $ 119,211,433 $ 121,142,245 $ 134,637,978 $ 141,150,180 Licenses,permits and fees 1,843,633 11646,077 2,037,211 2,703,240 Charges for services 5,172,465 6,307,377 6,563,868 6,916,463 Fines and forfeitures 1,573,476 1,440,795 1,616,922 2,153,309 Intergovernmental 990,683 2,950,833 9,511,022 3,822,463 Hotel occupancy tax 5,407,667 51515,163 5,714,235 6,000,447 Investment and other 368,748 931,601 2,335,783 4,670,671 Contributions 7,963,854 8,253,614 9,260,526 12,728,177 Total revenues 142,531,959 148,187,705 171,677,545 180,144,950 Expenditures- General government 24,394,392 21,055,932 23,744,730 22,423,018 Public safety 44,388,881 47,595,884 52,839,347 56,063,867 Public works 12,062,839 12,682,503 14,748,037 15,077,947 Culture and recreation 15,078,964 17,219,700 18,513,216 20,213,897 Capital projects 65,414,999 63,268,686 59,809,511 90,837,258 Debt service- Principal retirement 13,463,922 13,287,160 14,325,970 17,792,363 Interest and fiscal charges 9,641,498 8,306,767 9,244,645 8,616,675 Payment to refunding agent - 10,050,443 - 13,758,972 Other charges 229,245 423,510 - 967,009 Total expenditures 184,674,740 193,890,585 193,225,456 245,751,006 Excess of revenues over(under)expenditures (42,142,781) (45,702,880) (21,547,911) (65,606,056) Other financing sources(uses)- Issuance of lease(1) 2,250,000 - 5,981,044 2,900,000 Issuance of debt 11,450,000 38,725,000 - 67,685,000 Premium on bonds issued 1,094,690 2,652,531 4,884,123 Payment to refunded bond escrow agent (12,309,895) - - - Transfers in 30,552,126 31,908,470 22,678,818 42,110,430 Transfers out (26,942,126) (28,415,599) (25,640,589) (38,412,093) Total other financing sources(uses) 6,094,795 44,870,402 3,019,273 79,167,460 Net change in fund balances $ (36,047,986) $ (832,478) $ (18,528,638) $ 13,561,404 Capital outlay including amounts reported under departmental current expenditures $ 65,116,395 $ 90,020,515 $ 46,896,225 $ 87,242,801 Debt service as a percentage of noncapital expenditures 19.3% 20.8% 16.1% 16.7% (1) Issuance of lease refers to leases issued to debt finance equipment and vehicle replacement prior to FY 2022. GASB 87 was implemented in FY 2022 and changes the meaning of a lease.Therefore,the previous leases are referred to as Notes Payable throughout the Annual Comprehensive Financial Reporting,beginning in FY 2022. 138 2020 2021 2022 2023 2024 2025 $ 150,717,481 $ 166,252,010 $ 183,162,281 $ 188,219,454 $ 200,938,298 $ 213,976,377 1,834,311 2,543,143 2,959,342 4,443,231 2,721,325 3,935,751 5,274,975 7,092,585 7,929,787 8,749,122 9,384,978 9,572,502 1,623,976 1,152,990 1,380,898 1,246,354 1,236,382 1,520,430 5,540,163 11,400,907 24,816,402 20,188,481 13,461,703 13,968,603 4,111,858 11,003,127 15,128,191 17,048,182 16,927,611 16,250,961 9,165,467 7,261,313 2,778,909 21,244,232 26,200,867 23,855,455 3,336,036 2,338,936 3,285,315 7,880,970 7,306,731 17,987,034 181,604,267 209,045,011 241,441,125 269,020,026 278,177,895 301,067,113 24,841,662 31,324,914 35,377,631 39,592,677 44,587,914 40,177,056 56,494,602 59,445,458 64,353,318 71,658,737 79,580,289 94,349,862 17,290,725 16,946,664 19,056,273 19,383,569 20,342,252 23,033,058 19,022,847 19,931,144 24,017,708 26,620,493 29,439,138 41,805,622 82,350,573 47,540,721 87,575,761 85,953,520 89,783,294 208,164,659 18,296,526 20,148,502 19,650,222 24,867,905 24,666,863 21,670,000 10,243,591 10,367,705 12,133,701 12,237,746 11,206,001 13,258,503 7,010,563 - - - - - 276,058 1,225,607 1,512,308 - 730,985 514,947 235,827,147 206,930,715 263,676,922 280,314,647 300,336,736 442,973,707 (54,222,880) 2,114,296 (22,235,797) (11,294,621) (22,158,841) (141,906,594) 41,480,000 84,040,000 156,315,000 47,425,562 122,397,035 - 7,036,650 2,642,581 2,204,235 3,972,073 - (6,482,675) (79,078,568) - - - 39,495,337 75,973,539 70,036,965 43,448,957 82,379,430 64,292,607 (35,437,087) (70,777,539) (64,681,965) (37,189,093) (76,494,130) (58,141,307) 45,538,250 89,789,975 85,234,013 6,259,864 55,515,097 132,520,408 $ (8,684,630) $ 91,904,271 $ 62,998,216 $ (5,034,757) $ 33,356,256 $ (9,386,186) $ 80,820,915 $ 40,870,035 $ 86,316,796 $ 90,130,318 $ 94,451,327 $ 220,521,895 18.4% 18.4% 17.9% 19.5% 17.4% 16.3% 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 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 2021 14,769,011,872 1,302,409,762 16,071,421,634 713,462,308 15,357,959,326 0.4390 2022 17,549,969,505 1,450,591,938 19,000,561,443 1,329,837,647 17,670,723,796 0.3970 2023 24,341,708,325 1,568,031,609 25,909,739,934 4,216,713,471 21,693,026,463 0.3420 2024 24,404,533,554 1,682,642,459 26,087,176,013 2,035,120,348 24,052,055,665 0.3420 2025 25,001,604,774 1,834,256,565 26,835,861,339 1,537,623,785 25,298,237,554 0.3600 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 Debt Independent Direct and Fiscal Operating Service Total School Williamson Special Overlapping Year Rate Rate Direct District County Districts Rates 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 2021 0.2963 0.1427 0.4390 1.2212 0.4587 0.1258 2.2447 2022 0.2649 0.1321 0.3970 1.1336 0.4408 0.1223 2.0937 2023 0.2244 0.1176 0.3420 1.0626 0.3756 0.1162 1.8964 2024 0.2385 0.1035 0.3420 0.9190 0.3774 0.1156 1.7540 2025 0.2546 0.1054 0.3600 0.8931 0.4000 0.1183 1.7714 Source: Williamson County Tax Office 141 CITY OF ROUND ROCK,TEXAS PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2025 2016 Net %of Total Net %of Total Assessed Net Assessed Assessed Net Assessed Name of Taxpayer Valuation Rank Valuation Valuation Rank Valuation Kalahari Resorts and Conventions $ 547,781,857 1 2.165% $ - -% Dell Computer Holdings, LP 468,507,383 2 1.852 298,169,512 1 2.842 CPG Round Rock, LP/ Round Rock Premium Outlets 163,676,741 3 0.647 138,431,301 2 1.319 Texas Essential Housing Public Facility Corporation 151,075,978 4 0.597 - - CMF 15 Portfolio, LLC/ Colonial Grand Apartments 144,451,852 5 0.571 68,819,574 5 0.656 Dell Computer Corp. 141,838,661 6 0.561 91,256,835 3 0.870 Columbia/St. David Healthcare 119,621,932 7 0.473 66,533,660 6 0.634 Oncor Electric Delivery Co. 92,928,538 8 0.367 43,815,195 10 0.418 2811 La Frontera LP/ Griffis Apartments 89,587,767 9 0.354 - - TMP Parkside Project, LLC/ Parkside at Round Rock 87,990,045 10 0.348 - - Baltgem Development Corp./ La Frontera Village - - 77,884,064 4 0.742 Fisher-Rosemount Systems, Inc./ Emerson Process Management - - 49,000,000 7 0.467 Baev-LaSall Round Rock University Blvd, LLC - - 48,382,842 8 0.461 Las Brisas Luxury Apartment Homes LLP - - 43,921,785 9 0.419 $ 2,007,460,754 7.935% $ 926,214,768 8.828% 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 2016 $ 44,063,923 $ 43,894,949 99.62 % $ 1,386 $ 43,896,335 99.62 % 2017 49,113,540 48,988,540 99.75 2,549 48,991,089 99.75 2018 53,890,399 53,775,618 99.79 3,100 53,778,718 99.79 2019 57,296,592 57,106,114 99.67 2,526 57,108,640 99.67 2020 64,708,293 64,443,984 99.59 2,253 64,446,237 99.60 2021 68,133,164 67,922,644 99.69 2,616 67,925,260 99.69 2022 70,241,994 70,033,185 99.70 (20,528) 70,012,657 99.67 2023 74,262,463 74,016,437 99.67 (157,420) 73,859,017 99.46 2024 82,116,022 81,754,170 99.56 (674,083) 81,080,087 98.74 2025 90,575,785 90,283,507 99.68 - 90,283,507 99.68 143 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 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 2021 50,217,518 68,133,164 73.70 0.3270 122,827 409 2022 58,232,363 70,241,994 82.90 0.3295 124,614 467 2023 58,549,152 74,262,463 78.84 0.2699 128,957 454 2024 60,473,315 82,116,022 73.64 0.2514 132,927 455 2025 65,039,072 90,575,785 71.81 0.2571 139,436 466 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 effected through the office of the Texas Comptroller of Public Accounts who remits the proceeds of the tax, after deduction of a 2% service fee to the City monthly. The calculations above are only based on the 1%sales and use tax, not the 0.5%sales and use tax collected for reduction of ad valorem taxes or the 0.5%sales and use tax collected for transportation improvements. 144 090 145 CITY OF ROUND ROCK,TEXAS TAXABLE SALES BY CATEGORY LAST TEN CALENDAR YEARS Calendar Retail Wholesale Year Trade Manufacturing Services Trade Utilities 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 2020 1,782,012,610 843,382,610 523,120,666 221,749,525 24,315,005 2021 2,077,784,400 1,127,507,544 896,501,602 270,878,555 32,367,651 2022 2,278,068,535 1,457,309,601 957,452,286 308,871,134 57,963,650 2023 2,266,709,722 1,015,127,456 948,686,397 314,327,473 61,761,524 2024 2,180,044,618 1,042,339,984 1,088,818,878 313,149,204 57,092,184 $ 18,887,848,787 $ 10,244,088,254 $ 7,033,749,097 $ 2,169,103,334 $ 441,534,100 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 taxpayers 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 $ 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 8.25 159,456,159 3,103,437 3,557,140,012 2.00 6.25 8.25 151,326,047 3,053,232 4,559,419,031 2.00 6.25 8.25 194,741,671 3,034,913 5,257,441,790 2.00 6.25 8.25 192,283,446 3,343,849 4,802,239,867 2.00 6.25 8.25 162,739,241 3,499,440 4,847,683,549 2.00 6.25 8.25 $ 1,589,172,416 $ 29,708,713 $ 40,395,204,701 147 CITY OF ROUND ROCK,TEXAS HOTEL TAXPAYERS YEAR ENDED SEPTEMBER 30, 2025 (cash basis of accounting) Total Hotel Motel Hotel Motel Collections Number %of Occupancy Occupancy Year Ended of Total Taxpayer Tax Venue Tax Sept. 30, 2025 Rooms Collections Kalahari Resorts &Conventions $ 6,263,010 $ 1,789,432 $ 8,052,442 975 49.63% Austin Marriott North 743,253 212,517 955,770 295 5.89 Embassy Suites 610,983 176,330 787,313 180 4.85 Hyatt Place 316,429 91,183 407,612 138 2.51 Homewood Suites 256,560 73,303 329,863 115 2.03 Home2 Suites North 245,633 70,302 315,935 119 1.95 Element 229,858 66,337 296,195 123 1.83 Hilton Garden Inn 228,872 66,052 294,924 122 1.82 La Quinta East 215,116 61,462 276,578 99 1.70 Courtyard Marriott 199,205 56,983 256,188 113 1.58 Towneplace Suites 194,203 55,487 249,690 102 1.54 Aloft 187,318 54,060 241,378 120 1.49 Hampton Inn 182,516 52,147 234,663 93 1.45 Springhill Suites 180,959 52,047 233,006 104 1.44 Home2 Suites South 177,049 50,585 227,634 91 1.40 Holiday Inn Express North 159,817 46,123 205,940 109 1.27 Tru by Hilton 159,163 45,776 204,939 98 1.26 AVID 148,277 42,756 191,033 89 1.18 Holiday Inn Express South 141,339 40,751 182,090 91 1.12 Wingate Inn 133,353 38,453 171,806 100 1.06 Ruby Hotel 132,814 38,240 171,054 39 1.05 Holiday Inn 130,998 37,682 168,680 116 1.04 La Quinta North 129,719 37,385 167,104 116 1.03 Residence Inn 122,411 34,997 157,408 96 0.97 Staybridge 119,526 34,451 153,977 81 0.95 La Quinta South 117,436 33,892 151,328 86 0.93 Microtel 100,696 29,061 129,757 82 0.80 Days Inn 91,359 26,366 117,725 68 0.73 Sleep Inn 86,736 25,032 111,768 74 0.69 Short Term Rentals 82,162 23,643 105,805 93 0.65 Spark by Hilton 61,011 17,608 78,619 63 0.48 Quality Inn 59,822 17,092 76,914 49 0.47 Country Inn 57,076 16,307 73,383 61 0.45 Candlewood Suites 55,590 16,043 71,633 98 0.44 Extended Stay America#6197 54,272 15,506 69,778 104 0.43 Extended Stay America#6030 52,060 14,874 66,934 138 0.41 Motel 51,025 14,726 65,751 60 0.41 Woodspring Suites South 48,004 13,854 61,858 122 0.38 Red Roof Inn 45,999 13,275 59,274 107 0.37 Woodspring Suites North 40,337 11,525 51,862 121 0.32 $ 12,611,966 $ 3,613,645 $ 16,225,611 5,050 100.0% 148 CITY OF ROUND ROCK,TEXAS HOTEL OCCUPANCY TAX COLLECTION HISTORY BY QUARTER LAST TEN FISCAL YEARS (cash basis of accounting) Fiscal 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Oct.—Dec. Jan.—Mar. Apr.—June July—Sept. Total 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 2021 1,145,806 2,201,407 3,689,498 3,966,416 11,003,127 2022 3,235,991 3,249,855 4,400,515 4,241,830 15,128,191 2023 3,913,244 3,959,304 4,634,993 4,540,641 17,048,182 2024 3,926,574 3,194,936 4,501,096 5,519,156 17,141,762 2025 3,472,656 2,745,548 4,975,452 5,031,956 16,225,612 149 CITY OF ROUND ROCK,TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Business-Type Governmental Activities Activities General Revenue Bonds Total Percentage Fiscal Obligation Certificates of Other Debt and Other Primary of Personal Per Year Bonds Obligation Obligations Obligations Government Income Capita 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 2021 131,555,000 140,250,000 84,871,892 72,342,981 429,019,873 6.16 3,493 2022 162,165,000 148,300,000 104,303,592 68,669,982 483,438,574 6.16 3,879 2024 158,870,000 155,955,000 111,357,951 61,125,710 487,308,661 5.03 3,666 2025 237,350,000 168,580,000 116,214,585 56,970,341 579,114,926 4,153 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Other Debt Obligations include Limited Tax Notes, Hotel Tax Revenues Bonds,Sales Tax Revenue Bonds, State Infrastructure Bank Loan, Excess Sales Tax Liability, Leases, Subscriptions, and net deferred issuance costs. See the Schedule of Demographic and Economic Statistics for personal income and population data. *Personal Income data was not available when the 2025 ACFRwas prepared. 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 Available of Net Net in Bonded Net Assessed Gross Debt Net Debt to Bonded Fiscal Value (in Bonded Service Bonded Assessed Debt Per Year Population* thousands) Debt Fund Debt Value Capita 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 2021 122,827 15,357,959 298,467,896 5,519,166 292,948,730 1.91 2,385 2022 124,614 17,670,723 336,822,235 4,658,982 332,163,253 1.88 2,666 2023 128,957 21,693,026 314,626,851 4,110,112 310,516,739 1.43 2,408 2024 132,927 24,052,056 342,752,674 5,421,856 337,330,818 1.40 2,538 2025 139,436 25,298,238 438,012,929 1,812,005 436,200,924 1.72 3,128 *Source: Planning Department,City of Round Rock Note: Includes Certificates of Obligation, General Obligation Bonds, Limited Tax Notes, and Notes Payable net of related premiums and discounts. 151 CITY OF ROUND ROCK, TEXAS COMPUTATION OF DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT YEAR ENDED SEPTEMBER 30, 2025 Total Estimated General Estimated Share of Debt Percentage Overlapping Name of Governmental Unit Outstanding* Applicable** Debt Debt repaid with property taxes- Williamson County $ 1,422,205,000 17.25% $ 245,330,363 Round Rock Independent School District 911,250,000 38.41 350,011,125 Round Rock MUD#1 22,325,000 100.00 22,325,000 Round Rock MUD#2 19,625,000 100.00 19,625,000 Travis County 1,169,850,000 0.23 2,690,655 Austin Community College 657,685,000 6.03 39,658,406 Georgetown ISD 1,107,370,000 1.31 14,506,547 Pflugerville ISD 678,530,000 0.24 1,628,472 Travis County Healthcare District 157,670,000 0.23 362,641 Upper Brushy Creek WICD 48,465,000 27.43 13,293,950 Avery Centre Road District 9,340,000 100.00 9,340,000 Subtotal,overlapping debt 718,772,159 City direct debt 522,144,585 Total direct and overlapping debt $ 1,240,916,744 *Gross Debt as of September 30, 2025 **The percentage of overlapping debt applicable is estimated using taxable assessed property values. Source: City of Round Rock Finance Department and Municipal Advisory of Texas (Texas MAC) 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. 152 153 CITY OF ROUND ROCK,TEXAS LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2016 2017 2018 2019 Debt limit $ 1,786,728,268 $ 1,928,938,196 $ 2,120,343,710 $ 2,315,885,331 Total net debt applicable to limit 170,530,355 193,049,018 183,486,483 205,255,625 Legal debt margin $ 1,616,197,913 $ 1,735,889,178 $ 1,936,857,227 $ 2,110,629,706 Total net debt applicable to the limit as a percentage of debt limit 9.54% 10.01% 8.65% 8.86% Legal Debt Margin Calculation for Fiscal Year 2025 Total assessed value $ 25,298,237,554 Debt limit- maximum serviceable at permitted allocation of$1.50 per$100 of assessed value $ 4,308,111,513 Amount of debt applicable to debt limit: Total General Obligation Debt $ 430,168,392 Less: Amount available in Debt Service Fund (1,812,005) Total net debt applicable to debt limit 428,356,387 Legal debt margin $ 3,879,755,126 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, 2024, assessed valuation of $25,298,237,554 at 100%collection, tax revenue of$379,473,563 would be produced. This revenue could service the debt on $4,308,111,513 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 2026 $ 38,848,852 Tax Year 2024 Interest and Sinking Fund Tax Levy @ 99%Collection $ 32,154,100 Interest and Sinking Fund Balance as of September 30,2025 1,812,005 Self-Supporting Debt 6,398,950 40,365,055 Estimated Balance, September 30,2026 $ 1,516,203 154 2020 2021 2022 2023 2024 2025 $ 2,494,413,566 $ 2,615,352,206 $ 3,009,199,691 $ 3,694,169,480 $ 4,095,895,523 $ 4,308,111,513 224,164,909 266,285,834 315,255,537 301,800,792 325,906,422 428,356,387 $ 2,270,248,657 $ 2,349,066,372 $ 2,693,944,154 $ 3,392,368,688 $ 3,769,989,101 $ 3,879,755,126 8.99% 10.18% 10.48% 8.17% 7.96% 9.94% 155 CITY OF ROUND ROCK, TEXAS CONDENSED UTILITY STATEMENT OF OPERATIONS LAST TEN FISCAL YEARS 2016 2017 2018 2019 Gross Revenue (1) Charges for services $ 44,406,721 $ 47,769,478 $ 50,715,034 $ 51,973,150 Licenses, permits and fees 4,247,067 4,211,137 4,226,721 4,828,792 Investment and other income 1,211,532 2,284,171 3,122,041 4,772,982 Total 49,865,320 54,264,786 58,063,796 61,574,924 Direct Operating Expense (2) Personnel services 9,742,128 11,871,681 10,940,702 12,809,236 Contracted services 15,222,355 14,854,212 16,695,290 14,844,774 Materials and supplies 2,091,331 2,504,640 2,392,415 3,385,739 Heat, light and power 1,662,779 1,618,297 1,578,540 2,188,155 Total 28,718,593 30,848,830 31,606,947 33,227,904 Net available for Debt Service $ 21,146,727 $ 23,415,956 $ 26,456,849 $ 28,347,020 Debt Service Requirements (P&I) $ 5,994,842 $ 6,352,459 $ 5,444,927 $ 6,102,631 Revenue Bond Coverage 3.53 3.67 4.86 4.65 Metered Water Customers 32,930 33,602 34,581 35,397 Metered Wastewater Customers 31,984 32,614 33,277 34,085 Average Annual Principal and Interest Requirements, FY 2026-2039 $ 4,839,680 Coverage of Average Requirements by FY 2025 Net Revenue 9.00 Estimated Maximum Principal and Interest Requirements, FY 2026 $ 5,953,950 Estimated Coverage of Maximum Requirements by FY 2025 Net Revenue 7.32 Parity Debt Outstanding at FY 2025 $ 52,315,000 (1) Water and Wastewater Fund operating and non-operating revenues (2) Water and Wastewater Fund operating expenses,excluding depreciation/amortization 156 2020 2021 2022 2023 2024 2025 $ 55,695,939 $ 55,106,110 $ 60,923,212 $ 61,870,880 $ 58,952,865 $ 65,460,046 4,693,720 5,472,368 6,302,178 6,394,076 6,447,691 7,832,616 4,010,185 2,363,247 90,182 7,289,303 14,432,338 21,895,674 64,399,844 62,941,725 67,315,572 75,554,259 79,832,894 95,188,336 12,751,829 12,896,946 13,633,693 16,702,089 18,437,608 19,201,634 13,759,401 16,476,180 18,392,887 17,758,878 21,436,997 25,621,177 2,747,862 3,051,250 4,234,393 4,319,533 4,545,633 3,949,916 2,452,847 2,404,405 2,891,204 3,109,243 2,901,029 2,847,327 31,711,939 34,828,781 39,152,177 41,889,743 47,321,267 51,620,054 $ 32,687,905 $ 28,112,944 $ 28,163,395 $ 33,664,516 $ 32,511,627 $ 43,568,282 $ 6,082,481 $ 6,073,581 $ 6,062,631 $ 5,956,631 $ 5,948,181 $ 5,952,331 5.37 4.63 4.65 5.65 5.47 7.32 35,998 36,593 37,324 37,659 38,441 38,855 35,299 35,879 36,581 36,883 37,635 38,028 157 Fil dn � w, , gyp" 158 CITY OF ROUND ROCK,TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (2) Per (3) (4) (5) Fiscal (1) Personal Capita Median School Unemployment Year Population Income Income Age Enrollment Rate 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 2021 122,827 6,963,431,111 56,693 33.7 48,366 3.3 2022 124,614 7,842,083,634 62,931 33.7 47,184 2.6 2023 128,957 8,650,822,431 67,083 35.2 46,385 3.2 2024 132,927 9,680,807,556 72,828 35.4 47,131 3.3 2025 139,436 - - 36.7 46,075 3.6 Sources: (1) Planning Department, City of Round Rock (2) 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. (3) U.S.Census Bureau (4) Round Rock Independent School District (5) U.S. Bureau of Labor Statistics Personal Income data was not available when the 2025 ACFR was prepared. 159 CITY OF ROUND ROCK, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2025 2016 %of Total %of Total City City Name of Employer Employees Rank Employment Employees Rank Employment Dell Technologies 10,000 1 12.76% 11,000 1 18.09% Round Rock Independent School District 6,236 2 7.95 5,800 2 9.54 Kalahari Resorts &Conventions 1,830 3 2.33 - - City of Round Rock 1,204 4 1.54 918 4 1.51 Airco Mechanical 1,197 5 1.53 - - Baylor Scott&White Healthcare 1,000 6 1.28 750 7 1.23 UPS 914 7 1.17 - - St. David's Round Rock Medical Center 846 8 1.08 689 8 1.13 Ascension Seton Medical Center Williamson 708 9 0.90 - - Emerson Automation Solutions 700 10 0.89 875 5 1.44 Sears TeleServe - - 1,500 3 2.47 Round Rock Premium Outlets - - 800 6 1.32 Liquidation Channel - - 600 9 0.99 Wayne, a GE Energy Business - - 550 10 0.90 Total 24,635 31.43% 23,482 38.62% 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 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Function: General government 163 179 194 202 205 206 216 223 237 245 Public safety- Police- Officers 168 174 176 176 180 180 186 200 200 209 Civilians 72 74 75 78 78 78 82 82 87 90 Fire- Firefighters &officers 132 134 149 152 153 155 159 163 169 178 Civilians 8 8 9 10 10 8 22 24 25 22 Public works- Street&Stormwater 76 73 77 81 82 82 90 96 96 100 Shop 19 18 18 19 19 19 19 22 23 23 Culture&Recreation- Library 31 31 31 32 33 34 40 40 49 44 Parks&Recreation 106 102 105 107 108 108 110 129 134 137 Water&Wastewater Utility 128 128 131 151 151 151 151 153 157 156 Total 903 921 965 1,008 1,019 1,021 1,075 1,132 1,177 1,204 Source:City of Round Rock Finance Department 161 CITY OF ROUND ROCK, TEXAS OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS 2016 2017 2018 2019 Function: Police- Arrests 4,476 4,600 4,152 4,272 Accident reports 2,370 2,370 2,762 2,698 Index crimes reported* 2,383 2,383 2,870 2,648 Crimes per thousand residents* 22.50 22.50 26.50 23.40 Officers per thousand of population 1.43 1.48 1.56 1.53 Fire- Incident volume** 9,346 10,777 11,328 11,813 Priority calls answered** 3,735 2,548 5,083 4,078 Non-emergency calls answered** 5,611 8,229 6,245 7,735 Priority calls-response less than 6 minutes 61% 58% 53% 79% Public Works- Street- Street resurfacing (lane miles) 60 60 60 121 Potholes repaired annually 400 300 300 280 Signals maintained 83 89 90 93 Shop- Work orders 4,761 4,620 4,733 4,936 Number of departments served 12 12 12 12 Culture and Recreation- Library- Number of items circulated 1,080,312 1,188,757 1,229,141 1,315,186 Number of card holders 77,818 79,415 81,181 83,507 Number of library visits 391,256 389,930 388,732 416,391 Parks& Recreation- Total park acres maintained 2,045 2,270 2,270 2,285 Number of athletic fields maintained 49 49 49 49 Number of trees planted 195 408 43 74 Number of recreation participants 988,337 1,080,853 1,140,094 892,870 Water- New connections 480 665 911 789 Line maintenance work orders 3,512 3,346 3,013 1,778 Average monthly consumption 536,082,308 571,062,558 612,026,451 543,547,232 Wastewater- Average monthly treatment 416,357,161 425,631,471 426,330,521 410,300,487 Line feet reviewed for infiltration &inflow 189,418 206,675 169,579 133,098 Source: City of Round Rock Finance Department *Note:The Police Department started using the NIBRS System in FY 2020 to report to the State. **Note: The Fire Department started using a new program to record incidents starting in FY 2021. 162 2020 2021 2022 2023 2024 2025 3,592 3,049 4,243 4,275 4,208 3,687 2,636 2,236 3,109 3,408 3,281 3,881 2,400 6,960 8,522 8,365 7,873 7,957 21.00 56.10 67.80 57.70 58.40 56.01 1.53 1.49 1.48 1.52 1.48 1.48 12,189 13,193 14,876 15,781 16,160 17,233 3,248 2,590 6,288 3,715 4,844 5,136 8,941 10,603 8,588 12,066 11,316 12,097 73% 72% 67% 58% 71% 70% 183 190 140 80 72 60 250 220 260 285 320 300 100 100 100 101 104 107 4,980 2,972 4,492 4,763 4,896 4,949 12 12 12 14 14 14 986,686 1,105,973 1,171,561 1,290,953 1,500,148 1,270,200 80,656 65,159 65,788 74,490 81,173 91,552 219,736 156,742 275,851 449,234 552,424 538,438 2,285 2,295 2,301 2,305 2,328 2,328 51 51 51 51 51 51 98 73 21 56 51 184 332,895 513,322 518,194 548,195 717,461 675,700 534 486 710 347 814 474 2,366 2,383 2,513 2,508 3,599 4,527 620,080,709 622,781,309 773,701,493 802,575,698 671,803,014 774,905,722 440,156,307 498,103,453 537,916,079 554,289,168 464,221,683 466,222,890 109,080 102,296 194,727 204,657 166,454 124,870 163 CITY OF ROUND ROCK, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS 2016 2017 2018 2019 Function: Police- Number of stations 1 1 1 1 Number of units 259 256 261 241 Fire- Number of stations 7 9 9 9 Number of fire trucks 15 16 16 17 Public Works- Street- Lane miles 1,200 1,200 1,300 1,350 Drainage miles 150 151 200 200 Number of street lights 5,433 5,604 5,674 5,733 Number of traffic signals 83 89 90 93 Shop- Repair facilities 1 1 1 1 Number of bays 13 18 18 18 Culture and Recreation- Library- Number of library books 257,667 213,381 225,903 230,094 Number of library facilities 1 1 1 1 Parks& Recreation- Total park acres 2,035 2,270 2,270 2,285 Number of athletic fields 49 59 59 61 Number of parks 62 61 61 61 Number of tennis courts 25 22 21 21 Number of pools 4 4 4 4 Water- Number of miles of water lines* 615 614 651 636 Pumping stations 10 10 10 11 Tanks 19 19 19 19 Treatment capacity(millions of gallons/day) 52 52 52 52 Wastewater- Number of miles of wastewater mains 427 428 461 445 Wastewater lift stations 12 12 12 11 Source: City of Round Rock Finance Department *Includes MUDS and private owned lines 164 2020 2021 2022 2023 2024 2025 1 1 1 1 1 1 252 258 270 268 274 290 9 9 9 9 9 9 17 17 20 11 12 13 1,450 1,500 1,500 1,500 1,500 1,500 333 352 368 395 522 562 5,771 5,749 5,787 5,787 8,878 7,614 100 100 100 101 104 107 2 2 2 2 2 2 21 21 21 21 21 21 227,880 228,866 230,577 218,927 218,545 216,877 1 1 1 1 1 1 2,285 2,295 2,301 2,305 2,328 2,328 61 61 61 61 61 61 61 61 61 61 61 61 21 21 21 21 21 21 4 4 4 4 4 4 667 698 722 711 713 732 11 11 11 11 11 11 19 20 20 20 20 20 61 61 61 61 61 61 467 477 495 514 516 522 11 11 11 12 12 12 165 CITY OF ROUND ROCK, TEXAS TOP TEN WATER CUSTOMERS SEPTEMBER 30, 2025 %of Total Water Water Consumption Consumption Name of Customer Type of Business in Gallons in Gallons City of Georgetown,Texas Municipality 1,619,159,700 17.412% Fern Bluff Municipal Utility District Municipal Utility District 284,828,800 3.063 Paloma Lake Municipal Utility District Municipal Utility District 267,671,900 2.879 Williamson County Municipal Utility District#10 Municipal Utility District 210,970,400 2.269 Williamson County Municipal Utility District#11 Municipal Utility District 191,369,500 2.058 Chandler Creek Municipal Utility District Municipal Utility District 145,262,800 1.562 Kalahari Resorts &Conventions Hotel 144,776,300 1.557 Vista Oaks Municipal Utility District Municipal Utility District 107,996,800 1.161 Mid America Apartments, LP Multi-Family Housing 85,155,200 0.916 Dell, Inc. Electronic Equipment 78,597,500 0.845 3,135,788,900 33.722% Source: City of Round Rock Finance Department 166 CITY OF ROUND ROCK,TEXAS WATER AND WASTEWATER RETAIL RATES SEPTEMBER 30,2025 Water rates for retail customers inside the city limits are as follows: Volume Rate Monthly Service Charge Billing periods for residential: Meter Size Base Monthly Water Four block structure for use in excess of predetermined amounts set by meter size - Serving Customer Service Charge Block 1: $2.56 5/8 inch $ 17.35 Block 2: $3.41 3/4 inch 24.15 Block 3: $4.27 1 inch 38.14 Block 4: $6.40 1 1/2 inch 73.07 Block 5: $6.85 2 inch 114.99 3 inch 212.81 Billing periods for commercial: 4 inch 352.58 $2.90 per 1,000 gallons of water used by all customers 6 inch 1,099.20 8 inch 1,921.26 Billing periods for irrigation: 10 inch 3,017.35 Four block structure for use in excess of predetermined amounts set by meter size - 12 inch 3,702.42 Block 1: $3.41 Block 2: $4.27 Block 3: $6.40 Block 4: $6.85 Wastewater rates for retail customers inside the city limits are as follows: Volume Rate Monthly Service Charge Monthly $3.15 per 1,000 gallons of water used by all customers* Meter Size Base Wastewater Serving Customer Service Charge 5/8 inch $ 14.06 3/4 inch 18.35 1 inch 26.31 1 1/2 inch 47.98 2 inch 73.98 3 inch 134.63 4 inch 221.28 6 inch 652.19 8 inch 1,138.09 10 inch 1,785.94 12 inch 2,190.85 * Wastewater 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, No. 0-2022-020, No. 0-2024-225,and No.0-2024-266. 167 C- 168 CITY OF ROUND ROCK,TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2025 Grant or Pass-Through Identifying to Non-State Direct Total Federal Grantor/Pass-Through Grantor Program Title ALN* Number Entities Expenditures Expenditures U.S.Department of Homeland Security Pass-Through from Texas A&M Engineering Extension Service National Urban Search &Rescue Response System Tropical Cyclone Helene 97.025 250101 $ - $ 25,883 $ 25,883 Tropical Cyclone Milton 97.025 250102 - 8,332 8,332 Total National Urban Search&Rescue Response System - 34,215 34,215 Total U.S.Department of Homeland Security - 34,215 34,215 U.S.Department of Housing&Urban Development Community Development Block Grants/Entitlement Grants Cluster Community Development Block Grants/Entitlement Grants 14.218 B20MC480514 - 92,672 92,672 Community Development Block Grants/Entitlement Grants 14.218 B21 MC480514 - 2,153 2,153 Community Development Block Grants/Entitlement Grants 14.218 B22MC480514 - 926 926 Community Development Block Grants/Entitlement Grants 14.218 B23MC480514 - 161,813 161,813 Community Development Block Grants/Entitlement Grants 14.218 B24MC480514 96,334 128,446 224,780 Community Development Block Grants/Entitlement Grants (Covid-19) 14.218 B20MW480514 - 18,708 18,708 Total Community Development Block Grants/Entitlement Grants Cluster 96,334 404,718 501,052 Total U.S.Department of Housing&Urban Development 96,334 404,718 501,052 U.S.Department of Justice Public Safety Partnership and Community Policing Grants FY23 COPS Technology and Equipment Program 15JCOPS-23-GG- (Congressionally Directed Spending) 16.710 01671-TECP - 776,440 776,440 Total Public Safety Partnership and Community Policing Grants - 776,440 776,440 Total U.S.Department of Justice - 776,440 776,440 U.S.Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds (Covid-19) Coronavirus State and Local Fiscal Recovery Funds (Covid-19) 21.027 SLT-4414 - 6,224,301 6,224,301 Pass-Through from Williamson County, Texas Coronavirus State and Local Fiscal Recovery Funds (Covid-19) 21.027 N/A - 10,422,013 10,422,013 Total Coronavirus State and Local Fiscal Recovery Funds(Covid-79) - 16,646,314 16,646,314 Total U.S.Department of the Treasury - 16,646,314 16,646,314 U.S.Department of Transportation Federal Transit Cluster Federal Transit Formula Grants 20.507 TX-2021-039-00 - 308,561 308,561 Federal Transit Formula Grants 20.507 TX-2023-015-00 - 656,967 656,967 Total Federal Transit Cluster - 965,528 965,528 Total U.S.Department of Transportation - 965,528 965,528 Total Expenditures of Federal Awards $ 96,334 $ 18,827,215 $ 18,923,549 *Assistance Listing Number(ALN) formerly known as Catalog of Federal Domestic Assistance (CFDA). 169 CITY OF ROUND ROCK,TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS YEAR ENDED SEPTEMBER 30, 2025 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 15-percent de minimis indirect cost rate allowed under the Uniform Guidance. 4. EXPENDITURES INCURRED IN A PRIOR YEAR Some expenditures recorded in the SEFA, associated with Tropical Cyclone Helene that were passed through the Texas A&M Engineering Extension Service to the City of Round Rock from the U.S. Department of Homeland Security, were incurred in a prior year. Even though the expenditures were incurred in a prior year,the final invoices were not approved for payment until FY 2025. Accordingly, these expenditures are being reported on the City of Round Rock's SEFA in the year they were approved for payment,in compliance with the OMB Compliance Supplement. 170 Austin Office 3600 N.Capital of Tex Bldg B.Suite 250 Austin,Texas 78746 737.931.8200 Main whitleypenn.com INDEPENDENT AUDITOR'S 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 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 30,2025,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 9,2026. Report on 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 City's financial statements will not be prevented,or detected and corrected on a timely basis.Asignificant 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 or significant deficiencies may exist that were not identified. Report on 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. HLB AReE AN INDEPENDENT MEMBER OF THE GLOBAL ADVISORY 171 AND ACCOUNTING NETWORK To the Honorable Mayor and Members of City Council City of Round Rock,Texas 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 City'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 City's internal control and compliance.Accordingly,this communication is not suitable for any other purpose. Austin,Texas February 9,2026 172 Austin Office 3600 N.Capital of Tex Bldg B.Suite 250 Austin,Texas 78746 737.931.8200 Main whitleypenn.com INDEPENDENT AUDITORS' REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL 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 Opinion on Each Major Federal Program We have audited City of Round Rock,Texas' (the"City")compliance with the types of compliance requirements identified as subject to audit 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 30,2025.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. In our opinion,the City complied, in all material respects,with the 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 30,2025. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS);the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States(Government Auditing Standards);and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,Audit Requirements for Federal Awards(Uniform Guidance). Our responsibilities under those standards,the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City's compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation,and maintenance of effective internal control over compliance with the requirements of laws,statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City's federal programs. HLB AReE AN INDEPENDENT MEMBER OF THE GLOBAL ADVISORY 173 AND ACCOUNTING NETWORK To the Honorable Mayor and Members of City Council City of Round Rock,Texas Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred,whether due to fraud or error,and express an opinion on the City's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS,Government Auditing Standards,the Uniform Guidance,will always detect material noncompliance when it exists.The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error,as fraud may involve collusion,forgery, intentional omissions, misrepresentations,or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole. In performing an audit in accordance with GAAS,Government Auditing Standards,and the Uniform Guidance,we • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance,whether due to fraud or error,and design and perform audit procedures responsive to those risks.Such procedures include examining,on a test basis,evidence regarding the City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the City's internal control over compliance.Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding,among other matters,the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on 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.Amaterial 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.Asignificant 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 Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses,as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 174 To the Honorable Mayor and Members of City Council City of Round Rock,Texas Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. 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. Austin,Texas February 9,2026 175 CITY OF ROUND ROCK,TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended September 30,2025 I.Summary of Auditors'Results Financial Statements Type of auditors' report issued: Unmodified Internal control over financial reporting: Material weakness(es)identified? No Significant deficiencies identified that are not considered to be material weaknesses? None reported Noncompliance material to financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es)identified? No Significant deficiencies identified that are not considered to be material weaknesses? None reported Type of auditors' report issued on compliance with major programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? No Identification of Major Federal Programs: Assistance Listing Name of Federal Program or Cluster Number(ALN) U.S.Department of Justice FY23 COPS Technology and Equipment Program(Congressionally Directed Spending) 16.710 U.S.Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds(COVID-19) 21.027 Dollar Threshold Used to Distinguish Between Type A and Type B Programs $1,000,000 Auditee qualified as low-risk auditee? Yes II.Financial Statement Findings None noted. III. Federal Award Findings and Questioned Costs None noted. 176 CITY OF ROUND ROCK,TEXAS SUMMARYSCHEDULE OF PRIOR AUDIT FINDINGS For the Year Ended September 30,2025 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,or no longer valid or not warranting further action. The Summary Schedule of Prior Audit Findings for the year ended September 30,2025 has been prepared to address these requirements. I.Prior Audit Findings None noted. 177 CITY OF ROUND ROCK,TEXAS CORRECTIVE ACTION PLAN For the Year Ended September 30,2025 Federal regulations,Title 2 U.S. Code of Federal Regulations§200.511 states, "At the completion of the audit,the auditee must prepare a corrective action plan to address each audit finding included in the auditor's report for the current year.The corrective action plan must be a document separate from the auditor's findings described in §200.516." The Corrective Action Plan for the year ended September 30,2025 has been prepared to address these requirements. I.Corrective Action Plan Not applicable. 178