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Res 19-14 Approving Comprehensive Annual Financial Report for the year ended September 30, 2018 TOWN OF WESTLAKE RESOLUTION NO. 19-14 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF WESTLAKE, TEXAS, ACCEPTING THE COMPREHENSIVE ANNUAL FINANCIAL REPORT PRESENTED BY WEAVER AND TIDWELL, L.L.P., FOR THE FISCAL YEAR ENDED SEPTEMBER 30,2018. WHEREAS, Section 103.001 of the Local Government Code requires that a municipality shall have its records and accounts audited annually and shall have an annual financial statement prepared based on the audit; and WHEREAS, Section 103.002 of the Local Government Code requires that a municipality shall employ at its own expense a certified public accountant who is licensed in this state or a public accountant who holds a permit to practice from the Texas State Board of Public Accountancy to conduct the audit and to prepare the annual financial statements; and WHEREAS, the Town Council finds that the passage of this Resolution is in the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TOWN OF WESTLAKE: SECTION 1: That, all matters stated in the Recitals hereinabove are found to be true and correct and are incorporated herein by reference as if copied in their entirety. SECTION 2: That the Town Council does hereby accept the Comprehensive Annual Financial Report from Weaver and Tidwell, L.L.P., for the fiscal year ended September 30, 2018, attached as Exhibit "A". SECTION 3: If any portion of this Resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the Council hereby determines that it would have adopted this Resolution without the invalid provision. Resolution 19-14 Page 1 of 2 SECTION 4: That this resolution shall become effective from and after its date of passage. PASSED AND APPROVED ON THIS 25th DAY OF MARCH,2019. Laura Wheat, Mayor ATTEST: I FA V�y Kellp Ed rds, Town Secretary 7 APPRO - A FORM: m �FNA S L. anto L own Attorney Resolution 19-14 Page 2 of 2 THE TOWN OF _ • ,_, sji s�. raw iquAL M COIM. AW For the Fiscal Yeat Fn d- d I f > i f m er 8 2018 1-y 6 ��, - -tir o - InaSea The Town of Westlake 1500 Solana Blvd, Suite 722LWestlake, Texas 76262 * www.westiake-tx.org T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN Town of Westlake, Texas Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2018 Prepared by: Town of Westlake Finance Department 1500 Solana Blvd, Suite 7200 Westlake, Texas 76262 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN Town of Westlake Consolidated Annual Financial Report For the Fiscal Year Ended September 30, 2018 Table of Contents Page Exhibit Introductory Section Letter of Transmittal iii GFOA Certificate of Achievement x Organization Chart A Town Officials xiii Financial Section Independent Auditor's Report 4 Management's Discussion and Analysis 10 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 24 A-1 Statement of Activities 25 A-2 Fund Financial Statements Governmental Funds Financial Statements Balance Sheet 27 A-3 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 29 A-4 Statement of Revenues,Expenditures,and Changes in Fund Balances 31 A-5 Reconciliation of the Statement of Revenues,Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 33 A-6 Proprietary Funds Financial Statements Statement of Net Position 34 A-7 Statement of Revenues,Expenses,and Changes in Net Position 35 A-8 Statement of Cash Flows 36 A-9 Fiduciary Funds Financial Statements Statement of Fiduciary Net Position 37 A-10 Discretely Presented Component Units Financial Statements Combining Statement of Net Position 38 A-1 1 Combining Statement of Activities 39 A-12 Notes to the Basic Financial Statements 42 Required Supplementary Information Schedule of Revenues,Expenditures,and Changes in Fund Balance- Budget and Actual-General Fund 92 B-1 Schedule of Revenues,Expentitures and Changes in Fund Balance- Budget and Actual-Westlake Academy 93 B-2 Notes to Budgetary Comparison Schedules 94 Schedule of Net Pension Liability and Related Ratios-TMRS Pension Plan 95 B-3 Schedule of Pension Contributions-TMRS Pension Plan 96 B-4 Notes to TMRS Pension Plan Required Supplementary Information 97 Schedule of Academy's Proportionate Share of Net Pension Liability-TRS Pension Plan 98 B-5 Schedule of Pension Contributions-TRS Pensions 99 B-6 Notes to TRS Pensions Required Supplementary Information 100 Schedule of Changes in the Total OPEB Liability and Related Ratios-TMRS 101 B-7 Schedule of OPEB Contributions-TMRS 102 B-8 Notes to TMRS OPEB Required Supplementary Information 103 Schedule of Academy's Proportionate Share of Net OPEB Liability-TRS Care Plan 104 B-9 Schedule of OPEB Contributions -TRS Care Plan 105 B-10 Notes to TRS Care Plan Required Supplementary Information 106 i Town of Westlake Consolidated Annual Financial Report For the Fiscal Year Ended September 30, 2018 Table of Contents - Continued Page Exhibit Combining and Individual Fund Statements and Schedules Major Governmental Funds Schedule of Revenues,Expenditures and Changes in Fund Balances Budget and Actual- Debt Service Fund 109 C-1 Nonmajor Governmental Funds Combining Balance Sheet III C-2 Combining Statement of Revenues,Expenditures,and Changes in Fund Balance 112 C-3 Nonmajor Special Revenue Funds Budgetary Comparison Schedules Visitors Association Fund 113 C-4 Lone Star Public Facilities Corporation Fund 114 C-5 Economic Development Fund 115 C-6 4B Economic Development Corporation Fund 116 C-7 Agency Funds Statement of Changes in Assets and Liabilities-PID Agency Fund 118 C-8 Statistical Section Net Position By Component 122 S-1 Changes in Net Position 123 S-2 Fund Balances,Governmental Funds 125 S-3 Changes in Fund Balances,Governmental Funds 126 S-4 Assessed Value and Estimated Actual Value of Taxable Property 128 S-5 Principal Property Tax Payers 129 S-6 Property Tax Levies and Collections 130 S-7 Direct and Overlapping Property Tax Rates 131 S-8 Taxable Sales bylndustryType 132 S-9 Ratios of General Bonded Debt Outstanding 133 5-10 Ratios of Outstanding Debt by Type 134 S-1 1 Direct and Overlapping Governmental Activities Debt 135 S-12 Demographic and Economic Statistics 136 S-13 Principal Employers 137 S-14 Full-Time Equivalent City Government Employees by Function/Program 138 S-15 Operating Indicators by Function/Program 139 5-16 Capital Asset Statistics by Function/Program 140 S-17 ii 4- 7 N E T 0 W N O F WESTLAKE March 19, 2019 Honorable Mayor, Council Members and the Citizens of the Town of Westlake, The Town of Westlake (the "Town") Fiscal and Budgetary Policies require that the Town's Finance Department prepare a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Accordingly, the Comprehensive Annual Financial Report(CAFR)for the Town of Westlake, Texas for the fiscal year ended September 30,2018, is hereby issued. This report consists of management's representations concerning the finances of the Town. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making representations, the Town established a comprehensive internal control framework that was designed both to protect the Town's assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the Town's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Town's financial statements have been audited by Weaver and Tidwell, L.L.P. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town for the fiscal year ended September 30, 2018, were free of material misstatements. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit,that there was a reasonable basis for rendering an unmodified opinion that the Town's financial statements for the fiscal year ended September 30,2018,were fairly presented in conformity with GAAP. The independent auditors'report is presented as the first component of the financial section of this report. This report is presented in three sections: Introductory, Financial and Statistical. The Introductory Section includes this transmittal letter, a listing of Town Officials, and an organizational chart of the Town. The Financial Section includes the independent auditor's report on the basic financial statements, Management's Discussion and Analysis (MD&A), basic financial statements, the notes to the basic financial statements, and combining and individual fund statements and schedules. The MD&A is a narrative introduction, containing overview and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement, and should be read in conjunction with the MD&A. 1500 Solana Blvd., Suite 7200•Westlake,Texas 76262 Metro: 817-430-0941 •Fax: 817-430-1812 •www.westlake-tx.org iii The Town of Westlake's MD&A can be found immediately following the independent auditor's report. The Statistical Section includes financial and demographic information relevant to readers of the Town's financial statements. The statistical data is generally presented on a multi-year basis. Profile of the Town Westlake is an oasis of natural beauty that maintains open spaces in balance with distinctive development, trails, and quality of life amenities amidst an ever-expanding urban landscape. Nestled in the DFW Metroplex, Westlake is Gold Level Scenic City and Tree City USA designated, and home to many small independent businesses and several corporate campuses Distinctive developments and architecturally vibrant corporate campuses find harmony among our meandering roads and trails, lined with native oaks and stone walls. We are leaders in education, known for our innovative partnerships between the Town-operated Charter school and our corporate neighbors. We strive to maintain strong aesthetic standards and preserve the natural beauty in our town. Hospitality finds its home in Westlake, as a community, we are family friendly, welcoming, fully involved and invested in our rich heritage, vibrant present and exciting, sustainable future. Westlake is conveniently located between DFW Airport and Alliance Airport, on the south side of State Highway 114, providing quick, easy access to all areas of the Dallas-Ft. Worth Metroplex. The unique location of Westlake is ideal for many of its major corporate campuses and residential communities. A common ideal shared by our corporate and individual residents is their support of the existing character and charm of the community as well as a commitment to excellence in new development. Minutes from downtown Fort Worth, Texas and DFW International Airport, the Town of Westlake is home to several upscale residential communities and Fortune 500 companies, all of which share a unique character and charm, along with a commitment to excellence. The Town is located in northeast Tarrant County and may be conveniently accessed by several major thoroughfares, including SH 114 and US 377. The Town occupies approximately 7 square miles and serves a population of approximately 1,383. In 2018, the average size of new home construction was 9,693 square feet with an average estimated construction cost of$1.82 million. The Town, incorporated in 1956, is considered a Type A general-law municipality. The Town operates under the Council-Manager form of government. The Council is comprised of a mayor and five(5)council members and is responsible for, among other things,passing ordinances, adopting the budget, appointing committees, and hiring the Town Manager. The Town Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the Town and appointing and supervising heads of various departments. The Mayor and Town Council members serve two (2) year terms. All elected officials are elected at-large for a two-year staggered term each May. The financial reporting entity (the government) includes all funds of the primary government (i.e. the Town of Westlake), as well as all its component units. Component units are legally separate entities for which the primary government is financially accountable. The following entities are considered blended component units: iv Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act,as it's duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. 413 Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 4B of the Act. The board of directors is composed of seven persons appointed by the members of the Town Council. Four of the members of the board of directors are members of the Town Council. Westlake Academy (Academy) is an open-enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake ("Charter Holder") applied for and became the first municipality in Texas to ever receive this special charter designation. The Academy had 825 students in FY 15-16 and serves Kindergarten thru 12th grade. The Academy graduated their first class in FY 09-10. The Board consists of six(6)trustees and is appointed by the Town's governing body. Currently, all members of the board of trustees are members of the Town's governing body. The Academy's year-end is August 31 Discretely presented component units are legally separate entities and not part of the primary government's operations. These component units are as follows: Texas Student Housing Corporation- Denton Project, Texas Student Housing Authority-Jefferson Commons at Town Lake Project, Texas Student Housing Corporation-College Station Project, and Texas Student Housing Authority. Services Provided Westlake's value proposition is found in the excellent municipal and academic services that are provided to our residents—all at an exceptional price! Our community has high expectations for service delivery —both in accessibility, responsiveness, financial stewardship, amenities, distinctive developments, open spaces and education. Major services provided under the general government and enterprise functions are: Fire and emergency medical services, police, water and sewer utility services, park and recreational facilities, street improvements, education and administrative services. The Town utilizes a combination of direct service delivery along with out-sourced services in its service delivery mix. The decision as to which service to deliver directly versus out-sourcing is based on analysis of cost-effectiveness, citizen responsiveness, and customer service quality. Economic Conditions and Outlook Local Challenges Involving Residential Growth The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the environment within which the Town operates. The Town staff is aware that the Town of Westlake does not create wealth, but instead, is entrusted with public dollars collected on behalf of our citizens. We are stewards who are fully vested in the success of the Town of Westlake and Westlake Academy. We exist as a municipal corporation for one reason and one reason only: to prioritize and deliver the best services possible with the resources provided to achieve v an exceptional quality of life. This is a challenge the Staff takes very seriously, one that we pursue with vigor every day. Over the previous fiscal year,the Town has achieved and/or is continuing to work toward important initiatives and projects that will allow us to balance our "distinctive development, trails, and quality of life amenities amidst an ever-expanding urban landscape." Because of the current and potential development within our community, it is both an exciting and challenging time in Westlake! Adhering to the Town's Vision is the key to Westlake's success for managing the significant growth. While growth is occurring, it also presents very clear challenges for our community if we wish to continue to maintain the elements of Westlake that make it so unique. These community attributes include our beautiful neighborhoods with top quality residences, strong aesthetic standards, a top-tier Town owned K-12 charter school, open space preservation, streetscaping, emphasis on proactive planning, and maintaining our view corridors. The "sea of change"that surrounds Westlake involves not only our current internal development but also the current growth opportunities planned for the State Highway(SH 114) corridor in northeast Tarrant County and into southern Denton County. The communities that surround us are undergoing significant development as well, which adds to the "sea of change" affecting Westlake. The impact of anticipated growth along the SH 114 corridor is described by Mr. Robin McCaffrey(AIA and APA) of MESA Planning, the firm that was engaged to update the Town's latest Comprehensive Plan,Forging Westlake. According to Mr. McCaffrey: Westlake, with the arrival of the Charles Schwab Corporation project, is crossing through a portal into the future suggested by the Town's 2015 Comprehensive Plan. In conjunction with Fidelity and other financial services in and around Westlake, Westlake hosts nearly 4 million square feet of an industry type (i.e.financial services), constituting a significant Industry Cluster. At this scale, the aggregation of a single industrial code activity is important enough to attract vertical and horizontal expansion, which further substantiates Westlake's importance as a financial services center in the Dallas/Fort Worth Metroplex. Bringing the above described importance to the Town's other advantages ofproximity, makes Westlake a singularly important center for growth and development going forward. • Westlake's Permanent Population Growth: This is the portion of our population considered to be our permanent residents. From the 1990 population of 185 to 2018's population of 1,383 represents an increase of 747% equal to 1,198 additional residents. We will need to continue to monitor and plan for the continued increase in these numbers considering our Comprehensive Plan's (Forging Westlake) forecast of approximately 7.21% annual population growth between now and 2040. This would bring us to around 7,000 residents. • Traffic Demands Due to Growth in Westlake and Surrounding Areas: The four(4) municipalities surrounding Westlake (Keller, Southlake, Trophy Club, and Roanoke) are projected to have a combined population of 215,000 people by 2040. The growth in these communities will generate additional traffic that commutes through our Town. With our projected level of residents (7,000) and the existing zoning entitlements (if executed)we would expect an estimated 300,000 vehicle trips per day. Local impacts associated with this level of growth affect our street infrastructure, water and sewer system capital investment requirements, as well as demand for daily municipal services. Policies established in Forging Westlake will be essential for addressing this issue via the Town's thoroughfare plan as it pertains to development which occurs in the community. • Housing Start Increases and Maintaining Westlake's High-Quality Residential Housing: We continue to see strong single-family residential construction demand. This has been demonstrated in A Granada, Carlyle Court, Quail Hollow, Vaquero, and Terra Bella. Additionally, the infrastructure for a new single-family residential development, The Knolls is under construction. Also, the mixed-use development called Entrada continues to progress with residential and commercial projects under construction and making significant headway. Entrada's infrastructure is being financed with a Town approved Public Improvement District(PID), the bonds for which are paid back by assessments on development within Entrada. When the infrastructure is complete, it will add(over time) a wide variety of 322 residential units to Westlake -ranging from single family homes, to villas, to town homes. Our residential construction activity shows a steady increase in building permits for housing which has occurred since we have emerged from the 2008-09 recession. Housing starts in Westlake, due to the high value of our homes, add taxable value to our taxing base; however, this also impacts the demand for municipal services, especially the Town's charter school, Westlake Academy. As the area economy continues to perform well, and Westlake and our surrounding communities continue to experience commercial development, this will further attract individuals who work for and own these businesses. In turn, these individuals will need housing. As our housing stock expands in response to these forces, we will need to manage our distinctive developments to ensure we maintain our community as an `oasis of natural beauty' and achieve high-end housing options as identified in the Housing element of Forging Westlake. Local Challenges Involving Commercial Growth • Commercial Development, Economic Development, and Daytime Population Growth: Because Westlake is the home to major corporate office campuses, its Monday-Friday daytime population is growing and is conservatively estimated to be approximately 10,000 - 12,000 individuals. These office complexes are comprised of notable corporate clients that include Deloitte LLP, Fidelity Investments and Charles Schwab. • Charles Schwab Corporate Campus: Since the announcement of their regional corporate campus in 2016, Phase 1 will consist of a 500,000-sq. ft. office building and parking garage which is nearing completion and expected to be occupied in the fall of 2019. Phase 2 was announced in 2018 and will comprise of an additional 500,000 sq. ft office building and parking garage. Adjacent to the Schwab campus will be a mixed-use development, which Hillwood Properties will develop near the intersection of SH170 and SH114. The campus will initially have approximately 1,500-1,900 employees and should round out with an estimated 6,000 employees when all phases are complete • Commercial Development in Entrada: The mixed-use development called Entrada, located at FM1938/Davis Blvd. and SH114, will also create growth in our commercial tax base. During the past budget year additional commercial buildings have been approved by the Town for the development. A CVS Pharmacy is open for business as well as a Primrose Private School. Starbucks and restaurants are scheduled to open by the end of 2019. Other commercial uses include various retail, restaurants, amphitheater and hotels. • Economic Development: The Town has also pursued the ideas advanced in the Economic Development element of Forging Westlake. That is, where appropriate, to pursue businesses that ultimately expand the Town's tax base with high quality office buildings, and at the same time, compliments our financial services business cluster which has already been created through our corporate residents of Fidelity, Deloitte and Charles Schwab. Further, we pursue the types of vii businesses interested in high quality office campus development and creating well-paying positions for employees. With the completion of Charles Schwab along with TD AmeriTrade's complex in Southlake, we will be well on our way to becoming a financial services corridor within the DFW Metroplex. • Balanced Growth to Impact Cost of Municipal Services: Likewise, the ability to fund municipal services utilizing a cost-effective revenue format requires balanced growth that provides for commercial development and a diversified tax base, while maintaining the community's open space and bucolic atmosphere. At the same time, we must continue to ensure the policy direction of the Town is focused on growth paying for the infrastructure for which it creates the demand. Staff will continue to monitor our corporate stakeholders and attempt to identify avenues to strengthen these relationships and assist in attracting new corporations to Westlake. The expansion of commercial development will continue to grow Westlake's daytime population. Local Challenzes - Other There are other local challenges involving both financial and physical site planning, strategic forecasting, residential feedback through our survey instruments and the Town's public charter school, Westlake Academy. As we look to regional or state issues and opportunities,we will monitor these issues among others: • Pending ad valorem property tax cap proposed by the Governor—as presented, the proposal would restrict the Council's ability to respond locally to the needs of our community. Staff will continue to monitor any legislation put forward for consideration and advise both the community and the Council as updates or changes occur. • Water usage and demand—our staff team will continue to work with the City of Fort Worth on the Phase 2 waterline construction that will help secure our current and future water needs for Westlake. • Westlake's residential growth impact on the Academy: Planning for Academy growth in the face of residential development continues to be a challenge. Wherever possible, the Town has entered economic development agreements with residential developers to provide funding for Westlake Academy facilities to lessen the impact of their residential development on the school's enrollment. Town staff is currently updating Westlake Academy Facility Master Plan to determine student population and facility needs. • Pursuit of Infrastructure and Services Reinvestment While Combating Certain Cost Increases: We must also reinvest in maintaining our infrastructure. However, with growth comes the need to allocate capital spending in new public buildings and our water and sewer utility. An example of a key project needed to deal with the Town's growth, is a Phase 2 water transmission line to our wholesale water provider. This is a costly project which required a significant investment in our water system. As our community evolves staff will keep a close eye on partnerships and/or opportunities that will help foster mobility within the community without compromising the design standards and expectations of our residents. East/West traffic continues to be an area of concern along with the ability of our surrounding highway capacity for transient vehicles. Town staff is working with TxDOT regarding plans for construction of service roads between FM 1938 and Dove Road in Southlake. viii Users of this document, as well as others interested in the programs and services offered by the Town of Westlake, are encouraged to read the Town's Fiscal Year 2017-18 Budget. The budget details the Town's long-term goals and financial policies and describes program accomplishments and initiatives. Other Information The Government Finance Officers Association of the United States of America and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the Town of Westlake for its comprehensive annual financial report (CAFR) for the fiscal year ended September 30, 2017. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report (CAFR) continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. In addition, we also received our eleventh GFOA Distinguished Budget Presentation Award for the fiscal year beginning October 1, 2017 for our municipal budget and the ninth year for our educational services budget for Westlake Academy, a component unit of the Town. To qualify for the Distinguished Budget Presentation Award, the Town and Academy budget documents had to be judged proficient as a policy document, a financial plan, an operations guide, and a communications device. Westlake Academy has also received recognition from the Association of School Business Officials International as a recipient of the International Award for Budget Excellence for the past seven years. Acknowledgements The preparation of this report could not be accomplished without the efficient and dedicated services of the entire staff of the Finance Department. Appreciation is expressed to Town employees throughout the organization, especially those employees who were instrumental in the successful completion of this report. The staff would also like to thank the Mayor and Town Council for their conservative leadership and their support in planning and conducting the financial operations of the Town in a responsible and progressive manner. Respectfully Submitted, Debbie Piper, CPA Finance Director ix Government Finance Officers Association Certificate of" Achievement for Excellence in Financial Reportina Presented to Town of Westlake Texas For its Comprehensive Annual Financial Report for the Fiscal Year Ended September 30, 2017 6xw&,,� P. { Exfttfl we DMwtor/C20 x IF CITIZENS OF Town Attorney Advisory Boards MAYOR AND TOWN COUNCIL Court Judge And Committees Texas Student Housing TOWN MANAGER & WA SUPERINTENDENT ASSISTANT TOWN continued on next o e MANAGER Court Administrator Assistaht 50 Town Secretary -2 Part Time 1Part Time Marshals Court Judge Intern:50 Assistant.50 Lead Clerk 1 Full Time 1 Part Time Court Clerk Court Clerk es Finance ce .50 Supervisor Lf5 Assistant Human Resources. Academic Municipal Acctg Tech 0 Acctg Tech II - Parks and HB Generalist Recreation.50 Information ' Technology Fire Chief Planning& Development I WA Coordinator O� Paramedics Chief rshal Building Inspector P&0 Coordinator WA Technican L PT Firefighterhter Paramedics 24 9 Public Works Communications 1 Technician DB Coordinator Manager Ma Police Services Pw Inspector (contracted thruthe Project Manager City of Keller) This organizational chart is a visual depiction of the way work is distributed within the Town of T x 1 T 0 w • • F Westlake. It is also meant to be a tool to help enhance our working relationship with our W E ST LA KE customers,students and stake-holders,and to clear channels of communications to better BISmICFIVE BY BESIc6 accomplish our goals and objectives. A This organizational chart is a visual depiction of the way work is distributed within Westlake Academy BOARD OF continued from previous page Executive Director W.A.Foundation Assistant WESTLAKE ACADEMY EXECUTIVE DIRECTOR Princi al Secondary Primary P SPED Coordinator Principal Primary Assistant SPED Faculty Secondary Assistant Principal and Staff Principal Primary Curriculum Athletic Dlr. Registrar Coordinator [Student Life Coordinator Administrative Staff Primary Counselor - Technology Coordinator Primary Faculty MYP/DP Curriculum and Staff Coordinators Librarian Heads of Department Grade Level Team Leads This chart is meant to be a Secondary Counselor tool to help enhance our College Counselor working relationship with our customers, students and MYP/DP Faculty and.Staff stake-holders, and to clear channels of communications to better accomplish our goals and objectives. xii Town of Westlake Elected and Appointed Officials a Laura Alesa Michael Rick Carol Wayne Wheat Belvedere Barrett Rennhack Langdon Stoltenberg Elected Officials Mayor Laura Wheat Mayor Pro-Tem Carol Langdon Council Member Alesa Belvedere Council Member Michael Barrett Council Member Rick Rennhack Council Member Wayne Stoltenberg Appointed Officials TOM BRYMER Town Manager AMANDA DEGAN GINGER AWTRY Assistant Director of Communications Town Manager and Community Affairs DEBBIE PIPER KELLY EDWARDS Director of Finance Town Secretary RON RUTHVEN TODD WOOD Director of Planning and Director of Human Resources Development and Administrative Services JARROD GREENWOOD RICHARD WHITTEN Director of Public Works Fire Chief TROY MEYER JASON POWER Director of Facilities Maintenance Director of Information and Parks and Recreation Technology xiii T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN i Financial Section 2 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 3 weaver Austin I Conroe I Dallas I Fort Worth I Houston Los Angeles I Midland I New York City I San Antonio Independent Auditor's Report To the Honorable Mayor and Members of Town Council Town of Westlake,Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business- type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Town of Westlake (the Town) as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America;this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the Town, as of September 30, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Weaver and Tidwell, L.L.P. 2300 North Field Street,Suite 1000 1 Dallas,Texas 75201 4 Main:972.490.1970 1 Fax:972.702.8321 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor and Members of Town Council Town of Westlake,Texas Emphasis of Maffers Regarding Goinq Concern The accompanying financial statements have been prepared assuming the discretely presented component units will continue as going concerns. As discussed in Note 17 to the financial statements, the discretely presented component units are in default on their bonds due to failure to meet certain bond covenants. This gives bond holders the right to accelerate and demand payment on the bonds in full. This condition raises substantial doubt about the discretely presented component units' ability to continue as going concerns. Management's plans regarding these matters are also described in Note 17. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter. Change in Accountinq Principles As discussed in Note 22 to the financial statements,in 2018,the Town adopted new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Beginning net position has been restated to reflect the change in accounting principle for implementation of this Statement. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 10 through 20 and budgetary comparison information and pension and OPEB schedules on pages 92 through 106 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational,economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town's basic financial statements.The introductory section, combining and individual fund financial statements and schedules, and statistical section, are presented for purposes of additional analysis and are not a required part of the financial statements. The combining and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion,the combining and individual fund statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. 5 The Honorable Mayor and Members of Town Council Town of Westlake,Texas The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 19, 2019 on our consideration of the Town's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing,and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town's internal control over financial reporting and compliance. WEAVER AND TIDWELL, L.L.P. Dallas, Texas March 19, 2019 6 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN Management's Discussion and Analysis 8 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 9 Management's Discussion and Analysis Management of the Town of Westlake offers the readers of the Town's financial statements this narrative overview and analysis of the financial activities and financial position of the Town for the fiscal year ended September 30,2018. Financial reporting is limited in its ability to provide the"big picture" but rather focuses on financial position and changes in financial position. In other words, are revenues and/or expenditures higher or lower than the previous year? Has the net position (containing both short- term and long-term assets and liabilities) or fund balances (the current "spendable" assets less current liabilities) of the government been maintained? Readers are encouraged to consider the information presented here in conjunction with the additional information furnished in the letter of transmittal (pages iii-ix of this report) and the statistical section (pages 122 - 140 of this report) as well as information in the annual operating budget, along with other community information found on the Town's website at www.westlake-tx.org. It should be noted that the Independent Auditor's Report describes the auditors' association with the various sections of this report and that all the additional information from the website and other Town sources are unaudited. FINANCIAL HIGHLIGHTS • The assets and deferred outflows of resources of the Town exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $55,752,321 (Net position). This number must be viewed within the context that the vast majority of the Town's net position of $52,922,640 (95.0%) is its investment in capital assets and that most capital assets in a government entity do not directly generate revenue nor can they be sold to generate liquid capital. The net position restricted for specific purposes totaled $1,077,646 (2%).The remaining amount,$1,752,035 (3%), represents unrestricted net position. • As of the close of the current fiscal year, the Town of Westlake's governmental funds reported combined ending fund balances of$20,038,393,which is a decrease of$7,769,725 in comparison with the prior year.Within this total, $9,545,013 is non-spendable,restricted, committed or assigned by management or council. • At the end of the current fiscal year, fund balance for the general fund was $10,796,248 a decrease of $141,244 in comparison with the prior year. Of this total fund balance, $10,493,380 is unassigned. This represents 136% of the total general fund expenditures and is equivalent to 428 operating days. • The Town's capital assets (net of accumulated depreciation) increased by $6,630,735. This is due in large part to an increase of $7,510,981 in construction in progress accounts. This increase is primarily due to the infrastructure construction expenditures related to the Public Improvement District (PID) and the Fire/EMS Complex. • The Town's long-term debt decreased by $1,810,692 in total, due to the scheduled repayment of principal on outstanding bonded debt. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements. The Town's basic financial statements are comprised of the following three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains supplementary information in addition to the basic financial statements themselves. 10 Government-Wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private-sector business. The government-wide financial statements are prepared utilizing the economic resources measurement focus and the accrual basis of accounting. The statement of net position presents information on all the Town's assets and deferred outflows of resources and liabilities and deferred inflows of resources with the difference between the two reported as net position. Over time, increases or decreases in the Town's net position serves as a useful indicator of whether the financial position of the Town is improving or weakening. The statement of activities presents information showing how the government's net position changed during the most recent fiscal year. All the revenues and expenses 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. Both government-wide financial statements distinguish functions of the Town that are principally supported by sales taxes, property 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 Town include general government, public safety, culture and recreation, economic development, public works, visitor services and education.The business-type activities of the Town include water/sewer and cemetery. The government-wide financial statements include not only the Town (known as the primary government), but also discretely presented component units including all the Texas Student Housing entities. Financial information for these component units is reported separately from the financial information presented for the primary government itself. In addition, the Town has the following blended component units: Lone Star Public Facilities Corporation, 4B Economic Development Corporation, and Westlake Academy, an open enrollment charter school owned and operated by the Town of Westlake.See pages 42-43 of the "Financial Section" for detail on these entities. Fund Financial Statements A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. The Town, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Below are the three types of funds. Governmental funds - Governmental funds are used to account for essentially the same functions reported as government activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on 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 financial 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, the reader may better understand the long-term impact of the government'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. 11 The Town maintains eleven 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, Westlake Academy, Debt Service, Capital Projects, and Solana PID Capital Projects funds, all of which are presented as major funds. Data from the other funds (Visitors Association, Economic Development, Lone Star Public Facilities Corporation, Public Arts Contribution, Westlake Academy Expansion Capital Projects and Westlake 4B Economic Development Corporation Funds) are combined into a single, aggregate presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements elsewhere in this report. The Town adopts an annual appropriated budget for all funds, except the Capital Projects, Solana PID Capital Project, Public Arts Contribution, and Westlake Academy Expansion funds which are project- length based budgets. A budgetary comparison statement has been provided for all appropriate funds to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 27 - 33 of this report. Proprietary funds - There are two types of proprietary funds, Enterprise Funds and Internal Service Funds. An Enterprise Fund is the only proprietary fund currently maintained by the Town. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.The Town uses enterprise funds to account for its water and sewer activities and its cemetery activities. All activities associated with providing such services are accounted for in this fund, including administration, operation, maintenance, debt service, capital improvements, billing and collection. The Town's intent is that the costs of providing the services to the general public on a continuing basis is financed through user based charges in a manner similar to a private enterprise.The Town has no Internal Service Funds (fund to report activities that provide supplies and services for the Town's other programs and activities, i.e. self-insurance and fleet management). The basic proprietary fund financial statements can be found on pages 34- 36 on this report. Fiduciary funds - Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the Town's own programs.The accounting used for fiduciary funds is similar to the accounting used for proprietary funds. The Town of Westlake maintains one fiduciary fund, the PID Agency (Debt Service) Fund. 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.The notes to the financial statements can be found on pages 42- 89 of this report. Other information. In addition to the basic financial statements and accompanying notes, this report also presents schedules that further support the information in the financial statements. The schedules are presented immediately following the notes to the financial statements and can be found on pages 92- 106. 12 Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of the government's financial position. In the case of the Town, assets and deferred outflows exceeded liabilities and deferred inflows by$55,752,321 at the close of the most recent fiscal year. The Town's combined net position changed from a year ago, decreasing $4,132,985, inclusive of the cumulative effect of the change in accounting principle, from $59,885,306 to $55,752,321. Our analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the Town's governmental and business-type activities. The largest portion of the Town's net position, $52,922,640 (95.0%), reflects its investment in capital assets (e.g.land,buildings,equipment,improvements,construction in progress,and infrastructure),less any debt used to acquire capital assets still outstanding. The Town uses these capital assets to provide services to citizens;consequently,these assets are not available for future spending.Although the Town's investment in its 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 Town's net position, $1,077,646 (1.9%), represents resources that are subject to external or internal restrictions on how they may be used. The remaining balance of $1,752,035 (3.1%) represents unrestricted net position which is available for the Town's ongoing expenses. Table 1 Condensed Statement of Net Position At September 30, 2018 and 2017 Governmental Activities Business-type Activities Total 2018 2017 2018 2017 2018 2017 Assets Current and other assets $ 23,067,847 $ 30,062,328 $ 4,952,871 $ 5,254,725 $ 28,020,718 $ 35,317,053 Capital assets 75,098,124 67,940,280 11,163,062 11,690,171 86,261,186 79,630,451 Total Assets 98,165,971 98,002,608 16,1 15,933 16,944,896 114,281,904 114,947,504 Deferred outflows of resources 2,031,443 2,446,574 68,448 94,162 2,099,891 2,540,736 Liabilities Noncurrent liabilities 40,439,383 39,936,334 6,064,710 6,333,158 46,504,093 46,269,492 Other liabilities 3,168,518 2,402,774 9,483,304 8,869,026 12,651,822 11,271,800 Total Liabilities 43,607,901 42,339,108 15,548,014 15,202,184 59,155,915 57,541,292 Deferred inflows of resources 1,444,570 61,642 28,989 - 1,473,559 61,642 Net Position Net investments in capital assets 47,629,452 46,499,873 5,293,188 5,583,570 52,922,640 52,083,443 Restricted 1,077,646 2,034,916 - - 1,077,646 2,034,916 Unrestricted 6,437,845 9,513,643 (4,685,810) (3,746,696) 1,752,035 5,766,947 Total Net Position $ 55,144,943 $ 58,048,432 $ 607,378 $ 1,836,874 $ 55,752,321 $ 59,885,306 13 Table 2 Changes in Net Position For the Years Ended September 30, 2018 and 2017 Governmental Activities Business-type Activities Total 2018 2017 2018 2017 2018 2017 Revenues Program revenues Fees,fines and charges for service $ 3,195,972 $ 4,471,161 $ 5,824,258 $ 4,825,599 $ 9,020,230 $ 9,296,760 Operating grant and contributions 7,044,597 8,047,1 13 - - 7,044,597 8,047,1 13 Capital grants and contributions 424,948 3,485,255 1,271 426,219 3,485,255 General revenues Taxes Sales taxes 6,003,605 4,650,744 - 6,003,605 4,650,744 Property taxes 1,629,640 1,576,750 1,629,640 1,576,750 Hotel occupancy taxes 849,167 751,601 849,167 751,601 Mixed beverage taxes 62,347 68,432 62,347 68,432 Franchise taxes 779,506 818,423 - - 779,506 818,423 Interest on investments 356,076 182,095 79,961 28,684 436,037 210,779 Miscellaneous 215,076 278,071 - 50,000.00 215,076 328,071 Total revenues 20,560,934 24,329,645 5,905,490 4,904,283 $ 26,466,424 $ 29,233,928 Expenses General governmental 4,776,131 5,716,302 - 4,776,131 5,716,302 Public safety 3,133,733 3,063,003 - 3,133,733 3,063,003 Culture and recreation 184,685 217,489 184,685 217,489 Economic development 469,852 163,578 469,852 163,578 Public works 1,820,908 1,634,549 1,820,908 1,634,549 Visitor services 885,654 737,071 885,654 737,071 Education 6,568,453 8,566,295 6,568,453 8,566,295 Interest on long-term debt 1,184,818 1,401,199 - - 1,184,818 1,401,199 Water and sewer - - 7,049,946 4,893,075 7,049,946 4,893,075 Cemetery - - 9,754 8,021 9,754 8,021 Total expenses 19,024,234 21,499,486 7,059,700 4,901,096 26,083,934 26,400,582 Increase(decrease)in net position before transfers 1,536,700 2,830,159 (1,154,210) 3,187 382,490 2,833,346 Transfers 71,466 169,316 (71,466) (169,316) - - Change in net position 1,608,166 2,999,475 (1,225,676) (166,129) 382,490 2,833,346 Net position,beginning 58,048,432 55,048,957 1,836,874 2,003,003 59,885,306 57,051,960 Cumulative effect of a change in accounting principle (4,51 1,655) - (3,820) - (4,515,475) - Net position,ending $ 55,144,943 $ 58,048,432 $ 607,378 $ 1,836,874 $ 55,752,321 $ 59,885,306 14 Governmental activities: Exclusive of the cumulative effect of implementation of GASB Statement No. 75, Governmental activities increased the Town's net position by $1,608,166 (8%). Unrestricted net position, the part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling legislation, other legal requirements, and/or Council or management's decision, decreased by$3,075,798. Total revenues for governmental activities decreased by $3,768,71 1 when compared to the prior year. General revenue had an increase of$1,569,301, while program revenues had a decrease of$5,338,012. Program revenues • Fees, fines and charges for services decreased $1,275,189.The permit and review fees received from Charles Schwab & Co. in the prior year were the major contributor to this decrease from prior year. • Operating Grants and Contributions decreased by$1,002,516 mostly due recording the State's on-behalf portion of the Academy's OPEB expense which, in turn, decreased both operating grants and contributions and expenses. • Capital Grants and Contributions decreased by $3,060,307 with the major portion being attributed to the donation of land for the Fire/EMS station received in the prior year and revenues restricted for the benefit of Westlake Academy based on economic development agreements. General revenues • Interest on Investments increased by$173,981 due to higher interest rates. • Sales tax increased by$1,352,861 primarily due to an economic development situs agreement in addition to an increase of$52,890 in property tax. • Hotel occupancy taxes increased by $97,566. Most of the increase (62%) is for Marriott Hotel occupancy tax at $60,754 and a 37% increase of $36,465 for Deloitte hotel occupancy tax. There have been several new hotels in the area that are competing with the Marriott. Their increase is due to efforts being made to retain and attract additional meetings and tourist stays. • Franchise fees decreased by$38,917 primarily due to less receipts from AT&T and Verizon. Expenses • Total expenses for governmental activities decreased by$2,475,252 or approximately 12%. • General Government expenditures reflected a 16%decrease of$940K; a decrease in pension expense is the primary reason. • Education expenditures decreased by 23% ($2M) which was primarily due to a decrease in pension and OPEB expenses for the Teachers Retirement Plan. 15 Business-type Activities:The net position of our business-type activities ended fiscal year 2018 at$607,378 compared with $1,836,874 in 2018.This represents a decrease in net position of$1,229,496,or 67%less than the prior fiscal year, inclusive of the cumulative effect of the change in accounting principle. Revenues (Charges for Services) for business-type activities for the fiscal year ending September 30, 2018 were $5,824,258; an increase of $998,659 or 21%. Operating expenses for the business-type activities for the fiscal year ending September 30, 2018 were$7,059,700; an increase of$2,158,604 or 44%.This increase was primarily attributed to a higher cost for wastewater treatment and water purchases. Financial Analysis of the Town's Funds As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds. The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Town's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a town's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the Town's governmental funds reported combined ending fund balances of $20,038,393; a decrease of $7,769,725 in comparison with the prior year. Approximately 52% of this total ($10,493,380) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for new spending because it has already been committed. The following tables present a summary of general, special revenue, capital project, and debt service fund revenues and expenditures for the fiscal year ended September 30, 2018, and the amount and percentage of increases and decreases in relation to the prior year. Table 3 Summary of Governmental Funds Revenues Increase Percent 2017-18 Percent (Decrease) Increase Revenues Amount Of Total From 201 6-17 (Decrease) Taxes Sales taxes $ 6,003,605 27.1% $ 1,352,861 29.1% Property taxes 1,626,696 7.3% 48,881 3.1% Mixed beverage taxes 62,347 0.3% (6,085) -8.9% Hotel occupancy taxes 849,167 3.8% 97,566 13.0% Franchise taxes 779,506 3.5% (38,917) -4.8% Subtotal-Taxes 9,321,321 42.0% 1,454,306 18.5% State program 7,217,383 32.5% 614,025 9.3% Federal program 114,797 0.5% (25,355) -18.1% Interest income 356,076 1.6% 173,981 95.5% Building permits and fees 2,314,933 10.4% (1,206,753) -34.3% Fines and penalties 633,318 2.9% (40,398) -6.0% Intergovernmental - 0.0% - 0.0% Contributions 494,131 2.2% (234,756) -32.2% Miscellaneous 1,735,201 7.9% (1,128,600) -39.4% Total Revenues $ 22,187,160 100.0% $ (393,550) -1.7% 16 Table 4 Summary of Governmental Funds Expenditures Increase Percent 2017-18 Percent (Decrease) Increase Expenditures Amount Of Total From 2016-17 (Decrease) General government $ 3,672,933 12.2% $ (923,894) -20.1% Public safety 2,992,727 10.0% 308,483 1 1.5% Culture and recreation 183,816 0.6% 19,096 1 1.6% Economic development 469,852 1.6% 306,274 187.2% Public works 675,550 2.2% (108,729) -13.9% Visitor services 875,322 2.9% 158,267 22.1% Education 9,012,348 30.0% 193,174 2.2% Capital outlay 9,407,447 31.3% 2,324,603 32.8% Debt services 2,738,356 9.0% 140,005 5.4% Total Expenditures $ 30,028,351 100.0% $ 2,417,279 8.8% Below are summaries and explanations of the changes in fund balances from fiscal year 2017 to fiscal year 2018 of the Governmental Funds that are contained in the above totals. General Fund - At the end of the current fiscal year, fund balance for the general fund was $10,796,248, a decrease of $141,244 in comparison with the prior year. Of this total, $10,493,380 is unassigned. This represents 1 17% of the total general fund expenditures including transfers out to other funds related to operations of$1,226,268. This is equivalent to 428 operating days. • Revenues and transfers in decreased $851 K from FY17 to FY18; The Planning and Development department realized the biggest decrease in revenues with the majority ($1.4M) coming from building permits,inspection/plan review fees and reforestation tree escrow received in the prior year. This decrease was offset by an increase in interest income of$169K and an increase in General sales and use tax revenue of$727K due to an economic development situs agreement. • Expenditures and transfers out increased $580K from FY17 to FYI 8; Maintenance and replacement projects decreased $698K due to one-time purchases for furniture and equipment in the prior year for the new town hall building. This was offset by an increase of $295K in payroll and related taxes, insurance and retirement due to additional employees and market adjustments. Transfers out to the Capital Project fund increased by$950K and transfers out to the Debt Service fund increased $178K. Westlake Academy- Fund balance increased by$155,950 primarily due to a transfer in from the general fund. Capital Projects Fund- Fund balance decreased by$7,307,360 • Fund 405 Municipal Facility Expansion Fund - Fund balance decreased by $7,552,946 largely due to the use of funds for the construction of the Fire/EMS complex. Bond issuance and tax notes were received in prior years for the construction. • Fund 410 Primary Capital Project Fund - Fund balance increased $276,630 due to transfers in from general fund of $950K offset by the use of funds for FM1938 Town Improvements of $274K, the Solana/SH 114 Signalization project of $268K and the Outdoor Science project of$213K for Westlake Academy. 17 • Fund 412 Westlake Academy Expansion Fund - Fund balance increased by$238,498 due to transfers in from the Economic Development fund.This fund was created to account for proceeds from long- term financing and revenue and expenditures related to authorize construction related to the expansion of Westlake Academy facilities.The original project for this fund was completed in FY 2015. Transfers in will be recorded for lot fee revenue based on an economic development agreement related to lot sales in several residential sub-division in future years. Solana Public Improvement District(PID) Capital Project Fund- Fund balance decreased by$718,677 due to infrastructure construction on the project. This fund was created in FY 2015 to detail the funds contributed based on bond proceeds for the construction of infrastructure for the Entrada development. All infrastructure will be conveyed to the Town upon completion. Proprietary Funds. - The Town's proprietary fund statements provide the same type of information found in the government-wide financial statements with greater detail.Total net position of the Proprietary Funds amounted to $607,378, a decrease of $1,229,496, inclusive of the cumulative effect of the change in accounting principle. General Fund Budgetary Highlights The General Fund budget for fiscal year 2018 was amended in total to increase the net change in fund balance from ($1,372,677) to ($641,698), a total increase of $730,979. The amended budget for net revenues was increased by $341 K (3.7%) based on anticipated increases in property taxes, ($1 19K), interest income ($138K) and contributions ($142K). The amended budget for net expenditures was increased by $620K (8%).This increase was primarily due to service expenditures increasing $316K which included PID local costs, consultant and attorney fees, contracted services for Westlake Academy,the Fire Station complex, and the Keller Police contract. Rent and utility costs increased $209K for right of way (ROW) irrigation in the public works department. Project maintenance and replacements costs increased $96K of which the majority is for the purpose of a 77- passenger bus for Westlake Academy The General Fund actual revenue collections/other sources were more than the amended budget by $198K primarily due to an increase in sales taxes in the FYI 7-18. Actual expenditure costs/other uses were less than the amended budget by$679K due mostly to less than anticipated service expenditures. Capital Assets and Debt Administration Capital Assets.The Town's investment in capital assets for its governmental and business-type activities as of September 30, 2018, totaled $86,261,186 (net of accumulated depreciation).The investment in capital assets includes land, buildings,improvements,machinery and equipment,infrastructure,and construction in progress. The net increase in the Town's investment in capital assets for the current fiscal year was $6,630,735 or 8% mostly due to additional construction in progress related to the Public Improvement District and the Fire/EMS Complex. 18 Table 5 Town's Capital Assets (Net of Accumulated Depreciation) Governmental Activities Business-type Activities Total 2018 2017 2018 2017 2018 2017 Land $ 12,446,059 $ 12,446,059 $ - $ - $ 12,446,059 $ 12,446,059 Capital improvements 10,499,689 9,963,424 9,372,302 9,734,945 19,871,991 19,698,369 Building 25,035,319 25,693,236 25,035,319 25,693,236 Machinery and equipment 928,922 1,160,407 1,403,605 1,536,311 2,332,527 2,696,718 W/W treatments rights - 58,125 89,885 58,125 89,885 Construction in progress 26,188,135 18,677,154 329,030 329,030 26,517,165 19,006,184 Total capital assets $ 75,098,124 $ 67,940,280 $ 11,163,062 $ 11,690,171 $ 86,261,186 $ 79,630,451 Additional information on the Town's capital assets can be found in Note 4 on pages 56 - 57 of this report. Long-term liabilities-At the end of the current fiscal year,the Town had total long-term debt outstanding of $41,930,973. Of this amount, $34,666,000 represents bonded indebtedness, $162,004 capital leases, $201,727 in loans and$4,913,865 contractual obligations. During the fiscal year 2017-2018,the Town's total debt payable decreased by$1,810,692.This decrease was due to thee scheduled repayment of principal and interest on outstanding bonded debt. Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. has recently increased the Town's rate from AA+/stable to AAA/stable.Additional information about the rating agency or the significance of the rating provided may be obtained from Standard & Poor's web site. Additional information on the Town's long-term debt can be found in Note 5 on pages 59-63. Table 6 Outstanding Debt at Year-End Governmental Activities Business-type Activities Total 2018 2017 2018 2017 2018 2017 General obligation bonds $ 14,407,000 $ 15,267,000 $ - $ - $ 14,407,000 $ 15,267,000 Certificates of obligation 19,331,700 19,990,700 927,300 949,300 20,259,000 20,940,000 Contractual obligations - - 4,913,865 5,126,958 4,913,865 5,126,958 Capital leases 162,004 162,004 - - 162,004 162,004 Premium on bonds 1,479,097 1,578,909 28,709 29,881 1,507,806 1,608,790 Notes payable 201,727 238,404 - - 201,727 238,404 Compensated absences 407,160 333,005 72,411 65,504 479,571 398,509 Total long-term debt $ 35,988,688 $ 37,570,022 $ 5,942,285 $ 6,171,643 $ 41,930,973 $ 43,741,665 The Town's net pension liability relative to its participation in Texas Municipal Retirement System (TMRS) decreased from $1,476,481 as of September 30, 2017 to $1,062,281 as of September 30, 2018. The Town's net other post-employment benefits (OPEB) liability relative to its participation in Texas Municipal Retirement System (TMRS) increased from $39,253 as of September 30, 2017 to $56,862 as of September 30, 2018.The Academy's proportionate share of the Teacher Retirement System (TRS) net pension liability decreased from $1,051,346 as of August 31, 2017 to $895,663 as of August 31, 2018. The Academy's proportionate share of the Teacher Retirement System (TRS) net OPEB liability decreased from $4,516,574 as of August 31, 2017 to $2,558,314 as of August 31, 2018. 19 Economic Factors and Next Year's Budgets In the FY 2018-2019 adopted budget, the General Fund balance is anticipated to increase by $1.1 M. Adopted revenues and transfers in are budgeted to be more than the 2018 actuals by $32.6 (27%) primarily due to large one-time building fees and permits anticipated ($2.4M) as well as additional property tax revenue ($404K). Anticipated expenditures and transfers out are budgeted to be $1.53M (15%) more than the prior year. Payroll increases were approximately $500K (market adjustments, additional employees and staffing changes,increased insurance and benefits.Maintenance and Replacement projects increased by$51 OK due to anticipated expenditure of (1) upgrades for network storage and equipment, phone system, peripheral devices, and network services (2) maintenance and replacement to Westlake Academy (parking lot,flooring, classroom refurbishments,etc.), and (3) one-time repairs for the reserve ambulance. As stated in the Transmittal Letter, the Town's budget continues to be impacted by encouraging economic signs. Growth in Westlake, along the SH 114 corridor and with the progress of our new mixed- use development, Entrada, should continue to increase the commercial revenue sources. Additionally, increases are expected in residential-related revenues due to new housing developments. Contacting the Town's Finance Department This financial report is designed to provide our citizens, customers, and investors and creditors with a general overview of the Town's finances and to demonstrate the Town's accountability for the money it receives. If you have questions about this report or need additional financial information,contact Debbie Piper, Town of Westlake Finance Director, at 817-490-5712 or email at dpiper@westlake-tx.org. 20 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 21 Basic Financial Statements 22 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 23 Town of Westlake Exhibit A-1 Statement of Net Position September 30, 2018 Primary Government Discretely Governmental Business-type Presented Activities Activities Total Component Units ASSETS Cash and cash equivalents $ 19,450,048 $ 3,892,164 $ 23,342,212 $ 4,520,010 Receivables(net of allowance) 3,184,768 700,669 3,885,437 290,150 Inventories - 93,608 93,608 - Other assets 75,650 - 75,650 66,801 Restricted cash and cash equivalents 357,381 266,430 623,811 3,375,397 Capital assets: Land and construction in progress 38,634,194 329,030 38,963,224 5,099,597 Buildings and improvements 48,441,613 14,899,416 63,341,029 52,590,312 Wastewater treatment rights - 635,199 635,199 - Machinery and equipment 4,798,349 3,560,780 8,359,129 4,690,979 Less accumulated depreciation (16,776,032) (8,261,363) (25,037,395) (31,775,360) Total capital assets 75,098,124 11,163,062 86,261,186 30,605,528 Total assets 98,165,971 16,115,933 114,281,904 38,857,886 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources-TRS OPEB 46,603 - 46,603 - Deferred outflows of resources-TMRS OPEB 8,041 988 9,029 Deferred outflows of resources-TRS pension 509,509 - 509,509 Deferred outflows of resources-TMRS pension 568,794 67,460 636,254 Deferred loss on refunding 898,496 - 898,496 Total deferred outflows of resources 2,031,443 68,448 2,099,891 - LIABILITIES Accounts payable 3,018,263 382,732 3,400,995 454,330 Customer deposit payable - 216,430 216,430 - Unearned revenue 3,260 369,062 372,322 631,780 Accrued interest payable 146,995 8,515,080 8,662,075 29,801,770 Noncurrent liabilities: Due within one year Long-term debt 1,766,131 136,306 1,902,437 - Compensated absences 40,716 7,241 47,957 - Due in more than one year Long-term debt 33,815,397 5,733,568 39,548,965 51,237,586 Compensated absences 366,444 65,170 431,614 - TRS net OPEB liability 2,558,314 - 2,558,314 TMRS total OPEB liability 50,642 6,220 56,862 TRS net pension liability 895,663 - 895,663 TMRS net pension liability 946,076 116,205 1,062,281 - Totalliabilities 43,607,901 15,548,014 59,155,915 82,125,466 DEFERRED INFLOWS OF RESOURCES Deferred inflows-TRS OPEB 1,070,148 - 1,070,148 - Deferred inflows-TRS pension 137,845 - 137,845 Deferred inflows-TMRS pension 236,577 28,989 265,566 Total deferred inflows of resources 1,444,570 28,989 1,473,559 NET POSITION Net investment in capital assets 47,629,452 5,293,188 52,922,640 (20,632,058) Restricted for: Tourism 781,775 - 781,775 Construction 78,557 78,557 Court security and technology 203,173 203,173 Future projects 14,141 14,141 Unrestricted 6,437,845 (4,685,810) 1,752,035 (22,635,522) Total net position $ 55,144,943 $ 607,378 $ 55,752,321 $ (43,267,580) The Notes to the Financial Statements are an integral part of this statement. 24 Town of Westlake Statement of Activities For the Year Ended September 30, 2018 Program Revenues Charges for Operating Grants Capital Grants Functions/Programs Expenses Services and Contributions and Contributions PRIMARY GOVERNMENT Governmental activities: General government $ 4,776,131 $ 137,805 $ - $ 4 Public safety 3,133,733 782,833 37,238 - Cultural and recreation 184,685 - 31,945 - Public works 1,820,908 2,027,613 - 224,944 Economic development 469,852 - - 200,000 Visitor services 885,654 - - - Education 6,568,453 247,721 6,975,414 - Interest on long-term debt 1,184,818 - - - Total governmental activities 19,024,234 3,195,972 7,044,597 424,948 Business-type activities: Water and sewer 7,049,946 5,794,818 - - Cemetery 9,754 29,440 - 1,271 Total business-type activities 7,059,700 5,824,258 - 1,271 Total primary government $ 26,083,934 $ 9,020,230 $ 7,044,597 $ 426,219 Discretely Presented Component Units $ 15,007,677 $ 9,360,433 $ $ GENERAL REVENUES AND TRANSFERS Taxes: Sales taxes Property taxes Hotel occupancy taxes Mixed beverage taxes Franchise taxes Interest Income Miscellaneous Transfers Total general revenues and transfers Change in net position NET POSITION,beginning of year Cumulative effect of change in accounting principle NET POSITION,end of year The Notes to the Financial Statements are an integral part of this statement. 25 Exhibit A-2 Net(Expense) Revenue and Changes in Net Position Primary Government Discretely Governmental Business-Type Presented Activities Activities Total Component Units $ (4,638,322) $ $ (4,638,322) $ (2,313,662) (2,313,662) (152,740) (152,740) 431,649 431,649 (269,852) (269,852) (885,654) (885,654) 654,682 654,682 (1,184,818) (1,184,818) (8,358,717) (8,358,717) (1,255,128) (1,255,128) 20,957 20,957 (1,234,171) (1,234,171) $ (8,358,717) $ (1,234,171) $ (9,592,888) $ $ - $ $ - $ (5,647,244) 6,003,605 6,003,605 1,629,640 1,629,640 849,167 849,167 62,347 62,347 779,506 779,506 - 356,076 79,961 436,037 93,304 215,076 - 215,076 - 71,466 (71,466) - - 9,966,883 8,495 9,975,378 93,304 1,608,166 (1,225,676) 382,490 (5,553,940) 58,048,432 1,836,874 59,885,306 (37,713,640) (4,511,655) (3,820) (4,515,475) - $ 55,144,943 $ 607,378 $55,752,321 $ (43,267,580) 26 Town of Westlake Balance Sheet Governmental Funds September 30, 2018 Debt Westlake Service General Academy Fund ASSETS AND DEFERRED OUTFLOWS OF RESOURCES: Cash and cash equivalents $ 9,151,702 $ 728,468 $ 31,346 Receivables: Property taxes 6,889 - 1,041 Accounts receivable 1,495,199 794,795 - Due from other funds 487,121 - Prepaid items 19,253 53,081 Restricted cash and cash equivalents - - - TOTAL ASS EfS 11,160,164 1,576,344 32,387 DEFERRED OUTFLOWS OF RESOURCES Deferred contributions 323,439 - - Total deferred inflows of resources 323,439 - - Total assets and deferred outflows of resources $ 11,483,603 $ 1,576,344 $ 32,387 LIABILITIES,DEFFERED INFLOWS OF RESOURCES AND FUND BALANCE: Liabilities: Accounts payable $ 680,465 $ 131,707 $ 2,548 Unearned revenue - - Due to other funds - - - Total liabilities 680,465 131,707 2,548 DEFERRED INFLOWS OF RESOURCES Unavailable contributions - 323,439 - Unavailable resources-propertytaxes 6,890 - 1,041 Total deferred inflows of resources 6,890 323,439 1,041 FUND BALANCES Nonspendable: Prepaid items 19,253 53,081 - Restricted for: Tourism - - - Capital items - - Court security,technology,and Bonds 203,173 - Debt service - 28,798 Future projects - - - Education - 1,068,117 - Committed for: Street and tree improvements 80,442 - Unassigned 10,493,380 - - Total fund balances 10,796,248 1,121,198 28,798 TOTAL LIABILITIES,DEFERRED INFLOWS OF TheNoteRfoE�he na�ND PAS ements are an integral part 11 483(t03 $ 1,576,344 $ 32,387 of is ctrrtdmcn 27 Exhibit A-3 Solana PID Nonmajor Total Capital Capital Governmental Governmental Projects Projects Funds Funds $ 7,115,798 $ - $ 2,422,734 $ 19,450,048 - - - 7,930 - - 886,844 3,176,838 - - - 487,121 - 3,316 75,650 - 357,381 - 357,381 7,115,798 357,381 3,312,894 23,554,968 - - - 323,439 - - - 323,439 $ 7,115,798 $ 357,381 $ 3,312,894 23,878,407 $ 1,553,281 $ 278,824 $ 371,438 $ 3,018,263 - - 3,260 3,260 - - 487,121 487,121 1,553,281 278,824 861,819 3,508,644 - - - 323,439 - - - 7,931 - - - 331,370 - 3,316 75,650 - - 781,775 781,775 5,562,517 78,557 1,651,843 7,292,917 - - - 203,173 - - 28,798 - 14,141 14,141 - - - 1,068,1 17 - - 80,442 - - - 10,493,380 5,562,517 78,557 2,451,075 20,038,393 $ 7,115,798 $ 357,381 $ 3,312,894 $ 23,878,407 28 Town of Westlake Exhibit A-4 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position September 30, 2018 Total fund balance-governmental funds balance sheet $ 20,038,393 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the governmental funds balance sheet. 75,098,124 Deferred losses on refunding are reported as deferred outflows of resources in the government-wide statement of net position. 898,496 Revenues earned but not available within sixty days of the fiscal year-end are not recognized as revenue in the fund financial statements. 7,931 Deferred outflows of resources related to the Town's TMRS pension liability and OPEB liability increased net position by$568,794 and 8,041,respectively; while the Town's TMRS deferred resource inflows related to the pension liability decreases net position by$236,577.This amount is the net effect. 340,258 Deferred outflows of resources related to the Academy's TRS pension liability and OPEB liability increase net position by$509,509 and$46,603,respectively; while the Academy's TRS deferred resource inflows related to the pension liability and OPEB liability decreased net position by$137,845 and$1,070,148, respectively.This amount is the net effect. (651,881) Interest payable on long-term debt does not require current financial resources,therefore interest payable is not reported as a liability in the governmental funds balance sheet. (146,995) Long-term liabilities,including bonds payable,are not due and payable in the current period,and therefore are not reported in the fund financial statements. (40,439,383) NET POSITION OF GOVERNMENTAL ACTIVITIES-statementof net position $ 55,144,943 The Notes to the Financial Statements are an integral part of this statement. 29 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 30 Town of Westlake Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2018 Westlake Debt General Academy Service Fund REVENUES Taxes Sales $ 4,080,263 $ - $ - Property 1,329,236 - 297,460 Mixed beverage 62,347 - - Hotel occupancy - - - Franchise 779,506 - - State program revenues - 7,217,383 - Federal program revenues - 114,797 - Interest income 237,164 9,878 - Building permits and fees 2,314,933 - - Fines and penalties 633,318 -Contributions 37,238 - - Miscellaneous 206,305 1,520,125 - Total revenues 9,680,310 8,862,183 297,460 EXPENDITURES Current General government 3,672,933 - - Public safety 2,992,727 - - Cultural and recreation 183,816 - - Public works 620,985 - - Economic development - - - Visitor services - - - Education - 9,012,348 - Capital outlay 209,164 - - Debt service Principal retirement 36,677 - 1,519,000 Interest and other fiscal charges - 8,885 1,173,794 Total expenditures 7,716,302 9,021,233 2,692,794 Excess (deficiency) of revenues Over (Under) Expenditures 1,964,008 (159,050) (2,395,334) OTHER FINANCING SOURCES(USES) Transfers in 71,466 315,000 2,412,169 Transfers out (2,176,718) - - Net other financing sources (uses) (2,105,252) 315,000 2,412,169 NET CHANGE IN FUND BALANCES (141,244) 155,950 16,835 FUND BALANCES,AT BEGINNING OF YEAR 10,937,492 965,248 11,963 FUND BALANCES AT END OF YEAR $ 10,796,248 $ 1,121,198 $ 28,798 The Notes to the Financial Statements are an integral part of this statement. 31 Exhibit A-5 Solana PID Nonmajor Total Capital Capital Governmental Governmental Projects Projects Funds Funds $ - $ - $ 1,923,342 $ 6,003,605 - - - 1,626,696 - - - 62,347 - 849,167 849,167 - - - 779,506 - - - 7,217,383 - - - 114,797 41,479 9,601 57,954 356,076 - - - 2,314,933 - - - 633,318 224,944 4 231,945 494,131 333 - 8,438 1,735,201 266,756 9,605 3,070,846 22,187,160 - - - 3,672,933 - - - 2,992,727 - - - 183,816 54,565 - - 675,550 - - 469,852 469,852 - - 875,322 875,322 - - - 9,012,348 8,470,001 728,282 - 9,407,447 - - - 1,555,677 - - - 1,182,679 8,524,566 728,282 1,345,174 30,028,351 (8,257,810) (718,677) 1,725,672 (7,841,191) 950,450 - 200,000 3,949,085 - - (1,700,901) (3,877,619) 950,450 - (1,500,901) 71,466 (7,307,360) (718,677) 224,771 (7,769,725) 12,869,877 797,234 2,226,304 27,808,118 $ 5,562,517 $ 78,557 $ 2,451,075 $ 20,038,393 32 Town of Westlake Exhibit A-6 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended September 30, 2018 Net change in fund balances-total governmental funds. $ (7,769,725) 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 expense. 8,756,155 Depreciation expense on capital assets is reported in the statement of activities but does not require the use of current financial resources.Therefore,depreciation expense is not reported as expenditures in the governmental funds. (1,598,311) The repayment of the principal of long term debt consumes the current financial resources of governmental funds,but has no effect on net position.The amortization of bond premiums and deferred gain/loss on refunding of long term debt is reported in the statement of activities but does not require the use of current financial resources.Therefore,the effect of the amortization of these various items are not reported in the statement of revenues,expenditures,and changes in fund balance. This amount represents the net effect of the following items: Repayments 1,555,677 Amortization of deferred loss on refunding (108,507) Amortization of premium on bonds 99,812 1,546,982 Current year changes in accrued interest payable does not require the use of current financial resources;and therefore,are not reported as expenditures in governmental funds. 6,556 Implementation of GAS 68 and 75 requires certain expenditures to be de-expended and recorded as deferred outflows of resources.The changes in deferred outflows from pension and OPEB activity for TMRS decreased net position by$197,820 and increased net position by$4,185,respectively.The changes of net pension liability increased net position by$368,890.The changes in OPEB liability decreased net position by$15,683.The changes in deferred inflows of resources from pension activty for TMRS decreased net position by$236,577.This amount is the net effect. (77,005) Implementation of GAS 68 and 75 also affected the Academy.Pension and OPEB contributions made to TRS after the measurement date caused the change in net position to increase by$91,593 and$46,603, respectively.Pension and OPEB contributions made before the measurement period caused a decrease in the change in net position of$84,783 and$36,022,respectively.The net share of the Academy's amount of deferred inflows and outflows of resources decreased the change in net position by$90,778 and increased the change in net position by$888,1 12 for pension and OPEB,respectively.This amount is the net effect. 814,725 Current year changes in the long-term liability for compensated absences do not require the use of current financial resources;and therefore,are not reported as expenditures in governmental funds. (74,155) Certain revenues in the government-wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. 2,944 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES-statement of activities $ 1,608,166 The Notes to the Financial Statements are an integral part of this statement. 33 Town of Westlake Exhibit A-7 Statement of Net Position Proprietary Funds September 30, 2018 Utility Cemetery Fund Fund Total ASSETS Current assets Cash and cash equivalents $ 3,799,542 $ 92,622 $ 3,892,164 Accounts receivable 700,669 - 700,669 Inventories - 93,608 93,608 Restricted cash and investments 216,430 50,000 266,430 Total current assets 4,716,641 236,230 4,952,871 Noncurrent assets Capital assets Construction in progress 329,030 - 329,030 Buildings and improvements 14,899,416 14,899,416 Wastewater treatment rights 635,199 635,199 Machinery and equipment 3,560,780 3,560,780 Less:accumulated depreciation (8,261,363) (8,261,363) Total capital assets 11,163,062 11,163,062 Total noncurrent assets 11,163,062 - 11,163,062 TOTAL ASSETS 15,879,703 236,230 16,115,933 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows-TMRS OPEB 988 988 Deferred outflows-TMRS pension 67,460 - 67,460 TOTAL DEFERRED OUTFLOWS OF RESOURCES 68,448 - 68,448 LIABILITIES Current liabilities Accounts payable 382,064 668 382,732 Customer deposits payable 216,430 - 216,430 Accrued interest payable 8,515,080 8,515,080 Unearned revenue 369,062 369,062 Compensated absences-current portion 7,241 7,241 Current portion of bonds payable 22,550 22,550 Contractual obligations 113,756 - 113,756 Total current liabilities 9,626,183 668 9,626,851 Long-term liabilities: Bonds payable 904,750 - 904,750 Compensated absences 65,170 65,170 Contractual obligations 4,828,818 4,828,818 Total OPEB liability 6,220 6,220 Net pension liability 116,205 116,205 Total long-term liabilities 5,921,163 - 5,921,163 TOTAL LIABILITIES 15,547,346 668 15,548,014 DEFERRED INFLOWS OF RESOURCES Deferred inflows-TMRS pension 28,989 - 28,989 Total deferred inflows of resources 28,989 28,989 NET POSITION Net investment in capital assets 5,293,188 - 5,293,188 Unrestricted (4,921,372) 235,562 (4,685,810) TOTAL NET POSITION $ 371,816 $ 235,562 $ 607,378 The Notes to the Financial Statements are an integral part of this statement. 34 Town of Westlake Exhibit A-8 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended September 30, 2018 Utility Cemetery Fund Fund Total OPERATING REVENUES Charges for services $ 5,496,702 $ 29,440 $ 5,526,142 Miscellaneous revenue 298,116 1,271 299,387 Total operating revenues 5,794,818 30,711 5,825,529 OPERATING EXPENSES Payroll costs 466,165 - 466,165 Professional and contract services 1,003,706 5,495 1,009,201 Depreciation 495,349 - 495,349 Amortization of wastewater treatment rights 31,760 - 31,760 Water purchases 1,570,220 - 1,570,220 Cost of cemetary lots sold - 1,441 1,441 Other operating costs 2,595,594 2,818 2,598,412 Total operating expenses 6,162,794 9,754 6,172,548 Net operating income (loss) (367,976) 20,957 (347,019) NON-OPERATING REVENUES(EXPENSES) Interest income 76,703 3,258 79,961 Interest expense (887,152) - (887,152) Total non-operating revenues (expenses) (810,449) 3,258 (807,191) INCOME(LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS (1,178,425) 24,215 (1,154,210) Transfer out (71,466) - (71,466) Total transfers and capital contributions (71,466) - (71,466) Change in net position (1,249,891) 24,215 (1,225,676) Total net position,beginning of year 1,625,527 211,347 1,836,874 Cumulative effect of change in accounting principle (3,820) - (3,820) Total net position,end of year $ 371,816 $ 235,562 $ 607,378 The Notes to the Financial Statements are an integral part of this statement. 35 Town of Westlake Exhibit A-9 Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2018 Utility Cemetery Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 6,195,803 $ 30,711 $ 6,226,514 Payments to employees (447,465) - (447,465) Payments to suppliers (5,227,944) (7,497) (5,235,441) Net cash provided by operating activities 520,394 23,214 543,608 CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES Transfer to other funds (71,466) - (71,466) Net cash used in noncapital financing activities (71,466) (71,466) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on debt (235,093) (235,093) Interest paid on debt (162,997) - (162,997) Investment earnings 76,703 3,258 79,961 Net cash provided by(used in)capital and related financing activities (321,387) 3,258 (318,129) Net increase in cash 127,541 26,472 154,013 Cash and cash equivalents at the beginning of the year 3,888,431 116,150 4,004,581 Cash and cash equivalents at the end of the year $ 4,015,972 $ 142,622 $ 4,158,594 RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS Cash and cash equivalents $ 3,799,542 $ 92,622 $ 3,892,164 Restricted cash and cash equivalents 216,430 50,000 266,430 Total cash and cash equivalents $ 4,015,972 $ 142,622 $ 4,158,594 RECONCILIATION OF OPERATING INCOME(LOSS)TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ (367,976) $ 20,957 $ (347,019) Adjustments to reconcile operating income to net cash provided by(used in)operating activities: Depreciation and amortization 527,109 - 527,109 Pension expense 10,381 10,381 OPEB expense 1,412 1,412 Changes in operating assets and liabilities: Receivables 454,278 - 454,278 Inventory - 1,589 1,589 Compensated absences 6,907 - 6,907 Accounts payable (58,424) 668 (57,756) Customer deposits payable (16,005) - (16,005) Unearned revenue (37,288) - (37,288) Net cash provided by operating activities $ 520,394 $ 23,214 $ 543,608 The Notes to the Financial Statements are an integral part of this statement. 36 Exhibit A-10 Town of Westlake Statement of Fiduciary Net Position Agency Fund September 30, 2018 PI D Agency Fund ASSETS Restricted cash and cash equivalents $ 2,1 13,820 Total Assets $ 2,1 13,820 LIABILITIES Liability to bond holders $ 2,1 13,820 Total Liabilities $ 2,113,820 The Notes to the Financial Statements are an integral part of this statement. 37 Town of Westlake Exhibit A-I I Discretely Presented Component Units Combining Statement of Net Position September 30, 2018 Texas Student Texas Student Housing Housing Corporation Texas Student Corporation College Station Housing Denton Project Project Authority Total ASSETS Cash and cash equivalents $ 294,000 $ 920,116 $ 3,305,894 $ 4,520,010 Accounts receivable (net of allowance) 1 1 1,492 177,962 696 290,150 Prepaid rent 65,798 1,003 - 66,801 Restricted assets: Cash and cash equivalents 2,092,565 1,282,832 - 3,375,397 Capital assets: Land 2,200,000 2,899,597 - 5,099,597 Buildings and improvements 25,705,000 26,885,312 - 52,590,312 Machinery and equipment 1,253,841 3,437,138 4,690,979 Less:accumulated depreciation (16,138,289) (15,637,071) (31,775,360) Total assets 15,584,407 19,966,889 3,306,590 38,857,886 LIABILITIES AND NET POSITION LIABILITIES Accounts payable and accrued expenses 79,396 122,058 252,876 454,330 Unearned revenue 159,500 472,280 631,780 Accrued interest payable 8,975,418 20,826,352 - 29,801,770 Bonds payable 23,032,586 28,205,000 - 51,237,586 Total liabilities 32,246,900 49,625,690 252,876 82,125,466 NET POSITION Net investment in capital assets (10,012,034) (10,620,024) - (20,632,058) Unrestricted (6,650,459) (19,038,777) 3,053,714 (22,635,522) Total net position $ (16,662,493) $ (29,658,801) $ 3,053,714 $ (43,267,580) The Notes to the Financial Statements are an integral part of this statement. 38 Town of Westlake Discretely Presented Component Units Combining Statement of Activities For the Fiscal Year Ended September 30, 2018 Program Revenues Charges for Operating Grants Capital Grants Functions/Programs Expenses Services and Contributions and Contributions Business-type activities: Texas Student Housing Authority $ 456,560 $ 589,769 $ $ Texas Student Housing Authority College Station Project 8,569,140 3,331,791 Denton Project 5,981,977 5,438,873 Total business-type activities 15,007,677 9,360,433 Total component units $ 15,007,677 $ 9,360,433 $ $ GENERAL REVENUES Interest income Total general revenues Change in net position NET POSITION,beginning of year NET POSITION,end of year The Notes to the Financial Statements are an integral part of this statement. 39 Exhibit A-12 Net(Expense) Revenues and Changes in Net Positions Texas Student Texas Student Housing Housing Corporation Texas Student Corporation College Station Housing Denton Project Project Authority Total $ - $ - $ 133,209 $ 133,209 (5,237,349) - (5,237,349) (543,104) - - (543,104) (543,104) (5,237,349) 133,209 (5,647,244) $ (543,104) $ (5,237,349) $ 133,209 $ (5,647,244) 35,471 57,833 93,304 35,471 - 57,833 93,304 (507,633) (5,237,349) 191,042 (5,553,940) (16,154,860) (24,421,452) 2,862,672 (37,713,640) $ (16,662,493) $ (29,658,801) $ 3,053,714 $ (43,267,580) 40 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 41 Town of Westlake Notes to the Financial Statements Note 1. Summary of Significant Accounting Policies The Town of Westlake, Texas (the Town) was incorporated under the provisions of the laws of the State of Texas on December 26, 1956. The Town operates under a Council - Manager form of government and provides the following services as authorized by the laws of the State of Texas: public safety, cultural and recreation; and economic development. The accounting and reporting policies of the Town conform to accounting principles generally accepted in the United States of America for local governments.Generally accepted accounting principles (GAAP) for local governments include those principles prescribed by the Governmental Accounting Standards Board (GASB).The following is a summary of the more significant accounting and reporting policies: Financial Reporting Entity The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are,in substance, part of the Town's operations and are appropriately presented as funds of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the government-wide financial statements to emphasize it is legally separate from the Town. Based on these criteria,the financial information of the following entities have been blended or discretely presented within the financial statements: Lone Star Public Facilities Corporation, 4B Economic Development Corporation, Westlake Academy, Texas Student Housing Authority, Texas Student Housing Corporation-College Station Project and Texas Student Housing Corporation - Denton Project. The Texas Student Housing Authority, Texas Student Housing Authority-Jefferson Commons at Town Lake Project, Texas Student Housing Corporation - College Station Project, and Texas Student Housing Corporation - Denton Project (collectively, Texas Student Housing Entities) are Texas nonprofit organizations as a duly constituted authority of the Town pursuant to Section 53.35(b) of the Texas Education Code, as amended (Act).Texas Student Housing Entities' primary purpose is to construct, own, and operate student housing facilities on college campuses in Texas.The board consists of seven directors which are appointed by the Town's governing body and has the ability to remove at will the appointed members; thus, the governing body can impose its will on the organizations. However, the board is not substantively the same as the Town's governing body; therefore, the Texas Student Housing Entities are reported as discretely presented component units (enterprise funds). The Town is not responsible for the long-term debt of the Texas Student Housing Entities. The Texas Student Housing Entities' year-end is August 31. Component Units Discretely Presented Separately issued financial reports are available for all the Texas Student Housing Entities. These reports may be obtained by contacting the following office. Texas Student Housing Authority 99 Trophy Club Drive Trophy Club, Texas 76262 42 Town of Westlake Notes to the Financial Statements Blended Lone Star Public Facilities Corporation is a Texas nonprofit corporation that acts on behalf of the Town to further the public purposes under the Public Facilities Corporation Act, as its duly constituted authority and instrumentality. The board of directors, appointed by the Town's governing body, is comprised of seven members, of whom five must be members of the Town's governing body. Since the board of directors is substantively the same as the Town's governing body,and a financial benefit relationship exists, the entity has been reported as a blended component unit of the Town. 4B Economic Development Corporation is a Texas nonprofit industrial corporation under the Development Corporation Act of 1979 formed to promote economic development within the Town and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage employment and the public welfare of, for, and on behalf of the Town by developing, implementing, financing, and providing one or more projects defined and permitted under Section 4B of the Act. The board of directors is composed of seven persons appointed by the members of the Town's governing board. Four of the members of the board of directors are members of the Town's governing board. Since the board of directors is substantively the same as the Town's governing body, and a financial benefit relationship exists, the entity has been reported as a blended component unit of the Town. Westlake Academy (Academy) is an open-enrollment charter school, as provided by Subchapter D, Chapter 12, of the Texas Education Code. The Town of Westlake (Charter Holder) applied for and became the first municipality in Texas to ever receive this special charter designation. The board consists of six trustees and is appointed by the Town's governing body. Currently, all the members of the board of trustees are members of the Town's governing body.Since the board of directors is substantively the same as the Town's governing body, and a financial benefit relationship exists, the entity has been reported as a blended component unit of the Town. The Academy's year-end is August 31. Basis of Presentation Government-Wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the Town. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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 and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate 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. 43 Town of Westlake Notes to the Financial Statements Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Town considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Sales taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Town. The Town uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self-balancing set of accounts. Governmental Funds are those through which most governmental functions of the Town are financed. The acquisition, use, and balances of the Town's expendable financial resources and the related liabilities (except those accounted for in the proprietary fund type) are accounted for through governmental funds. The measurement focus is upon determination of changes in financial position, rather than upon income determination. The Town reports the following major governmental funds: General Fund - to account for all financial resources except those required to be accounted for in another fund. The General Fund balance is available for any purpose, provided it is expended or transferred in accordance with the legally adopted budget of the Town. The General Fund includes the Town's Major Maintenance and Replacement Fund, Vehicle Replacement Fund, and PID (local) Fund. Westlake Academy Fund - to account for all local, state and federal revenue and related educational expenditures of the Academy. Debt Service Fund-to account for resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds. Capital Protects Fund- to account for proceeds from long-term financing and revenue and expenditures related to authorized construction and other capital asset acquisitions other than those related to the expansion of Westlake Academy facilities. 44 Town of Westlake Notes to the Financial Statements Solana Public Improvement District (PID) Capital Projects Fund - to account for the acquisition or construction of capital facilities and improvements relating to the Solana public improvement district. In addition, the Town reports the following nonmajor governmental funds: Visitors Association Fund - to account for municipal hotel occupancy taxes collected and expenditures to promote tourism and the convention and hotel industry. Lone Star Public Facilities Corporation- to account for investment activity relating to the Lone Star Public Facilities Corporation. 4B Economic Development Corporation -to account for sales tax collected to fund the activities of the 4B Economic Development Corporation. Economic Development Fund - to account for sales tax and hotel occupancy tax collected to fund activity relating to Economic Development agreements. Public Arts Contribution Fund-to account for contributions restricted for public art. Westlake Academy Expansion Capital Projects Fund-to account for proceeds from long-term financing and revenue and expenditures related to authorized construction related to the expansion of Westlake Academy facilities. The Town adopts an annual appropriated budget for all governmental funds except capital projects, Solana PID capital projects, and Westlake Academy Expansion funds, which are project-length based budgets. A budgetary comparison schedule has been provided for all appropriate funds to demonstrate compliance with the budget. Proprietary Funds distinguish operating revenues and expenses from nonoperating 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 Town's Enterprise Fund are charges to customers for sales and services. Operating expenses for the Enterprise Fund include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenue and expenses. The Town reports the following major proprietary funds: Utility Fund-to account for revenues and expenses related to providing water and sewer services to the general public on a continuing basis. Cemetery Fund- to account for the operations of the Town's cemetery. The Town reports the following fiduciary fund: Solana PID Agency Fund-to account for bond proceeds,assessments, and related debt associated with bonds issued by the Town as an agent for the Solana public improvement district. As a general rule,the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the Town's water and wastewater function and various other functions of the government. Elimination of these charges would distort the direct costs and program revenue reported for the various functions concerned. 45 Town of Westlake Notes to the Financial Statements Amounts reported as program revenues include: 1) charges to customer or applicants for goods,services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenue. Likewise, general revenue includes all taxes. Assets, Liabilities, Deferred Inflows/Outflows of Resources, and Net Position or Equity Cash and Cash Equivalents Cash and investments of all funds, including restricted cash, are available upon demand and are considered to be"cash equivalents." For purposes of the statement of cash flows, the Town considers highly-liquid investments (including restricted assets) with an original maturity of three months or less when purchased to be cash equivalents. State statutes authorize the Town to invest in (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal of, and interest on,which are unconditionally guaranteed or insured by the State of Texas or the United States; (4) obligations of states, agencies, counties, cities, and other political subdivisions of any state having been rated as to investment quality by a nationally recognized investment rating firm and having received a rating of not less than"A"or its equivalent; (5) certificates of deposit by state or national banks domiciled in this state that are (a) guaranteed or insured by the Federal Deposit Insurance Corporation, or its successor; or, (b) secured by obligations that are described by (1) - (4); or (6) fully collateralized direct repurchase agreements having a defined termination date, secured by obligations described by (1) pledged with third-party selected or (2) approved by the Town, and placed through a primary government securities dealer. All investments are recorded at fair value based on quoted market prices. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties. Receivables and Payables Transactions between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as"due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as"internal balances." Advances between funds, as reported in the fund financial statements, are offset by nonspendable fund balance in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. The Town's property taxes are levied on October 1 on the assessed value listed as of the prior January 1 for all real and business personal property located in the Town. Assessed values are established at 100% of estimated market value. Property taxes attach as an enforceable lien on property as of January 1. Taxes are due by January 31 following the October 1 levy date and are considered delinquent after January 31 of each year. All property tax receivables are shown net of an allowance for uncollectibles. The net property tax receivable allowance is equal to management's estimate of uncollectible outstanding property taxes at September 30, 2018. 46 Town of Westlake Notes to the Financial Statements Restricted Assets Certain bond proceeds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Inventories and Prepaid Items Inventories, which are expended as they are consumed, are stated at the lower of cost or market on a first-in, first-out basis. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. Fund Changes and Transactions between Funds Legally authorized transfers are treated as transfers in and out and are included as other financing sources (uses) of both governmental and proprietary funds. The Town allocates an indirect cost percentage of the salaries,wages and related costs of personnel who perform administrative services as well as other indirect costs necessary for the operation of various funds. Expenses are budgeted and paid from the appropriate fund. Capital Assets All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available.The cost of nominal maintenance and repairs that do not add value to the asset or materially extend assets' lives are not capitalized. Donated assets are valued at their acquisition value on the date donated. Assets capitalized have an original cost of $5,000 or more and three years or more of life. All infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), regardless of the acquisition date or amount, have been included. Estimated historical cost for initial reporting of infrastructure assets (those reported by governmental activities) was valued by estimating the current replacement cost of the infrastructure and using an index to deflate the cost to the estimated acquisition/construction year. As the Town constructs or acquires additional capital assets, including infrastructure assets, they are capitalized and reported at historical cost. Depreciation has been calculated on each class of depreciable property using the straight-line method. Estimated useful lives are as follows: Assets Years Water and sewer system 10-50 Buildings 20-50 Machinery and equipment 3-30 Improvements 5-30 Information systems and software 3 47 Town of Westlake Notes to the Financial Statements Compensated Absences The Town's policy allows employees to earn 5 days of vacation and 5 days of sick leave between six months and one year of service, and 10 days of vacation and 10 days of sick leave between one year and two years of service and each successive year through five years of service. After completion of 5 years of service, 15 days of vacation and 15 days of sick leave per year are earned. After completion of 10 years of service, 20 days of vacation and 20 days of sick leave per year are earned. The Town makes sick and vacation time available in full at the beginning of each year, and hours are actually earned throughout the year. Unused, earned vacation hours are paid upon termination or retirement at the employee's normal hourly rate; accumulated, unused sick time is only payable upon retirement, death of the employee, or other circumstances when authorized by the Town Manager. Long-Term Obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method, which approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as issuance costs during the current period.The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts are reported as other financing uses. Issuance costs, even if withheld from the actual proceeds, are reported as expenditures. Fund Equity and Net Position The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the Town is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows: Nonspendable:This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. Nonspendable items are not expected to be converted to cash or are not expected to be converted to cash within the next year. Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by board resolution of the Town council, the Town's highest level of decision making authority. These amounts cannot be used for any other purpose unless the Town council removes or changes the specified use by taking the same type of action that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractual requirements. Assicined: This classification includes amounts that are constrained by the Town's intent to be used for a specific purpose but are neither restricted nor committed. In the General Fund, assigned amounts represent intended uses established by the Town Council or the Town Finance Director who has been delegated that authority. 48 Town of Westlake Notes to the Financial Statements Unassigned: This classification includes the residual fund balance for the General Fund. The unassigned classification also includes negative residual fund balance of any other governmental fund that cannot be eliminated by offsetting of assigned fund balance amounts. In the government-wide financial statements, net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction or improvements of those assets, and adding back unspent proceeds. Net position is reported as restricted when there are limitations imposed on its use either though the enabling legislations adopted by the Town or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The government-wide and fund level financial statements report restricted fund balances for amounts not available for appropriation or legally restricted for specific uses. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, it is the Town's policy to use restricted resources first,then unrestricted resources as needed.When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the Town considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds. Pensions and Other Post-Employment Benefits (OPEB) For purposes of measuring the net pension/OPEB and total OPEB liabilities, pension and OPEB related deferred outflows and inflows of resources and pension and OPEB expense, the Town's specific information about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and Teachers Retirement System (TRS) and additions to/deductions from the Town's Fiduciary Net Position have been determined on the same basis as they are reported by TMRS and TRS. 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. For TMRS, information regarding the Town's Total Pension Liability and Total OPEB Liability is obtained from TMRS through reports prepared for the Town by TMRS consulting actuary, Gabriel Roeder Smith & Company, in compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. For TRS, information regarding the Town's Total Pension Liability and Total OPEB Liability is obtained from TRS which is a cost-sharing multi-employer defined benefit plan. Reports prepared are in compliance with Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. Deferred Outflows and Inflows of Resources In addition to assets, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred outflows of resources on the Statement of Net Position and Governmental Fund Balance Sheet.This separate financial statement element,deferred outflows of resources,represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The Town has the following items that qualify for reporting in this category: Deferred Outflow from Loss on Refunding —these deferred outflows reported at the net position result 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. 49 Town of Westlake Notes to the Financial Statements Deferred Outflow/Inflows from Pensions/OPEB - these deferred outflows/inflows reported on the Statement of Net Position result from pension/OPEB contributions after the measurement date (deferred and recognized as a reduction of the related liability in the following fiscal year) and/or differences in projected and actual earnings on pension/OPEB assets (deferred and amortized over a closed five-year period). Deferred Outflow/Inflows from Contributions — these deferred outflows/inflows result from contributions made or received before time requirement is met. The deferred outflows/inflows from contributions are eliminated at the Statement of Activities and Net Position. Deferred Inflows from Unavailable Resources—these deferred inflows result from property tax receivables not being collected within 60 days of year end.The deferred inflows from unavailable resources are recorded as revenues on the Statement of Activities. Estimates The preparation of financial statements,in conformity with U.S.generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual amounts could differ from those estimates. Subsequent Events The Town has evaluated all events or transactions that occurred after September 30, 2018 up through March 19, 2019, the date the financial statements were issued. Note 2. Cash and Investments Legal provisions generally permit the Town to invest in certificates of deposit, repurchase agreements, public funds investment pools, direct obligations of the United States of America or its subdivisions and state and local government securities. The Public Funds Investment Act (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 Town to adopt, implement, and publicize its 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. 50 Town of Westlake Notes to the Financial Statements Statutes and the Town's investment policy authorized the Town to invest in the following investments as summarized in the table below: Maximum Maximum Authorized Maximum Percentage Investment Investment Type Maturity of Portfolio In One Issuer Obligations of the U.S.Government, its agencies and instrumentalities 2 years None None Certificates of deposit 1 year None None Mutual funds 2 years 80% None Investment pools - None None The Town did not engage in repurchase or reverse repurchase agreement transactions during the current year. At year end, the carrying amount of the Town's deposits was $23,808,440 and the bank balance was $24,465,133. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the Town's name. At year end,the carrying amount of the component units' deposits was$7,895,407 and the bank balance was $8,102,720. The bank balance was completely covered by federal deposit insurance and collateral held by the pledging financial institution in the component units' names. The carrying amount consists of $4,520,010 in cash and cash equivalents and $3,375,397 in restricted cash and cash equivalents. 51 Town of Westlake Notes to the Financial Statements At September 30, 2018, the Town's cash and cash equivalents consist of and are classified in the accompanying financial statements are follows: Primary government: Cash and cash equivalents $23,342,212 Restricted cash and investments 623,811 Total primary government 23,966,023 Fiduciary funds: Restricted cash and cash equivalents 2,1 13,820 Total cash and investments $26,079,843 Deposits with financial institutions $23,808,440 Investments 2,271,403 Total cash and investments $26,079,843 Disclosures Relating to Interest Rate Risk This is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. In order to limit interest and market rate risk from changes in interest rates, the Town's investment policy sets a maximum stated maturity limit of two years for obligations of the United States Government, its agencies and instrumentalities (excluding mortgage backed securities) and one year for fully insured or collateralized certificates of deposit. No more than 80% of the Town's monthly average balance may be invested in money market funds.Additionally,the Town invests in an investment pool that purchases a combination of shorter term investments with an average maturity of 28 days thus reducing the interest rate risk. Information about the sensitivity of the fair values of the Town's investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Town's Investments. As of September 30, 2018, the Town's investments were as follows: Weighted Carrying Average Investment Type Amount Fair Value Maturity(days) TexPool $ 201 $ 201 28 days Mutual funds 2,271,202 2,271,202 N/A Total $ 2,271,403 $ 2,271,403 52 Town of Westlake Notes to the Financial Statements Disclosures Relating to Credit Risk This is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the Public Funds Investment Act, the Town's investment policy, or debt agreements, and the actual rating as of year-end for each investment type. Minimum Rating Carrying Fair Legal as of Primary government Amount Value Rating Year-end Investments: TexPool $ 201 $ 201 N/A AAA-m Mutual funds 2,271,202 2,271,202 N/A A-1 Total $ 2,271,403 $ 2,271,403 Disclosures Relating to Concentration of Credit Risk The Town's investment policy is to avoid a concentration of assets in a specific maturity, a specific issue, or a specific class of investments. Disclosures Relating to Custodial Credit Risk Custodial credit risk for deposits is the risk that,in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party.The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The Public Funds Investment Act does not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The Public Funds Investment Act requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least the bank balance less the FDIC insurance at all times. The Town requires all deposits to be covered by Federal Depository Insurance Corporation (FDIC) insurance and/or collateralized by qualified securities pledged by the Town's depository in the Town's name and held by the depository's agent. As of September 30, 2018, the Town's entire cash deposits with financial institutions in excess of federal depository insurance were fully collateralized. The Town categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application, provides a framework for measuring fair value which establishes a three-level fair value hierarchy that describes the inputs that are used to measure assets and liabilities. 53 Town of Westlake Notes to the Financial Statements Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that a government can access at the measurement date. Level 2 inputs are inputs -other than quoted prices included within Level 1 -that are observable for an asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for an asset or liability. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. If a price for an identical asset or liability is not observable, a government should measure fair value using another valuation technique that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement. The Town has recurring fair value measurements as presented in the table below. The Town's investment balances and weighted average maturity of such investments are as follows: Fair Value Measurements Using Quoted Prices in Active Significant Markets for Other Significant Weighted Value at Identical Observable Unobservable Percent of Average September 30, Assets Inputs Inputs Total Maturity 2018 (Level 1) (Level 2) (Level 3) Investments (Days) Investments not Subject to Fair Value: Investment Pools: TexPool $ 201 $ - $ $ 0.01% 28 Investments by Fair Value Level: Mutual Funds 2,271,202 2,271,202 99.99% N/A Total Value $ 2,271,403 $ 2,271,202 $ $ Mutual funds reported as Level 1 consist of shares of a money market funds government portfolio and are valued at net asset value (NAV) of the assets held by the Town. The NAV is a quoted price in an active market. Investment in State Investment Pools On September 1, 1989, local government investment pools became authorized investments for the majority of public entities in Texas. The Interlocal Cooperation Act was amended by the 715' Texas Legislature to facilitate the creation of local government investment pools in Texas. This act permits the creation of investment pools to which a majority of political subdivisions (local governments) may delegate, by contract, the authority to make investments purchased with local investment funds and to hold legal title as custodian of the investments. TexPool was organized to conform with the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code, and the Public Funds Investment Act, Chapter 2256 of the Texas Government Code. 54 Town of Westlake Notes to the Financial Statements During the year ended September 30, 2018, the Town had investments with TexPool. TexPool, a public funds investment pool created by the Treasurer of the State of Texas acting by and through the Texas Treasury Safekeeping Trust Company, which is empowered to invest funds and acts as custodian of investments purchased with local investment funds.These investments are not required to be categorized because the investor is not issued securities, but rather it owns an undivided beneficial interest in the assets of the respective funds.The fair value of the position in TexPool is the same as the value of the pool shares. Restricted Cash Proprietary Fund Within the proprietary funds, $216,430 of restricted cash represents customer deposits received for water and sewer usage that are refundable upon termination of service and $50,000 of restricted cash represents a contribution restricted for cemetery improvements. Discretely Presented Component Units Within the discretely presented component units, the $3,375,397 in restricted cash and cash equivalents represents funds held for debt service. Note 3. Receivables Governmental activities receivable balance consists of the following as of September 30, 2018: Governmental Funds Debt Total Westlake Service Nonmajor Governmenta General Academy Fund Fund Funds Receivables: Sales tax $ 1,149,748 $ - $ - $ 805,104 $ 1,954,852 Property tax 9,186 - 1,041 - 10,227 Other taxes 16,523 - - 81,740 98,263 Franchise tax 198,136 - - - 198,136 Other 130,792 794,795 - - 925,587 Gross receivables 1,504,385 794,795 1,041 886,844 3,187,065 Less:allowance for uncollectibles (2,297) - - - (2,297) Net total receivables $ 1,502,088 $ 794,795 $ 1,041 $ 886,844 $ 3,184,768 55 Town of Westlake Notes to the Financial Statements Business-type receivables balance consists of the following as of September 30, 2018: Business-Type Activities Utility Cemetery Fund Fund Total Receivables: Accounts $ 753,714 $ $ 753,714 Other - - Gross receivables 753,714 753,714 Less:allowance for uncollectibles (53,045) - (53,045) Net total receivables $ 700,669 $ $ 700,669 Note 4. Capital Assets Capital asset activity for the year ended September 30, 2018, was as follows: Primary Government Beginning Ending Balance Increases Decreases Transfers Balance Governmental activities: Capital assets,not being depreciated: Land $12,446,059 $ - $ $ - $ 12,446,059 Construction in progress 18,677,154 8,278,835 (767,854) 26,188,135 Total assets not being depreciated 31,123,213 8,278,835 (767,854) 38,634,194 Capital assets,being depreciated: Capital improvements 15,079,702 331,471 767,854 16,179,027 Buildings 32,262,586 - - 32,262,586 Machinery and equipment 4,360,1 15 110,397 - 4,470,512 Information systems and software 292,385 35,452 - 327,837 Total capital assets being depreciated 51,994,788 477,320 767,854 53,239,962 Less accumulated depreciation: Capital improvements (5,1 16,278) (563,060) - (5,679,338) Buildings (6,569,350) (657,917) (7,227,267) Machinery and equipments (3,311,193) (300,656) (3,611,849) Information systems and software (180,900) (76,678) (257,578) Total accumulated depreciation (15,177,721) (1,598,311) - (16,776,032) Total capital assets being depreciated 36,817,067 (1,120,991) 767,854 36,463,930 Governmental activities capital assets,net $67,940,280 $ 7,157,844 $ $ - $ 75,098,124 56 Town of Westlake Notes to the Financial Statements Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities: Capital assets,not being depreciated: Construction in progress $ 329,030 $ $ $ $ 329,030 Total assets not being depreciated 329,030 329,030 Capital assets,being depreciated: Capital improvements 14,899,416 14,899,416 Wastewater treatment rights 635,199 635,199 Machinery and equipment 3,560,780 3,560,780 Total capital assets being depreciated 19,095,395 19,095,395 Less accumulated depreciation: Capital improvements (5,164,471) (362,643) (5,527,114) Wastewater treatment rights (545,314) (31,760) (577,074) Machinery and equipment (2,024,469) (132,706) (2,157,175) Total accumulated depreciation (7,734,254) (527,109) (8,261,363) Total capital assets being depreciated 11,361,141 (527,109) 10,834,032 Business-type activities capital assets,net $11,690,171 $ (527,109) $ $ $ 11,163,062 Depreciation was charged to departments of the primary government as follows: Governmental activities: General government $ 915,911 Public safety 199,473 Public works 482,927 Total depreciation expense-governmental activities $ 1,598,311 Business-type activities: Water and sewer $ 527,109 57 Town of Westlake Notes to the Financial Statements A summary of discretely presented component units' capital assets at September 30, 2018 follows: Texas Student Housing Corporation - Denton Project Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 2,200,000 $ - $ - $ 2,200,000 Total assets not being depreciated 2,200,000 - - 2,200,000 Capital assets,being depreciated: Buildings 25,705,000 - - 25,705,000 Furniture and fixtures 1,253,841 - - 1,253,841 Total capital assets being depreciated 26,958,841 - - 26,958,841 Less accumulated depreciation: Buildings (14,066,346) (856,833) - (14,923,179) Furniture and fixtures (1,206,660) (8,450) - (1,215,1 10) Total accumulated depreciation (15,273,006) (865,283) - (16,138,289) Total capital assets being depreciated 11,685,835 (865,283) - 10,820,552 Capital assets,net $13,885,835 $ (865,283) $ - $13,020,552 Texas Student Housing Corporation -College Station Project Beginning Ending Balance Increases Decreases Balance Capital assets,not being depreciated: Land $ 2,899,597 $ - $ - $ 2,899,597 Total assets not being depreciated 2,899,597 - - 2,899,597 Capital assets, being depreciated: Buildings 26,885,312 - - 26,885,312 Furniture and fixtures 3,437,138 - - 3,437,138 Total capital assets being depreciated 30,322,450 - - 30,322,450 Less accumulated depreciation: Buildings (11,541,705) (896,178) - (12,437,883) Furniture and fixtures (3,1 14,417) (84,771) - (3,199,188) Total accumulated depreciation (14,656,122) (980,949) - (15,637,071) Total capital assets being depreciated 15,666,328 (980,949) - 14,685,379 Capital assets,net $18,565,925 $ (980,949) $ - $17,584,976 58 Town of Westlake Notes to the Financial Statements Note 5. Long-Term Debt The Town issues general obligation bonds, certificates of obligation and tax notes to provide for the acquisition and construction of major capital facilities and infrastructure. Combination tax and revenue certificates of obligation are issued for both governmental and business-type activities. General obligation bonds,governmental revenue bonds and tax notes pledge the full faith and credit of the Town. A summary of long-term debt transactions for the year ended September 30, 2018, was as follows: Amount Beginning Ending Due within Balance Additions Reductions Balance One year Governmental activities: General obligation bonds other obligations $35,257,700 $ - $ (1,519,000) $ 33,738,700 $1,567,450 Unamortized bond premium 1,578,909 - (99,812) 1,479,097 - Notes payable 238,404 - (36,677) 201,727 36,677 Capital leases 162,004 - - 162,004 162,004 Compensated absences 333,005 202,853 (128,698) 407,160 40,716 Total OPEB liability-TMRS 34,959 15,683 - 50,642 Net OPEB liability-TRS 4,516,574 (1,958,260) 2,558,314 Net pension liability-TMRS 1,314,966 - (368,890) 946,076 - Netpensionliability-TRS 1,051,346 - (155,683) 895,663 - Total governmental activities $44,487,867 $ 218,536 $ (4,267,020) $ 40,439,383 $1,806,847 Amount Beginning Ending Due within Balance Additions Reductions Balance One year Business-type activities: Certificates of obligation $ 949,300 $ - $ (22,000) $ 927,300 $ 22,550 Contractual obligations 5,126,958 - (213,093) 4,913,865 113,756 Unamortized bond premium 29,881 - (1,172) 28,709 - Compensated absences 65,504 29,696 (22,789) 72,411 7,241 Total OPEB liability-TMRS 4,294 1,926 - 6,220 - Netpensionliability-TMRS 161,515 - (45,310) 116,205 - Total business-type activities $ 6,337,452 $ 31,622 $ (304,364) $ 6,064,710 $ 143,547 The Town's accrued interest for general obligation bonds reported in governmental activities was $146,995 and certificate of obligation s reported in business-type activities for$4,100. 59 Town of Westlake Notes to the Financial Statements General Obligation Bonds and Certificates of Obligation General obligation bonds and certificates of obligation are as follows as of September 30, 2018: General Obligations Bonds,Tax Notes,and Final Business- Certificates of Obligation Maturity Interest Rates Governmental Type $2,095,000 Combination Tax and Revenue Certificates of Obligation,Series 2011 2031 3.25% $ 1,473,000 $ - $7,375,000 General Obligation Refunding Bonds, Series 2011 2028 2.0-4.0% 5,660,000 $9,320,000 Certificates of Obligation,Series 2013 2043 2.0-4.0% 7,550,700 927,300 $2,200,000 General Obligation Refunding Bonds, Series 2013 2028 2.0-2.5% 1,452,000 - $9,180,000 Certificate of Obligation Bonds, Series 2016 2046 2.0-5.0% 8,980,000 - $5,795,000 General Obligation Refunding Bonds, Series 2017 2032 2.0-5.0% 5,765,000 - $1,530,000 Tax Notes,Series 2017 2024 2.0-5.0% 1,328,000 - $1,910,000 General Obligation Refunding Bonds, Series 2014 2032 2.0-5.0% 1,530,000 - $ 33,738,700 $ 927,300 Debt service requirements of certificates of obligation and general obligations to be retired from governmental funds are as follows: Year Ending Total September 30, Principal Interest Requirements 2019 $ 1,567,450 $ 1,122,540 $ 2,689,990 2020 1,613,350 1,080,730 2,694,080 2021 1,651,350 1,037,343 2,688,693 2022 1,699,250 992,212 2,691,462 2023 1,742,700 945,371 2,688,071 2024-2028 8,503,850 3,921,635 12,425,485 2029-2033 8,260,800 2,342,786 10,603,586 2034-2038 3,293,100 1,375,407 4,668,507 2039-2043 3,966,850 696,848 4,663,698 2044-2046 1,440,000 88,000 1,528,000 Total $ 33,738,700 $ 13,602,872 $ 47,341,572 60 Town of Westlake Notes to the Financial Statements Debt service requirements of certificates of obligation to be retired from proprietary funds as follows: Year Ending Total September 30, Principal Interest Requirements 2019 $ 22,550 $ 32,576 $ 55,126 2020 23,650 32,114 55,764 2021 23,650 31,582 55,232 2022 24,750 30,977 55,727 2023 25,300 30,288 55,588 2024-2028 139,150 139,223 278,373 2029-2033 233,200 107,112 340,312 2034-2038 196,900 65,840 262,740 2039-2043 238,150 24,503 262,653 Total $ 927,300 $ 494,215 $ 1,421,515 Notes Payable In March 2014,the Town received a$366,774 loan from Bennett Benner Pettit,the proceeds of which were used to fund a portion of the Westlake Academy expansion project. The terms of the note call for ten annual payments at 0% interest. Year Ending Note September 30, Payments 2019 $ 36,677 2020 36,677 2021 36,677 2022 36,677 2023 36,677 2024 18,342 Total $ 201,727 Capital Leases The Westlake Academy has entered into lease agreements as lessee for financing the acquisition of computer equipment and software. The lease agreements qualify as capital leases for accounting purposes, and therefore, have been recorded at the present value of its future minimum lease payments as of the inception date. Equipment and software with a historical cost of $730,049 was under capital lease at August 31, 2018. Because the cost of the individual items was below the Town's capitalization threshold, the entire cost was recorded as expense during the year ended August 31, 2018. 61 Town of Westlake Notes to the Financial Statements The following schedule shows the future minimum lease payments under the capitalized lease together with the present value of the net minimum lease payments as of August 31, 2018: Year Ending Annual August 31, Lease Payments 2019 $ 166,038 Total minimum lease payments 166,038 Less:Amounts representing interest (4,034) Present value of net minimum lease payments $ 162,004 Contractual Obligations Proprietary funds contractual obligations as of September 30, 2018 are as follows: Business- Contractual Obligations Maturity Interest Rate Type Elevated Water Storage Facility 2020 5.0-5.65% $ 233,921 Limited pledge contractual obligation: Dove Road Water Line and West Pump Station 2028 6.75% 4,679,944 $4,913,865 Elevated Water Storage Facility - On October 9, 2000, the Town approved an interlocal agreement with the Town of Keller, which provided for the joint construction, operation, maintenance and use of an elevated water storage facility and appurtenances. The Town recorded a contractual obligation of $1,466,000 based on the terms of the interlocal agreement,which requires 20 annual principal and interest payments to the Town of Keller, with payments due each September 30 at interest rates ranging from 5.0%to 5.65%. Dove Road Water Line and West Pump Station - In April 2000, the Town approved an agreement with the Hillwood Development Corporation (Hillwood). In the agreement, Hillwood agreed to bear all initial costs for the design, engineering and constructions of the Dove Road Water Line and the West Pump Station that will service the residents of the Town. The Town agreed to reimburse Hillwood for the cost of the project upon completion and the Town's acceptance of the project,which occurred in June 2001, solely from a $.25 charge per 1,000 gallons of usage. The Town further agreed to deposit debt service revenue of $.25 per 1,000 gallons of usage collected from Town residents to fund its repayment to Hillwood. Debt service revenue will be allocated between Hillwood service area and Town service area by 52%and 48%, respectively and deposited into two separate debt service funds that will result in debt service revenue to pay the respective share of the construction cost. The Town recorded a limited pledge contractual obligation of $4,679,944 for the project cost based upon the terms of the agreement, which requires 239 monthly principal and interest payments to Hillwood, at an interest rate of 6.75%. If the Town collects insufficient funds to pay current interest on the debt, the interest payment may be deferred. No portion of debt payments will be applied to the principal component, until all current and deferred interest is fully paid.The obligation of the Town to pay the purchase price and interest thereon is not a general obligation of the Town but is a limited recourse obligation payable solely from debt service revenue. 62 Town of Westlake Notes to the Financial Statements The schedule of future payments by the Town under these agreements is as follows: Year Ending Total September 30, Principal Interest Requirements Past Due $ - $ 8,510,980 $ 8,510,980 2019 113,756 891,431 1,005,187 2020 120,165 949,146 1,069,311 2021 4,679,944 752,757 5,432,701 Total $ 4,913,865 $ 11,104,314 $ 16,018,179 Prior Year Defeasance of Debt In prior years, the government defeased general obligations bonds by placing proceeds of the new bonds in an irrevocable trust account to provide for 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 government's financial statements. At September 30, 2018, there were no prior year defeased bonds outstanding. Compensated Absences Although compensated absences are liquidated by the fund to which they relate, the significant portion of the governmental activities compensated absences has typically been liquidated by the general fund. Discretely Presented Component Units - Long-Term Debt Texas Student Housing Corporation -Denton Project The long-term debt activity of the Denton Project is as follows: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Bonds: 2001 A Bonds $21,195,000 $ - $ (955,000) $20,240,000 $ 1,015,000 2001 B Bonds 3,240,000 - - 3,240,000 1,430,000 Less discount on bonds (484,899) - 37,485 (447,414) - Total $23,950,101 $ - $ (917,515) $23,032,586 $2,445,000 The Bonds are payable solely from the revenues generated by the Denton Property and are secured by the revenues pledged and assigned under the terms of the Trust Indenture. The Town of Westlake does not have any liability for the payment of the bonds as the bonds are non-recourse to both the Town of Westlake and Texas Student Housing Authority. Interest rates on the bonds range from 5.00% to 11.00% and are payable semi-annually on July 1 and January 1 of each year thereafter. 63 Town of Westlake Notes to the Financial Statements At August 31, 2018, the Project was not in compliance with certain covenants of the Indenture including insufficient funds in some of the required funds and a fixed charges ratio less than 1.25. In addition, all required principal payments on the Series B bonds had not been made as of August 31, 2018. Upon certain events of default either the trustee, or owners of not less than 25% in aggregate principal of the bonds then outstanding, may declare the principal and all interest then due to be immediately due and payable. The debt service requirements of the bonds are as follows: Year Ending Total August 31, Principal Interest Requirements Past Due $ 1,360,000 $ 8,710,421 $ 10,070,421 2019 1,085,000 1,589,980 2,674,980 2020 1,165,000 1,513,768 2,678,768 2021 1,250,000 1,431,730 2,681,730 2022 1,330,000 1,343,530 2,673,530 2023 1,430,000 1,248,483 2,678,483 2024-2028 8,860,000 4,543,880 13,403,880 2029-2031 7,000,000 1,039,228 8,039,228 $ 23,480,000 $ 21,421,020 $ 44,901,020 Texas Student Housing Corporation - College Station Project The Project's installment note payable is summarized as follows: Lender/Security/Due/Date Rate Balance Cambridge Student Housing Financing Company,L.P.;substantially all assets and assignment of rents: due November 1,2039 8.00% $28,205,000 The following is a summary of long-term debt transactions of the Project for the year ended August 31, 2018: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Certificates $28,419,200 $ - $ (214,200) $28,205,000 $1,610,800 64 Town of Westlake Notes to the Financial Statements The debt is to be amortized through 2040 with varying payments. The annual requirements to amortize the Project's outstanding installment notes payable as of August 31, 2018 are as follows: Year Ending August 31, Principal Interest Total Past Due $ 890,800 $ 20,336,807 $ 21,227,607 2019 720,000 1,650,637 2,370,637 2020 775,000 1,592,890 2,367,890 2021 830,000 1,530,858 2,360,858 2022 895,000 1,464,122 2,359,122 2023 495,000 1,410,935 1,905,935 2024-2028 3,090,000 6,415,005 9,505,005 2029-2033 4,450,000 5,004,005 9,454,005 2034-2038 6,425,000 2,953,495 9,378,495 2039-2040 9,634,200 372,715 10,006,915 Total $ 28,205,000 $ 42,731,469 $ 70,936,469 Class C and D bonds are in default and the property does not generate enough revenue to pay the debt obligations. All of the Class C and D bonds issued remain outstanding as of August 31, 2018. Each class has certain rights and privileges, as contained in the private placement memorandum. As a part of the offering, the Project entered into a trust agreement with J. P.Morgan Trust Company, N.A. (the Trustee) for the purpose of determining that each class is paid in accordance with the private placement memorandum. At August 31, 2018, the Project was not in compliance with the fixed charge coverage ratio. As a result, the lender may accelerate the maturity of the unpaid portion of the principal payable under the installment sale agreement. However, the Authority does not anticipate this event will occur, since foreclosure by private interests would result in the loss of tax-exempt status for the Project. The Town of Westlake does not have any liability for the payment of debt of the discretely presented component units as the bonds are non-recourse to both the Town and Texas Student Housing Authority. Note 6. Unearned Revenue / Deferred Inflows of Resources Unearned revenue in the proprietary fund of $369,062 relates to the collection of the entire amount due on twelve Ductbank leases as follows: three leases with AT&T local network services ranging from 5 - 30 years; six leases with Verizon Southwest ranging from 5-30 years; one five-year lease with MCI Metro; one five-year lease with L3 Communications for use of the Town's Ductbank; and one five-year lease with Charter. Governmental funds report deferred inflows of resources in connection with receivables for revenue that is not considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, deferred inflows of resources reported in the governmental funds consist of$6,890 and $1,041 of unavailable property taxes in the general fund and debt service fund, respectively, as well as$323,439 of unavailable contributions in the Westlake Academy fund.The unavailable contribution is from the Town (general fund) with a time constraint to be used for fiscal year 2019. Accordingly, a deferred outflow of resources has been recorded in the general fund in the same amount. 65 Town of Westlake Notes to the Financial Statements Note 7. Interlocal Agreement with the Town of Westlake In August 1995, the Town entered into an agreement with the Town of Southlake to allow the Town to utilize capacity in a sewer line and to set forth their respective rights and obligations with respect to the sewer line owned by the City of Southlake. The Town is obligated to share in the cost of construction, operation and maintenance of the sewer line. The sewer line was constructed in 2000. Additionally, the Town must pay the Town of Southlake all transportation, treatment and related costs allocable to the metered flow of sewage from the Town into the sewer line. Note 8. Federal and State Program Revenues The Town received financial assistance from various federal and state governmental agencies in the form of grants for Westlake Academy. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any unallowed disbursement resulting from such audits becomes a liability of the Town. In the opinion of the Town management, no material refunds will be required as a result of unallowed disbursements (if any) by the grantor agencies.Sources of federal and state program revenues for the year ended September 30, 2018,were as follows: Westlake Source Academy Federal program revenues: U.S.Department of Education-Passed through State Department of Education Total federal program revenues $ 1 14,797 State program revenues: State Department of Education $ 7,217,383 Note 9. Interfund Balances and Transactions Interfund receivables and payables at September 30, 2018, were as follows: Due from Due to Other Funds Other Funds General fund $ 487,121 $ - Nonmajor governmental funds: 413 Economic Development Fund - 487,121 $ 487,121 $ 487,121 The 413 Economic Development Corporation Fund amount of $487,121 payable to the General Fund is related to debt service payment reimbursement. Inter-fund transfers are reported in the governmental funds and proprietary fund financial statements. In the government-wide statements, inter-fund transfers are eliminated within the governmental activities column and business-type column, as appropriate. 66 Town of Westlake Notes to the Financial Statements Individual fund transfers for fiscal year 2018 were as follows: Transfer out Transfer in Amount Purpose General Fund Debt Service Fund $ 911,268 Debt service payments General Fund Westlake Academy 315,000 For student reserve fund General Fund Capital projects fund 950,450 For capital improvements Nonmajor Governmental Nonmajor Governmental 200,000 Economic development payments for benefit of Westlake Academy Nonmajor Governmental Debt Service 1,500,901 Debt service payments Utility Fund General Fund 71,466 Fort Worth impact revenue $ 3,949,085 Note 10. Water Purchase and Wastewater Treatment Contracts The Town has a contract with the City of Fort Worth, Texas, to purchase water. Under the contract, the Town may obtain from the City of Fort Worth, a supply of potable water at a reasonable rate based on water usage.The rate charges are subject to minimum annual contract payments.Water expense for the year ended September 30, 2018 was $1,570,220. Note 11. Defined Benefit Pension Plan - TMRS Plan Description The Town participates as one of 866 plans in the nontraditional,joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System (TMRS).TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act) as an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax-qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com. All eligible employees of the Town 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 Town, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the Town-financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. 67 Town of Westlake Notes to the Financial Statements Employees Covered By Benefit Terms At the December 31, 2017 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees of beneficiaries currently receiving benefits 1 1 Inactive employees entitled to but not yet receiving benefits 22 Active employees 41 74 Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7%of employee gross earnings, and the Town matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the Town. Under the state law governing TMRS,the contribution rate for each Town is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method.The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the Town were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the Town were 12.05% and 12.84% in calendar years 2017 and 2018, respectively. The Town's contributions to TMRS for the year ended September 30, 2018, were $454,421, and were equal to the required contributions. Net Pension Liability The Town's Net Pension Liability (NPL) was measured as of December 31, 2017, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumptions The Total Pension Liability in the December 31, 2017 actuarial valuation was determined using the following actuarial assumptions: • Inflation 2.5% per year • Overall payroll growth 3.0% per year • Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation Salary increases were based on a service-related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with males rates multiplied by 109% and female rates multiplied by 103% with a 3-year set-forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements subject to the 3%floor. 68 Town of Westlake Notes to the Financial Statements Actuarial assumptions used in the December 31, 2017, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2010 through December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. Assumptions are reviewed annually. No additional changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience investigation study, the Board amended the long-term expected rate of return on pension plan investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long- term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios,GRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive).At its meeting on July 30,2015,the TMRS Board approved a new portfolio target allocation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: Long-Term Expected Real Asset Class Target Allocation Rate of Return (Arithmetic) Domestic Equity 17.5% 4.55% International Equity 17.5% 6.35% Core Fixed Income 10.0% 1.00% Non-Core Fixed Income 20.0% 4.15% Real Return 10.0% 4.15% Real Estate 10.0% 4.75% Absolute Return 10.0% 4.00% Private Equity 5.0% 7.75% Total 100.0% Discount Rate The discount rate used to measure the Total Pension Liability was 6.75%.The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees.Therefore,the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. 69 Town of Westlake Notes to the Financial Statements Allocations The Town's net pension liability, pension expense, and deferred outflows of resources related to TMRS have been allocated between governmental activities and business-type activities using a contribution- based method. Changes in the Net Pension Liability Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a)- (b) Balance at 12/31/2016 $ 6,304,274 $4,827,793 $ 1,476,481 Changes for the year: Service Cost 566,643 - 566,643 Interest 439,725 - 439,725 Change of benefit terms - - - Difference between expected and actual experience (120,557) - (120,557) Changes of assumptions - - - Contributions-employer - 400,684 (400,684) Contributions-employee - 232,776 (232,776) Net investment income - 670,195 (670,195) Benefit payments,including refunds of employee contributions (146,316) (146,316) - Administrative expense (3,468) 3,468 Other changes - (176) 176 Net Changes 739,495 1,153,695 (414,200) Balance at 12/31/17 $ 7,043,769 $5,981,488 $ 1,062,281 Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Town, calculated using the discount rate of 6.75%, as well as what the Town's net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate: 1%Decrease in 1%Increase in Discount Rate Discount Rate Discount Rate (5.75%) (6.75%) (7.75%) Net pension liability $ 2,193,790 $ 1,062,281 $ 135,820 Pension Plan Fiduciary Net Position Detailed information about the pension plan's Fiduciary Net Position is available in a separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. 70 Town of Westlake Notes to the Financial Statements Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2018, the Town recognized pension expense of $530,286. At September 30, 2018, the Town 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 Difference between expected and actual economic experience $ 227,613 $ 97,506 Changes in actuarial assumptions 65,071 - Difference between projected and actual investment earnings - 168,060 Contributions subsequent to the measurement date 343,570 Total $ 636,254 $ 265,566 $343,570 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ending September 30, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended Net Deferred September 30, Outflows (Inflows) 2018 $ 78,927 2019 54,075 2020 (27,277) 2021 (73,305) 2022 (5,302) Total $ 27,118 71 Town of Westlake Notes to the Financial Statements Note 12. Defined Benefit Pension Plan -TRS Plan Description The Academy participates in a cost-sharing multiple-employer defined benefit pension that has a special funding situation. The plan is administered by the Teacher Retirement System of Texas (TRS). TRS's defined benefit pension plan is established and administered in accordance with the Texas Constitution, Article XVI,Section 67 and Texas Government Code,Title 8,Subtitle C.The pension trust fund is a qualified pension trust under Section 401 (a) of the Internal Revenue Code. The Texas Legislature establishes benefits and contribution rates within the guidelines of the Texas Constitution.The pension's Board of Trustees does not have the authority to establish or amend benefit terms. All employees of public, state-supported educational institutions in Texas who are employed for one-half or more of the standard work load and who are not exempted from membership under Texas Government Code,Title 8, Section 822.002 are covered by the system. Pension Plan Fiduciary Net Position Detailed information about the Teacher Retirement System's fiduciary net position is available in a separately issued Comprehensive Annual Financial Report that includes financial statements and required supplementary information. That report may be obtained on the Internet at http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR; by writing to TRS at 1000 Red River Street, Austin, TX, 78701-2698; or by calling (512) 542-6592. Benefits Provided TRS provides service and disability retirement, as well as death and survivor benefits, to eligible employees (and their beneficiaries) of public and higher education in Texas.The pension formula is calculated using 2.3 percent (multiplier) times the average of the five highest annual creditable salaries times years of credited service to arrive at the annual standard annuity except for members who are grandfathered, the three highest annual salaries are used. The normal service retirement is at age 65 with five years of credited service or when the sum of the member's age and years of credited service equals 80 or more years. Early retirement is at age 55 with five years of service credit or earlier than 55 with 30 years of service credit. There are additional provisions for early retirement if the sum of the member's age and years of service credit total at least 80, but the member is less than age 60 or 62 depending on date of employment, or if the member was grandfathered in under a previous rule. There are no automatic post- employment benefit changes; including automatic COLAs. Ad hoc post-employment benefit changes, including ad hoc COLAs can be granted by the Texas Legislature as noted in the Plan description above. Contributions Contribution requirements are established or amended pursuant to Article 16, section 67 of the Texas Constitution which requires the Texas legislature to establish a member contribution rate of not less than 6%of the member's annual compensation and a state contribution rate of not less than 6%and not more than 10% of the aggregate annual compensation paid to members of the system during the fiscal year. Texas Government Code section 821.006 prohibits benefit improvements, if as a result of the particular action, the time required to amortize TRS' unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the amortization period already exceeds 31 years, the period would be increased by such action. 72 Town of Westlake Notes to the Financial Statements Employee contribution rates are set in state statute, Texas Government Code 825.402. Senate Bill 1458 of the 83rd Texas Legislature amended Texas Government Code 825.402 for member contributions and established employee contribution rates for fiscal years 2015 thru 2016.The 84th Texas Legislature, General Appropriations Act (GAA) established the employer contribution rates for fiscal years 2017 and 2018. Contribution rates 2017 2018 Member 7.70% 7.70% Non-employer contributing entity(State) 6.80% 6.80% Employers 6.80% 6.80% 2018 Employer contributions $ 91,593 2018 Member contributions $ 407,324 2017 NECE on-behalf contributions $ 355,959 Contributors to the plan include members, employers and the State of Texas as the only non-employer contributing entity. The State is the employer for senior colleges, medical schools and state agencies including TRS. In each respective role, the State contributes to the plan in accordance with state statutes and the General Appropriations Act (GAA). As the non-employer contributing entity for public education and junior colleges, the State of Texas contributes to the retirement system an amount equal to the current employer contribution rate times the aggregate annual compensation of all participating members of the pension trust fund during that fiscal year reduced by the amounts described below which are paid by the employers. Employers (public school, junior college, other entities or the State of Texas as the employer for senior universities and medical schools) are required to pay the employer contribution rate in the following instances: • On the portion of the member's salary that exceeds the statutory minimum for members entitled to the statutory minimum under Section 21.402 of the Texas Education Code. • During a new member's first 90 days of employment. • When any part or all of an employee's salary is paid by federal funding sources, a privately sponsored source, from non-educational and general, or local funds. • When the employing district is a public junior college or junior college district, the employer shall contribute to the retirement system an amount equal to 50% of the state contribution rate for certain instructional or administrative employees; and 100% of the state contribution rate for all other employees. In addition to the employer contributions listed above, there are two additional surcharges an employer is subject to: • When employing a retiree of the Teacher Retirement System the employer shall pay both the member contribution and the state contribution as an employment after retirement surcharge • When a school district or charter school does not contribute to the Federal Old-Age,Survivors and Disability Insurance (OASDI) Program for certain employees,they must contribute 1.5%of the state contribution rate for certain instructional or administrative employees; and 100% of the state contribution rate for all other employees. 73 Town of Westlake Notes to the Financial Statements Actuarial Assumptions The total pension liability in the August 31, 2017 actuarial valuation was determined using the following actuarial assumptions: Valuation Date August 31, 2017 Actuarial Cost Method Individual Entry Age Normal Asset Valuation Method Market Value Single Discount Rate 8.00% Long-term expected Investment Rate of Return* 8.00% Inflation 2.50% Salary Increases including inflation 3.50%to 9.50% Payroll Growth Rate 2.50% Benefit Changes during the year None Ad hoc post-employment benefit changes None The actuarial methods and assumptions are primarily based on a study of actual experience for the four-year period ending August 31, 2014 and adopted on September 24, 2015. Discount Rate The discount rate used to measure the total pension liability was 8.0%. There was no change in the discount rate since the previous year. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those of the contributing employers and the non- employer contributing entity are made at the statutorily required rates. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all future benefit payments of current plan 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 total pension liability. The long-term rate of return on pension plan investments is 8%. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimates ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. 74 Town of Westlake Notes to the Financial Statements Best estimates of geometric real rates of return for each major asset class included in the Systems target asset allocation as of August 31, 2017 are summarized below: Long-term Expected Portfolio Target Real Return Real Rate of Asset Class Allocation Geometric Basis Return' Global Equity U.S. 18% 4.6% 1.0% Non-U.S.Developed 13% 5.1% 0.8% Emerging Markets 9% 5.9% 0.7% Directional Hedge Funds 4% 3.2% 0.1% Private Equity 13% 7.0% 1.1% Stable Value U.S.Treasuries 1 1% 0.7% 0.1% Absolute Return 0% 1.8% 0.0% Stable Value Hedge Funds 4% 3.0% 0.1% Cash 1% -0.2% 0.0% Real Return Global Inflation Linked Bonds 3% 0.9% 0.0% Real Assets 16% 5.1% 1.1% Energy and Natural Resources 3% 6.6% 0.2% Commodities 0% 1.2% 0.0% Risk Parity Risk Parity 5% 6.7% 0.3% Inflation Expectation 2.2% Alpha 1.0% Total 100.0% 8.7% 'The Expected contribution to Returns incorporates the volatility drag resulting from the conversion between Arithmetic and Geometric mean returns. Discount Rate Sensitivity Analysis The following schedule shows the impact of the Net Pension Liability if the discount rate used was 1% less than and 1%greater than the discount rate that was used (8%) in measuring the 2017 Net Pension Liability. 1%Decrease in Discount 1%Increase in Discount Rate (7.0%) Rate (8.0%) Discount Rate (9.0%) Academy's proportionate share of the TRS net pension liability $ 1,509,911 $ 895,663 $ 384,202 75 Town of Westlake Notes to the Financial Statements Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At August 31, 2017, the Academy reported a liability of $895,663 for its proportionate share of the TRS's net pension liability. This liability reflects a reduction for State pension support provided to the Academy. The amount recognized by the Academy as its proportionate share of the net pension liability,the related State support, and the total portion of the net pension liability that was associated with the Academy were as follows: Academy's proportionate share of the collective net pension liability $ 895,663 State's proportionate share that is associated with Academy 3,480,057 $ 4,375,720 The net pension liability was measured as of August 31, 2017 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The employer's proportion of the net pension liability was based on the employer's contributions to the pension plan relative to the contributions of all employers to the plan for the period September 1, 2016 thru August 31, 2017. At August 31, 2017, the employer's proportion of the collective net pension liability was 0.0028012%which was an increase of 0.000019%from its proportion measured as of August 31, 2016. Changes since the Prior Actuarial Valuation There were no changes to the actuarial assumptions or other inputs that affected measurement of the total pension liability since the prior measurement period. There were no changes of benefit terms that affected measurement of the total pension liability during the measurement period. For the year ended August 31,2018,the Academy recognized pension expense of$441,006 and revenue of$265,445 for support provided by the State. 76 Town of Westlake Notes to the Financial Statements At August 31, 2018, the Academy reported its proportionate share of the TRS's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual economic experience $ 13,104 $ 48,302 Changes in actuarial assumptions 40,799 23,356 Changes in proportionate share 364,013 913 Difference between projected and actual investment earnings - 65,274 Contributions paid to TRS subsequent to the measurement date 91,593 - Total $ 509,509 $ 137,845 The $91,593 reported as a deferred outflow of resources resulting from Academy contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending August 31, 2019. The other amounts of the employer's balances of deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended Net Deferred Aug.31, Outflows (Inflows) 2019 $ 63,372 2020 120,544 2021 58,977 2022 36,466 2023 857 Thereafter (145) Total $ 280,071 Note 13. Other Post-Employment Benefits -TMRS Plan Description Texas Municipal Retirement System ("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 participating member cities may elect, by ordinance, to provide group-term life insurance coverage for their active members, including or not including retirees. Employers 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 Town has elected to participate in the SDBF for its active members including retirees. As the SDBF covers both active and retiree participants, with no segregation of assets, the SDBF is considered to be an unfunded single-employer OPEB plan (i.e. no assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75) for Town reporting. 77 Town of Westlake Notes to the Financial Statements Benefits Provided 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). The death benefit for retirees is considered an other postemployment benefit ("OPEB") and is a fixed amount of$7,500. At the December 31, 2017 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees currently receiving benefits 6 Inactive employees entitled to but not yet receiving benefits 3 Active employees 41 50 Contributions The member city contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy 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. Contributions are made monthly based on the covered payroll of employee members of the participating member city. The contractually required contribution rate is determined annually for each Town. The rate is based on the mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the city. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect.The funding policy of this plan is to assure that adequate resources are available to meet all death benefit payments for the upcoming year. The retiree portion of contribution rates to the SDBF for the Town was 0.00% and 0.0 1% in calendar years 2017 and 2018.The Town's contributions to the SDBF for the year ended September 30, 2018 were $6,380, and were equal to the required contributions. Total OPEB Liability The Town's Total OPEB Liability (TOL) was measured as of December 31, 2017 and was determined by an actuarial valuation as of that date. 78 Town of Westlake Notes to the Financial Statements Actuarial Assumptions The Total OPEB Liability in the December 31, 2017 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5%per year Salary increases 3.5%to 10.5%including inflation Discount rate 3.31% Retiree's share of benefit-related costs 0.00% Salary increases were based on a service-related table. Mortality rates for service retirees were based on the RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109%and female rates multiplied by 103% and projected on a fully generational basis with scale BB. Mortality rates for disabled retirees were based on the RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109%and female rates multiplied by 103%with a 3-year set-forward for both males and females. The rates are projected on a fully generational basis with scale BB to account for future mortality improvements subject to the 3%floor. The actuarial assumptions used in the December 31, 2017, valuation were developed primarily from an actuarial experience study of the four-year period from December 31, 2010 through December 31, 2014. They were adopted in 2015 and first used in the December 31, 2015 actuarial valuation.The post-mortality assumption for healthy annuitants and Annuity Purchase Rate (APRs) are based on the Mortality Experience Investigation Study covering 2009 through 2011 and dated December 31,2013. In conjunction with these changes first used in the December 31, 2013 valuation, TMRS adopted the Entry Age Normal Actuarial Cost Method. The discount rate used to measure the Total OPEB Liability was 3.31%and was based on the Fidelity Index's "20-Year Municipal GO AA Index" rate as of December 31, 2017. 79 Town of Westlake Notes to the Financial Statements Changes in Total OPEB Liability Total OPEB Liability Balance at 12/31/2016 $ 39,253 Changes for the year: Service Cost 6,318 Interest on Total OPEB Liability 1,603 Change of benefit terms - Difference between expected and actual experience - Changes of assumptions or other inputs 4,872 Benefit payments 4,816 Administrative expense - Other changes - Net changes 17,609 Balance at 12/31/17 $ 56,862 Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the Town, calculated using the discount rate of 3.31%, as well as what the Town's total OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower (2.31%) or 1 percentage-point higher (4.31%) than the current rate: 1%Decrease 1%Increase in Discount Discount in Discount Rate (2.31%) Rate (3.31%) Rate (4.31%; Total OPEB Liability $ 64,808 $ 56,862 $ 42,389 80 Town of Westlake Notes to the Financial Statements OPEB Expense and Deferred Oufflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended September 30, 2018, the Town recognized pension expense of $8,580. At September 30, 2018, the Town 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 Changes in assumptions and other inputs $ 4,213 $ - Contributions subsequent to the measurement date 4,816 - Total $ 9,029 $ - The $4,816 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will reduce the Total OPEB liability during the year ending September 30, 2019. The other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ended Net Deferred Se pt.30: Outflows (Inflows 2019 $ 659 2020 659 2021 659 2022 659 2023 659 Thereafter 918 Total $ 4,213 Note 14. Health Care Coverage During the period ended August 31, 2018,employees of the Academy (a blended component unit of the Town) who met minimum eligibility requirements were covered by a state-wide health care plan, TRS Active Care. The Academy's participation in this plan is renewed annually. The Academy paid into the Plan $351 per month per employee and $276 per month when the employee works less than 30 hours per week if eligible to enroll in TRS Active Care. Employees, at their option, pay premiums for any coverage above these amounts as well as for dependent coverage. The Teacher Retirement System (TRS) manages TRS Active Care. The medical plan is administered by Aetna, and Caremark Health administers the prescription drug plan. The latest financial information on the state-wide plan may be obtained by writing to the TRS Communications Department, 1000 Red River Street, Austin, Texas 78701, by calling the TRS Communications Department at 1-800-223-8778, or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS Publications heading. 81 Town of Westlake Notes to the Financial Statements Note 15. Defined Other Post Employment Benefit Plan —TRS Plan Description The Academy participates in the Texas Public School Retired Employees Group Insurance Program (TRS-Care).It is a multiple-employer,cost-sharing defined Other Post-Employment Benefit (OPEB) plan that has a special funding situation.The plan is administered through a trust by the Teacher Retirement System of Texas (TRS) Board of Trustees. It is established and administered in accordance with the Texas Insurance Code, Chapter 1575. OPEB Plan Fiduciary Net Position Detail information about the TRS-Care's fiduciary net position is available in the separately-issued TRS Comprehensive Annual Financial Report that includes financial statements and required supplementary information. That report may be obtained on the Internet at http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR; by writing to TRS at 1000 Red River Street, Austin, TX, 78701-2698; or by calling (512) 542-6592. Benefits Provided TRS-Care provides a basic health insurance coverage (TRS-Care 1), at no cost to all retirees from public schools, charter schools, regional education service centers and other educational Academys who are members of the TRS pension plan. Optional dependent coverage is available for an additional fee. Eligible retirees and their dependents not enrolled in Medicare may pay premiums to participate in one of two optional insurance plans with more comprehensive benefits (TRS-Care 2 and TRS-Care 3). Eligible retirees and dependents enrolled in Medicare may elect to participate in one of the two Medicare health plans for an additional fee. To qualify for TRS-Care coverage, a retiree must have at least 10 years of service credit in the TRS pension system. The Board of Trustees is granted the authority to establish basic and optional group insurance coverage for participants as well as to amend benefit terms as needed under Chapter 1575.052. There are no automatic post-employment benefit changes; including automatic COLAs. The premium rates for the optional health insurance are based on years of service of the member. The schedule below shows the monthly rates for the average retiree with Medicare Parts A&B coverage,with 20 to 29 years of service for the basic plan and the two optional plans. TRS-Care Plan Premium Rates Effective September 1,2016-December 31,2017 TRS-Care 1 TRS-Care 2 TRS-Care 3 Basic Plan Optional Plan Optional Plar Retiree* $ - $ 70 $ 100 Retiree and spouse 20 175 255 Retiree* and children 41 132 182 Retiree and family 61 237 337 Surviving children only 28 62 82 * or surviving spouse 82 Town of Westlake Notes to the Financial Statements Contributions Contribution rates for the TRS-Care plan are established in state statute by the Texas Legislature,and there is no continuing obligation to provide benefits beyond each fiscal year. The TRS-Care plan is currently funded on a pay-as-you-go basis and is subject to change based on available funding. Funding for TRS- Care is provided by retiree premium contributions and contributions from the state, active employees, and Academy based upon Academy payroll. The TRS Board of trustees does not have the authority to set or amend contribution rates. Texas Insurance Code, Section 1575.202 establishes the state's contribution rate which is 1.0% of the employee's salary. Section 1575.203 establishes the active employee's rate which is .65% of pay. Section 1575.204 establishes an employer contribution rate of not less than 0.25 percent or not more than 0.75 percent of the salary of each active employee of the public. The actual employer contribution rate is prescribed by the Legislature in the General Appropriations Act.The following table shows contributions to the TRS-Care plan by type of contributor. 2018 2017 Active employee 0.65% 0.65% Non-employer contribution entity(state) 1.25% 1.00% Employers/District 0.75% 0.55% Federal/private funding remitted by Employer 1.25% 1.00% The contribution amounts for the Academy's fiscal year 2018 are as follows: 2018 Employer contributions $ 46,204 2018 Member contributions $ 407,324 2018 NECE on-behalf contributions $ 52,680 In addition to the employer contributions listed above, there is an additional surcharge all TRS employers are subject to (regardless of whether or not they participate in the TRS Care OPEB program). When employers hire a TRS retiree,they are required to pay to TRS Care, a monthly surcharge of$535 per retiree. TRS-Care received supplemental appropriations from the State of Texas as the Non-Employer Contributing Entity in the amount of$15.6 million in fiscal year 2017 and $182.6 million in fiscal year 2018. 83 Town of Westlake Notes to the Financial Statements Actuarial Assumptions The total OPEB liability in the August 31, 2017 actuarial valuation was determined using the following actuarial assumptions: Rates of mortality General inflation Rates of retirement Wage inflation Rates of termination Expected payroll growth Rates of disability incidence Additional Actuarial Methods and Assumptions: Valuation date August 31, 2017 Actuarial cost method Individual entry age normal Inflation 2.50% Discount rate* 3.42%* Aging factors Based on plan specific experience Expenses third-party administrative expenses related to the delivery of health care benefits are included in the age- adjusted claims costs. Payroll growth rate 2.50% Projected salary increases- 3.50%to 9.50%** Healthcare trend rates— 4.50%to 12.00%*** Election Rates Normal retirement: 70% participation prior to age 65 and 75% participation after age 65 Ad hoc post-employment benefit changes None Source: Fixed income municipal bonds with 20 years to maturity that include only federal tax-exempt municipal bonds as reported in Fidelity Index's"20-Year Municipal GO AA Index"as of August 31, 2017. **Includes inflation at 2.50% ..*Initial trend rates are 7.00%for non-Medicare retiree; 10.00%for Medicare retirees and 12.00%for prescriptions for all retirees.Initial trend rates decrease to an ultimate trend rate of 4.50%over a period of 10 years. Other information-There was a significant plan change adopted in fiscal year ending August 31,2017.Effective January 1, 2018, only one health plan option will be offered and all retirees will be required to contribute monthly premiums for coverage. Assumption changes made for the August 31, 2017 valuation include a change to the assumption regarding the phase-out of the Medicare Part D subsidies and a change to the discount rate from 2.98%as of August 31,2016 to 3.42%as of August 31,2017. Discount Rate A single discount rate of 3.42% was used to measure the total OPEB liability. There was a change of .44 percent in the discount rate since the previous year. Because the plan is essentially a "pay-as-you-go" plan, the single discount rate is equal to the prevailing municipal bond rate. The projection of cash flows used to determine the discount rate assumed that contributions from active members and those of the contributing employers and the non-employer contributing entity are made at the statutorily required rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to not be able to make all future benefit payments of current plan members. Therefore, the municipal bond rate was applied to all periods of projected benefit payments to determine the total OPEB liability. 84 Town of Westlake Notes to the Financial Statements Discount Rate Sensitivity Analysis. The following schedule shows the impact of the Net OPEB Liability if the discount rate used was 1% less than and 1% greater than the discount rate that was used (3.42%) in measuring the Net OPEB Liability. 1%Decrease in Discount 1%Increase in Discount Rate Rate Discount Rate (2.42%) (3.42%) (4.42%) Academy's proportionate share of the net OPEB liability $ 3,019,446 $ 2,558,314 $ 2,187,668 Healthcare Cost Trend Rates Sensitivity Analysis. The following presents the net OPEB liability of the plan using the assumed healthcare cost trend rate, as well as what the net OPEB liability would be if it were calculated using a trend rate that is one-percentage point lower or one-percentage point higher than the assumed healthcare cost trend rate. 1%Decrease in Discount 1%Increase in Discount Rate Rate Discount Rate Academy's proportionate share of the net OPEB liability $ 2,130,052 $ 2,558,314 $ 3,120,248 OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs At August 31, 2018, the Academy reported a liability of$2,558,314 for its proportionate share of the TRS's Net OPEB Liability. This liability reflects a reduction for State OPEB support provided to the Academy. The amount recognized by the Academy as its proportionate share of the net OPEB liability, the related State support, and the total portion of the net OPEB liability that was associated with the Academy were as follows: Academy's proportionate share of the collective net pension liability $ 2,558,314 State's proportionate share that is associate with Academy 4,406,333 Total $ 6,964,647 The Net OPEB Liability was measured as of August 31, 2017 and the Total OPEB Liability used to calculate the Net OPEB Liability was determined by an actuarial valuation as of that date. The employer's proportion of the Net OPEB Liability was based on the employer's contributions to the OPEB plan relative to the contributions of all employers to the plan for the period September 1, 2016 thru August 31, 2017. At August 31, 2017 the employer's proportion of the collective Net OPEB Liability was .00588304% which was the same proportion measured as of August 31, 2016. Changes Since the Prior Actuarial Valuation. The following were changes to the actuarial assumptions or other inputs that affected measurement of the Total OPEB liability since the prior measurement period. The following assumptions and other inputs which are specific to TRS-Care were updated during the year ended August 31, 2017: 1. Effective January 1, 2018, only one health plan option will exist (instead of three), and all retirees will be required to contribute monthly premiums for coverage.The health plan changes triggered changes to several of the assumptions,including participation rates,retirement rates,and spousal participation rates. 85 Town of Westlake Notes to the Financial Statements 2. The August 31, 2016 valuation had assumed that the savings related to the Medicare Part D reimbursements would phase out by 2022. This assumption was removed for the August 31, 2017 valuation. Although there is uncertainty regarding these federal subsidies, the new assumption better reflects the current substantive plan. This change was unrelated to the plan amendment, and its impact was included as an assumption change in the reconciliation of the total OPEB liability. This change significantly lowered the OPEB liability. 3. The discount rate changed from 2.98 percent as of August 31, 2016 to 3.42 percent as of August 31, 2017. This change lowered the total OPEB liability. For the year ended August 31,2018,the Academy recognized OPEB expense of ($2,326,965) and revenue of ($1,474,476) for support provided by the State. At August 31, 2018, the Academy reported its proportionate share of the TRS's deferred outflows of resources and deferred inflows of resources related to other post-employment benefits from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience $ - $ 53,407 Changes in actuarial assumptions - 1,016,741 Difference between projected and actual investment earnings 389 - Changes in proportion and difference between the employer's contributions and the proportionate share of contributions 10 - Contributions paid to TRS subsequent to the measurement date 46,204 - Total $ 46,603 $1,070,148 The $46,204 deferred outflow of resources resulting from Academy contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended August 31,2019.The net amounts of the remaining balances of deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: OPEB Expense Year Ended (Income) August 31, Amount 2019 $ (141,154) 2020 (141,154) 2021 (141,154) 2022 (141,154) 2023 (141,251) Thereafter (363,882) Total $ (1,069,749) 86 Town of Westlake Notes to the Financial Statements Note 16. Risk Management The Town is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and omissions; injuries to employees, and natural disasters. The Town's general liability, workers' compensation liability, law enforcement liability, errors and omissions liability, and automobile liability coverage is insured by the Texas Municipal League, a public entity risk pool. The Town's only responsibility to the Texas Municipal League is to pay premiums for insurance and related deductible amounts of these policies. Other risk of loss is covered by commercial insurance. Settlements of claims have not exceeded coverage in the past three years. Note 17. Contingent Liabilities Litigation Various claims and lawsuits are pending against the Town. In the opinion of Town management, after consultation with legal counsel, the potential loss on these claims and lawsuits will not materially affect the Town's financial position. Circle T Municipal Utility Districts The Town and Hillwood are currently in discussions regarding the debt for Municipal Utility District's (MUDS) #1 and #3 on the Circle T property in Westlake which is controlled by AIL Investments, L.P. As this property develops, Hillwood agreed to de-annex developed property from the MUDs in exchange for pro-rata payments on water and sewer infrastructure installed by the MUDS at their inception. To date, three projects, Lexington TNI, Deloitte University, and Charles Schwab, have been or are being developed within these MUDS. Discussions regarding the Town's payment to AIL Investments, L.P. in exchange for de-annexation of these two tracks from the Circle T MUDs have taken place but have not come to a conclusion as to the settlement amounts.These discussions are ongoing until the Town receives full documentation that it determines is adequate to support the requested payments. The Town of Westlake holds full rights and privileges under the State granted Certificate of Convenience and Necessity (CCN) and can serve all water and sewer customers within these MUD boundaries regardless of the status of these negotiations. Note 18. Solana Public Improvement District On February 24, 2014, the Town Council granted a petition by Maguire Partners-Solana Land, LP in resolution 14-07 to authorize and provide for the creation of a public improvement district, The Solana Public Improvement District ("the District"). The District encompasses approximately 85 acres currently being developed as a master-planned mixed-use development known as "Westlake Entrada" that is expected to include, among other things, condominiums, residential villas, hotels, office, retail, commercial, institutional and hospitality uses, and a wedding event center. The District was created in accordance with Chapter 372 of the Texas Local Government Code. 87 Town of Westlake Notes to the Financial Statements On February 5, 2015, the Town Council approved issuance of$26,175,000 of Special Assessment Revenue Bonds, Series 2015 related to the District. The Public Improvement District Bonds (The Bonds) are special and limited obligations of the Town payable solely from the pledged revenues and other funds comprising the Trust Estate, as and to the extent provided in the indenture. The bonds do not give rise to a charge against the general credit or taxing power of the Town and are payable solely from the sources identified in the indenture. The owners of the bonds shall never have the right to demand payment thereof out of money raised or to be raised by taxation, or out of any funds of the Town other than the Trust Estate, as and to the extent provided in the indenture; and, no owner of the bonds shall have the right to demand any exercise of the Town's taxing power to pay the principal of the bonds or the interest or redemption premium, if any, thereon. The Town shall have no legal or moral obligation to pay the bonds out of any funds of the Town other than the Trust Estate in accordance with the Texas Local Government Code. The proceeds from the bond issue are being used as follows: payment of a portion of the costs of construction, acquisition, or purchase of certain water, wastewater and roadway public improvements for the special benefit of the District; funding a reserve fund; funding capitalized interest; payment of a portion of the costs incidental to the organization of the District; and payment of the cost of issuance of the bonds. The Town is not, and will not be obligated to provide any funds to finance construction of authorized improvements. All design and construction costs of the District's authorized public improvements will be paid from the District assessments and from other sources of funds, if any, to the extent provided in the Trust Indenture. Note 19. Tax Abatements The Town enters into economic development agreements authorized under Chapter 380 of the Texas Local Government Code and Chapter 312 of the Texas Tax Code. These agreements are planning tools designed to stimulate economic activity,redevelopment,community improvement,and provide a return on investment for the community.These programs abate or rebate property and/or sales and hotel/motel taxes and may include other incentive payments such as fee reductions or construction costs reimbursements. Economic development agreements are considered on a case-by-case basis by the Town Council and generally contain recapture provisions, which may require repayment or termination if recipients do not meet the required provisions of the economic incentives. Other Economic Agreements Chapter 380 of the Texas Local Government Code allows the Town to provide grants for the purpose of promoting local economic development. These grants are based on a percentage of property and/or sales tax received by the Town. For the fiscal year ending September 30, 2018, the Town abated $246,646 in property taxes; $422,441 in sales taxes; and $47,410 in hotel/motel taxes. Note 20. Going Concern The 2018 financial statements were prepared assuming the Texas Student Housing entities will continue as going concerns. The Texas Student Housing entities' bonds payable are considered to be in default due to not making full principal and interest payments and, therefore, are reported as current liabilities. This is considered an event of default by the Trustees,which gives the bondholders the right to accelerate and demand payment of the bonds in full. Management and the property managers are in the process of developing and implementing plans to increase occupancy and rental rates at the properties to improve their financial performance. 88 Town of Westlake Notes to the Financial Statements Note 21. Expenditures In Excess of Appropriations For the year ended September 30, 2018, the Westlake Academy Fund expenditures exceeded appropriations by$93,31 1. The over-expenditure will be addressed through future appropriations. Note 22. Cumulative Effect of Change in Accounting Principle As a result of the implementation of GASB Statement No. 75, "Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions", the following adjustments were made to beginning net position: Governmental Business-Type Activities Activities Beginning Net position before restatement $ 58,048,432 $ 1,836,874 Deferred outflow(TMRS) 3,856 474 Total Pension Liability(TMRS) (34,959) (4,294) Deferred outflow(TRS) 36,022 Net OPEB Liability(TRS) (4,516,574) - Cumulative effect of change in accounting principle (4,51 1,655) (3,820) Beginning Net position $ 53,536,777 $ 1,833,054 89 Required Supplementary Information 90 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 91 Town of Westlake Exhibit 13-1 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual - General Fund For the Year Ended September 30, 2018 General Fund Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales $ 3,510,500 $ 3,510,500 $ 4,080,263 $ 569,763 Property 1,205,205 1,325,125 1,329,236 4,111 Mixed beverages 62,500 62,500 62,347 (153) Franchise 983,630 983,815 779,506 (204,309) Interest income 45,575 183,735 237,164 53,429 Building permits and fees 2,445,266 2,420,481 2,314,933 (105,548) Fines and penalties 809,880 715,545 633,318 (82,227) Contributions - 142,240 37,238 (105,002) Miscellaneous 78,035 137,960 206,305 68,345 Total revenues 9,140,591 9,481,901 9,680,310 198,409 EXPENDITURES Current General government 3,632,122 3,946,671 3,672,933 273,738 Public safety 3,096,217 3,234,696 2,992,727 241,969 Cultural and recreation 360,288 348,172 183,816 164,356 Public works 438,069 581,569 620,985 (39,416) Capital outlay 212,000 248,125 209,164 38,961 Debt service Principal retirement 36,680 36,697 36,677 20 Total expenditures 7,775,376 8,395,930 7,716,302 679,628 Excess of revenues over expenditures 1,365,215 1,085,971 1,964,008 878,037 OTHER FINANCING SOURCES (USES) Transfers in 50,000 62,000 71,466 9,466 Transfers out (2,787,892) (1,789,669) (2,176,718) (387,049) Net other financing sources (uses) (2,737,892) (1,727,669) (2,105,252) (377,583) NET CHANGE IN FUND BALANCE (1,372,677) (641,698) (141,244) 500,454 FUND BALANCE AT BEGINNING OF YEAR 10,937,492 10,937,492 10,937,492 - FUND BALANCE AT END OF YEAR $ 9,564,815 $ 10,295,794 $ 10,796,248 $ 500,454 92 Town of Westlake Exhibit B-2 Schedule of Revenues, Expenditures And Changes in Fund Balances Budget and Actual - Westlake Academy For the Year Ended September 30, 2018 Westlake Academy Variance Budgeted Amounts Favorable Original Final Actual (Unfavorable) REVENUES State program revenues $ 7,159,096 $ 7,030,713 $ 7,217,383 $ 186,670 Federal program revenues 104,000 114,797 114,797 - Interest income 3,000 9,000 9,878 878 Local and intermediate sources 1,334,900 1,480,986 1,520,125 39,139 Total revenues 8,600,996 8,635,496 8,862,183 226,687 EXPENDITURES Education 8,643,210 8,919,037 9,012,348 (93,311) Interest and other fiscal charges 8,885 8,885 8,885 - Total expenditures 8,652,095 8,927,922 9,021,233 (93,311) Deficiency of revenues under expenditures (51,099) (292,426) (159,050) 133,376 OTHER FINANCING SOURCES Transfers in 315,000 315,000 315,000 - Total other financing sources 315,000 315,000 315,000 - NET CHANGE IN FUND BALANCE 263,901 22,574 155,950 133,376 FUND BALANCE AT BEGINNING OF YEAR 965,248 965,248 965,248 - FUND BALANCE AT END OF YEAR $ 1,229,149 $ 987,822 $ 1,121,198 $ 133,376 93 Town of Westlake Notes to Budgetary Comparison Schedules Budgetary Information -The Town follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules: 1. The Town Manager submits to the Town Council a proposed budget for the fiscal year commencing the following October 1. The budget includes proposed expenditures and the means of financing them. 2. Prior to October 1, the budget is legally adopted through passage of an ordinance. This budget is reported as the Original Budget in the budgetary comparison schedules. 3. During the fiscal year, changes to the adopted budget may be authorized, as follows: a. Items requiring Town Council action - appropriation of fund balance reserves; transfers of appropriations between funds; new inter-fund loans or advances; and creation of new capital projects or increases to existing capital projects. b. Items delegated to the Town Manager - appropriation balances from an expenditure account to another within a single fund. 4. Annual budgets are legally adopted and amended as required for the general, special revenue and debt service funds. Project length budgets are adopted for the capital projects funds. All budgets are adopted on a basis consistent with generally accepted accounting principles. Budgets are adopted for the proprietary funds annually only as a management tool.There are no legally mandated budgetary constraints for the proprietary funds. 5. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules. 6. The appropriated budget is prepared by fund, function and department. The Town's management may make transfers of appropriations within a fund. Transfers of appropriations between funds require the approval of the Town Council. The legal level of budgetary control is the fund level. The Town Council made several supplementary budget appropriations during the year. 7. Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance accounting under which purchase orders, contracts and other commitments for the expenditure of resources are recorded to reserve that portion of the applicable appropriation is utilized in the governmental funds. Encumbrances lapse at year-end and do not constitute expenditures or liabilities because the commitments must be re-appropriated and honored during the subsequent year. 94 Town Of Westlake Exhibit B-3 Schedule of Net Pension Liability and Related Ratios Texas Municipal Retirement System Pension Plan Last Four Measurement Years 2017 2016 2015 2014 Total pension liability Service cost $ 566,643 $ 483,414 $ 435,146 $ 288,923 Interest 439,725 371,753 317,982 264,994 Change in benefit terms - - - - Difference between expected and actual experience (120,557) 212,434 96,226 176,965 Change in assumptions - - 139,579 - Benefit payments (146,316) (58,144) (38,289) (55,762) Net change in total pension liability 739,495 1,009,457 950,644 675,120 Total pension liability,beginning 6,304,274 5,294,817 4,344,173 3,669,053 Total pension liability,ending 7,043,769 6,304,274 5,294,817 4,344,173 Plan fiduciary net position Contributions,employer 400,684 330,604 290,278 172,064 Contributions,nonemployer 232,776 203,359 188,725 152,077 Net investment income 670,195 276,056 5,368 182,430 Benefit payments (146,316) (58,144) (38,289) (55,762) Administrative income (3,468) (3,113) (3,268) (1,904) Other (176) (168) (191) (127) Net change in plan fiduciary net position 1,153,695 748,594 442,623 448,778 Plan fiduciary net position,beginning 4,827,793 4,079,199 3,636,576 3,187,798 Plan fiduciary net position,ending 5,981,488 4,827,793 4,079,199 3,636,576 Town's net pension liability,ending $ 1,062,281 $ 1,476,481 $ 1,215,618 $ 707,597 Plan fiduciary net position as a of total pension liability 84.92% 76.58% 77.04% 83.71% Covered payroll $ 3,325,369 $ 2,905,134 $ 2,696,072 $ 2,172,525 Town's net pension liability as a% of payroll 31.94% 50.82% 45.09% 32.57% Note: Only four years of data is presented in accordance with GASB #68, paragraph 138. "The information for all period for the 10-year schedules that are required to be presented as required supplementary information may not be available initially.In these cases,during the transition period,that information should be presented for as many periods as are available.The schedules should not include information that is not measured in accordance with the requirements of this statement. Additional years' will be displayed as it becomes available." 95 Town of Westlake Exhibit B-4 Schedule of Pension Contributions Texas Municipal Retirement System Pension Plan Last Four Measurement Years 2018 2017 2016 2015 Actuarially determined contributions $ 454,421 $ 419,720 $ 316,618 $ 277,651 Contributions in relation to the actuarially determined contributions (454,421) (419,720) (316,618) (277,651) Contribution deficiency(excess) $ - $ - $ - $ - Covered payroll 3,595,707 3,325,369 2,821,349 2,778,776 Contributions as a percentage of covered payroll 12.64% 12.62% 1 1.22% 9.99% Note:GASB#68,paragraph 81.2.b requires that the data in this schedule be presented as of the Town's fiscal year as opposed to the time period covered by the measurement date. Note: Only four years of data is presented in accordance with GASB #68, paragraph 138. "The information for all period for the 10-year schedules that are required to be presented as required supplementary information may not be available initially.In these cases,during the transition period,that information should be presented for as many periods as are available.The schedules should not include information that is not measured in accordance with the requirements of this statement.Additional years' information will be displayed as it becomes available." 96 Town of Westlake Notes to Texas Municipal Retirement System Pension Plan Required Supplementary Information For the Year Ended September 30, 2018 Valuation Date Actuarial determined contribution rates are calculated as of December 31 each year and become effective in January, 12 months and one 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 26 years Asset valuation method 10 year smoothed market; 15%soft corridor Inflation 2.50% Salary increases 3.50%to 10.50%including inflation Investment rate of return 6.75% Retirement age Experience-based table of rates that are specific to the City's plan of benefits. Last updated for the 2015 valuation pursuant to an experience study of the period 2010-2014. Mortality RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109%and female rates multiplied by 103%and projected on a fully generational basis with scale BB. Other information There were no benefit changes during the year. 97 Town of Westlake Exhibit B-5 Schedule of Academy's Proportionate Share of Net Pension Liability-Teacher Retirement System Pension Plan Last Four Measurement Years 2017 2016 2015 2014 Academy's proportion of the net pension liability 0.0028012% 0.0027822% 0.0030945% 0.0007190% Academy's proportionate share of net pension liability $ 895,663 $ 1,051,346 $ 1,093,865 $ 192,056 State's proportionate share of net pension liability associated with the Westlake Academy 3,480,057 4,035,754 3,667,893 2,965,583 Total $ 4,375,720 $ 5,087,100 $ 4,761,758 $ 3,157,639 Academy's covered payroll $ 5,391,515 $ 5,094,571 $ 4,784,695 $ 4,300,931 Academy's proportionate share of net pension liability as a percentage of its covered payroll 16.61% 20.64% 22.86% 4.47% Plan fiduciary net position as a percentage of total pension liability 82.17% 78.00% 78.43% 83.25% Note:Only four years of data is presented in accordance with GASB#68,paragraph 138.'The information for all periods for the 10- year schedules that are required to be presented as required supplementary information may not be available initially. In these cases,during the transition period,that information should be presented for as many years as are available.The schedules should not include information that is not measured in accordance with the requirements of this Statement:' 98 Town of Westlake Exhibit B-6 Schedule of Pension Contributions Teacher Retirement System Pension Plan Last Four Fiscal Years (Unaudited) 2018 2017 2016 2015 Statutorily required contributions $ 91,593 $ 131,436 $ 88,399 $ 92,325 Actual contributions in relation to statutorily required contributions (91,593) 131,436 88,399 92,325 Contribution deficiency(excess) $ - $ - $ - $ - Academy's covered payroll $ 5,289,916 $ 5,391,515 $ 5,094,571 $ 4,784,694 Contributions as a percentage of Academy's covered payroll 1.73% 2.44% 1.74% 1.93% Note: GASB 68, Paragraph 81.2.b requires that the data in this schedule be presented as of the Academy's current fiscal year as opposed to the time period covered by the measurement date. Note:Only four years of data is presented in accordance with GASB#68,paragraph 138.'The information for all periods for the 10- year schedules that are required to be presented as required supplementary information may not be available initially. In these cases,during the transition period,that information should be presented for as many years as are available.The schedules should not include information that is not measured in accordance with the requirements of this Statement:' 99 Town of Westlake Notes to Teachers Retirement System Pension Plan Required Supplementary Information For the Year Ended September 30, 2018 Actuarial Methods and Assumptions used to Determine Contribution Rates The following information was used in the actuarial valuation for determining the actuarially-determined contribution rate used for funding purposes.The methods and assumptions are as follows: Valuation date August 31,2017 Actuarial cost method Ultimate entry age normal Amortization method Level percentage of payroll,Floating Remaining amortization period 32.2 years Asset valuation method Five year smoothed market Actuarial assumption Inflation 2.50% Salary increases 3.50%to 9.50%including inflation Investment rate of return 8.00% "Actuarial determined contribution rates are calculated as of August 31, of the preceding fiscal year. Members and employees are based upon statutorily fixed rates. 100 Town of Westlake Exhibit B-7 Schedule of Changes in the Total OPEB Liability and Related Ratios Texas Municipal Retirement System OPEB Plan Last Ten Measurement Years (Unaudited) 2017 Total OPEB liability Service cost $ 6,318 Interest 1,603 Change in benefit terms - Difference between expected and actual experience - Change in assumptions 4,872 Benefit payments 4,816 Net change in total OPEB liability 17,609 Total OPEB liability,beginning 39,253 Total OPEB liability,ending $ 56,862 Covered payroll $ 3,325,369 Total OPEB liability as a% of covered payroll 1.71% Note:Only one year of data is presented in accordance with GASB#75.Additional years' information will be displayed as it becomes available. The TMRS Supplementary Death Benefit Fund (SDBF)is considered to be an unfunded OPEB plan;therefore,no plan fiduciary net position and related ratios are reported in the above schedule. 101 Town of Westlake Exhibit B-8 Schedule of OPEB Contributions Texas Municipal Retirement System OPEB Plan Last Ten Fiscal Years (Unaudited) 2018 Actuarially determined contributions $ 6,380 Contributions in relation to the actuarially determined contributions (6,380) Contribution deficiency(excess) $ - Covered payroll $ 3,595,707 Contributions as a percentage of covered payroll 0.18% Note:GASB #75, paragraph 57 requires that the data in this schedule be presented as of the Town's fiscal year as opposed to the time period covered by the measurement date. The TMRS Supplementary Death Benefit Fund (SDBF) is considered to be an unfunded OPEB plan; therefore, no plan fiduciary net position and related ratios are reported in the above schedule. 102 Town of Westlake Notes to Texas Municipal Retirement System OPEB Required Supplementary Information For the Year Ended September 30, 2018 Valuation Date Actuarially determined contribution rates are calculated as of December 31,and become effective in January 13 months Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll,closed Remaining amortization period 17 years Asset valuation method 10 year smoothed market; 15%soft corridor Inflation 2.50% Salary increases 3.50%to 10.50%including inflation Investment rate of return 6.75% Retirement age Experience-based table of rates that are specific to the City's plan of benefits. Last updated for the 2015 valuation pursuant to an experience study of the period 2010-2014. Mortality RP2000 Combined Mortality Table with Blue Collar 103 Town of Westlake Exhibit B-9 Schedule of Academy's Proportionate Share the Net OPEB Liability and Related Ratios Teacher Retirement System TRS Care Plan Last Ten Measurement Years (Unaudited) 2017 Academy's proportion of the net OPEB liability 0.0058830% Academy's proportionate share of net OPEB liability $ 2,558,314 State's proportionate share of net OPEB liability associated with the Westlake Academy 4,406,333 Total $ 6,964,647 Academy's covered payroll $ 5,391,515 Academy's proportionate share of net OPEB liability as a percentage of its covered payroll 47.45% Plan fiduciary net position as a percentage of total OPEB liability 0.91 Note:Only one year of data is presented in accordance with GASB #75.'The information for all periods for the 10-year schedules that are required to be presented as required supplementary information may not be available initially. In these cases, during the transition period, that information should be presented for as many years as are available. The schedules should not include information that is not measured in accordance with the requirements of this Statement." 104 Town of Westlake Exhibit B-10 Schedule of Academy's OPEB Contributions Teacher Retirement System TRS Care Plan Last Ten Fiscal Years (Unaudited) 2018 Statutorily required contributions $ 46,204 Actual contributions in relation to statutorily required contributions (46,204) Contribution deficiency(excess) $ - Academy's covered payroll $ 5,289,916 Contributions as a percentage of Academy's covered payroll 0.87% Note:GASB 75 requires that the data in this schedule be presented as of the Academy's current fiscal year as opposed to the time period covered by the measurement date. Note:Only one year of data is presented in accordance with GASB #75.'The information for all periods for the 10-year schedules that are required to be presented as required supplementary information may not be available initially.In these cases,during the transition period, that information should be presented for as many years as are available. The schedules should not include information that is not measured in accordance with the requirements of this Statement." 105 Town of Westlake Notes to Teacher Retirement System TRS Care Plan Required Supplementary Information For the Year Ended September 30, 2018 There was a significant plan change adopted in fiscal year ending August 31,2017. Effective January 1, 2018, only one health plan option will be offered and all retirees will be required to contribute monthly premiums for coverage. Assumption changes made for the August 31, 2017 valuation include a change to the assumption regarding the phase-out of the Medicare Part D subsidies and a change to the discount rate from 2.98%as of August 31, 2016 to 3.42%as of August 31,2017.The change to the Medicare Part D subsidy phase-out assumption had the larger impact. 106 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 107 Combining and Individual Fund Statements and Schedules 108 Town of Westlake Exhibit C-1 Schedule of Revenues, Expenditures and Changes In Fund Balances Budget and Actual - Debt Service Fund For the Year Ended September 30, 2018 Debt Service Fund Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Property $ 271,411 $ 296,984 $ 297,460 $ 476 Total revenues 271,411 296,984 297,460 476 EXPENDITURES Debt service Principal retirement 1,519,000 1,519,000 1,519,000 - Interestandotherfiscalcharges 1,169,160 1,171,293 1,173,794 (2,501) Total expenditures 2,688,160 2,690,293 2,692,794 (2,501) Deficiency of revenues under expenditures (2,416,749) (2,393,309) (2,395,334) (2,025) OTHER FINANCING SOURCES (USES) Transfers in 2,710,068 2,412,169 2,412,169 Net other financing sources (uses) 2,710,068 2,412,169 2,412,169 NET CHANGE IN FUND BALANCE 293,319 18,860 16,835 (2,025) FUND BALANCE AT BEGINNING OF YEAR 11,963 11,963 11,963 FUND BALANCE AT END OF YEAR $ 305,282 $ 30,823 $ 28,798 $ (2,025) 109 Town of Westlake Nonmajor Governmental Funds Visitors Association Fund To account for municipal hotel occupancy taxes collected and expenditures to promote tourism and the convention and hotel industry. Lone Star Public Facilities Corporation To account for investment activity relating to the Lone Star Public Facilities Corporation. Economic Development Fund To account for sales tax and hotel occupancy tax collected to fund activity relating to Economic Development agreements. Public Arts Contribution Fund To account for contributions restricted for public arts. 4B Economic Development Corporation To account for sales tax collected to fund the activities of the 4B Economic Development Corporation. Westlake Academy Expansion Fund To account for proceeds from long-term financing and revenue and expenditures related to authorized construction related to expansion of Westlake Academy facilities. 110 Town of Westlake Exhibit C-2 Combining Balance Sheet Non Major Governmental Funds For the Year Ended September 30, 2018 Special Revenue Funds Lone Star Westlake Public 4B Economic Academy Total Facilities Economic Development Expansion Nonmajor Visitors Corporation Development Public Arts Corporation Capital Projects Governmental Association Fund Fund Contribution Fund Fund Funds AS S ETS Cash and cash equivalents $ 705,350 $ 14,141 $ 21,400 $ 30,000 $ - $ 1,651,843 $ 2,422,734 Accounts receivable 79,909 - 319,814 - 487,121 - 886,844 Prepaid items 3,316 - - - 3,316 Total assets $ 788,575 $ 14,141 $ 341,214 $ 30,000 $ 487,121 $ 1,651,843 $ 3,312,894 LIABILITIES AND FUND BALANCES Accounts payable $ 30,224 $ $ 341,214 $ $ $ - $ 371,438 Unearned revenue 3,260 - 3,260 Due to other funds - 487,121 487,121 Total liabilities 33,484 341,214 487,121 861,819 FUND BALANCES Nonspendable: Prepaid items 3,316 - 3,316 Restricted for: Capital items - 1,651,843 1,651,843 Tourism 751,775 30,000 - 781,775 Future projects - 14,141 - - 14,141 Total fund balances 755,091 14,141 - 30,000 - 1,651,843 2,451,075 Total liabilities and fund balances $ 788,575 $ 14,141 $ 341,214 $ 30,000 $ 487,121 $ 1,651,843 $ 3,312,894 111 Town of Westlake Exhibit C-3 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended September 30, 2018 Special Revenue Funds Westlake Lone Star Academy Public 413 Economic Expansion Facilities Economic Development Capital Total Nonmajor Visitors Corporation Development Public Arts Corporation Projects Governmental Association Fund Fund Contribution Fund Fund Funds REVENUES Salestaxes $ - $ $ 422,441 $ $ 1,500,901 $ $ 1,923,342 Hotel occupancy taxes 801,756 47,411 - 849,167 Interest income 19,104 352 - 38,498 57,954 Contributions 1,945 - 200,000 30,000 - 231,945 Miscellaneous 8,438 - - - 8,438 Total revenues 831,243 352 669,852 30,000 1,500,901 38,498 3,070,846 EXPENDITURES Current: Economic development - - 469,852 - - - 469,852 Visitor services 875,322 - 875,322 Total expenditures 875,322 - 469,852 1,345,174 Excess(deficiency)of revenues over(under)expenditures (44,079) 352 200,000 30,000 1,500,901 38,498 1,725,672 OTHER FINANCING SOURCES(USES) Transfers in - - - - 200,000 200,000 Transfers out (200,000) (1,500,901) - (1,700,901) Total other financing sources(uses) (200,000) (1,500,901) 200,000 (1,500,901) Net change in fund balances (44,079) 352 30,000 238,498 224,771 Fund balances,October 1 799,170 13,789 - 1,413,345 2,226,304 Fund balances,September30 $ 755,091 $ 14,141 $ $ 30,000 $ $ 1,651,843 $ 2,451,075 112 Town Of Westlake Exhibit C-4 Schedule of Revenues, Expenditures And Changes in Fund Balances Budget and Actual -Visitors Association Fund For the Year Ended September 30, 2018 Visitors Association Fund Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Hotel occupancy $ 812,360 $ 816,702 $ 801,756 $ (14,946) Interest income 5,150 14,606 19,104 4,498 Contributions 3,000 3,000 1,945 (1,055) Miscellaneous 6,310 14,137 8,438 (5,699) Total revenues 826,820 848,445 831,243 (17,202) EXPENDITURES Visitor services 909,759 893,919 875,322 18,597 Total expenditures 909,759 893,919 875,322 18,597 Excess (deficiency) of revenues over (under)expenditures (82,939) (45,474) (44,079) 1,395 NET CHANGE IN FUND BALANCE (82,939) (45,474) (44,079) 1,395 FUND BALANCE AT BEGINNING OF YEAR 799,170 799,170 799,170 - FUND BALANCE AT END OF YEAR $ 716,231 $ 753,696 $ 755,091 $ 1,395 113 Town of Westlake Exhibit C-5 Schedule of Revenues, Expenditures and Changes In Fund Balances Budget and Actual - Lone Star Public Facilities Corporation Fund For the Year Ended September 30, 2018 Lone Star Public Facilities Corporation Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES: Interest income $ 80 $ 275 $ 352 $ 77 Total revenues 80 275 352 77 EXPENDITURES: Economic development - - - - Total expenditures - - - - NET CHANGE IN FUND BALANCE 80 275 352 77 FUND BALANCE AT BEGINNING OF YEAR 13,789 13,789 13,789 - FUND BALANCE AT END OF YEAR $ 13,869 $ 14,064 $ 14,141 $ 77 114 Town of Westlake Exhibit C-6 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Economic Development Fund For the Year Ended September 30, 2018 Economic Development Fund Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales $ 202,000 $ 202,000 $ 422,441 $ 220,441 Hotel occupancy 32,640 36,940 47,411 10,471 Miscellaneous 750,000 340,000 200,000 (140,000) Total revenues 984,640 578,940 669,852 90,912 EXPENDITURES Economic development 234,640 238,940 469,852 (230,912) Total expenditures 234,640 238,940 469,852 (230,912) Excess of revenues over expenditures 750,000 340,000 200,000 (140,000) OTHER FINANCING SOURCES (USES) Transfers out (750,000) (340,000) (200,000) 140,000 Total other financing sources (uses) (750,000) (340,000) (200,000) 140,000 NET CHANGE IN FUND BALANCE - - - - FUND BALANCE AT BEGINNING OF YEAR - - - - FUND BALANCE AT END OF YEAR $ - $ - $ - $ - 115 Town of Westlake Exhibit C-7 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual -4B Economic Development Corporation Fund For the Year Ended September 30, 2018 4B Economic Development Corporation Variance Budgeted Amounts Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales $ 1,237,500 $ 1,237,500 $ 1,500,901 $ 263,401 Total revenues 1,237,500 1,237,500 1,500,901 263,401 EXPENDITURES Economic development - - - - Total expenditures - - - - Excess of revenues over expenditures 1,237,500 1,237,500 1,500,901 263,401 OTHER FINANCING USES Transfers out (1,237,500) (1,237,500) (1,500,901) (263,401) Total other financing uses (1,237,500) (1,237,500) (1,500,901) (263,401) NET CHANGE IN FUND BALANCE - - - - FUND BALANCE AT BEGINNING OF YEAR - - - - FUND BALANCE AT END OF YEAR $ - $ - $ - $ - 116 Town of Westlake Agency Funds PID Agency Fund To account for bond proceeds, assessments, and related debt associated with bonds issued by the Town as an agent for the Solana public improvement district. 117 Town of Westlake Exhibit C-8 PID Agency Fund Statement of Changes in Assets and Liabilities For the Year Ended September 30, 2018 Balance at Balance at Beginning End of Year Additions Deletions of Year AS S ETS Restricted cash and cash equivalents $ 2,085,576 $ 28,244 $ - $ 2,1 13,820 Total assets $ 2,085,576 $ 28,244 $ - $ 2,113,820 LIABILITIES Liability to bond holders $ 2,085,576 $ 28,244 $ - $ 2,1 13,820 Total liabilities $ 2,085,576 $ 28,244 $ - $ 2,113,820 118 T H E T 0 W N O F WESTLAKE DISTINCTIVE BY DESIGN 119 Statistical Section 120 Statistical Section Unaudited This part of the Town of Westlake, Texas' comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information says about the Town's overall financial health. Page Financial Trends 122- 127 These schedules contain trend information to help the reader understand how the Town's financial performance and well-being have changed over time. Revenue Capacity 128- 132 These schedules contain information to help the reader assess the Town's most significant local revenue sources.Although sales taxes are the Town's most significant local revenue source,information about principal revenue payers is confidential under Texas statutes, and;therefore,not disclosed.Trend information about sales tax revenue is provided in Exhibit S-9. Debt Capacity 133- 135 These schedules present information to help the reader assess the affordability of the Town's current levels of outstanding debt and the Town's ability to issue additional debt in the future. Demographic and Economic Information 136- 138 These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town's financial activities take place. operating Information 139- 140 These schedules contain service and infrastructure data to help the reader understand how the information in the Town's financial report relates to the services the Town provides and the activities it performs. Sources: U nless otherwise noted,the information in these schedules is derived from annual financial reports for the relev ant year. 121 Town of Westlake Exhibit S-1 Net Position by Component Last Ten Years Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental activities: Net Investment in capital assets $ 13,244,690 $ 13,633,485 $ 12,658,921 $ 14,866,299 $ 21,177,426 $ 32,048,991 $ 29,633,298 $ 38,299,337 $ 46,499,873 $ 47,629,452 Restricted 1,761,067 1,564,868 7,137,362 4,726,376 4243,239 2,284,947 17,827,177 7,489,048 2,034,916 1,077,646 Unrestricted 4,122,185 5,866,046 3,448,100 5,023,731 6,636,876 ( 910,977) 7,108,101 9,260,572 9,513,643 6,437,845 Total governmental activities net position $ 19,127,942 $ 21,064,399 $ 23244,383 $ 24,616,406 $ 32,057,541 $ 33,422,961 $ 54,568,576 $ 55,048,957 $ 58,048,432 $ 55,144,943 Business-type activities: Net investment in capital assets $ 7,349,032 $ 7,033,831 $ 6,875,031 $ 6,877,555 $ 6,601,949 $ 6,734,414 $ 6,410,547 $ 6,044,363 $ 5,583,570 $ 5,293,188 Unrestricted ( 1,945,578) ( 2,003,600) ( 1,542,092) ( 1,636,249) ( 842,457) ( 1,272,014) ( 2,608,315) ( 4,041,360) ( 3,746,696) ( 4,685,810) Total business-type activities net position $ 5,403,454 $ 5,030,231 $ 5,332,939 $ 5,241,306 $ 5,759,492 $ 5,462,400 $ 3,802,232 $ 2,003,003 $ 1,836,874 $ 607,378 Primary government: Net investment in capital assets $ 20,593,722 $ 20,667,316 $ 19,533,952 $ 21,743,854 $ 27,779,375 $ 38,783,405 $ 36,043,845 $ 44,343,700 $ 52,083,443 $ 52,922,640 Restricted 1,761,067 1,564,868 7,137,362 4,726,376 4,243,239 2,284,947 17,827,177 7,489,048 2,034,916 1,077,646 Unrestricted 2,176,607 3,862,446 1,906,008 3,387,482 5,794,419 (2,182,991) 4,499,786 5,219,212 5,766,947 1,752,035 Total primary government net position $ 24,531,396 $ 26,094,630 $ 28,577,322 $ 29,857,712 $ 37,817,033 $ 38,885,361 $ 58,370,808 $ 57,051,960 $ 59,885,306 $ 55,752,321 Source: Annual financial reports 122 Town of Westlake Exhibit S-2 Changes in Net Position Last Ten Years - Concluded Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 EXPENSES Governmental activities: General government $ 2,203,882 $ 2,272,127 $ 2,478,826 $ 2,518,490 $ 2,606,785 $ 2,784,587 $ 3,145,716 $ 4,491,557 $ 5,716,302 $ 4,776,131 Public Safety 1,939,441 1,698,164 1,801,585 1,883,424 1,978,803 2,190,050 2,381,437 2,737,084 3,063,003 3,133,733 Cultural and Recreation 115,770 105,997 122,400 111,765 113,924 123,541 129,970 187,274 217,489 184,685 Public Works 1,028,934 594,705 470,054 216,901 267,973 955,794 1,081,996 1,102,636 1,634,549 1,820,908 Economic Development 207,044 309,653 680,823 546,039 626,423 147,680 171,757 141,779 163,578 469,852 Visitor Services 341,270 420,270 356,365 475,719 521,521 493,087 665,936 740,835 737,071 885,654 Education 3,722,705 4,138,875 4,884,985 6,193,560 5,803,611 7,147,411 8,598,261 9,516,287 8,566,295 6,568,453 Interest on long-term debt 1,068,935 1,026,026 1,127,913 897,573 1,031,328 998,951 1,022,201 990,413 1,401,199 1,194,818 Total governmental activities expenses 10,627,981 10,565,817 11,922,951 12,843,471 12,950,368 14,841,101 17,197,274 19,907,865 21,499,486 19,024,234 Business-type activities: Water and Sewer 2,694,407 2,567,675 2,794,235 3,098,466 3,356,466 3,690,137 4,861,529 5,519,116 4,893,075 7,049,946 Cemetery 473 27,822 5,604 6,282 5,328 7,121 7,297 7,831 8,021 9,754 Total business-type activities expenses 2,694,880 2,595,497 2,799,839 3,104,748 3,361,794 3,697,258 4,868,826 5,526,947 4,901,096 7,059,700 Totalprimary government programexpenses $ 13,322,861 $ 13,161,314 $ 14,722,790 $ 15,948,219 $ 16,312,162 $ 18,538,359 $ 22,066,100 $ 25,434,812 $ 26,400,582 $ 26,083,934 PROGRAMREVEVUES Governmental activities: Fees,fines,and charges for services: General Government $ 677,948 $ 716,624 $ 721,157 $ 673,090 $ 774,909 $ 33,975 $ 110,778 $ 789,457 $ 73,180 $ 137,805 Public Safety 107,634 80,665 140,600 142,402 182,154 848,772 887,919 932,017 783,681 782,833 Public Works 594,338 1,597,655 292,572 407,328 659,246 1,022,769 936,245 1,789,776 3,338,541 2,027,613 Education 98,314 102,406 99,638 195,059 182,220 222,270 531,090 283,077 275,759 247,721 Operating grants and contributions 1,522,935 853,151 728,242 5,269,841 4,907,472 6,592,642 7,615,653 7,863,168 8,047,113 7,044,597 Capital grants and contributions 2,059,624 83,250 425,900 - 5,897,456 80,472 19,983,078 269,185 3,485,255 424,948 Total governmental activities pmgramrevenues 5,060,793 3,433,751 2,408,109 6,687,720 12,603,457 8,800,900 30,064,763 11,926,680 16,003,529 10,665,517 Business-type activities: Charges for services: Water and Sewer 2,345,236 2,101,510 3,078,868 2,934,842 3,157,332 3,428,702 3,549,775 3,968,086 4,815,635 5,794,818 Cemetery - 5,550 13,300 4,500 5,510 7,749 13,620 11,115 9,964 29,440 Operating grants and contributions 46,810 - 24,423 - - - - - - Capital grants and contributions 50,000 1,271 Total business-type activities progmmrevenues 2,345,236 2,153,870 3,092,168 2,963,765 3,162,842 3,436,451 3,563,395 3,979,201 4,875,599 5,825,529 Total primary government progmmrevenues $ 7,406,029 $ 5,587,621 $ 5,500,277 $ 9,651,485 $ 15,766,299 S 12,237,351 $ 33,628,158 $ 15,905,881 $ 20,879,128 $ 16,491,046 123 Town of Westlake Exhibit S-2 Changes in Net Position Last Ten Years - Concluded Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NEC(EXPENSE)REVENUES Governmental activities $( 5,567,188) $( 7,132,066) $( 9,514,842) $( 6,155,751) $( 346,911) $( 6,040,201) $ 12,867,489 $( 7,981,185) $( 5,495,957) $( 8,358,717) Business-type activities ( 349,644) ( 441,627) 292,329 ( 140,983) ( 198,952) ( 260,807) ( 1,305,431) ( 1,547,746) ( 25,497) ( 1,234,171) Total primary government net expense ( 5,916,832) ( 7,573,693) ( 9,222,513) ( 6,296,734) ( 545,863) ( 6,301,008) 11,562,058 ( 9,528,931) ( 5,521,454) ( 9,592,888) GENERAL REVENUES AND OTHER CHANGES IN NEC POSCCION Governmental activities: Taxes Sales 3,664,409 3,790,533 4,609,626 3,657,274 4,375,397 4,725,845 4,925,428 4,609,523 4,650,744 6,003,605 Property 1,260,112 1,441,238 1,366,633 1,367,069 1,438,%9 1,476,355 1,576,750 1,629,640 Hotel Occupancy 497,769 457,693 527,261 590,853 709,578 796,481 872,179 822,490 751,601 849,167 Mixed Beverage 17,869 17,902 19,721 38,286 39,727 51,602 59,184 61,476 68,432 62,347 Franchise 624,401 603,233 586,836 664,991 734,935 795,322 963,040 930,043 818,423 779,506 Unrestricted grants and contributions 2,960,590 3,484,141 3,744,757 - Investment earnings 61,224 38,383 46,248 33,353 24,218 26,713 28,904 55,600 182,095 356,076 Miscellaneous 568,782 676,638 691,345 1,112,858 1,023,149 246,633 198,199 241,501 278,071 215,076 Transfers 61,321 - 145,216 45,507 ( 485,591) 43,399 323,100 264,578 169,316 71,466 Extraordinary item - 56,704 ( 124,346) - - - - - - Special item - 67,760 Gain on sale of capital assets - 7,000 - - - - - - - Total governmental activities 8,456,365 9,068,523 11,694,826 7,527,774 7,788,046 8,053,064 8,809,003 8,461,566 8,495,432 9,966,883 Business-type activities: Investment earnings 7,858 8,334 9,929 10,077 6,552 7,114 7,083 13,095 28,684 79,961 Miscellaneous 77,266 60,070 145,666 84,780 224,995 1,271 1,271 - - - Transfers ( 61,321) - ( 145,216) ( 45,507) 485,591 ( 43,399) ( 323,100) ( 264,578) ( 169,316) ( 71,466) Total business-type activities 23,803 68,404 10,379 49,350 717,138 ( 35,014) ( 314,746) ( 251,483) ( 140,632) 8,495 Total primary government 8,480,168 9,136,927 11,705,205 7,577,124 8,505,184 8,018,050 8,494,257 8,210,083 8,354,800 9,975,378 CHANGEIN NEC POSMON Governmental activities 2,889,177 1,936,457 2,179,984 1,372,023 7,441,135 2,012,863 21,676,492 480,381 2,999,475 1,608,166 Business-type activities ( 325,841) ( 373,223) 302,708 ( 91,633) 518,186 ( 295,821) ( 1,620,177) ( 1,799,229) ( 166,129) ( 1,225,676) Total primary government $ 2,563,336 $ 1,563,234 $ 2,482,692 $ 1,280,390 $ 7,959,321 $ 1,717,042 $ 20,056,315 $( 1,318,848) $ 2,833,346 $ 382,490 Source:Annual financial reports 124 Town of Westlake Exhibit S-3 Fund Balances Governmental Funds Last Ten Years Modified Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General fund Reserved $ 193,105 $ 214,750 $ - $ - $ - $ - $ - $ - $ - $ - Unreserved 2,532,207 3,578,235 - - - - - - - - Nonspendable: Prepaid items - - 62,020 6,856 6,906 8,821 13,334 12,794 18,705 19,253 Restricted for: Court security and technology 186,776 192,768 194,422 193,082 203,173 238,636 219,693 203,173 Committed for: Future projects 219,687 49,941 74,941 80,442 80,442 335,322 335,392 80,442 Assigned for: Future equipment - - 22,000 22,000 24,000 - - - - - Unassigned 3,524,911 4,992,240 6,751,362 7,671,173 7,383,601 9,092,721 10,363,702 10,493,380 Total general fund $ 2,725,312 $ 3,792,985 $ 4,015,394 $ 5,263,805 $ 7,051,631 $ 7,953,518 $ 7,680,550 $ 9,679,473 $ 10,937,492 $ 10,796,248 All other governmental funds Reserved Special revenue funds $ 1,256,954 $ 1,112,941 $ $ $ $ $ $ $ $ Unreserved,reported in: Special revenue funds 1,933,564 2,693,846 - Nonspendable: Prepaid items - - 33,511 60,963 62,635 80,118 83,359 68,718 243,401 56,397 Restricted for: Tourism 1,109,365 1,052,546 1,025,891 1,107,520 1,081,009 1,003,636 791,308 781,775 Future projects 4,647,863 3,594,379 10,370,914 1,751,405 13,632 13,679 13,789 14,141 Debt service 7,505 22,657 1,482 1,081 20,916 30,468 11,963 28,798 Education 885,365 758,127 931,094 993,998 1,592,227 1,098,359 729,709 1,068,117 Economic development - - 267,577 178,384 - - - - - - Capital projects funds 323,009 237,177 - - 17,713,788 8,501,489 15,080,456 7,292,917 Unassigned - - - - - - - - - Total all other governmental funds $ 3,513,527 $ 4,043,964 $ 6,951,186 $ 5,667,056 $ 12,392,016 $ 3,934,122 $ 20,504,931 $ 10,716,349 $ 16,870,626 $ 9,242,145 Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY2007. further consideration,the 413 Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. The Town implemented GASB Statement No.54 in fiscal year 2011. Source: Annual financial reports 125 Town of Westlake Exhibit S-4 Changes in Fund Balances Governmental Funds Last Ten Years - Continued Modified Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 REVENUES Taxes $ 4,804,448 $ 4,869,361 $ 7,000,690 $ 6,393,472 $ 7,226,180 $ 7,722,606 $ 8,252,748 $ 7,902,983 $ 7,867,015 $ 9,321,321 Licenses,fees and permits 860,697 1,746,954 530,646 598,394 944,735 1,175,075 1,200,790 2,715,236 3,521,686 2,314,933 Fines and penalties 523,515 647,170 605,705 622,338 695,167 730,441 734,152 796,014 673,716 633,318 State pregramrevenues 3,163,129 3,687,706 3,945,658 4,369,635 4,696,540 5,269,641 6,173,418 6,543,782 6,603,358 7,217,383 Federal program revenues 56,134 199,436 337,508 152,351 81,958 80,103 87,797 98,564 140,152 114,797 Investment earnings 61,224 38,383 46,248 33,353 24,218 26,713 28,904 55,600 182,095 356,076 Contributions 1,264,262 533,400 - 732,535 5,916,014 82,446 18,785,953 283,684 728,887 494,131 Other revenues 673,400 779,044 980,816 1,323,237 1,274,826 1,665,003 2,471,191 1,542,835 2,863,801 1,735,201 Total revenues 11,406,809 12,501,454 13,447,271 14,225,315 20,859,638 16,752,028 37,734,953 19,938,698 22,580,710 22,187,160 EXPENDITURES General government 1,519,600 1,644,587 1,733,324 1,878,885 1,910,545 2,236,360 2,411,239 3,280,507 4,596,827 3,672,933 Public safety 1,890,469 1,634,936 1,842,751 2,224,469 1,967,584 2,146,587 2,490,551 2,453,857 2,684,244 2,992,727 Cultural and recreation 115,770 105,997 122,400 111,765 113,924 123,541 130,322 185,923 164,720 183,816 Public works 841,822 333,831 326,749 391,115 532,675 615,781 744,028 773,751 784,279 675,550 Economic development 229,907 401,879 706,391 243,939 296,565 147,685 171,757 141,779 163,578 469,852 Visitor services 341,270 420,270 356,365 475,719 521,521 493,082 670,157 725,971 717,055 875,322 Education 3,722,705 4,138,875 4,884,985 6,193,560 5,762,652 7,143,678 7,938,501 9,245,592 8,819,174 9,012,348 Capital Outlay 4,335,114 682,103 1,023,772 1,110,476 7,601,631 9,964,047 5,274,282 9,561,954 7,082,844 9,407,447 Capital Project Debt service Principal 593,937 563,703 555,000 668,000 2,955,000 1,004,677 1,130,762 1,150,490 1,124,697 1,555,677 Interest and other fiscal charges 990,641 977,163 1,083,377 952,027 830,425 1,116,489 977,412 947,411 1,105,376 1,182,679 Bond issuance cost 36,446 148,891 185,699 69,283 - 368,278 - Total expenditures 14,581,235 10,903,344 12,671,560 14,398,846 22,678,221 25,061,210 21,939,011 28,467,235 27,611,072 30,028,351 EXCESS(DEFICIENCY) OF REVENUES OVER (UNDER)EXPENDITURES $( 3,174,426)$ 1,598,110 $ 775,711 $( 173,531)$( 1,818,583)$( 8,309,182)$ 15,795,942 $( 8,528,537)$( 5,030,362)$( 7,841,191) 126 Town of Westlake Exhibit S-4 Changes in Fund Balances Governmental Funds Last Ten Years - Continued Modified Accrual Basis of Accounting - Unaudited Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 OTHER FINANCING SOURCES(USES): Proceeds from sale ofland $ $ $ - $ $ $ $ $ $ - $ Sale of assets 7,000 1,200,000 Issuance of debt 117,640 2,095,000 8,294,800 - Premium on CO issued - - 284,437 - Refunding bonds issued 7,799,196 2,200,000 1,910,000 5,795,000 Premium on refunding bonds issued - 37,723 84,598 1,020,809 Payments to bond escrow agent ( 7,650,305) - (1,925,315) - ( 6,452,467) Issuance ofcapital lease - 239,009 16,740 474,300 Notes payable issued 50,000 401,484 162,059 - - Certificate ofobligations issued - - - - - 10,710,000 Special item - 67,760 40,959 - Extraordinary item - 56,704 ( 124,346) ( 40,959) - - - - - Transfers in 2,435,486 1,804,577 7,082,163 2,121,099 2,104,929 3,094,211 4,617,896 2,485,227 3,621,066 3,949,085 Transfers out ( 2,374,165) ( 1,804,577) ( 6,936,947) ( 2,075,592) ( 2,590,520) 30( , 50,812) 42( , 94,796) 2( ,220,649) ( ,34 51,750) 3,8( 77,619) Total other financing sources(uses) 178,961 2,353,920 137,812 10,331,369 753,175 501,899 738,878 12,442,658 71,466 Prior period adjustment - - - NEI'CHANGES IN FOND BALANCES $( 2,995,465)$ 1,598,110 $ 3,129,631 $( 35,719)$ 8,512,786 $( 7,556,007)$ 16,297,841 $( 7,789,659)$ 7,412,296 $( 7,769,725) DEBT SERVICEAS A PERCENTAGE OF NONCAPITAL EXPENDITURES 15.4% 15.0% 14.1% 12.5% 25.3% 14.4% 12.8% 11.1% 12.4% 12.9% Note: Economic Development Funds were classified as special revenue funds through FY2002 and considered discretely presented component units through FY2007. Upon further consideration,the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. Source: Annual Financial Reports 127 Town of Westlake Exhibit S-5 Assessed Value and Estimated Actual Value of Taxable Property Last Eight Fiscal Years Modified Accrual Basis of Accounting - Unaudited Appraised Value Less: Total Taxable Total Fiscal Real Personal Tax-&empt Assessed Direct Year Property Property Property Value Tax Rate 2011 $ 951,070,355 $ 70,569,170 $ 143,856,142 $ 877,783,383 0.16010 2012 1,016,474,604 85,329,823 156,315,552 945,488,875 0.15684 2013 1,099,249,031 122,792,343 335,814,215 886,227,159 0.15684 2014 1,091,142,760 151,927,427 346,730,543 896,339,644 0.15634 2015 1,123,354,430 139,936,507 342,248,275 921,042,662 0.15634 2016 1,175,230,336 107,537,466 336,770,136 945,997,666 0.15634 2017 1,468,274,115 132,422,540 437,293,366 1,163,403,289 0.13695 2018 1,517,833,356 133,680,163 442,433,216 1,209,080,303 0.13615 Note: No ad valorem taxes were assessed by the Town of Westlake prior to the fiscal year ended September 30,2011. Source: Tarrant County Appraisal District Denton Central Appraisal District 128 Town of Westlake Exhibit S-6 Principal Property Tax Payers Current and Seven Years Ago - Unaudited 2018 2011 Percentage Percentage Taxable of Total Town Taxable of Total Town Assessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Taxpayer Value Rank Assessed Value BRE Solana LLC $ 123,689,077 1 30.92% Maguire Thomas Partners,etal $ 116,839,380 1 13.31% FMR Texas,LLC/LTD Partnership 77,129,554 2 19.28% FMR Texas,LLC/LTD Partnership 148,569,643 2 16.93% Dallas MTA LP 49,822,886 3 12.46% Maguire Partners 39,117,985 3 4.46% DCLI,LLC 46,697,787 4 11.67% Lexington TNI Westlake LP 18,249,200 4 2.08% HMC Solana LLC 39,844,325 5 9.96% First American Leasing/Real Estate 17,636,457 5 2.01% Maguire Parthers-Solana Land LP 17,562,432 6 4.39% DCLI,LLC 13,234,691 6 1.51% Lexington TNI Westlake LP 17,012,143 7 4.25% Fidelity Investments 12,277,810 7 1.40% Marsh USA Inc 11,763,580 8 2.94% Levi Strauss&Co. 8,215,271 8 0.94% Fidelity Investments 9,482,577 9 2.37% Westlake Terra,LLC 7,400,002 9 0.84% Prince Whipple Trust 6,979,984 10 1.76% EMC Corp 6,418,484 10 0.73% Total $ 399,984,345 100.00% Total $ 387,958,923 44.21% Source: Tarrant County Appraisal District Note: (1)Priorto fiscalyear ended September 30,2011,the Town of Westlake did not assess an ad valoremtax (2)Total Taxable Assessed Value including real and personal property for taxyear 2010(fiscal year 2011)is$877,783,383. (3)Total Taxable Assessed Value including real and personal property for taxyear 2017(fiscal year 2018)is$1,209,080,303. 129 Town of Westlake Exhibit S-7 Property Tax Levies and Collections Last Eight Fiscal Years - Unaudited Collected within the Fiscal Year Total Collections Taxes Levied Adjusted of the Levy Collections to Date Fiscal for the Adjustments Taxes Levied Percent in Subsequent Percentage Year Fiscal Year to Levy for Fiscal Year Amount of Levy Years Amount of Levy 2011 $ 1,409,956 $ 47,560 $ 1,362,396 $ 1,356,050 99.53% $ 4,136 $ 1,360,186 99.84% 2012 1,486,968 47,220 1,439,748 1,437,908 99.87% 3,359 1,437,908 99.87% 2013 1,398,777 45,297 1,353,480 1,352,097 99.900/0 3,358 1,352,097 99.900/0 2014 1,405,819 44,761 1,361,058 1,350,639 99.23% 10,172 1,360,811 99.98% 2015 1,450,674 43,948 1,406,726 1,405,148 99.89% 1,005 1,406,153 99.96% 2016 1,482,989 40,244 1,442,745 1,441,536 99.92% - 1,441,536 99.92% 2017 1,573,803 33,281 1,540,522 1,536,921 99.77% 25,133 1,562,054 101.40% 2018 1,661,110 30,810 1,630,300 1,624,655 99.65% (8,127) 1,616,528 99.16% Note: Prior to fiscal year ended September 30,2011,the Town of Westlake did not assess an ad valorem tax Source: Tarrant County Appraisal District Denton Central Appraisal District 130 Town of Westlake Exhibit S-8 Direct and Overlapping Property Tax Rates (Per $100 of Assessed Value) Last Eight Fiscal Years - Unaudited City Direct Rates Overlapping Rates Operating/ School Districts Counties Tarrant Tarrant Trophy Total Fiscal General Debt Ser-.ice Total(A) Carroll Northwest Keller Denton Tarrant County County Club Direct and Year Fund Fund Direct ISD LSD LSD County County College Dist Hospital Dist. MOD#1 Overlapping 2011 0.15620 0.00390 0.16010 1.41500 1.37500 1.53060 0.27736 0.26400 0.13764 0.22790 0.19500 5.58260 2012 0.13835 0.01849 0.15684 1.41500 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.17500 5.58557 2013 0.14197 0.01487 0.15684 1.40000 1.37500 1.54000 0.28287 0.26400 0.14897 0.22790 0.13339 5.52896 2014 0.13710 0.01924 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583 2015 0.13710 0.01924 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583 2016 0.13947 0.01687 0.15634 1.40000 1.45250 1.54000 0.27220 0.26400 0.14950 0.22790 0.13339 5.59583 2017 0.12882 0.00813 0.13695 1.39000 1.45250 1.52000 0.24841 0.25400 0.14473 0.22790 0.12722 5.50171 2018 0.11133 0.02482 0.13615 1.38500 1.49000 1.52000 0.23781 0.24400 0.14006 0.22443 0.12021 5.49766 Notes: Prior to fiscal year ended September 30,2011,the Town of Westlake did not assess an advaloremtax Overlapping rates are those oflocal and county governments that apply to property owners within the Town of Westlake. Not all overlapping rates apply to all Town's property owners(e.g.,the rates for the counties and school districts apply only to the proportion of the Town's property owners whose property is located within the geographic boundaries ofthe county and school district) Source: Tarrant County Appraisal District Denton Central Appraisal District 131 Town of Westlake Exhibit S-9 Taxable Sales by Industry Type Last Ten Fiscal Years - Unaudited Fiscal Year NAICS Industry Type 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 11 Agriculture,Forestry,Fishing and Hunting $ 210 $ $ 60 $ 38 $ 163 $ 731 $ 775 $ 2,083 $ 1,685 $ 4,303 21 Mining 20 400 4,260 3,050 335 15 714 655 128 5 22 Utilities 186,773 178,693 180,032 171,131 176,622 204,280 191,031 138,331 147,000 180,564 23 Construction 1,043,752 68,306 132,780 139,000 365,049 239,888 216,546 230,067 340,077 1,294,092 31-33 Manufacturing 430,515 386,492 402,062 526,755 295,660 375,905 234,651 209,128 86,798 113,487 42 Wholesale Trade 138,456 105,557 145,631 134,466 59,571 421,371 515,602 356,946 339,854 278,054 44-45 Retail 648,597 1,097,007 707,553 1,106,427 1,132,811 962,244 1,332,659 415,356 458,833 428,355 48-49 Transportation and Warehousing 791 556 316 1,156 3,662 1,962 3,550 1,107 1,133 567 51 Infnniation 377,828 423,834 508,609 367,298 378,221 623,828 567,685 551,172 387,714 817,086 52 Financial and Insurance 68,936 87,188 73,455 27,857 75,529 505,585 295,622 754,386 509,201 709,787 53 Real Estate and Rental and Leasing 154,315 327,207 210,158 215,754 457,693 493,570 708,747 940,971 999,118 675,273 54 Professional,Scientific,and Technical Services 192,008 202,263 231,526 221,331 536,971 242,069 193,145 287,066 261,704 309,704 56 Admin and Support and Waste Mgmt&Rem Sry 22,319 39,539 65,045 39,027 110,686 103,340 50,264 125,033 85,430 93,967 61 Education Services 2,980 619,228 1,675,351 356,689 373,117 153,279 201,761 230,775 220,078 555,159 62 Health Care and Social Assistance - - 170 106 251 11,018 2,887 228 398 999 71 Arts,Entertainment and Recreation 174,485 158,996 206,050 204,456 184,687 191,343 189,027 201,391 241,107 216,403 72 Accommodation and Food Services 140,344 140,996 175,938 93,123 204,044 221,061 246,755 230,615 233,769 228,003 81 Other Services(except Public Administration) 1,756 4,462 4,632 9,805 13,156 17,412 8,965 3,167 2,963 2,772 92 Public Administration 11 1 135 295 27,243 1 1,391 $ 3,584,085 $ 3,840,735 $ 4,723,629 $ 3,617,604 $ 4,368,523 $ 4,796,144 $ 4,960,386 $ 4,678,477 $ 4,316,991 $ 5,909,966 Town direct sales taxrate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00°/ 2.00% 2.00% 2.00% Note: Due to confidentiality issues,the names ofthe ten largest revenue payers are not available.The categories presented are intended to provide alternative information regarding the sources ofthe Town's sales taxrevenue Source: Texas State Comptroller reports 132 Town of Westlake Exhibit S-10 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years - Unaudited General Bonded Debt Outstanding Percentage General Certificates of Actual Fiscal Obligation of Taxable Per Year Bonds Obligation Tax Notes Total Sales Capita 2009 $ 9,735,000 $ 10,975,000 $ $ 20,710,000 11.30% 25,791 2010 9,630,000 10,555,000 20,185,000 10.65% 23,831 2011 8,962,656 12,210,000 21,172,656 9.19% 21,343 2012 16,770,000 4,877,000 21,647,000 11.84% 20,369 2013 16,590,000 13,622,000 30,212,000 13.81% 27,251 2014 18,260,000 11,044,000 29,304,000 12.40% 24,748 2015 17,480,000 11,046,131 28,526,131 11.58% 23,772 2016 17,091,659 10,739,306 27,830,965 12.08% 22,627 2017 15,267,000 18,460,700 1,530,000 35,257,700 15.16% 26,914 2018 14,455,000 18,883,000 1,328,000 34,666,000 11.55% 25,066 Notes: Details regarding the Town's outstanding debt can be found in the notes to the financial statements. There was no debt issued until fiscal year 2002. See Table 13 for personal income and population data. 35 30 25 20 0 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ■General Obligation Bonds ■Certificates ofObligation 133 Town of Westlake Exhibit S-I I Ratios of Outstanding Debt by Type Last Ten Fiscal Years - Unaudited Business-Type Governmental Activities Activities General Certificates Other Certificates Total Percentage Fiscal Obligation of Capital Contractual of Primary of Personal Per Year Bonds Obligation Tax Notes Leases Loans Obligations Obligation Government Income Capita 2009 $ 9,735,000 $ 10,975,000 $ $ 46,559 $ $ 5,734,191 $ $ 26,490,750 190/0 23,887 2010 9,630,000 10,555,000 - 5,658,888 25,843,888 18% 22,473 2011 8,962,656 12,210,000 50,000 5,580,380 26,803,036 17% 22,638 2012 16,770,000 4,877,000 34,075 5,498,668 27,179,743 190/0 25,576 2013 16,590,000 13,622,000 - 18,150 5,412,149 35,642,299 21% 32,150 2014 18,260,000 10,029,800 237,378 437,253 5,320,824 1,014,200 35,299,455 22% 29,812 2015 17,480,000 9,759,250 154,347 357,041 5,226,294 1,286,881 34,263,813 20% 24,775 2016 17,091,659 9,736,953 563,045 275,101 5,126,958 971,300 33,796,069 20% 28,308 2017 15,267,000 18,460,700 1,530,000 162,004 238,404 5,156,839 949,300 41,764,247 22% 31,881 2018 14,455,000 17,955,700 1,328,000 - 201,737 4,913,865 927,300 39,781,602 23% 28,765 Note: Details regarding the Town's outstanding debt can be found in the notes to the financial statements. No debt was issued until fiscal year 2000. See Table 13 for personal income and population data. 134 Town of Westlake Exhibit S-12 Direct and Overlapping Governmental Activities Debt As of September 30, 2018-Unaudited Overlapping Amount of Taxing Body Debt Outstanding As of Percent(1) Amount Carroll ISD $ 254,924,999 9/30/2018 5.74% $ 14,632,695 Denton County 612,630,000 9/30/2018 0.01% 61,263 Keller ISD 680,508,707 9/30/2018 4.07% 27,696,704 Northwest ISD 870,670,379 9/30/2018 1.15% 10,012,709 Tan-ant County 294,500,000 9/30/2018 0.72% 2,120,400 Tarrant County Hospital District 19,300,000 9/30/2018 0.72% 138,960 Trophy Club MUD#1 8,725,000 9/30/2017 18.64% 1,626,340 Total Overlapping Debt 56,289,072 Town of Westlake Outstanding Debt 34,666,000 Total Direct&Overlapping Debt $ 90,955,072 Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas("MAC") Note: Overlapping governments are those that coincide,at least in part,with the geographic boundaries of the Town. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the Town of Westlake. This process recognized that,when considering the Town's ability to issue and repay long-term debt,the entire debt burden borne by the resident 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. (1) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the entity's taxable assessed value that is within the Town's boundaries and dividing it by the entities'total taxable assessed value. 135 Town of Westlake Exhibit S-13 Demographic and Economic Statistics Last Ten Fiscal Years - Unaudited Calendar Estimated Personal Personal Median School Unemployment Year Population Income Income Age Enrollment Rate 2009 803 $ 150,586 $ 120,920,285 37.6 417 8.1% 2010 992 121,431 120,459,552 39.8 491 8.1% 2011 1063 110,487 117,447,681 41.5 530 7.9% 2012 1,109 112,697 138,423,531 41.8 630 6.2% 2013 1,150 114,951 147,292,890 41.4 658 6.0% 2014 1,184 117,250 160,462,095 41.2 697 5.0% 2015 1,205 119,595 144,111,592 41.8 812 4.0% 2016 1,230 121,987 173,419,076 41.7 825 4.1% 2017 1,310 124,426 162,998,462 41.5 830 3.2% 2018 1,383 126,915 175,523,215 41.2 856 3.4% Sources: Tarrant County Unemployment Rate information taken from Texas Workforce Commission. Municipal Advisory Council of Texas -Population USA.com-Per Capita Income source North Central Texas Council of Governments United States Census -Median Age Estimated Population 1500 1383 992 1063 1109 1150 1184 1205 1230 1000 803 500 — 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 136 Town of Westlake Exhibit S-14 Principal Employers Current and Ten Years Ago - Unaudited 2018 2008 Percentage Percentage of Estimated of Estimated Total Town Total Town Employer Employees Employment Employer Employees Employment Fidelity Investments 2,568 33.86% Fidelity Investments 2,691 38.21% Schwab 850 11.21% Core Logic 1,800 25.56% Travelocity 580 7.65% TD Auto Finance 1,000 14.20% Wells Fargo 573 7.55% Wells Fargo 400 5.68% Deloitte 501 6.61% McKesson 215 3.05% Sabre JLL Facilities 345 4.55% Sonitrol/World Factory 156 2.22% Verizon Wireless 319 4.21% Marriott Solana Hotel 150 2.13% Goosehead Insurance 273 3.60% Walco/Animal Health 145 2.06% Sound Physicians 194 2.56% Vaquero Country Club 132 1.87% Solera 190 2.50% Levi Strauss 92 1.31% Levi Strauss 143 1.89% Westlake Academy 77 1.09% Vaquero Country Club 130 1.71% Pfizer,Inc. 50 0.71% Town of Westlake/Westlake Academy 142 1.87% Premier Academy 30 0.43% All Other Businesses 777 10.24% Solara Health 104 1.48% Total 7,585 1000/0 Total 7,042 1000/0 Source: Cushman&Wakefield tenant records and contact with employers of the Town 137 Town of Westlake Exhibit S-15 Full-Time Equivalent Town Government Employees by Function/Program Last Ten Fiscal Years - Unaudited Fiscal Year Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General government Town manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Assistant Town Manager 0.00 0.00 0.00 0.00 0.75 0.90 1.00 0.90 1.00 1.00 Assistant to Town Manager 1.00 1.00 1.00 0.75 0.00 0.00 0.00 0.50 0.50 0.75 Administrative 0.75 0.50 0.75 0.75 1.00 0.50 0.50 0.00 1.50 1.00 Building official 1.33 1.33 1.33 1.33 1.50 1.66 1.66 3.17 4.00 4.00 Town secretary 1.00 1.00 1.00 1.00 1.00 1.00 1.25 1.25 1.50 1.50 Facilities/Grounds maintenance 1.08 1.08 1.08 0.83 1.00 1.09 1.34 1.58 0.50 1.75 Municipal 4.25 4.50 4.50 3.75 4.75 5.10 5.00 4.60 4.00 3.50 Finance 3.00 3.00 3.00 3.00 3.00 4.00 4.00 4.25 4.00 4.00 Payroll/Human Resources 1.33 1.33 1.33 1.33 2.00 2.00 2.00 2.00 2.00 2.00 hiformation Technology 0.00 0.00 0.00 0.00 0.00 1.00 1.00 1.00 1.00 2.00 Public safety(EMS) 9.00 9.00 9.00 9.00 10.00 13.25 14.25 14.25 11.00 15.50 Culture and recreation 0.75 0.75 0.75 0.50 0.75 0.84 0.84 0.84 0.50 0.50 Public works 1.50 1.50 1.50 2.00 3.00 2.66 2.66 2.67 3.00 4.00 Marketing and public affairs 0.00 0.00 0.00 1.00 1.00 2.00 2.00 2.00 2.00 2.00 Education 48.10 55.62 59.44 67.48 76.18 91.18 93.65 95.31 95.05 98.00 Total 74.09 81.61 85.68 93.72 106.93 128.18 132.15 135.32 132.55 142.50 Source: Prior Town budgets and Academy personnel records Note: A full time municipal employee is scheduled to work 2,080 hours per year(including vacation and sick leave). Fulltime equivalent employment is calculated by dividing total labor hours by 2,080. A full time education employee is scheduled to work 1,122 hours per year. 138 Town of Westlake Exhibit S-16 Operating Indicators by Function/Program Last Ten Fiscal Years - Unaudited Fiscal Year Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General government Permits issued 61 44 70 85 132 144 159 218 217 259 Permit values $ 21,051,297 $ 190,388,737 $ 21,173,592 $ 29,481,047 $ 50,544,048 $ 59,358,904 $ 80,011,354 $ 87,307,794 $ 262,690,940 $ 311,013,915 Police(Contract with Keller PD) Motor vehicle stops 9,247 9,763 9,829 12,221 9,993 9,579 10,432 11,109 10,718 8,339 Traffic accident investigations 266 273 348 343 322 341 398 461 386 333 Part Icrimes 23 19 30 39 9 15 20 13 22 31 DWI arrests 24 32 80 50 69 55 62 66 70 50 Fire/EMS Fire runs 118 172 191 181 238 211 211 257 248 320 Ambulance runs 184 187 264 266 286 240 253 288 269 202 Inspections 15 71 71 54 96 286 261 246 290 188 Public Works-General Street resurfacing(IF) - - 3,800 30,000 - - - - 6,000 - Potholes repaired 10 5 36 6 2 6 20 20 10 5 Public Works-Utility Number ofwater accounts 437 478 500 568 614 651 713 752 810 835 Water main breaks 5 6 4 4 3 1 1 - - 1 Avg daily consumption MG(water) 1.020 0.889 1.200 1.100 1.090 1.045 1.021 1.122 1.233 1.400 Peak daily consumption MG(water) 2.740 2.460 2.540 2.600 2.480 2.690 2.770 1.586 1.646 1.564 System capacity-MG(water) 1.685 1.685 1.685 1.685 1.685 2.685 2.685 2.685 2.685 2.685 Water purchased(in gallons x 000) 372,933 324,843 443,222 407,305 401,457 381,482 372,838 409,817 450,208 510,931 Water sold(in gallons x 1000) 313,495 290,000 385,320 376,496 357,297 347,148 360,000 350,000 419,520 470,168 Wastewater Number of new sewer connections 251 254 245 292 325 350 384 403 454 503 Avg daily sewage treatment 0.101 0.063 0.163 0.136 0.151 0.208 0.166 0.132 0.176 1.171 (thousands ofgallons) Source: Various Town departments Notes: N/A represents information that is unavailable. 139 Town of Westlake Exhibit S-17 Capital Asset Statistics by Function/Program Last Ten Fiscal Years - Unaudited Fiscal Year Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Fire Stations 1 1 1 1 1 1 1 1 1 1 Public Works-Utility Pump station 1 1 1 1 1 1 1 1 1 1 Lift station 2 3 3 3 3 3 3 3 3 3 Telecommunications Duct Bank(LF) 49,103 51,803 57,783 57,783 57,783 59,936 66,084 66,084 82,231 82,231 Telecomrnunications Duct Bank Manholes 113 122 122 122 122 122 140 140 140 140 Water Water mains(LF) 70,000 79,000 130,000 137,891 137,891 142,694 148,117 148,117 181,393 181,393 Fire hydrants 130 154 188 191 191 201 214 214 256 256 Storage capacity MG 1,685 1,685 1,685 1,685 1,685 2,685 2,685 2,685 2,685 2,685 Wastewater Sanitary sewers(LF) 39,300 49,900 94,000 94,000 94,000 98,964 104,373 104,373 123,168 123,168 Manholes 284 304 304 304 304 326 355 355 444 444 Public Works-Utility Streets(miles) 10.80 10.80 10.80 10.25 10.25 10.25 10.50 10.42 10.42 10.42 Traffic signals(school zone flashers) 2 2 2 2 2 2 2 2.0 2.0 2.0 Parks and recreation Open Space(acres) 25 25 25 25 25 27 27 27.0 27.0 27.0 Playgrounds 2 2 2 2 2 2 2.0 2.0 2.0 2.0 Softball/soccer field 1 1 1 1 1 1 1.0 1.0 1.0 1.0 Football field 1 1 1 1 1 1 1.0 1.0 1.0 1.0 Public trails(miles) 3.5 3.5 5.0 5.0 5.0 7.0 8.5 8.5 8.5 15.0 Source: Various Town departments Note: No capital asset indicators are available for the general government. The amount ofroads decreased in FY 2011-2012 due to a portion ofroad being dedicated to TXDot 140