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Res 21-14 Accepting a Comprehensive Financial Report from Weaver & TidwellTOWN OF WESTLAKE RESOLUTION NO.21-14 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, 2020. 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 ill the best interest of the citizens of Westlake. NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE TO-;,V11; 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, 2020, 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. SECTION 4: That this resolution shall become effective from and after its date of passage. Resolution 21-14 Page 1 of 2 PASSED AND .APPROVED ON THIS 26"' DAY OFAPRIL 2021. ATTEST: 1�-'41 Tod Wood, Toy Secretary APPROVED AS TO FORM: L. Stanton Lowry, Town Attorney Laura Wheat, Mayor d"'& L A,, - -- Amanda DeGan, Town Manager Resolution 21-11 Page 2 of 2 weaver Assurance • inx • Advisory Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards The Honorable Mayor and Members of the Town Council Town of Westlake, Texas We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business -type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the Town of Westlake, Texas (the Town), as of and for the year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the Town's basic financial statements, and have issued our report thereon dated April 20, 2021. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town's internal control. Accordingly, we do not express an opinion on the effectiveness of the Town's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 1 Dallas, Texas 75201 Main: 972.490.1970 CPAs AND ADVISORS I WEAVER.COM The Honorable Mayor and Members of the Town Council Town of Westlake, Texas Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. WEAVER AND TIDWELL, L.L.P. Dallas, Texas April 20, 2021 2 Resolution 21-14 - Exhibit "A" Town of Westlake, Texas Comprehensive Annual Financial Report Fiscal Year Ended September 30, 2020 Prepared by: Town of Westlake Finance Department 1500 Solana Blvd, Suite 7200 Westlake, Texas 76262 Town of Westlake Consolidated Annual Financial Report For the Fiscal Year Ended September 30, 2020 Table of Contents i PageExhibit Introductory Section Letter of Transmittal iii GFOA Certificate of Achievement xi Or ganization Chart xii Town Officials xiv Financial Section Independent Auditor’s Report 3 Management's Discussion and Analysis 9 Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 23 A-1 Statement of Activities 24 A-2 Fund Financial Statements Governmental Funds Financial Statements Balance Sheet 26 A-3 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 28 A-4 Statement of Revenues, Expenditures, and Changes in Fund Balances 30 A-5 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 32 A-6 Proprietary Funds Financial Statements Statement of Net Position 33 A-7 Statement of Revenues, Expenses, and Changes in Net Position 34 A-8 Statement of Cash Flows 35 A-9 Fiduciary Funds Financial Statements Statement of Fiduciary Net Position 36 A-10 Discretely Presented Component Units Financial Statements Combining Statement of Net Position 37 A-11 Combining Statement of Activities 38 A-12 Notes to the Basic Financial Statements 41 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 91 B-1 Schedule of Revenues, Expentitures and Changes in Fund Balance - Budget and Actual - Westlake Academy 92 B-2 Notes to Budgetary Comparison Schedules 93 Schedule of Net Pension Liability and Related Ratios - TMRS Pension Plan 94 B-3 Schedule of Pension Contributions - TMRS Pension Plan 95 B-4 Schedule of Academy's Proportionate Share of Net Pension Liability - TRS Pension Plan 96 B-5 Schedule of Pension Contributions - TRS Pension Plan 97 B-6 Schedule of Changes in the Total OPEB Liability and Related Ratios - TMRS OPEB Plan 98 B-7 Schedule of OPEB Contributions - TMRS OPEB Plan 99 B-8 Schedule of Academy's Proportionate Share of Net OPEB Liability - TRS Care Plan 100 B-9 Schedule of OPEB Contributions - TRS Care Plan 101 B-10 Town of Westlake Consolidated Annual Financial Report For the Fiscal Year Ended September 30, 2020 Table of Contents – Continued ii PageExhibit Combining and Individual Fund Statements and Schedules Maj or Governmental Funds Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Debt Service Fund 104 C-1 Nonmaj or Governmental Funds Combining Balance Sheet 106 C-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance 107 C-3 Nonmaj or Special Revenue Funds Budgetary Comparison Schedules Visitors Association Fund 108 C-4 Lone Star Public Facilities Corporation Fund 109 C-5 Economic Development Fund 110 C-6 4B Economic Development Corporation Fund 111 C-7 Agency Funds Statement of Changes in Assets and Liabilities - PID Agency Fund 113 C-8 Statistical Section Net Position By Component 117 S-1 Changes in Net Position 118 S-2 Fund Balances, Governmental Funds 120 S-3 Changes in Fund Balances, Governmental Funds 121 S-4 Assessed Value and Estimated Actual Value of Taxable Propert y 123 S-5 Principal Property Tax Payers 124 S-6 Property Tax Levies and Collections 125 S-7 Direct and Overlapping Property Tax Rates 126 S-8 Taxable Sales by Industry Type 127 S-9 Ratios of General Bonded Debt Outstanding 128 S-10 Ratios of Outstanding Debt by Type 129 S-11 Direct and Overlapping Governmental Activities Debt 130 S-12 Demographic and Economic Statistics 131 S-13 Principal Employers 132 S-14 Full-Time Equivalent Town Government Employees by Function/Program 133 S-15 Operating Indicators by Function/Program 134 S-16 Capital Asset Statistics by Function/Program 135 S-17 1500 Solana Blvd, Building 7. Suite 7200  Westlake, Texas 76262 Metro: 817-430-0941  Fax: 817-430-1812  www.westlake-tx.org iii April 20, 2021 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 for the Town of Westlake, Texas for the fiscal year ended September 30, 2020, 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 an absolute, assurance that the financial statements will be free from material misstatements. As management, we assert that this financial report is complete and reliable in all material respects to the best of our knowledge and belief. 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, 2020, 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, 2020, were fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial section of this report. 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 and is generally presented on a multi-year basis. iv Profile of the Town Westlake is certainly distinctive by design. As a result of this intentional design, our community 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 Dallas-Fort Worth (DFW) Metroplex, Westlake is designated as both a Platinum Level Scenic City and a Tree City USA. Extraordinary residential developments and architecturally vibrant corporate campuses find harmony among our meandering roads and trails, lined with native oaks and stone walls. Westlake is a leader 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 community where hospitality finds its home. Westlake is family-friendly, welcoming, fully involved and invested in our rich heritage, with a vibrant present and sustainable future.  Ideally located minutes from downtown Fort Worth, its Alliance Airport and the Dallas/Fort Worth International Airport, the Town of Westlake is home to several prestigious residential communities, Fortune 500 companies, and corporate headquarters, all of which possess a unique character and charm. There is a common ideal shared by our corporate and individual residents of support for the existing character and charm of the Westlake community as well as a commitment to excellence in new development. The Town geographically lies in both northeast Tarrant County and southern Denton County and may be conveniently accessed by several major thoroughfares, including SH 114, SH 170 and US 377. Westlake occupies approximately seven (7) square miles and serves a population of approximately 1,664. In 2020, the average size of new home construction was 11,469 square feet, with an average estimated construction cost of $2.85 million. Westlake, 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: 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. v 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 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 (7) 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 890 students in FY 19-20 and serves Kindergarten thru 12th grade. The Academy graduated their first class in FY 09-10. The Board consists of six (6) trustees, appointed by the Town's governing body. Currently, all members of the Academy Board 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 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 Coronavirus (COVID-19) The coronavirus pandemic has cast a large shadow over the Town of Westlake's economic outlook and our country’s as a whole. The United States' economic downturn was unprecedented as local, state and federal leaders worked through the impacts caused by the necessary actions designed to suppress COVID- 19 transmission. The Town moved to increase their established conservative approach during this time and proceeded with cost-saving adjustments that included:  Deeper examination of budget expenditures;  No new staff requests;  Deferred transfers to conduit funds; and  Delayed capital improvement projects. vi 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 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's work on important initiatives and projects allows us to balance our "distinctive development, trails, and quality of life amenities amidst an ever- expanding urban landscape." The current and potential development within our community continues to be both an exciting and challenging time in Westlake! Adhering to the Town's Vision remains the key to Westlake's success in managing the significant growth. While growth has continued, albeit slower in FY 2020 and 2021-, it also presents very clear challenges for our community if we wish to maintain the elements of Westlake that make it so distinctive. These community attributes include our beautiful neighborhoods with high quality residences, strong aesthetic standards, an exemplary Town owned IB World K-12 charter school, open space preservation, future public art projects, streetscaping, emphasis on proactive planning, and maintaining our view corridors. The impending change that surrounds Westlake involves not only our current internal development but also the growth opportunities planned for the State Highway corridors (SH 114 and SH 170) in northeast Tarrant County and into southern Denton County. Our neighboring communities have also experienced significant growth and are nearing a fully developed condition that will only add pressure from developers as they look to a relatively undeveloped Westlake. The impact of anticipated growth along the SH 114 corridor is best described by Mr. Robin McCaffrey (AIA and APA) of MESA Planning, the firm that was engaged to update the Town's 2015 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 of proximity, 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 the 2020 population of 1,664, our Town saw an increase of 54 additional residents in the past year. We will monitor and plan for the anticipated increase in these numbers considering our Comprehensive Plan's 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 vii 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 our Comprehensive Plan will be essential for addressing this issue via the Town's thoroughfare plan as it pertains to development 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 Granada, Quail Hollow, Vaquero, and The Knolls of Solana. The Entrada mixed-use development continues to progress slowly with residential and commercial projects under construction. Entrada's infrastructure is 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 - including single-family homes, villas, condominiums, and townhomes. Our residential construction activity shows a steady increase in building permits for housing, even through the effects of Covid-19. Housing starts in Westlake, due to our homes' high value, 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 push through the economic downturn of a pandemic, 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 our Comprehensive Plan. 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 14,000 individuals, pre-COVID. These office complexes are comprised of notable corporate clients that include Deloitte LLP, Fidelity Investments and Charles Schwab.  Commercial Development in Entrada: The mixed-use development of Entrada, located at FM1938/Davis Boulevard 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. Starbucks and several medical services offices opened for business, joining CVS Pharmacy and Primrose Private Preschool, and soon the water front restaurants and chapel on the northeast side of the development will be as well. Other approved commercial uses include various retail, restaurants, wedding chapel, reception hall, and hotels.  Economic Development: The Town has pursued the ideas advanced in the Economic Development element of the Comprehensive Plan. 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 industry hub which has already been created through our corporate residents of Fidelity, Deloitte, and Charles Schwab. Further, we pursue the types of businesses interested in high quality office campus development and creating well-paying employees' positions. The completion of viii Charles Schwab and its merger with TD Ameritrade's complex in Southlake firmly establishes us as a leading financial services corridor within the DFW Metroplex. Additionally, the Town has recently entered into an economic development agreement with Deloitte, LLP for expansion of their international learning and innovation center, no later than early 2022.  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 pastoral 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 Challenges – 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:  Impact of the Legislative Session – The 87th Texas legislative session began on January 12, 2021. We understand there may be a few bills that could impact the Town. While it is still early, we will continue to follow this legislative session as the impact of any applicable bills passed could necessitate changes in our internal operations as well as our revenue forecasts in future years.  Water Usage and Demand – The Town's future water needs have been secured through the addition of a million gallon water tank in 2013, more recently through the completion of the new 30-inch regional water line through a partnership with the City of Fort Worth and the Town of Westlake, and lastly, we are entering the bidding process for the addition of a fifth water pump at our Westlake Pump Station to be completed by the end of 2021. These improvements are estimated to meet the needs projected development at final build-out of the Town, along with our neighboring communities in northeast Tarrant County.  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 continues work on the updating of the Westlake Academy Facility Master Plan to determine the best balance of 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 infrastructure, including water and sewer utilities and our roadways. As our community, and those surrounding us, continue to grow, Staff will maintain 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 ix with the ability of our surrounding highway capacity for transient vehicles. Town staff continues to work with TxDOT regarding the construction of service roads between FM 1938 and Dove Road in Southlake and for the construction of SH 170 main lanes from SH 114 west to I-35. 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 2020-2021 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 for the fiscal year ended September 30, 2019. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to GFOA to determine its eligibility for another certificate. In addition, we also received our twelfth GFOA Distinguished Budget Presentation Award for the fiscal year beginning October 1, 2019 for our municipal budget. To qualify for the Distinguished Budget Presentation Award, the Town budget document 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 nine years. Acknowledgements The preparation of this report could not be accomplished without the efficient and dedicated services of the entire Finance Department staff. Appreciation is expressed to all Town employees, especially those employees who were instrumental in the successful completion of this report. Town Staff would sincerely like to thank the Mayor and Council for their conservative leadership and steadfast support through their governance of the Town’s financial operations in a responsible and progressive manner. Respectfully Submitted, Amanda DeGan Ginger R. Awtry Town Manager/Superintendent Finance Director x xi xii xiii xiv 1 Financial Section 2 Weaver and Tidwell, L.L.P. 2300 North Field Street, Suite 1000 | Dallas, Texas 75201 Main: 972.490.1970 CPAs AND ADVISORS | WEAVER.COM 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, 2020, 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, 2020, 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. The Honorable Mayor and Members of Town Council Town of Westlake, Texas 4 Emphasis of Matters Regarding Going 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. 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 9 through 19 and budgetary comparison information and pension and OPEB schedules on pages 91 through 101 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. 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. The Honorable Mayor and Members of Town Council Town of Westlake, Texas 5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 20, 2021 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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 April 20, 2021 6 7 Management’s Discussion and Analysis 8 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, 2020. 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 and the statistical section, 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 $61,031,306 (Net position). This number must be viewed within the context that the vast majority of the Town's net position of $51,306,319 (84.1%) 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 $3,703,143 (6.1%). The remaining amount, $6,021,844 (9.8%), 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 $23,520,815, which is a decrease of $102,058 in comparison with the prior year. Within this total, $7,255,506 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 $16,590,510 an increase of $1,352,312 in comparison with the prior year. Of this total fund balance, $16,265,309 is unassigned. This represents 170.3% of the total general fund expenditures and is equivalent to 613 operating days.  The Town's capital assets (net of accumulated depreciation) decreased by $1,317,438. This is due in large part to depreciation expense exceeding current year capital asset additions.  The Town's long-term debt decreased by $1,767,955 in total, primarily 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 41 - 42 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 Westlake Academy Expansion 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, Solana PID Capital Projects and 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, 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 26 - 32 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 33 - 35 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 41 – 88 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 91 - 113. 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 $61,031,306 at the close of the most recent fiscal year. The Town’s combined net position changed from a year ago, increasing $78,126. 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, $51,306,319 (84.1%), 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, $3,703,143 (6.1%), represents resources that are subject to external restrictions on how they may be used. The remaining balance of $6,021,844 (9.8%) represents unrestricted net position which is available for the Town’s ongoing expenses. Table 1 Condensed Statement of Net Position At September 30, 2020 and 2019 2020 2019 2020 2019 2020 2019 Current and other assets 24,790,376$ 25,588,032$ 7,072,350$ 7,165,216$ 31,862,726$ 32,753,248$ Capital assets 76,747,384 77,683,045 10,260,090 10,641,867 87,007,474 88,324,912 Total Assets 101,537,760 103,271,077 17,332,440 17,807,083 118,870,200 121,078,160 Deferred outflows of resources 2,670,680 2,816,250 78,178 103,307 2,748,858 2,919,557 Noncurrent liabilities 38,422,095 40,286,447 7,833,053 8,115,903 46,255,148 48,402,350 Other liabilities 1,392,491 2,092,732 11,150,698 11,425,166 12,543,189 13,517,898 Total Liabilities 39,814,586 42,379,179 18,983,751 19,541,069 58,798,337 61,920,248 Deferred inflows of resources 1,757,053 1,115,505 32,362 8,784 1,789,415 1,124,289 Net Position (deficit ) Net investments in capital assets 46,633,638 48,030,010 4,672,681 4,909,471 51,306,319 52,939,481 Restricted 3,653,143 3,786,893 50,000 - 3,703,143 3,786,893 Unrestricted 12,350,020 10,775,740 (6,328,176)(6,548,934)6,021,844 4,226,806 Total Net Position (deficit)62,636,801$ 62,592,643$ (1,605,495)$ (1,639,463)$ 61,031,306$ 60,953,180$ Liabilities Governmental Activities Business-type Activities Total Assets 13 Table 2 Changes in Net Position For the Years Ended September 30, 2020 and 2019 2020 2019 2020 2019 2020 2019 Program revenues Char ges for services 2,645,897$ 6,808,893$ 6,478,333$ 5,404,863$ 9,124,230$ 12,213,756$ Operating grant and contributions 9,725,263 9,166,821 - - 9,725,263 9,166,821 Capital grants and contributions 280,000 1,861,623 - 54 280,000 1,861,677 General revenues Taxes Sales taxes 7,378,900 8,032,671 - - 7,378,900 8,032,671 Property taxes 2,411,279 1,956,630 - - 2,411,279 1,956,630 Hotel occupancy taxes 369,145 861,710 - - 369,145 861,710 Mixed beverage taxes 41,949 66,923 - - 41,949 66,923 Franchise taxes 972,520 964,239 - - 972,520 964,239 Interest on investments 260,003 517,128 62,177 110,208 322,180 627,336 Miscellaneous 72,688 142,230 - - 72,688 142,230 Total revenues 24,157,644 30,378,868 6,540,510 5,515,125 30,698,154$ 35,893,993$ General governmental 6,555,048 6,091,403 - - 6,555,048 6,091,403 Public safety 3,991,114 3,489,071 - - 3,991,114 3,489,071 Culture and recreation 282,512 299,815 - - 282,512 299,815 Economic development 150,037 306,982 - - 150,037 306,982 Public works 1,326,090 1,368,049 - - 1,326,090 1,368,049 Visitor services 802,244 927,670 - - 802,244 927,670 Education 9,979,674 9,523,906 - - 9,979,674 9,523,906 Interest on long-term debt 1,103,925 1,131,485 - - 1,103,925 1,131,485 Water and sewer - - 6,407,650 7,544,125 6,407,650 7,544,125 Cemeter y - - 21,734 10,628 21,734 10,628 Total expenses 24,190,644 23,138,381 6,429,384 7,554,753 30,620,028 30,693,134 Increase (decrease) in net position before transfers (33,000) 7,240,487 111,126 (2,039,628) 78,126 5,200,859 Transfers 77,158 207,213 (77,158)(207,213)- - Change in net position 44,158 7,447,700 33,968 (2,246,841) 78,126 5,200,859 Net position (deficit ), be ginning 62,592,643 55,144,943 (1,639,463)607,378 60,953,180 55,752,321 Net position (deficit), ending 62,636,801$ 62,592,643$ (1,605,495)$ (1,639,463)$ 61,031,306$ 60,953,180$ Governmental Activities Business-type Activities Total Revenues Expenses 14 Governmental activities: Governmental activities increased the Town's net position by $44,158 (0.1%). 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, increased by $1,574,280 primarily due to an increase in charges for services from building permits and fees and sales taxes. Total revenues for governmental activities decreased by $6,221,224 when compared to the prior year. General revenue had a decrease of $1,035,047, while program revenues had a decrease of $5,186,177. Program revenues  Charges for services decreased $4,162,996 which was primarily due to a decrease in permit and review fees for development.  Capital Grants and Contributions decreased by $1,581,623 with the major portion being attributed to a $1 million donation received in the prior year for Westlake Academy expansion. General revenues  Sales tax decreased by $653,771 as a result of decreased taxable sales due, in part, to the COVID-19 pandemic.  Property taxes increased by $454,649 due to increases in both the tax rate and taxable valuation. Expenses  Total expenses for governmental activities increased by $1,052,263 or approximately 4.5%.  Westlake Academy expenses reflected 43.3% of the increase which increased $455,768. This increase is primarily due to the increase in the Westlake Academy teachers’ pension and OPEB expense.  The remaining increase in expenses was primarily due to increases in public safety expenses of $502,043 due to an increase in fire fighter personnel and general governmental expenses of $463,645 which was primarily due to an increase in the Town’s pension expense. Business-type Activities: The net position of the business-type activities was a deficit balance of $1,605,495 as of September 30 2020, which was an increase of $33,968. The business-type activities increased primarily due to operating revenues increasing by over $1.0 million for service fees and operating expenses decreasing by over $1.1 million, mainly attributed to reduced spending for the Southlake waste water treatment and professional and contract services. Revenues (Charges for Services) for business-type activities for the fiscal year ending September 30, 2020 were $6,478,333; an increase of $1,073,470 or 19.9% due to increased water consumption and service fees. Operating expenses for the business-type activities for the fiscal year ending September 30, 2020 were $6,429,384; a decrease of $1,125,369 or 14.9%. This decrease was primarily attributed to reduced and conservative spending during the pandemic. 15 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 $23,520,815; a decrease of $102,058 in comparison with the prior year. Approximately 69.2% of this total ($16,265,309) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of fund balance is non-spendable, restricted, committed or assigned to indicate that it is not available for new spending because of constraints. The following tables present a summary of general, special revenue, capital project, and debt service fund revenues and expenditures for the fiscal year ended September 30, 2020, and the amount and percentage of increases and decreases in relation to the prior year. Table 3 Summary of Governmental Funds Revenues Increase Percent 2019-20 Percent (Decrease) Increase Amount of Total From 2018-19 (Decrease) Taxes Sales taxes 7,378,900$ 30.5% (653,771)$ -8.1% Property taxes 2,411,864 10.0% 455,623 23.3% Mixed beverage taxes 41,949 0.2% (24,974) -37.3% Hotel occupancy taxes 369,145 1.5% (492,565) -57.2% Franchise taxes 972,520 4.0% 8,281 0.9% Subtotal - Taxes 11,174,378 46.2% (707,406) -6.0% State program 8,011,061 33.1% 595,842 8.0% Federal program 137,910 0.6% 27,662 25.1% Interest income 260,003 1.1% (257,125) -49.7% Building permits and fees 1,996,834 8.3% (3,876,695) -66.0% Fines and penalties 492,435 2.0% (124,016) -20.1% Intergovernmental 24,750 0.1% 24,750 0.0% Contributions 292,860 1.2% (960,340) -76.6% Miscellaneous 1,812,994 7.6% 8,685 0.5% Total Revenues 24,203,225$ 100.0% (5,268,643)$ -17.9% Revenues 16 Table 4 Summary of Governmental Funds Expenditures Increase Percent 2019-20 Percent (Decrease)Increase Amount Of Total From 2018-19 (Decrease) General government 5,169,039$ 20.7%(161,135)$ -3.0% Public safety 3,512,456 14.1% 242,678 7.4% Culture and recreation 264,248 1.1%(7,898) -2.9% Economic development 203,407 0.8%(103,575) -33.7% Public works 622,307 2.5% 28,477 4.8% Visitor services 781,883 3.1%(122,806) -13.6% Education 9,845,685 39.4% 848,971 9.4% Capital outlay 1,627,548 6.5%(1,897,889) -53.8% Debt services 2,941,491 11.7% 46,640 1.6% Total Expenditures 24,968,064$ 100.0%(1,126,537)$ -4.3% Expenditures Below are summaries and explanations of the changes in fund balances from fiscal year 2019 to fiscal year 2020 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 (which for financial reporting purposes also includes the major maintenance fund and vehicle maintenance/replacement fund) was $16,590,510, an increase of $1,352,312 in comparison with the prior year. Of this total, $16,265,309 is unassigned. This represents 170.3% of the total general fund expenditures including transfers out to other funds related to operations of $272,089. This is equivalent to 613 operating days.  Revenues decreased $4,450,382 from FY19 to FY20; the primary reason for the decrease was building permits and fees which decreased $3,876,695 from the previous year due to the Schwab building and campus being built in 2019.  Expenditures remained consistent from FY19 to FY20, increasing by only $47,810 due to conservative spending during the pandemic. Westlake Academy - Fund balance increased by $373,597 primarily due to a transfer in from the general fund. Capital Projects Fund - Fund balance decreased by $1,651,656 primarily due to spending of proceeds of bonds issued in prior years on current year projects. Westlake Academy Expansion Capital Projects Fund – Fund balance increased by $213,705 due primarily to transfers in of $280,000 from the Economic Development Fund and interest income of $33,705, offset by a $100,000 transfer out for a cost analysis and programming study of the future Westlake Academy Arts & Science Center expansion. 17 Debt Service Fund – The debt service fund remained consistent only slightly increasing by $105,835 with an ending fund balance of $150,518. The debt service fund had transfers in from the general and non- major funds totaling $2,116,814 which offset the net of debt service payments and property tax revenues ($2,010,979). Non Major Funds – The non major fund balance decreased by $495,851 the result of transfers to the debt service fund of $1,844,725. 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 increased by $33,968. This increase is the net effect of a decrease in the utility fund of $14,168 primarily due to reduced operating revenues and increased operating costs; and a $48,136 increase in the cemetery fund due to a $36,779 increase in charges for services. General Fund Budgetary Highlights The General Fund budget for fiscal year 2020 was amended in total to increase the net change in fund balance from ($126,176) to $168,204, a total increase of $294,380. The amended budget for revenues was decreased by $714,606 (6.4%) based on an anticipated decrease in building permits and fees ($960,395). The amended budget for expenditures was decreased by $235,126 (2.3%).This decrease was primarily due to anticipated general government expenditures decreasing $252,034 primarily for contracted planning and development cost of $180K and equipment of $125K. In addition, the anticipated budget for transfers out was reduced by $773,860. The General Fund actual revenues were more than the amended budget by $658,589 primarily due to sales taxes and building permits and fee revenues more than budgeted. Actual expenditures were less than the amended budget by $494,187 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, 2020, totaled $87,007,474 (net of accumulated depreciation). The investment in capital assets includes land, buildings, improvements, machinery and equipment, infrastructure, and construction in progress. The net decrease in the Town's investment in capital assets for the current fiscal year was $1,317,438 or 1.5% mostly due to depreciation exceeding current year capital asset additions. Table 5 Town’s Capital Assets (Net of Accumulated Depreciation) 2020 2019 2020 2019 2020 2019 Land 12,446,059$ 12,446,059$ -$ -$ 12,446,059$ 12,446,059$ Capital improvements 27,033,940 27,747,452 8,646,033 9,009,627 35,679,973 36,757,079 Building 34,370,215 34,937,051 34,370,215 34,937,051 Machinery and equipment 1,442,037 1,781,244 1,285,027 1,276,845 2,727,064 3,058,089 W/W treatments rights - - 26,365 - 26,365 Construction in pro gress 1,455,133 771,239 329,030 329,030 1,784,163 1,100,269 Total capital assets 76,747,384$ 77,683,045$ 10,260,090$ 10,641,867$ 87,007,474$ 88,324,912$ Governmental Activities Business-type Activities Total Additional information on the Town's capital assets can be found in Note 4 on pages 55 - 56 of this report. 18 Long-term liabilities - At the end of the current fiscal year, the Town had total long-term debt outstanding of $40,398,437. Of this amount, $33,449,000 represents bonded indebtedness with premium outstanding of $1,305,838, $398,012 of capital leases, $437,270 of compensated absences, $128,373 in loans and $4,679,944 of contractual obligations. During the fiscal year 2019-2020, the Town's total debt payable decreased by $ 1,767,955 from payment of bond, capital lease, and note principal of $2,066,453, amortization of premium of $100,984, a decrease in compensated absence liabilities of $186,141, and issuance of a $585,623 capital lease. Standard & Poor's Ratings Services, a division of McGraw-Hill, Inc. has recently increased the Town's rate from AA+/stable to AAA/stable. Additional information about the rating agency or the significance of the rating provided may be obtained from Standard & Poor's web site. Additional information on the Town's long-term debt can be found in Note 5 on pages 58 – 62. Table 6 Outstanding Debt at Year-End 2020 2019 2020 2019 2020 2019 General obligation bonds 12,660,000$ 13,570,000$ -$ -$ 12,660,000$ 13,570,000$ Certificates of obligation 17,897,900 18,601,250 2,891,100 2,999,750 20,789,000 21,601,000 Contractual obligations - - 4,679,944 4,800,109 4,679,944 4,800,109 Capital leases 398,012 - - - 398,012 - Premium on bonds 1,279,473 1,379,285 26,365 27,537 1,305,838 1,406,822 Notes payable 128,373 165,050 - - 128,373 165,050 Compensated absences 368,239 531,355 69,031 92,056 437,270 623,411 Total long-term debt 32,731,997$ 34,246,940$ 7,666,440$ 7,919,452$ 40,398,437$ 42,166,392$ Governmental Activities Business-type Activities Total In addition to the liabilities in Table 6, the Town reports liabilities for the Academy’s proportionate share of the TRS net pension and OPEB liabilities and the Town’s net pension and total OPEB liabilities associated with TMRS. The Town’s net pension liability relative to its participation in Texas Municipal Retirement System (TMRS) decreased from $1,741,361 as of September 30, 2019 to $1,440,488 as of September 30, 2020. The Town’s net other post-employment benefits (OPEB) liability relative to its participation in Texas Municipal Retirement System (TMRS) increased from $54,484 as of September 30, 2019 to $82,590 as of September 30, 2020. The Academy’s proportionate share of the Teacher Retirement System (TRS) net pension liability increased from $1,489,525 as of August 31, 2019 to $1,502,914 as of August 31, 2020. The Academy’s proportionate share of the Teacher Retirement System (TRS) net OPEB liability decreased from $2,950,588 as of August 31, 2019 to $2,830,719 as of August 31, 2020. 19 Economic Factors and Next Year's Budgets In the FY 2020-2021 adopted budget, the fund balance of the General Fund, which includes the Town’s General Fund, General Major Maintenance Fund and the Vehicle Maintenance/Replacement Fund for audit purposes, is anticipated to decrease by $271K. Adopted revenues and transfers in are budgeted to be more than the 2020 actuals by $46K primarily due to a decrease in fines and penalties and the volatile market for interest income. Anticipated expenditures and transfers out are budgeted to be $1.6M less than the prior year. Payroll increases were approximately $217K (market adjustments, staffing changes, and increased insurance/benefits). The COVID-19 public health crisis has presented unique challenges for the upcoming fiscal year. Given the level of economic uncertainty due to COVID-19, the total budget and the economic impacts on businesses and local governments are unknown. Therefore, Town staff recommended the following cost saving adjustments:  All departments continue to budget expenditures conservatively;  No new staff requested unless the Town is awarded the SAFER grant for three new Fire/EMS positions; Subsequent to the adoption of the budget, we were not awarded this grant;  Deferred transfers to conduit funds; and  Delayed capital improvement projects. The budget continues to support initiatives for service delivery and our ongoing commitment to community and organizational excellence. In adherence to our fiscal policies, the budget will be monitored monthly and regular updates will be provided to Town Council in order to respond responsibly. The budget is intended to be adaptable given the unknown long-term fiscal impact of COVID-19. Contacting the Town's Finance Department This financial report is designed to provide our citizens, customers, and investors and creditors with a general overview of the Town's finances and to demonstrate the Town's accountability for the money it receives. If you have questions about this report or need additional financial information, contact Ginger R. Awtry, Town of Westlake Director of Finance, at 817-490-5719 or email at gawtry@westlake- tx.org. 20 21 Basic Financial Statements 22 Town of Westlake Exhibit A-1 Statement of Net Position September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 23 Primary Government Discretely Governmental Business-type Presented Activities Activities Total Component Units Cash and cash equivalents 22,694,794$ 5,562,951$ 28,257,745$ 4,196,080$ Receivables (net of allowance)1,740,154 1,027,342 2,767,496 50,527 Inventories - 88,639 88,639 - Other assets 125,026 - 125,026 - Restricted cash and cash equivalents 230,402 393,418 623,820 2,231,260 Capital assets: Land and construction in progress 13,901,192 329,030 14,230,222 5,099,597 Buildings and improvements 77,583,883 14,899,416 92,483,299 52,590,312 Wastewater treatment rights - 635,199 635,199 - Machinery and equipment 6,108,098 3,710,614 9,818,712 4,690,979 Less accumulated depreciation (20,845,789) (9,314,169) (30,159,958) (35,416,962) Total capital assets 76,747,384 10,260,090 87,007,474 26,963,926 Total assets 101,537,760 17,332,440 118,870,200 33,441,793 Deferred outflows of resources - TRS OPEB 397,462 - 397,462 - Deferred outflows of resources - TMRS OPEB 22,528 2,767 25,295 - Deferred outflows of resources - TRS pension 955,246 - 955,246 - Deferred outflows of resources - TMRS pension 613,962 75,411 689,373 - Deferred loss on refunding 681,482 - 681,482 - Total deferred outflows of resources 2,670,680 78,178 2,748,858 - Accounts payable 1,260,049 397,448 1,657,497 427,273 Customer deposit payable - 241,480 241,480 - Unearned revenue - 289,048 289,048 432,105 Accrued interest payable 132,442 10,222,722 10,355,164 37,941,881 Noncurrent liabilities: Due within one year Long-term debt 1,883,135 4,793,594 6,676,729 49,212,556 Compensated absences 36,824 6,903 43,727 - Due in more than one year Long-term debt 30,480,623 2,803,815 33,284,438 - Compensated absences 331,415 62,128 393,543 - TRS net OPEB liability 2,830,719 - 2,830,719 - TMRS total OPEB liability 73,555 9,035 82,590 - TRS net pension liability 1,502,914 - 1,502,914 - TMRS net pension liability 1,282,910 157,578 1,440,488 - Total liabilities 39,814,586 18,983,751 58,798,337 88,013,815 Deferred inflows - TRS OPEB 1,224,611 - 1,224,611 - Deferred inflows - TRS pension 268,967 - 268,967 - Deferred inflows - TMRS OPEB 4,389 539 4,928 - Deferred inflows - TMRS pension 259,086 31,823 290,909 - Total deferred inflows of resources 1,757,053 32,362 1,789,415 - Net investment in capital assets 46,633,638 4,672,681 51,306,319 (22,248,630) Restricted for: Tourism 423,333 - 423,333 - Construction 3,011,918 - 3,011,918 - Court security and technology 203,173 - 203,173 - Future projects 14,719 - 14,719 - Improvements - 50,000 50,000 - Unrestricted 12,350,020 (6,328,176) 6,021,844 (32,323,392) Total net position (deficit)62,636,801$ (1,605,495)$ 61,031,306$ (54,572,022)$ NET POSITION (DEFICIT ) ASSETS LIABILITIES DEFERRED INFLOWS OF RESOURCES DEFERRED OUTFLOWS OF RESOURCES Town of Westlake Statement of Activities For the Year Ended September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 24 Program Revenues Charges for Operating Grants Capital Grants Expenses Services and Contributions and Contributions PRIMARY GOVERNMENT Governmental activities: General government 6,555,048$ 318,140$ -$ -$ Public safety 3,991,114 649,795 37,610 - Cultural and recreation 282,512 - 2,089 - Public works 1,326,090 1,587,839 - - Economic development 150,037 - - 280,000 Visitor services 802,244 - - - Education 9,979,674 90,123 9,685,564 - Interest on long-term debt 1,103,925 - - - Total governmental activities 24,190,644 2,645,897 9,725,263 280,000 Business-type activities: Water and sewer 6,407,650 6,410,755 - - Cemetery 21,734 67,578 - - Total business-type activities 6,429,384 6,478,333 - - Total primary government 30,620,028$ 9,124,230$ 9,725,263$ 280,000$ Di scretely P resented Component Units 13,104,158$ 7,456,317$ -$ -$ 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 NET POSITION, end of year Functions/Programs Exhibit A-2 25 Primary Government Discretely Governmental Business - Type Presented Activities Activities Total Component Units (6,236,908)$ -$ (6,236,908)$ -$ (3,303,709) - (3,303,709) - (280,423) - (280,423) - 261,749 - 261,749 - 129,963 - 129,963 - (802,244) - (802,244) - (203,987) - (203,987) - (1,103,925) - (1,103,925) - (11,539,484) - (11,539,484) - - 3,105 3,105 - - 45,844 45,844 - 48,949 48,949 - (11,539,484)$ 48,949$ (11,490,535)$ -$ -$ -$ -$ (5,647,841)$ 7,378,900 - 7,378,900 - 2,411,279 - 2,411,279 - 369,145 - 369,145 - 41,949 - 41,949 - 972,520 - 972,520 - 260,003 62,177 322,180 70,283 72,688 - 72,688 - 77,158 (77,158) - - 11,583,642 (14,981) 11,568,661 70,283 44,158 33,968 78,126 (5,577,558) 62,592,643 (1,639,463) 60,953,180 (48,994,464) 62,636,801$ (1,605,495)$ 61,031,306$ (54,572,022)$ Net (Expense) Revenue and Changes in Net Position Town of Westlake Balance Sheet Governmental Funds September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 26 Debt Westlake Service General Academy Fund ASSETS Cash and cash equivalents 15,976,916$ 1,351,339$ 150,518$ Receivables : Property taxes 5,818 - 1,917 Accounts receivable 1,045,393 437,260 - Due from other funds 249,766 - - Prepaid items 41,586 76,171 - Restricted cash and cash equivalents - - - Total assets 17,319,479 1,864,770 152,435 TOTAL ASSETS 17,319,479$ 1,864,770$ 152,435$ LIABILITIES, DEFFERED INFLOWS OF RESOURCES AND FUND BALANCE Liabilities: Accounts payable 723,151$ 101,706$ -$ Due to other funds - - - Total liabilities 723,151 101,706 - DEFERRED INFLOWS OF RESOURCES Unavailable contributions - 1,777 - Unavailable resources - property taxes 5,818 - 1,917 Total deferred inflows of resources 5,818 1,777 1,917 FUND BALANCES Nonspendable: Prepaid items 41,586 76,171 - Restricted for: Tourism - - - Capital items - - - Court security and technology 203,173 - - Debt service - - 150,518 Future projects - - - Education - 1,685,116 - Committed for: Street and tree improvements 80,442 - - Unassigned 16,265,309 - - Total fund balances 16,590,510 1,761,287 150,518 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES 17,319,479$ 1,864,770$ 152,435$ Exhibit A-3 27 Westlake Academy Nonmajor Total Capital Expansion Governmental Governmental Projects Capital Projects Funds Funds 1,762,320$ 3,011,918$ 441,783$ 22,694,794$ - - - 7,735 - - 249,766 1,732,419 - - - 249,766 - - 7,269 125,026 - - 230,402 230,402 1,762,320 3,011,918 929,220 25,040,142 1,762,320$ 3,011,918$ 929,220$ 25,040,142 223,193$ -$ 211,999$ 1,260,049$ - - 249,766 249,766 223,193 - 461,765 1,509,815 - - - 1,777 - - - 7,735 - - - 9,512 - - 7,269 125,026 - - 416,064 416,064 1,539,127 3,011,918 29,403 4,580,448 - - - 203,173 - - - 150,518 - - 14,719 14,719 - - - 1,685,116 - - - 80,442 - - - 16,265,309 1,539,127 3,011,918 467,455 23,520,815 1,762,320$ 3,011,918$ 929,220$ 25,040,142$ Town of Westlake Exhibit A-4 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 28 Total fund balance-governmental funds balance sheet 23,520,815$ 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. 76,747,384 Deferred losses on refunding are reported as deferred outlfows of resources in the government-wide statement of net position. 681,482 Revenues earned but not available within sixty days of the fiscal year-end are not recognized as revenue in the fund financial statements. 9,512 Deferred outflows of resources related to the Town's TMRS pension liability and OPEB liability increased net position by $613,962 and $22,528, respectively; while the Town's TMRS deferred resource inflows related to the pension liability and OPEB liability decreased net position by $259,086 and $4,389. This amount is the net effect.373,015 Deferred outflows of resources related to the Academy's TRS pension liability and OPEB liability increased net position by $955,246 and $397,462, respectively; while the Academy's TRS deferred resource inflows related to the pension liability and OPEB liability decreased net position by $268,967 and $1,224,611, respectively. This amount is the net effect.(140,870) Interest payable on long-term debt does not require current financial resources, therefore interest payable is not reported as a liability in the governmental funds balance sheet.(132,442) Long-term liabilities, including bonds payable, are not due and payable in the current period, and therefore are not reported in the fund financial statements.(38,422,095 ) NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of net position 62,636,801$ 29 Town of Westlake Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 30 Westlake Debt General Academy Service Fund REVENUES Taxes Sales 5,534,125$ -$ -$ Property 1,725,951 - 685,913 Mixed beverage 41,949 - - Hotel occupancy - - - Franchise 972,520 - - State program revenues - 8,011,061 - Federal program revenues - 137,910 - Interest income 170,036 17,293 - Building permits and fees 1,996,834 - - Fines and penalties 492,435 - - Intergovernmental 24,750 - - Contributions 12,860 - - Miscellaneous 126,198 1,675,317 - Total revenues 11,097,658 9,841,581 685,913 EXPENDITURES Current General government 5,169,039 - - Public safety 3,512,456 - - Cultural and recreation 264,248 - - Public works 567,995 - - Economic development - - - Visitor services - - - Education - 9,845,685 - Capital outlay - - - Debt service Principal retirement 36,677 187,611 1,613,350 Interest and other fiscal charges - 20,311 1,083,542 Total expenditures 9,550,415 10,053,607 2,696,892 Excess (deficiency) of revenues Over (Under) Expenditures 1,547,243 (212,026) (2,010,979) OTHER FINANCING SOURCES (USES) Transfers in 77,158 - 2,116,814 Transfers out (272,089) - - Issuance of capital lease - 585,623 - Net other financing sources (uses) (194,931) 585,623 2,116,814 NET CHANGE IN FUND BALANCES 1,352,312 373,597 105,835 FUND BALANCES, AT BEGINNING OF YEAR 15,238,198 1,387,690 44,683 FUND BALANCES AT END OF YEAR 16,590,510$ 1,761,287$ 150,518$ Exhibit A-5 31 Nonmajor Total Capital Governmental Governmental Projects Funds Funds -$ -$ 1,844,775$ 7,378,900$ - - - 2,411,864 - - - 41,949 - - 369,145 369,145 - - - 972,520 - - - 8,011,061 - - - 137,910 30,204 33,705 8,765 260,003 - - - 1,996,834 - - - 492,435 - - - 24,750 - - 280,000 292,860 - - 11,479 1,812,994 30,204 33,705 2,514,164 24,203,225 - - - 5,169,039 - - - 3,512,456 - - - 264,248 54,312 - - 622,307 - - 203,407 203,407 - - 781,883 781,883 - - - 9,845,685 1,627,548 - - 1,627,548 - - - 1,837,638 - - - 1,103,853 1,681,860 - 985,290 24,968,064 (1,651,656) 33,705 1,528,874 (764,839) 100,000 280,000 100,000 2,673,972 (100,000) (100,000) (2,124,725) (2,596,814) - - - 585,623 - 180,000 (2,024,725) 662,781 (1,651,656) 213,705 (495,851) (102,058) 3,190,783 2,798,213 963,306 23,622,873 1,539,127$ 3,011,918$ 467,455$ 23,520,815$ Westlake Academy Expansion Capital Projects Fund 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, 2020 The Notes to the Financial Statements are an integral part of this statement. 32 Net change in fund balances- total governmental funds.(102,058)$ 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.1,430,820 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. (2,366,481) 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 1,650,027 Amortization of deferred loss on refunding (108,507) Amortization of premium on bonds 99,812 1,641,332 Governmental funds reflect the proceeds of capital leases as other financing sources and payments as expenditures. However, in the government-wide statements, the proceeds and payments are reflected as changes in liabilities. This amount represents the net effect of proceeds ($585,623) and payments, $187,611. (398,012) 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. 8,623 Implementation of GASB 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 $219,000 and increase net position by $14,422, respectively. The change in net position liability increased net position by $267,960. The change in OPEB liability decreased net position by $25,031. The change in deferred inflows of resources from pension and OPEB activity for TMRS decreased net position by $192,776 and increased net position by $815, respectively. This amount is the net effect. (153,612) Implementation of GASB 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 TRS increased net position by $37,423 and $130,094, respectively. The change in net pension liability decreased net position by $13,389. The change in OPEB liability increased net position by $119,869. The changes in deferred inflows of resources from pension and OPEB activity for TRS decreased net position by $158,023 and by $291,564, respectively. This amount is the net effect. (175,590) Current year changes in the long-term liability for compensated absences do not require the use of current financial resources; and therefore, are not reported as expenditures in governmental funds.163,116 Certain revenues in the government-wide statement of activities that do not provide current financial resources are not reported as revenue in the governmental funds. (3,980) CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES - statement of activities 44,158$ Town of Westlake Exhibit A-7 Statement of Net Position Proprietary Funds September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 33 Utility Cemetery Fund Fund Total ASSETS Current assets Cash and cash equivalents 5,390,988$ 171,963$ 5,562,951$ Accounts receivable 1,027,342 - 1,027,342 Inventories - 88,639 88,639 Restricted cash and investments 343,418 50,000 393,418 Total current assets 6,761,748 310,602 7,072,350 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 3,710,614 - 3,710,614 Less: accumulated depreciation (9,314,169) - (9,314,169) Total capital assets 10,260,090 - 10,260,090 Total noncurrent assets 10,260,090 - 10,260,090 TOTAL ASSETS 17,021,838 310,602 17,332,440 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows - TMRS OPEB 2,767 2,767 Deferred outflows - TMRS pension 75,411 - 75,411 TOTAL DEFERRED OUTFLOWS OF RESOURCES 78,178 - 78,178 LIABILITIES Current liabilities Accounts payable 395,150 2,298 397,448 Customer deposits payable 241,480 - 241,480 Accrued interest payable 10,222,722 - 10,222,722 Unearned revenue 289,048 - 289,048 Compensated absences - current portion 6,903 6,903 Current portion of bonds payable 113,650 - 113,650 Contractual obli gations 4,679,944 - 4,679,944 Total current liabilities 15,948,897 2,298 15,951,195 Long-term liabilities: Bonds payable 2,803,815 - 2,803,815 Compensated absences 62,128 - 62,128 Total OPEB liability 9,035 9,035 Net pension liability 157,578 - 157,578 Total long-term liabilities 3,032,556 - 3,032,556 TOTAL LIABILITIES 18,981,453 2,298 18,983,751 Deferred inflows - TMRS OPEB 539 - 539 Deferred inflows - TMRS pension 31,823 - 31,823 Total deferred inflows of resources 32,362 - 32,362 NET POSITION (DEFICIT ) Net investment in capital assets 4,672,681 - 4,672,681 Restricted for improvements - 50,000 50,000 Unrestricted (6,586,480) 258,304 (6,328,176) TOTAL NET POSITION (DEFICIT )(1,913,799)$ 308,304$ (1,605,495)$ DEFERRED INFLOWS OF RESOURCES Town of Westlake Exhibit A-8 Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 34 Utility Cemetery Fund Fund Total OPERATING REVENUES Char ges for services 6,067,022$ 67,578$ 6,134,600$ Miscellaneous revenue 343,733 - 343,733 Total operating revenues 6,410,755 67,578 6,478,333 OPERATING EXPENSES Payroll costs 387,839 - 387,839 Professional and contract services 1,011,596 12,722 1,024,318 Depreciation 505,246 - 505,246 Amortization of wastewater treatment rights 26,365 - 26,365 Water purchases 1,201,671 - 1,201,671 Cost of cemetary lots sold - 3,379 3,379 Other operating costs 2,209,740 5,633 2,215,373 Total operating expenses 5,342,457 21,734 5,364,191 Net operating income 1,068,298 45,844 1,114,142 NON-OPERATING REVENUES (EXPENSES) Interest income 59,885 2,292 62,177 Interest expense (1,065,193) - (1,065,193) Total non-operating revenues (expenses)(1,005,308) 2,292 (1,003,016) INCOME BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS 62,990 48,136 111,126 Transfer in - - - Transfer out (77,158) - (77,158) Total transfers and capital contributions (77,158) - (77,158) Chan ge in net position (14,168) 48,136 33,968 Total net position, beginning of year (1,899,631) 260,168 (1,639,463) Total net position, end of year (1,913,799)$ 308,304$ (1,605,495)$ Town of Westlake Exhibit A-9 Statement of Cash Flows Proprietary Funds For the Year Ended September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 35 Utility Cemetery Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 6,281,319$ 67,578$ 6,348,897$ Payments to employees (412,200) - (412,200) Payments to suppliers (5,457,213) (16,678) (5,473,891) Net cash provided by operating activities 411,906 50,900 462,806 CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds - - - Transfer to other funds (77,158) - (77,158) Net cash used in noncapital financing activities (77,158) - (77,158) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Principal paid on debt (228,815) - (228,815) Interest paid on debt (218,215) - (218,215) Purchase of property and equipment (149,834) - (149,834) Net cash used in capital and related financing activities (596,864) - (596,864) CASH FLOWS FROM INVESTING ACTIVITIES Investment earnings 59,885 2,292 62,177 Net cash provided by investing activities 59,885 2,292 62,177 Net increase (decrease) in cash (202,231) 53,192 (149,039) Cash and cash equivalents at the beginning of the year 5,936,637 168,771 6,105,408 Cash and cash equivalents at the end of the year 5,734,406$ 221,963$ 5,956,369$ RECONCILIATION OF TOTAL CASH AND CASH EQUIVALENTS Cash and cash equivalents 5,390,988$ 171,963$ 5,562,951$ Restricted cash and cash equivalents 343,418 50,000 393,418 Total cash and cash equivalents 5,734,406$ 221,963$ 5,956,369$ RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income 1,068,298$ 45,844$ 1,114,142$ Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation and amortization 531,611 - 531,611 Pension expense (2,911) - (2,911) OPEB expense 1,575 - 1,575 Changes in operating assets and liabilities: Receivables (109,821) - (109,821) Prepaid Items 50,269 - 50,269 Inventory - 3,379 3,379 Compensated absences (23,025) - (23,025) Accounts payable (1,084,475) 1,677 (1,082,798) Customer deposits payable 2,110 - 2,110 Unearned revenue (21,725) - (21,725) Net cash provided by operating activities 411,906$ 50,900$ 462,806$ Exhibit A-10 Town of Westlake Statement of Fiduciary Net Position Agency Fund September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 36 PID Agency Fund ASSETS Restricted cash and cash equivalents 2,097,911$ Total Assets 2,097,911$ LIABILITIES Liability to bond holders 2,097,911$ Total Liabilities 2,097,911$ Town of Westlake Exhibit A-11 Discretely Presented Component Units Combining Statement of Net Position September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 37 Texas Student Texas Student Housing Housing Corporation Texas Student Corporation College Station Housing Denton Project Project Authority Total Cash and cash equivalents 385,650$ 403,085$ 3,407,345$ 4,196,080$ Accounts receivable (net of allowance)34,553 15,278 696 50,527 Restricted assets: Cash and cash equivalents 1,959,384 271,876 - 2,231,260 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 (17,868,855) (17,548,107) - (35,416,962) Total assets 13,669,573 16,364,179 3,408,041 33,441,793 LIABILITIES Accounts payable and accrued expenses 138,350 285,477 3,446 427,273 Unearned revenue 158,454 273,651 - 432,105 Accrued interest payable 10,200,536 27,741,345 - 37,941,881 Bonds payable 21,007,556 28,205,000 - 49,212,556 Total liabilities 31,504,896 56,505,473 3,446 88,013,815 NET POSITION (DEFICIT) Net investment in capital assets (9,717,570) (12,531,060) - (22,248,630) Unrestricted (8,117,753) (27,610,234) 3,404,595 (32,323,392) Total net position (deficit)(17,835,323)$ (40,141,294)$ 3,404,595$ (54,572,022)$ LIABILITIES AND NET POSITION ASSETS Town of Westlake Discretely Presented Component Units Combining Statement of Activities For the Fiscal Year Ended September 30, 2020 The Notes to the Financial Statements are an integral part of this statement. 38 Charges for Operating Grants Capital Grants Functions/Programs Expenses Services and Contributions and Contributions Business-type activities: Texas Student Housing Authority 412,099$ 435,990$ -$ -$ Texas Student Housing Corporation College Station Project 6,689,950 1,785,725 - - Denton Project 6,002,109 5,234,602 - - Total business-type activities 13,104,158 7,456,317 - - Total component units 13,104,158$ 7,456,317$ -$ -$ GENERAL REVENUES Interest income Total general revenues Change in net position NET POSITION (DEFICIT), beginning of year NET POSITION (DEFICIT), end of year Program Revenues Exhibit A-12 39 Texas Student Texas Student Housing Housing Corporation Texas Student Corporation College Station Housing Denton Project Project Authority Total -$ -$ 23,891$ 23,891$ - (4,904,225) - (4,904,225) (767,507) - - (767,507) (767,507) (4,904,225) 23,891 (5,647,841) (767,507)$ (4,904,225)$ 23,891$ (5,647,841)$ 27,834 - 42,449 70,283 27,834 - 42,449 70,283 (739,673) (4,904,225) 66,340 (5,577,558) (17,095,650) (35,237,069) 3,338,255 (48,994,464) (17,835,323)$ (40,141,294)$ 3,404,595$ (54,572,022)$ Net (Expense) Revenues and Changes in Net Positions 40 Town of Westlake Notes to the Financial Statements 41 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 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 P.O. Box 93419 Southlake, Texas 76092 Town of Westlake Notes to the Financial Statements 42 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. Town of Westlake Notes to the Financial Statements 43 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 Projects 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. Town of Westlake Notes to the Financial Statements 44 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. 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 Fund – to account for contributions restricted for public art. 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. The Town adopts an annual appropriated budget for all governmental funds except capital projects, Solana PID capital projects, Public Arts, and Westlake Academy Expansion capital projects fund, 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. Town of Westlake Notes to the Financial Statements 45 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, 2020. Town of Westlake Notes to the Financial Statements 46 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 using the consumption method 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: Years Water and sewer system 10-50 Buildings 20-50 Machinery and equipment 3-30 Improvements 5-30 Information systems and software 3 Assets Town of Westlake Notes to the Financial Statements 47 Compensated Absences The Town's policy provides vacation and sick leave to be accrued at the start of employment. Employees earn 10 days of vacation and 10 days of sick leave between one year and 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. Unused vacation hours are paid upon termination or retirement at the employee's normal hourly rate. 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. Assigned: 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. 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. Town of Westlake Notes to the Financial Statements 48 In the government-wide financial statements, net position represents the difference between assets and deferred outflows and liabilities and deferred inflows. 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. Town of Westlake Notes to the Financial Statements 49 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), differences in projected and actual earnings on pension/OPEB investments (deferred and amortized over a closed five-year period), and differences between expected and actual experience and/or changes in assumptions (deferred and amortized over the remaining average service life of participants.) 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 Governmental-wide 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. 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. Town of Westlake Notes to the Financial Statements 50 Statutes and the Town's investment policy authorized the Town to invest in the following investments as summarized in the table below: Maximum Maximum Maximum Percentage Investment 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 Authorized Investment Type 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 $28,850,957 and the bank balance was $29,307,755. 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 $6,427,341 and the bank balance was $6,456,006. 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 $4,196,080 in cash and cash equivalents and $2,231,261 in restricted cash and cash equivalents. At September 30, 2020, the Town's cash and cash equivalents consist of and are classified in the accompanying financial statements are follows: Primary government: Cash and cash equivalents 28,257,745$ Restricted cash and investments 623,820 Total primary government 28,881,565 Fiduciary funds: Restricted cash and cash equivalents 2,097,911 Total cash and investments 30,979,476$ Deposits with financial institutions 28,850,957$ Investments 2,128,519 Total cash and investments 30,979,476$ Town of Westlake Notes to the Financial Statements 51 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 38 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, 2020, the Town's investments were as follows: Weighted Carrying Average Amount Fair Value Maturity (days) TexPool 207$ 207$ 38 days Mutual funds 2,128,312 2,128,312 N/A Total 2,128,519$ 2,128,519$ Investment Type 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 207$ 207$ N/A AAA-m Mutual funds 2,128,312 2,128,312 N/A A-1 Total 2,128,519$ 2,128,519$ 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. Town of Westlake Notes to the Financial Statements 52 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, 2020, 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. 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. Town of Westlake Notes to the Financial Statements 53 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: 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 2020 (Level 1) (Level 2) (Level 3) Investments (Days) Investments not Subject to Fair Value: Investment Pools: TexPool 207$ -$ -$ -$ 0.01 %38 Investments by Fair Value Level: Mutual Funds 2,128,312 2,128,312 - - 99.99% N/A Total Value 2,128,519$ 2,128,312$ -$ -$ Fair Value Measurements Using 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 71st 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. During the year ended September 30, 2020, 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, $241,480 of restricted cash represents customer deposits received for water and sewer usage that are refundable upon termination of service; $101,938 represents remaining Texas Water Development Board bond proceeds to be spent on the Fort Worth waterline; and $50,000 of restricted cash represents a contribution restricted for cemetery improvements. Discretely Presented Component Units Within the discretely presented component units, the $2,231,260 in restricted cash and cash equivalents represents funds held for debt service. Town of Westlake Notes to the Financial Statements 54 Note 3. Receivables Governmental activities receivable balance consists of the following as of September 30, 2020: Debt Total Westlake Service Nonmaj or Governmental General Academy Fund Fund Funds Receivables: Sales tax 749,299$ -$ -$ 249,766$ 999,065$ Property tax 7,757 - 2,556 - 10,313 Other taxes 4,209 - - - 4,209 Franchise tax 215,108 - - - 215,108 Other 139,891 437,260 - - 577,151 Gross receivables 1,116,264 437,260 2,556 249,766 1,805,846 Less: allowance for uncollectibles (65,053) - (639) - (65,692) Net total receivables 1,051,211$ 437,260$ 1,917$ 249,766$ 1,740,154$ Governmental Funds Business-type receivables balance consists of the following as of September 30, 2020: Utility Cemetery Fund Fund Total Receivables: Accounts 1,027,342$ -$ 1,027,342$ Gross receivables 1,027,342 - 1,027,342 Less: allowance for uncollectibles - - - Net total receivables 1,027,342$ -$ 1,027,342$ Business-Type Activities Town of Westlake Notes to the Financial Statements 55 Note 4. Capital Assets Capital asset activity for the year ended September 30, 2020, 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 pro gress 771,239 683,894 - - 1,455,133 Total assets not being depreciated 13,217,298 683,894 - - 13,901,192 Capital assets, being depreciated: Capital improvements 34,114,192 179,984 - - 34,294,176 Buildings 42,974,724 314,983 - - 43,289,707 Machinery and equipment 5,047,482 186,286 (23,000) - 5,210,768 Information systems and software 831,657 65,673 - - 897,330 Total capital assets being depreciated 82,968,055 746,926 (23,000) - 83,691,981 Less accumulated depreciation: Capital improvements (6,366,740) (893,496) - - (7,260,236) Buildings (8,037,673) (881,819) - - (8,919,492) Machinery and equipments (3,782,419) (407,275) 23,000 - (4,166,694) Information systems and software (315,476) (183,891) - - (499,367) Total accumulated depreciation (18,502,308) (2,366,481) 23,000 - (20,845,789) Total capital assets being depreciated 64,465,747 (1,619,555) - - 62,846,192 Governmental activities capital assets, net 77,683,045$ (935,661)$ -$ -$ 76,747,384$ Town of Westlake Notes to the Financial Statements 56 Beginning Ending Balance Increases Decreases Transfers Balance Business-type activities: Capital assets, not being depreciated: Construction in pro gress 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 3,560,780 149,834 - - 3,710,614 Total capital assets being depreciated 19,095,395 149,834 - - 19,245,229 Less accumulated depreciation: Capital improvements (5,889,789) (363,594) - - (6,253,383) Wastewater treatment rights (608,834) (26,365) - - (635,199) Machinery and equipment (2,283,935) (141,652) - - (2,425,587) Total accumulated depreciation (8,782,558) (531,611) - - (9,314,169) Total capital assets being depreciated 10,312,837 (381,777) - - 9,931,060 Business-type activities capital assets, net 10,641,867$ (381,777)$ -$ -$ 10,260,090$ Depreciation was charged to departments of the primary government as follows: Governmental activities: General government 936,226$ Public safety 630,275 Public works 799,980 Total depreciation expense - governmental activities 2,366,481$ Business-type activities: Water and sewer 531,611$ Town of Westlake Notes to the Financial Statements 57 A summary of discretely presented component units' capital assets at August 31, 2020 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 (15,780,012) (856,833) - (16,636,845) Furniture and fixtures (1,223,560) (8,450) - (1,232,010) Total accumulated depreciation (17,003,572) (865,283) - (17,868,855) Total capital assets being depreciated 9,955,269 (865,283) - 9,089,986 Capital assets, net 12,155,269$ (865,283)$ -$ 11,289,986$ 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 (13,334,060) (896,177) - (14,230,237) Furniture and fixtures (3,283,959) (33,911) - (3,317,870) Total accumulated depreciation (16,618,019) (930,088) - (17,548,107) Total capital assets being depreciated 13,704,431 (930,088) - 12,774,343 Capital assets, net 16,604,028$ (930,088)$ -$ 15,673,940$ Town of Westlake Notes to the Financial Statements 58 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, 2020, was as follows: Amount Beginning Ending Due within Balance Additions Reductions Balance One year Governmental activities: General obligation bonds other obligations 32,171,250$ -$ (1,613,350)$ 30,557,900$ 1,651,350$ Unamortized bond premium 1,379,285 - (99,812) 1,279,473 - Notes payable 165,050 - (36,677) 128,373 36,677 Capital leases - 585,623 (187,611) 398,012 195,108 Compensated absences 531,355 194,622 (357,738) 368,239 36,824 Total OPEB liability - TMRS 48,524 25,031 - 73,555 - Net OPEB liability - TRS 2,950,588 - (119,869) 2,830,719 - Net pension liability - TMRS 1,550,870 - (267,960) 1,282,910 - Net pension liability - TRS 1,489,525 13,389 - 1,502,914 - Total governmental activities 40,286,447$ 818,665$ (2,683,017)$ 38,422,095$ 1,919,959$ Amount Beginning Ending Due within Balance Additions Reductions Balance One year Business-type activities: Certificates of obligation 2,999,750$ -$ (108,650)$ 2,891,100$ 113,650$ Contractual obligations 4,800,109 - (120,165) 4,679,944 4,679,944 Unamortized bond premium 27,537 - (1,172) 26,365 - Compensated absences 92,056 46,032 (69,057) 69,031 6,903 Total OPEB liability - TMRS 5,960 3,075 - 9,035 - Net pension liability - TMRS 190,491 - (32,913) 157,578 - Total business-type activities 8,115,903$ 49,107$ (331,957)$ 7,833,053$ 4,800,497$ The Town’s accrued interest for general obligation bonds reported in governmental activities was $132,442 and certificates of obligation reported in business-type activities for $32,977. Town of Westlake Notes to the Financial Statements 59 General Obligation Bonds, Tax Notes and Certificates of Obligation General obligation bonds, tax notes and certificates of obligation are as follows as of September 30, 2020: Final Business- Maturity Interest Rates Governmental Type $2,095,000 Combination Tax and Revenue Certificates of Obligation, Series 2011 2031 3.25% 1,303,000$ -$ $7,375,000 General Obligation Refunding Bonds, Series 2011 2028 2.0-4.0% 4,215,000 - $9,320,000 Certificates of Obligation, Series 2013 2043 2.0-4.0% 7,128,900 881,100 $2,200,000 General Obligation Refunding Bonds, Series 2013 2028 2.0-2.5% 1,225,000 - $9,180,000 Certificate of Obligation Bonds, Series 2016 2046 2.0-5.0% 8,565,000 - $5,795,000 General Obligation Refunding Bonds, Series 2017 2032 2.0-5.0% 5,700,000 - $1,530,000 Tax Notes, Series 2017 2024 2.0-5.0% 901,000 - $1,910,000 General Obligation Refunding Bonds, Series 2014 2032 2.0-5.0% 1,520,000 - $2,100,000 Certificates of Obligation, Series 2018 2028 2.0-2.7% - 2,010,000 30,557,900$ 2,891,100$ General Obligations Bonds, Tax Notes, and Certificates of Obligation Debt service requirements of certificates of obligation and general obligations to be retired from governmental funds are as follows: Total Principal Interest Requirements 1,651,350$ 1,037,343$ 2,688,693$ 1,699,250 992,212 2,691,462 1,742,700 945,371 2,688,071 1,796,600 894,734 2,691,334 1,594,600 841,342 2,435,942 8,819,200 3,328,520 12,147,720 5,805,000 1,819,199 7,624,199 3,532,700 1,129,867 4,662,567 3,416,500 402,014 3,818,514 500,000 10,000 510,000 30,557,900$ 11,400,602$ 41,958,502$ Total Year Ending September 30, 2021 2022 2023 2024 2026-2030 2031-2035 2025 2036-2040 2041-2045 2046 Town of Westlake Notes to the Financial Statements 60 Debt service requirements of certificates of obligation to be retired from proprietary funds as follows: Total Principal Interest Requirements 113,650$ 86,717$ 200,367$ 114,750 84,051 198,801 120,300 81,173 201,473 121,400 78,075 199,475 121,400 74,884 196,284 703,800 319,064 1,022,864 830,000 198,879 1,028,879 617,300 69,238 686,538 148,500 9,086 157,586 2,891,100$ 1,001,167$ 3,892,267$ Total 2023 2025 2026-2030 2024 2036-2040 2041-2043 2031-2035 September 30, 2022 Year Ending 2021 Notes Payable In March 2014, the Town received a $366,774 loan from Bennett Benner Pettit, the proceeds of which were used to fund a portion of the Westlake Academy expansion project. The terms of the note call for ten annual payments at 0% interest. Note September 30, Payments 36,677 36,677 36,677 18,342 128,373$ 2024 Total 2022 2023 2021 Year Ending Capital Leases In 2020, the Academy acquired equipment and software with a historical cost of $585,623 under a capital lease. The following schedule shows the future minimum payments under the lease as of August 31, 2020: Annual Principal Interest Lease Payments 195,108$ 12,814$ 207,922$ 202,904 5,017 207,921 398,012$ 17,831$ 415,843$ Year Ending August 31, 2021 2022 Total Town of Westlake Notes to the Financial Statements 61 Contractual Obligations Proprietary funds contractual obligations as of September 30, 2020 are as follows: Business- Maturity Interest Rate Type Limited pledge contractual obligation: Dove Road Water Line and West Pump Station 2028 6.75% 4,679,944$ Contractual Obli gations Elevated Water Storage Facility - On October 9, 2000, the Town approved an interlocal agreement with the City 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 City of Keller, with payments due each September 30 at interest rates ranging from 5.0% to 5.65%. The last payment to the City of Keller was made in fiscal year 2020. 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 $4,679,944 for the project cost based upon the terms of the agreement, which requires 239 monthly principal and interest payments to Hillwood, at an interest rate of 6.75%. If the Town collects insufficient funds to pay current interest on the debt, the interest payment may be deferred. No portion of debt payments will be applied to the principal component, until all current and deferred interest is fully paid. The obligation of the Town to pay the purchase price and interest thereon is not a general obligation of the Town but is a limited recourse obligation payable solely from debt service revenue. The schedule of future payments by the Town under these agreements is as follows: Total Principal Interest Requirements -$ 10,189,745$ 10,189,745$ 4,679,944 768,278 5,448,222 4,679,944$ 10,958,023$ 15,637,967$ Past Due Total Year Ending September 30, 2021 Town of Westlake Notes to the Financial Statements 62 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, 2020, 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 19,225,000$ -$ (1,085,000)$ 18,140,000$ 1,160,000$ 2001 B Bonds 3,240,000 - - 3,240,000 1,600,000 Less discount on bonds (409,929) - 37,485 (372,444) - Total 22,055,071$ -$ (1,047,515)$ 21,007,556$ 2,760,000$ 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. At August 31, 2020, 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, 2020. 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. Town of Westlake Notes to the Financial Statements 63 The debt service requirements of the bonds are as follows: Total Principal Interest Requirements 1,510,000$ 9,961,914$ 11,471,914$ 1,250,000 1,431,730 2,681,730 1,330,000 1,343,530 2,673,530 1,430,000 1,248,483 2,678,483 1,535,000 1,145,963 2,680,963 1,645,000 1,035,835 2,680,835 10,185,000 3,220,028 13,405,028 2,495,000 181,283 2,676,283 21,380,000$ 19,568,766$ 40,948,766$ Year Ending 2026-2030 2025 August 31, Past Due 2022 2024 2023 2021 2031 Texas Student Housing Corporation – College Station Project The Project's installment note payable is summarized as follows: Rate Balance Cambridge Student Housing Financing Company, L.P.; substantially all assets and assi gnment of rents: due November 1, 2039 8.00% 28,205,000$ Lender/Security/Due/Date The following is a summary of long-term debt transactions of the Project for the year ended August 31, 2020: Amounts Beginning Ending Due Within Balance Increases Decreases Balance One Year Revenue Certificates 28,205,000$ -$ -$ 28,205,000$ 3,215,800$ Town of Westlake Notes to the Financial Statements 64 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, 2020 are as follows: Year Ending August 31, Principal Interest Total 2,385,800$ 27,285,485$ 29,671,285$ 830,000 1,530,858 2,360,858 895,000 1,464,122 2,359,122 495,000 1,410,935 1,905,935 530,000 1,372,495 1,902,495 570,000 1,331,160 1,901,160 3,575,000 5,912,733 9,487,733 5,155,000 4,275,367 9,430,367 13,769,200 1,854,218 15,623,418 Total 28,205,000$ 46,437,373$ 74,642,373$ 2021 2022 2036-2040 Past Due 2023 2024 2025 2026-2030 2031-2035 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, 2020. 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 The Bank of New York (the Trustee) for the purpose of determining that each class is paid in accordance with the private placement memorandum. At August 31, 2020, 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 $289,048 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 $5,818 and $1,917 of unavailable property taxes in the general fund and debt service fund, respectively. The unavailable contribution of $1,777 reported in the Westlake Academy fund is from the Town (general fund) with a time constraint to be used for fiscal year 2021. Town of Westlake Notes to the Financial Statements 65 Note 7. Interlocal Agreement with the City of Southlake In August 1995, the Town entered into an agreement with the Town of Southlake to allow the Town to utilize capacity in a sewer line and to set forth their respective rights and obligations with respect to the sewer line owned by the City of Southlake. The Town is obligated to share in the cost of construction, operation and maintenance of the sewer line. The sewer line was constructed in 2000. Additionally, the Town must pay the Town of Southlake all transportation, treatment and related costs allocable to the metered flow of sewage from the Town into the sewer line. Note 8. Federal and State Program Revenues The Town received financial assistance from various federal and state governmental agencies in the form of grants for Westlake Academy. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any unallowed disbursement resulting from such audits becomes a liability of the Town. In the opinion of the Town management, no material refunds will be required as a result of unallowed disbursements (if any) by the grantor agencies. Sources of federal and state program revenues for the year ended September 30, 2020, were as follows: Westlake Academy Federal program revenues: U.S. Department of Education - Passed through State Department of Education Total federal program revenues 137,910$ State program revenues: State Department of Education 8,011,061$ Source Note 9. Interfund Balances and Transactions Interfund receivables and payables at September 30, 2020, were as follows: Due from Due to Other Funds Other Funds General fund 249,766$ -$ Nonmaj or governmental funds: 4B Economic Development Fund - 249,766 249,766$ 249,766$ The 4B Economic Development Corporation Fund amount of $249,766 payable to the General Fund is related to sales tax. Inter-fund transfers are reported in the governmental funds and proprietary fund financial statements. In the government-wide statements, inter-fund transfers are eliminated within the governmental activities column and business-type column, as appropriate. Town of Westlake Notes to the Financial Statements 66 Individual fund transfers for fiscal year 2020 were as follows: Transfer out Transfer in Amount Purpose General Fund Debt Service Fund 272,089$ Debt service payments Capital projects fund Nonmajor Governmental 100,000 Accumulate funds for expenditures Westlake Academy Expansion Capital projects fund 100,000 For Westlake Academy capital projects Nonmajor Governmental Westlake Academy Expansion 280,000 For Westlake Academy capital projects Nonmajor Governmental Debt Service Fund 1,844,725 Debt service payments Utility Fund General Fund 77,158 Fort Worth impact revenue 2,673,972$ 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, 2020 was $1,201,671. Note 11. Town of Westlake and Westlake Academy Pension Plans The Town provides for two pension plans; one provides for defined retirement pension benefits to the Town’s employees, Texas Municipal Retirement System - TMRS, and the other provides defined retirement pension benefits to teachers at Westlake Academy, Teacher Retirement System of Texas (TRS). Both plans are described in detail below. Aggregate amounts for the two pension plans are as follows: TMRS TRS Total Pension Liability 1,440,488$ 1,502,914$ 2,943,402$ Deferred outflows of resources 689,373 955,246 1,644,619 Deferred inflows of resources 290,909 268,967 559,876 Pension Expense 639,541 1,192,380 1,831,921 TMRS Plan Description The Town participates as one of 888 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 by writing to TMRS, P.O. Box 149153, Austin, Texas, 78714-9153 or by calling 800-924-8677. In addition, the report is available on TMRS’ website at www.tmrs.com. All eligible employees of the Town are required to participate in TMRS. Town of Westlake Notes to the Financial Statements 67 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. TMRS Employees Covered By Benefit Terms At the December 31, 2019 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees of beneficiaries currently receiving benefits 13 Inactive employees entitled to but not yet receiving benefits 27 Active employees 45 85 TMRS 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 11.80% and 11.77% in calendar years 2019 and 2020, respectively. The Town’s contributions to TMRS for the year ended September 30, 2020, were $478,059, and were equal to the required contributions. TMRS Net Pension Liability The Town’s Net Pension Liability (NPL) was measured as of December 31, 2019, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. TMRS Actuarial Assumptions The Total Pension Liability in the December 31, 2019 actuarial valuation was determined using the following actuarial assumptions:  Inflation 2.5% per year  Overall payroll growth 3.5% to 11.5%, including inflation  Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation  Amortization method: Level percentage of payroll, closed  Actuarial Cost Method: Entry Age Normal Town of Westlake Notes to the Financial Statements 68 Salary increases were based on a service-related table. Mortality rates for post-retirement were based on the 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with the scale UMP. Mortality rates for pre-retirement were based on PUB(10) mortality tables, with the Public Safety table used for males and the General Employee table used for females. The rates are projected on a fully generational basis with scale UMP. Actuarial assumptions used in the December 31, 2019, valuation were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2014 to December 31, 2018. They were first adopted in 2019 and first used in the December 31, 2019 actuarial valuations. The pension plan’s policy in regard to the allocation of invested assets is established and may be amended by the Board. Plan assets are managed on a total return basis with an emphasis on both capital appreciation and the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and best estimates of 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% 4.30 % International Equity 17.5% 6.10% Core Fixed Income 10.0% 1.00 % Non-Core Fixed Income 20.0% 3.39 % Real Return 10.0% 3.76 % Real Estate 10.0% 4.44% Absolute Return 10.0% 3.56 % Private Equity 5.0%7.75% Total 100.0% Town of Westlake Notes to the Financial Statements 69 TMRS 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 remain at the current 7% 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. TMRS Changes in the Net Pension Liability Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a)(b)(a) - (b) Balance at 12/31/2018 8,183,993$ 6,442,632$ 1,741,361$ Chan ges for the year: Service Cost 651,255 - 651,255 Interest 570,598 - 570,598 Chan ge of benefit terms - - - Difference between expected and actual experience 131,635 - 131,635 Chan ges of assumptions 89,534 - 89,534 Contributions - employer - 470,903 (470,903) Contributions - employee - 279,349 (279,349) Net investment income - 999,440 (999,440) Benefit payments, including refunds of employee contributions (112,642) (112,642) - Administrative expense (5,628) 5,628 Other changes - (169) 169 Net Changes 1,330,380 1,631,253 (300,873) Balance at 12/31/19 9,514,373$ 8,073,885$ 1,440,488$ Increase (Decrease) Net Pension Liability as a Percentage of Covered Payroll is 36.36%. Town of Westlake Notes to the Financial Statements 70 TMRS 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 2,921,522$ 1,440,488$ 222,317$ TMRS 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. TMRS Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended September 30, 2020, the Town recognized pension expense of $639,541. At September 30, 2020, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Difference between expected and actual economic experience 250,080$ 51,404$ Changes in actuarial assumptions 87,548 - Difference between projected and actual investment earnings - 239,505 Contributions subsequent to the measurement date 351,745 - Total 689,373$ 290,909$ $351,745 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the year ending September 30, 2021. Town of Westlake Notes to the Financial Statements 71 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended Net Deferred September 30, Outflows (Inflows) 2021 44,766$ 2022 (1,262) 2023 66,740 2024 (69,969) 2025 6,444 Total 46,719$ Defined Benefit Pension Plan – TRS 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. TRS 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. TRS 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. Town of Westlake Notes to the Financial Statements 72 TRS 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. Employee contribution rates are set in state statute, Texas Government Code 825.402. The Texas Pension Reform Bill (Senate Bill 12) of the 86th Texas Legislature amended Texas Government Code 825.402 for member contributions and increased both employee and employer contribution rates for plan years 2020 through 2025. 2019 2020 Member 7.70% 7.70% Non-employer contributing entity (State) 6.80% 7.50% Employers (District) 6.80% 7.50% Employers (District - Non-OASDI)* 1.50% 1.50% 2019 Employer contributions 230,148$ 2019 Member contributions 462,758$ 2019 NECE on-behalf contributions 354,995$ Contribution rates *SB12 requires an increase in employer contributions by public school districts, charter schools and regional education service centers. Prior to SB12 only those employers not participating in social security were required to pay a 1.5% contribution (Non-OASDI surcharge). Beginning September 1, 2019, all employers are required to pay the Public Education Employer contribution irrespective of participation in social security. Contributors to the plan include members, employers and the State of Texas as the only non-employer contributing entity. 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.  On 1.5% of covered payroll. This contribution, known as the Public Education Employer Contribution, replaced the non-OASDI surcharge that was in effect until 2019. Town of Westlake Notes to the Financial Statements 73 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. TRS Actuarial Assumptions The total pension liability in the August 31, 2019 actuarial valuation was determined using the following actuarial assumptions: Valuation Date August 31, 2018 rolled forward to August 2019 Actuarial Cost Method Individual Entry Age Normal Asset Valuation Method Market Value Single Discount Rate 7.25% Long-term expected Investment Rate of Return* 7.25% Municipal bond rate as of August 2018 2.63%. Source for the rate is the fixed Income Market Data/Yield Curve/Date Municipal Bonds with 20 Years to maturity that include only federally tax-exempt Municipal bonds as reported in Fidelity Index’s “20-Year Municipal GO AA Index” Inflation 2.30% Salary increases including inflation 3.50% to 9.50% includes inflation Ad hoc post-employment benefit changes None Active mortality rates Based on 90% of the RP 2014 Employing Mortality Tables for males and females with full generational mortality. The post- retirement mortality rates for healthy lives were based on the 2018 TRS of Texas Health Pensioner Mortality Tables with full Generational projection using the ultimate Improvement rates from the most recently Published projective scale U-MP. The actuarial methods and assumptions are primarily based on a study of actual experience for the four-year period ending August 31, 2017 and adopted on September 24, 2018. Town of Westlake Notes to the Financial Statements 74 TRS Discount Rate The discount rate used to measure the total pension liability was 7.25%. The single discount rate was based on the expected rate of return on pension plan investments of 7.25% and a municipal bond rate of 2.63%. 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 sufficient to finance the benefit payments until the year 2069. As a result, the long-term expected rate of return on pension plan investments was applied to projected benefit payments through the year 2069, and the municipal bond rate was applied to all benefit payments after that date. 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. Best estimates of geometric real rates of return for each major asset class included in the Systems target asset allocation as of August 31, 2019 are summarized below: Long-term Expected Portfolio 2019 PY Target Net Target Real Rate of Allocation* Allocation** Return *** Global Equity U.S. 18% 18.0% 6.4% Non-U.S. Developed 13% 13.0% 6.3% Emerging Markets 9% 9.0% 7.3% Directional Hedge Funds 4% 0.0% 0.0% Private Equity 13% 14.0% 8.4% Stable Value U.S. Treasuries 11% 16.0% 3.4% Absolute Return 4% 5.0% 4.5% Stable Value Hedge Funds 0% 0.0% 0.0% Cash 0% 0.0% 0.0% Real Return Global Inflation Linked Bonds 3% 0.0% 0.0% Real Assets 14% 16.0% 8.5% Ener gy and Natural Resources 5%6.0%7.3% Commodities 0% 0.0% 0.0% Risk Parity Risk Parity 5% 8.0% 5.8%/6.5% **** Asset Allocation Leverage 2.5% Cash 1% 2.0% Asset Allocat ion Leverage0%-6.0%2.7% Total 100.0% 7.2% Asset Class * FY 2019 Target Allocation based on the Strategic Asset Allocation dated 10/1/2018 ** New Target allocation based on the Strategic Asset Allocation dated 10/1/2019 *** 10-Year annualized geometric nominal returns include the real rate of return and inflation of 2.1% **** New Target Allocation groups Government Bonds within the stable value allocation. This include global sovereign nominal and inflation-linked bonds Town of Westlake Notes to the Financial Statements 75 TRS 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 (7.25%) in measuring the 2019 Net Pension Liability. 1% Decrease in Discount 1% Increase in Discount Rate (6.25%) Rate (7.25%) Discount Rate (8.25%) Academy's proportionate share of the TRS net pension liability 2,310,197$ 1,502,914$ 848,859$ TRS Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At August 31, 2020, the Academy reported a liability of $1,502,914 for its proportionate share of the TRS’s net pension liability. This liability reflects a reduction for State pension support provided to the Academy. The amount recognized by the Academy as its proportionate share of the net pension liability, the related State support, and the total portion of the net pension liability that was associated with the Academy were as follows: Academy's proportionate share of the collective net pension liability 1,502,914$ State's proportionate share that is associated with Academy 5,272,547 6,775,461$ The net pension liability was measured as of August 31, 2018 and rolled forward to August 31, 2019 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as August 31, 2018 rolled forward to August 31, 2019. 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, 2018 thru August 31, 2019. At August 31, 2019, the employer’s proportion of the collective net pension liability was 0.0028912% which was an increase of 0.00001851% from its proportion measured as of August 31, 2018. TRS Changes since the Prior Actuarial Valuation The following were changes to the actuarial assumptions or other inputs that affected measurement of the total pension liability since the prior measurement period.  The single discount rate as of August 31, 2018 was a blended rate of 6.907% and that has changed to the long-term rate of return of 7.25% as of August 31, 2019.  With the enactment of Senate Bill 3 by the 2019 Texas Legislature, an assumption has been made about how this would impact future salaries. It is assumed that eligible active members will each receive a $2,700 increase in plan year 2020. For the year ended August 31, 2019, the Academy recognized pension expense of $1,192,380 and revenue of $828,243 for support provided by the State. Town of Westlake Notes to the Financial Statements 76 At August 31, 2020, the Academy reported its proportionate share of the TRS’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Difference between expected and actual economic experience 6,314$ 52,184$ Changes in actuarial assumptions 466,278 192,688 Changes in proportionate share 237,415 24,095 Difference between projected and actual investment earnings 15,091 - Contributions paid to TRS subsequent to the measurement date 230,148 - Total 955,246$ 268,967$ The $230,148 reported as a deferred outflow of resources resulting from Academy contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending August 31, 2021. The other amounts of the employer’s balances of deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended Net Deferred Aug. 31, Outflows (Inflows) 2021 143,456$ 2022 120,512 2023 86,421 2024 83,164 2025 32,429 Thereafter (9,851) Total 456,131$ Town of Westlake Notes to the Financial Statements 77 Note 12. Other Post-Employment Benefits (OPEB) The Town provides for two other post-employment benefit (OPEB) plans; one provides for postemployment health insurance benefits for teachers at Westlake Academy through a multiple- employer defined benefit medical plan Texas Public School Retired Employees Group Insurance Program (TRS-Care), and the other is the Texas’ Municipal Retirement System Supplemental Death Benefits Fund (TMRS-SDBF), a single employer defined benefit OPEB plan for the Town employees. Both plans are described in detail below. Aggregate amounts for the two OPEB plans are as follows: TMRS SDBF TRS-Care Total OPEB Liability 82,590$ 2,830,719$ 2,913,309$ Deferred outflows of resources 25,295 397,462 422,757 Deferred inflows of resources 4,928 1,224,611 1,229,539 OPEB Expense 11,524 187,014 198,538 TMRS-SDBF 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. TMRS-SDBF 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, 2019 valuation and measurement date, the following employees were covered by the benefit terms: Inactive employees currently receiving benefits 8 Inactive employees entitled to but not yet receiving benefits 4 Active employees 45 57 Town of Westlake Notes to the Financial Statements 78 TMRS-SDBF 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 0.019% and 0.019% in calendar years 2019 and 2020. The Town’s contributions to the SDBF for the year ended September 30, 2020 were $7,712, and were equal to the required contributions. TMRS-SDBF Total OPEB Liability The Town’s Total OPEB Liability (TOL) was measured as of December 31, 2019 and was determined by an actuarial valuation as of that date. TMRS-SDBF Actuarial Assumptions The Total OPEB Liability in the December 31, 2019 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Salary increases 3.5% to 11.5% including inflation Discount rate 2.75% Retiree's share of benefit-related costs $0 Salary increases were based on a service-related table. Salary increases were based on a service - related table. Mortality rates for post-retirement were based on the 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. Mortality rates for pre- retirement were based on PUB(10) mortality tables, with the Public Safety table used for males and the General Employee table used for females. The rates are projected on a fully generational basis with scale UMP. Actuarial assumptions used in the December 31, 2019 valuation were developed primarily from the actuarial investigation of the experience of TMRS over the four-year period from December 31, 2014 to December 31, 2018. They were first adopted in 2019 and first used in the December 31, 2019 actuarial valuation. The discount rate used to measure the Total OPEB Liability was 2.75% and was based on the Fidelity Index’s “20-Year Municipal GO AA Index” rate as of December 31, 2019. Town of Westlake Notes to the Financial Statements 79 TMRS-SDBF Changes in Total OPEB Liability Total OPEB Liability Balance at 12/31/2018 54,484$ Chan ges for the year: Service Cost 7,131 Interest on Total OPEB Liability 2,146 Change of benefit terms - Difference between expected and actual experience 3,831 Changes of assumptions or other inputs 15,394 Benefit payments (396) Administrative expense - Other changes - Net changes 28,106 Balance at 12/31/19 82,590$ Total OPEB Liability as a Percentage of Covered Payroll is 2.08%. TMRS-SDBF 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 2.75%, 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 (1.75%) or 1 percentage-point higher (3.75%) than the current rate: 1% Decrease 1% Increase in Discount Discount in Discount Rate (1.75%) Rate (2.75%) Rate (3.75%) Total OPEB Liability 102,472$ 82,590$ 67,205$ Town of Westlake Notes to the Financial Statements 80 TMRS-SDBF OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the year ended September 30, 2020, the Town recognized OPEB expense of $11,524. At September 30, 2020, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Changes in expected and actual experience 3,332$ 1,550$ Changes in assumptions and other inputs 16,285 3,378 Contributions subsequent to the measurement date 5,678 - Total 25,295$ 4,928$ The $5,678 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will reduce the Total OPEB liability during the year ending September 30, 2021. The other amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: Fiscal Year Ended Net Deferred Sept. 30, Outflows (Inflows) 2021 2,247$ 2022 2,247 2023 2,247 2024 2,247 2025 1,847 Thereafter 3,854 Total 14,689$ TRS-Care Health Care Coverage During the period ended August 31, 2020, 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 $367 per month per employee and $292 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. Town of Westlake Notes to the Financial Statements 81 TRS-Care Defined Other Post Employment Benefit Plan TRS-Care 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. TRS-Care 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. TRS-Care 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 academies 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 2 Medicare Non-Medicare Retiree* 135$ 200$ Retiree and spouse 529 689 Retiree* and children 468 408 Retiree and family 1,020 999 * or surviving spouse TRS-Care Plan Premium Rates Effective September 1, 2019 - December 31, 2019 Town of Westlake Notes to the Financial Statements 82 TRS-Care 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 1.25% 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. 2019 2018 Active employee 0.65% 0.65% Non-employer contribution entity (state) 1.25% 1.25% Employers/District 0.75% 0.75% Federal/private funding remitted by Employers 1.25% 1.25% The contribution amounts for the Academy’s fiscal year 2020 are as follows: 2019 Employer contributions 46,278$ 2019 Member contributions 39,064 2019 NECE on-behalf contributions 56,446 In addition, the State of Texas contributed $27,410, $20,423, and $16,866 in 2020, 2019, and 2018, respectively, for on-behalf payments for Medicare Part D. 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 $73.3 million in fiscal year 2019. TRS-Care Actuarial Assumptions The actuarial valuation was performed as of August 31, 2018. Update procedures were used to roll forward the total OPEB liability to August 31, 2019. The actuarial valuation of the OPEB plan offered through TRS- Care is similar to the actuarial valuation performed for the pension plan, except that the OPEB valuation is more complex. The following assumptions used for the valuation of the TRS-Care OPEB liability are identical to the assumptions employed in the August 31, 2019 TRS annual pension actuarial valuation: Demographic Assumptions Economic Assumptions Rates of mortality General inflation Rates of retirement Wage inflation Rates of termination Salary increase Rates of disability Town of Westlake Notes to the Financial Statements 83 The demographic assumptions were developed in the experience study performed for TRS for the period ending August 31, 2017. The initial medical trend rates were 10.25% for Medicare retirees and 7.50% for non-Medicare retirees. There was an initial prescription drug trend rate of 10.25% for all retirees. The initial trend rates decrease to an ultimate trend rate of 4.50% over a period of 13 years. Valuation date Actuarial cost method Inflation 2.30% Discount Rate Aging factors Election rates Retirement; 65% participation prior to age 65 and Expenses Third-party administrative expenses related to the delivery of health care benefits are included in the Healthcare trend rates Initial medical trend rates of 107.74 percent and 9.00 percent for Medicare retirees and an initial medical trend rate of 6.75 percent for Non-medicare retirees. Initial prescription drug trend rate of 11.00 percent for all retirees. The first year trend increase for Medicare Advantage (medical) premiums reflects the anticipated return of the Health Insurer Fee (HIF) in 2020. Ad-hoc employment benefit changes None Fidelity Index’s “20-Year Municipal GO AA Index” as age- adjusted claims costs. August 31, 2018, rolled forward to August 31, 2019 Individual entry age normal Based on plan specific experience Normal 50% after age 65. 2.63%. Source from fixed income municipal bonds with 20 years to maturity that include only federal tax-exempt municipal bonds as reported in In this valuation, the impact of the Cadillac Tax has been calculated as a portion of the trend assumption. Assumptions and methods used to determine the impact of the Cadillac Tax include:  2018 thresholds of $850/$2,292 were indexed annually by 2.30%  Premium data submitted was not adjusted for permissible exclusions to the Cadillac Tax  There were no special adjustments to the dollar limit other than those permissible for non-Medicare retirees over 55. Results indicate that the value of the excise tax would be reasonably represented by a 25 point addition to the long-term trend rate assumption. Town of Westlake Notes to the Financial Statements 84 TRS-Care Discount Rate A single discount rate of 2.63% was used to measure the total OPEB liability at August 31, 2019. There was a change of 1.06% in the discount rate since August 31, 2018 measurement date. The plan is essentially a “pay-as-you-go” plan, and based on the assumption that contributions are made at the statutorily required rates, the OPEB plan’s fiduciary net position was projected to not be able to make all future benefit payments to current members and therefore, the single discount rate is equal to the prevailing municipal bond rate. The source for the rate is the Fixed Income Market Data / Yield Curve / Data Municipal Bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as reported in Fidelity Index’s “20-Year Municipal GO AA Index”. TRS-Care Discount Rate Sensitivity Analysis. The following schedule shows the impact of the Net OPEB Liability if the discount rate used was 1% less than and 1% greater than the discount rate that was used (2.63%) in measuring the Net OPEB Liability. 1% Decrease in Discount 1% Increase in Discount Rate Rate Discount Rate (1.63%) (2.63%) (3.63%) Academy's proportionate share of the net OPEB liability 3,417,584$ 2,830,719$ 2,371,611$ TRS-Care 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 Trend 1% Increase in Rate Rate Discount Rate Academy's proportionate share of the net OPEB liability 2,309,200$ 2,830,719$ 3,529,311$ TRS-Care OPEB Liabilities, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs. At August 31, 2020, the Academy reported a liability of $2,830,719 for its proportionate share of the TRS’s Net OPEB Liability. This liability reflects a reduction for State OPEB support provided to the Academy. The amount recognized by the Academy as its proportionate share of the net OPEB liability, the related State support, and the total portion of the net OPEB liability that was associated with the Academy were as follows: Academy's proportionate share of the collective net OPEB liability 2,830,719$ State's proportionate share that is associated with Academy 3,761,390 Total 6,592,109$ The Net OPEB Liability was measured as of August 31, 2018 and rolled forward to August 31, 2019 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, 2018 thru August 31, 2019. Town of Westlake Notes to the Financial Statements 85 At August 31, 2019 the employer’s proportion of the collective Net OPEB Liability was .0059857139% which was an increase of .0000763739% the same proportion measured as of August 31, 2018. TRS-Care 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 discount rate changed from 3.69% as of August 31, 2018 to 2.63% as of August 31, 2019. This change increased the total OPEB liability.  The participation rate for pre-65 retirees was lowered from 70% to 65%. The participation rate for post-65 retirees was lowered from 75% to 50%. 25% of pre-65 retirees are assumed to discontinue their coverage at age 65. There was no lapse assumption in the prior valuation. These changes decreased the total OPEB liability.  The trend rates were reset to better reflect the plan’s anticipated experience. This change increased the total OPEB liability.  The percentage of retirees who are assumed to have two-person coverage was lowered from 20% to 15%. In addition, the participation assumption for the surviving spouses of employees that die while actively employed was lowered from 20% to 10%. These changes decreased the total OPEB liability. For the year ended August 31, 2020, the Academy recognized OPEB expense of $187,014 and revenue of $99,135 for support provided by the State. At August 31, 2020, the Academy reported its proportionate share of the TRS’s deferred outflows of resources and deferred inflows of resources related to other post-employment benefits from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 138,871$ 463,217$ Changes in actuarial assumptions 157,224 761,394 Difference between projected and actual investment earnings 305 - Changes in proportion and difference between the employer’s contributions and the proportionate share of contributions 54,784 - Contributions paid to TRS subsequent to the measurement date 46,278 - Total 397,462$ 1,224,611$ The $46,278 deferred outflow of resources resulting from Academy contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ended August 31, 2021. Town of Westlake Notes to the Financial Statements 86 The net amounts of the remaining balances of deferred outflows and inflows of resources related to OPEB will be recognized in OPEB expense as follows: OPEB Expense Year Ended (Income) August 31, Amount 2021 (149,145)$ 2022 (149,145) 2023 (149,244) 2024 (149,303) 2025 (149,287) Thereafter (127,303) Total (873,427)$ Note 13. 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 14. 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 three 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. Town of Westlake Notes to the Financial Statements 87 Note 15. 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. 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 16. 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, 2020, the Town abated $258,852 in property taxes; $130,702 in sales taxes; and $19,335 in hotel/motel taxes. Town of Westlake Notes to the Financial Statements 88 Note 17. Going Concern The 2020 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. Note 18. Subsequent Events The Town has evaluated all events or transactions that occurred after September 30, 2020 up through April 20, 2021, the date the financial statements were issued. During this period, there were no material subsequent events that required recognition or additional disclosure in these financial statements, except as follows: COVID-19 In March 2020, the World Health Organization declared the novel coronavirus (‘COVID-19’) a global pandemic and recommended containment and mitigation measures worldwide. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected public education, workforces, economies, and financial markets globally, potentially leading to economic downturn. It has also disrupted the normal operations of many businesses and organizations. It is not possible for management to predict the duration or magnitude of the adverse results of the outbreak and its disruptive effects on the Town’s operations and financial results at this time. 89 Required Supplementary Information 90 Town of Westlake Exhibit B-1 Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual – General Fund For the Year Ended September 30, 2020 91 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales 5,437,500$ 5,085,001$ 5,534,125$ 449,125$ Property 1,634,916 1,725,000 1,725,951 951 Mixed beverages 62,500 40,750 41,949 1,199 Franchise 316,924 981,968 972,520 (9,448) Interest income 289,250 197,500 170,036 (27,464) Building permits and fees 2,838,560 1,878,165 1,996,834 118,669 Fines and penalties 547,426 510,709 492,435 (18,274) Intergovernmental - - 24,750 24,750 Contributions - (24,750) 12,860 37,610 Miscellaneous 26,600 44,727 126,198 81,471 Total revenues 11,153,676 10,439,070 11,097,658 658,589 EXPENDITURES Current General government 5,719,036 5,467,003 5,169,039 297,964 Public safety 3,688,420 3,672,643 3,512,456 160,187 Cultural and recreation 354,395 308,997 264,248 44,749 Public works 481,196 559,279 567,995 (8,716) Debt service Principal retirement 36,680 36,680 36,677 3 Total expenditures 10,279,728 10,044,602 9,550,415 494,187 Excess of revenues over expenditures 873,948 394,468 1,547,243 1,152,775 OTHER FINANCING SOURCES (USES) Transfers in 67,225 67,225 77,158 9,933 Transfers out (1,067,349) (293,489) (272,089) 21,400 Net other financing sources (uses) (1,000,124) (226,264) (194,931) 31,333 NET CHANGE IN FUND BALANCE (126,176) 168,204 1,352,312 1,184,108 FUND BALANCE AT BEGINNING OF YEAR 15,238,198 15,238,198 15,238,198 - FUND BALANCE AT END OF YEAR 15,112,022$ 15,406,402$ 16,590,510$ 1,184,108$ General Fund Budgeted Amounts Town of Westlake Exhibit B-2 Schedule of Revenues, Expenditures And Changes in Fund Balances Budget and Actual – Westlake Academy For the Year Ended August 31, 2020 92 Variance Favorable Original Final Actual (Unfavorable) REVENUES State program revenues 8,277,372$ 8,108,857$ 8,011,061$ (97,796)$ Federal program revenues 111,772 113,670 137,910 24,240 Interest income 20,000 18,000 17,293 (707) Local and intermediate sources 1,819,061 1,737,640 1,675,317 (62,323) Total revenues 10,228,205 9,978,167 9,841,581 (136,586) EXPENDITURES Education 9,222,497 10,231,943 9,845,685 386,258 Debt service 350,005 207,922 207,922 - Total expenditures 9,572,502 10,439,865 10,053,607 386,258 Excess (Deficiency) of revenues over (under) expenditures 655,703 (461,698) (212,026) 249,672 OTHER FINANCING SOURCES Transfers in 90,000 90,000 - (90,000) Issuance of capital lease - 585,623 585,623 - Total other financing sources 90,000 675,623 585,623 (90,000) NET CHANGE IN FUND BALANCE 745,703 213,925 373,597 159,672 FUND BALANCE AT BEGINNING OF YEAR 1,387,690 1,387,690 1,387,690 - FUND BALANCE AT END OF YEAR 2,133,393$ 1,601,615$ 1,761,287$ 159,672$ Westlake Academy Budgeted Amounts Town of Westlake Notes to Budgetary Comparison Schedules 93 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. Expenditures were in excess of appropriations as follows for the fiscal year ended September 30, 2020:  Public works ($8,716) 5. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules. 6. The appropriated budget is prepared by fund, function and department. The Town's management may make transfers of appropriations within a fund. Transfers of appropriations between funds require the approval of the Town Council. The legal level of budgetary control is the fund level. The Town Council made several supplementary budget appropriations during the year. 7. Commitments are for goods or services in future years. Accounting under other commitments for the expenditure of resources are recorded to reserve a portion of the governmental funds. The budgeted commitments lapse at year-end and do not constitute expenditures or liabilities because the commitments must be re-appropriated, budgeted, and honored during the subsequent year. 8. Prior to August 25 of the preceding fiscal year, the Westlake Academy prepares a budget for the next succeeding fiscal year beginning September 1. The operating budget includes proposed expenditures and the means of financing them. A meeting of the Board of Trustees is then called for the purpose of adopting the proposed budget. Prior to September 1, the budget is legally enacted through resolution by the Board. Once a budget is approved, it can only be amended at the object, function and fund level by approval of a majority of the members of the Board. Amendments are presented to the Board at its regular meetings. Each amendment made before the fact, is reflected in the official minutes of the Board, and is not made after fiscal year end. All budget appropriations lapse at year end. Town Of Westlake Exhibit B-3 Schedule of Net Pension Liability and Related Ratios Texas Municipal Retirement System Pension Plan Last Six Measurement Years 94 2019 2018 2017 2016 2015 2014 Total pension liability Service cost 651,255$ 605,453$ 566,643$ 483,414$ 435,146$ 288,923$ Interest 570,598 493,022 439,725 371,753 317,982 264,994 Change in benefit terms - - - - - - Difference between expected and actual experience 131,635 126,691 (120,557) 212,434 96,226 176,965 Change in assumptions 89,534 - - - 139,579 - Benefit payments (112,642) (84,942) (146,316) (58,144) (38,289) (55,762) Net change in total pension liability 1,330,380 1,140,224 739,495 1,009,457 950,644 675,120 Total pension liability, beginning 8,183,993 7,043,769 6,304,274 5,294,817 4,344,173 3,669,053 Total pension liability, ending 9,514,373 8,183,993 7,043,769 6,304,274 5,294,817 4,344,173 Plan fiduciary net position Contributions, employer 470,903 472,011 400,684 330,604 290,278 172,064 Contributions, nonemployer 279,349 257,327 232,776 203,359 188,725 152,077 Net investment income 999,440 (179,608) 670,195 276,056 5,368 182,430 Benefit payments (112,642) (84,942) (146,316) (58,144) (38,289) (55,762) Administrative income (5,628) (3,463) (3,468) (3,113) (3,268) (1,904) Other (169) (181) (176) (168) (191) (127) Net change in plan fiduciary net position 1,631,253 461,144 1,153,695 748,594 442,623 448,778 Plan fiduciary net position, beginning 6,442,632 5,981,488 4,827,793 4,079,199 3,636,576 3,187,798 Plan fiduciary net position, ending 8,073,885 6,442,632 5,981,488 4,827,793 4,079,199 3,636,576 Town's net pension liability, ending 1,440,488$ 1,741,361$ 1,062,281$ 1,476,481$ 1,215,618$ 707,597$ Plan fiduciary net position as a % of total pension liability 84.86% 78.72% 84.92% 76.58% 77.04% 83.71% Covered payroll 3,961,404$ 3,676,095$ 3,325,369$ 2,905,134$ 2,696,072$ 2,172,525$ Town's net pension liability as a % of payroll 36.36% 47.37% 31.94% 50.82% 45.09% 32.57% Note: Only six 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.” Town of Westlake Exhibit B-4 Schedule of Pension Contributions Texas Municipal Retirement System Pension Plan Last Six Fiscal Years 95 2020 2019 2018 2017 2016 2015 Actuarially determined contributions 478,059$ 473,030$ 454,421$ 419,720$ 316,618$ 277,651$ Contributions in relation to the actuarially determined contributions (478,059) (473,030) (454,421) (419,720) (316,618) (277,651) Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ Covered payroll 4,058,942 3,920,565 3,676,094 3,325,369 2,821,349 2,778,776 Contributions as a percentage of covered payroll 11.78% 12.07% 12.36% 12.62% 11.22% 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 six 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.” Town of Westlake Exhibit B-5 Schedule of Academy’s Proportionate Share of Net Pension Liability – Teacher Retirement System Pension Plan Last Six Measurement Years 96 2019 2018 2017 2016 2015 2014 Academy's proportion of the net pension liability 0.0028912% 0.0027061% 0.0028012% 0.0027822% 0.0030945% 0.0007190% Academy's proportionate share of net pension liability 1,502,914$ 1,489,525$ 895,663$ 1,051,346$ 1,093,865$ 192,056$ State's proportionate share of net pension liability associated with the Westlake Academy 5,272,547 5,571,598 3,480,057 4,035,754 3,667,893 2,965,583 Total 6,775,461$ 7,061,123$ 4,375,720$ 5,087,100$ 4,761,758$ 3,157,639$ Academy's covered payroll 5,534,431$ 5,289,916$ 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 27.16% 28.16% 16.61% 20.64% 22.86% 4.47% Plan fiduciary net position as a percentage of total pension liability 75.24% 73.74% 82.17% 78.00% 78.43% 83.25% Note: Only six 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." Town of Westlake Exhibit B-6 Schedule of Pension Contributions Teacher Retirement System Pension Plan Last Six Fiscal Years (Unaudited) 97 2020 2019 2018 2017 2016 2015 Statutorily required contributions 230,148$ 100,311$ 91,593$ 131,436$ 88,399$ 92,325$ Actual contributions in relation to statutorily required contributions (230,148) (100,311) (91,593) 131,436 88,399 92,325 Contribution deficiency (excess)-$ -$ -$ -$ -$ -$ Academy's covered payroll 5,984,542$ 5,534,431$ 5,289,916$ 5,391,515$ 5,094,571$ 4,784,694$ Contributions as a percentage of Academy's covered payroll 3.85% 1.81% 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 six years of data is presented in accordance with GASB #68, paragraph 138. "The information for all periods for the ten-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." Town of Westlake Exhibit B-7 Schedule of Changes in the Total OPEB Liability and Related Ratios Texas Municipal Retirement System OPEB Plan Last Three Measurement Years (Unaudited) 98 2019 2018 2017 Total OPEB liability Service cost 7,131$ 7,720$ 6,318$ Interest 2,146 1,844 1,603 Change in benefit terms - - - Difference between expected and actual experience 3,831 (2,126) - Change in assumptions 15,394 (4,632) 4,872 Benefit payments (396) (5,184) 4,816 Net change in total OPEB liability 28,106 (2,378) 17,609 Total OPEB liability, beginning 54,484 56,862 39,253 Total OPEB liability, ending 82,590$ 54,484$ 56,862$ Covered payroll 3,961,404$ 3,676,094$ 3,325,369$ Total OPEB liability as a % of covered payroll 2.08% 1.48% 1.71% Note: Only three years 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. Town of Westlake Exhibit B-8 Schedule of OPEB Contributions Texas Municipal Retirement System OPEB Plan Last Three Fiscal Years (Unaudited) 99 2020 2019 2018 Actuarially determined contributions 7,712$ 7,349$ 6,380$ Contributions in relation to the actuarially determined contributions (7,712) (7,349) (6,380) Contribution deficiency (excess)-$ -$ -$ Covered payroll 4,058,942$ 3,920,565$ 3,676,094$ Contributions as a percentage of covered payroll 0.19 %0.19%0.17% 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. Only three years 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. Town of Westlake Exhibit B-9 Schedule of Academy’s Proportionate Share of the Net OPEB Liability and Related Ratios Teacher Retirement System TRS Care Plan Last Three Measurement Years (Unaudited) 100 2019 2018 2017 Academy's proportion of the net OPEB liability 0.59857139% 0.00590934% 0.00588304% Academy's proportionate share of net OPEB liability 2,830,719$ 2,950,588$ 2,558,314$ State's proportionate share of net OPEB liability associated with the Westlake Academy 3,761,390 4,695,104 4,406,333 Total 6,592,109$ 7,645,692$ 6,964,647$ Academy's covered payroll 5,534,431$ 5,289,916$ 5,391,515$ Academy's proportionate share of net OPEB liability as a percentage of its covered payroll 51.15% 55.78% 47.45% Plan fiduciary net position as a percentage of total OPEB liability 2.66% 1.57% 0.91% Note: Only three years 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." Town of Westlake Exhibit B-10 Schedule of Academy’s OPEB Contributions Teacher Retirement System TRS Care Plan Last Three Fiscal Years (Unaudited) 101 2020 2019 2018 Statutorily required contributions 46,278$ 46,703$ 46,204$ Actual contributions in relation to statutorily required contributions (46,278) (46,703) (46,204) Contribution deficiency (excess)-$ -$ -$ Academy's covered payroll 5,984,542$ 5,534,431$ 5,289,916$ Contributions as a percentage of Academy's covered payroll 0.77% 0.84% 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 three years 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.” 102 103 Combining and Individual Fund Statements and Schedules 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, 2020 104 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Property 666,221$ 701,220$ 685,913$ (15,307)$ Total revenues 666,221 701,220 685,913 (15,307) EXPENDITURES Debt service Principal retirement 1,613,350 1,613,350 1,613,350 - Interest and other fiscal charges 1,084,340 1,084,340 1,083,542 798 Total expenditures 2,697,690 2,697,690 2,696,892 798 Excess (deficiency) of revenues over (under) expenditures (2,031,469) (1,996,470) (2,010,979) (14,509) OTHER FINANCING SOURCES Transfers in 1,988,489 1,988,489 2,116,814 128,325 Total other financing sources 1,988,489 1,988,489 2,116,814 128,325 NET CHANGE IN FUND BALANCE (42,980) (7,981) 105,835 113,816 FUND BALANCE AT BEGINNING OF YEAR 44,683 44,683 44,683 - FUND BALANCE AT END OF YEAR 1,703$ 36,702$ 150,518$ 113,816$ Debt Service Fund Budgeted Amounts Town of Westlake Nonmajor Governmental Funds 105 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 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. 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. Town of Westlake Exhibit C-2 Combining Balance Sheet Non Major Governmental Funds September 30, 2020 106 Visitors Association Lone Star Public Facilities Corporation Fund Economic Development Fund Public Arts Fund 4B Economic Development Corporation Fund Solana PID Capital Pro jects Fund Total Nonmajor Governmental Funds ASSETS Cash and cash equivalents 327,014$ 14,719$ 50$ 100,000$ -$ -$ 441,783$ Accounts receivable - - - - 249,766 - 249,766 Prepaid items 7,269 - - - - - 7,269 Restricted cash and investments - - - - - 230,402 230,402 Total assets 334,283$ 14,719$ 50$ 100,000$ 249,766$ 230,402$ 929,220$ LIABILITIES AND FUND BALANCES Accounts payable 10,950$ -$ 50$ -$ -$ 200,999 211,999$ Due to other funds - - - - 249,766 - 249,766 Total liabilities 10,950 - 50 - 249,766 200,999 461,765 FUND BALANCES Nonspendable: Prepaid items 7,269 - - - - - 7,269 Restricted for: Capital items - - - - - 29,403 29,403 Tourism 316,064 - - 100,000 - - 416,064 Future projects - 14,719 - - - - 14,719 Total fund balances 323,333 14,719 - 100,000 - 29,403 467,455 Total liabilities and fund balances 334,283$ 14,719$ 50$ 100,000$ 249,766$ 230,402$ 929,220$ Special Revenue Funds 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, 2020 107 Visitors Association Lone Star Public Facilities Corporation Fund Economic Development Fund Public Arts Fund 4B Economic Development Corporation Fund Solana PID Capital Projects Fund Total Nonmajor Governmental Funds REVENUES Sales taxes -$ -$ 50$ -$ 1,844,725$ -$ 1,844,775$ Hotel occupancy taxes 349,810 - 19,335 - - - 369,145 Interest income 7,594 176 - - - 995 8,765 Contributions - - 280,000 - - 280,000 Miscellaneous 11,479 - - - - - 11,479 Total revenues 368,883 176 299,385 - 1,844,725 995 2,514,164 EXPENDITURES Current: Economic development - - 150,037 - - 53,370 203,407 Visitor services 771,883 - - 10,000 - - 781,883 Total expenditures 771,883 - 150,037 10,000 - 53,370 985,290 Excess (deficiency) of revenues over (under) expenditures (403,000) 176 149,348 (10,000) 1,844,725 (52,375) 1,528,874 OTHER FINANCING SOURCES (USES) Transfers in - - - 100,000 - - 100,000 Transfers out - - (280,000) - (1,844,725) - (2,124,725) Total other financing sources (uses) - - (280,000) 100,000 (1,844,725) - (2,024,725) Net change in fund balances (403,000) 176 (130,652) 90,000 - (52,375) (495,851) Fund balances, October 1 726,333 14,543 130,652 10,000 - 81,778 963,306 Fund balances, September 30 323,333$ 14,719$ -$ 100,000$ -$ 29,403$ 467,455$ Special Revenue Funds 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, 2020 108 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Hotel occupancy taxes 816,702$ 349,723$ 349,810$ 87$ Interest income 14,606 8,000 7,594 (406) Miscellaneous 4,112 11,480 11,479 (1) Total revenues 835,420 369,203 368,883 (320) EXPENDITURES Visitor services 955,966 915,341 771,883 143,458 Total expenditures 955,966 915,341 771,883 143,458 Excess (deficiency) of revenues over (under) expenditures (120,546) (546,138) (403,000) 143,138 NET CHANGE IN FUND BALANCE (120,546) (546,138) (403,000) 143,138 FUND BALANCE AT BEGINNING OF YEAR 726,333 726,333 726,333 - FUND BALANCE AT END OF YEAR 605,787$ 180,195$ 323,333$ 143,138$ Visitors Association Fund Budgeted Amounts 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, 2020 109 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Interest income 1,035$ 150$ 176$ 26$ Total revenues 1,035 150 176 26 NET CHANGE IN FUND BALANCE 1,035 150 176 26 FUND BALANCE AT BEGINNING OF YEAR 14,543 14,543 14,543 - FUND BALANCE AT END OF YEAR 15,578$ 14,693$ 14,719$ 26$ Lone Star Public Facilities Corporation Budgeted Amounts 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, 2020 110 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales -$ -$ 50$ 50$ Hotel occupancy 36,982 23,000 19,335 (3,665) Miscellaneous 280,000 280,000 280,000 - Total revenues 316,982 303,000 299,385 (3,615) EXPENDITURES Economic development 36,982 153,652 150,037 3,615 Total expenditures 36,982 153,652 150,037 3,615 Excess of revenues over expenditures 280,000 149,348 149,348 - OTHER FINANCING USES Transfers out (280,000) (280,000) (280,000) - Total other financing uses (280,000) (280,000) (280,000) - NET CHANGE IN FUND BALANCE - (130,652) (130,652) - FUND BALANCE AT BEGINNING OF YEAR 130,652 130,652 130,652 - FUND BALANCE AT END OF YEAR 130,652$ -$ -$ -$ Economic Development Fund Budgeted Amounts 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, 2020 111 Variance Favorable Original Amended Actual (Unfavorable) REVENUES Taxes Sales 1,812,500$ 1,695,000$ 1,844,725$ 149,725$ Total revenues 1,812,500 1,695,000 1,844,725 149,725 OTHER FINANCING USES Transfers out (1,812,500) (1,695,000) (1,844,725) (149,725) Total other financing uses (1,812,500) (1,695,000) (1,844,725) (149,725) NET CHANGE IN FUND BALANCE - - - - FUND BALANCE AT BEGINNING OF YEAR - - - - FUND BALANCE AT END OF YEAR -$ -$ -$ -$ 4B Economic Development Corporation Budgeted Amounts Town of Westlake Agency Funds 112 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. Town of Westlake Exhibit C-8 PID Agency Fund Statement of Changes in Assets and Liabilities For the Year Ended September 30, 2020 113 Balance at Balance at Beginning End of Year Additions Deletions of Year ASSETS Restricted cash and cash equivalents 2,160,298$ -$ (62,387)$ 2,097,911$ Total assets 2,160,298$ -$ (62,387)$ 2,097,911$ LIABILITIES Liability to bond holders 2,160,298$ -$ (62,387)$ 2,097,911$ Total liabilities 2,160,298$ -$ (62,387)$ 2,097,911$ 114 115 Statistical Section Statistical Section Unaudited 116 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 117 - 122 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 123 - 127 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 128 - 130 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 131 - 133 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 134 - 135 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: Unless otherwise noted, the information in these schedules is derived from annual financial reports for the relevant year. Town of Westlake Exhibit S-1 Net Position by Component Last Ten Years Accrual Basis of Accounting – Unaudited 117 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Governmental activities:Net Investment in capital assets 12,658,921$ 14,866,299$ 21,177,426$ 32,048,991$ 29,633,298$ 38,299,337$ 46,499,873$ 47,629,452$ 48,030,010$ 46,633,638$ Restricted 7,137,362 4,726,376 4,243,239 2,284,947 17,827,177 7,489,048 2,034,916 1,077,646 3,786,893 3,653,143 Unrestricted3,448,100 5,023,731 6,636,876 910,977)( 7,108,101 9,260,572 9,513,643 6,437,845 10,775,740 12,350,020 Total governmentalactivities net position23,244,383$ 24,616,406$ 32,057,541$ 33,422,961$ 54,568,576$ 55,048,957$ 58,048,432$ 55,144,943$ 62,592,643$ 62,636,801$ Business-type activities:Net investment in capital assets 6,875,031$ 6,877,555$ 6,601,949$ 6,734,414$ 6,410,547$ 6,044,363$ 5,583,570$ 5,293,188$ 4,909,471$ 4,672,681$ Restricted - - - - - - - - - 50,000 Unrestricted1,542,092)( 1,636,249)( 842,457)( 1,272,014)( 2,608,315)( 4,041,360)( 3,746,696)( 4,685,810)( 6,548,934)( 6,328,176)( Total business-typeactivities net position5,332,939$ 5,241,306$ 5,759,492$ 5,462,400$ 3,802,232$ 2,003,003$ 1,836,874$ 607,378$ 1,639,463)$( 1,605,495)$( Primary government:Net investment in capital assets 19,533,952$ 21,743,854$ 27,779,375$ 38,783,405$ 36,043,845$ 44,343,700$ 52,083,443$ 52,922,640$ 52,939,481$ 51,306,319$ Restricted 7,137,362 4,726,376 4,243,239 2,284,947 17,827,177 7,489,048 2,034,916 1,077,646 3,786,893 3,703,143 Unrestricted1,906,008 3,387,482 5,794,419 2,182,991)( 4,499,786 5,219,212 5,766,947 1,752,035 4,226,806 6,021,844 Total primary governmentnet position28,577,322$ 29,857,712$ 37,817,033$ 38,885,361$ 58,370,808$ 57,051,960$ 59,885,306$ 55,752,321$ 60,953,180$ 61,031,306$ Source: Annual financial reportsFiscal Year Town of Westlake Exhibit S-2 Changes in Net Position Last Ten Years – Concluded Accrual Basis of Accounting – Unaudited 118 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020EXPENSESGovernmental activities:General government 2,478,826$ 2,518,490$ 2,606,785$ 2,784,587$ 3,145,716$ 4,491,557$ 5,716,302$ 4,776,131$ 6,091,403$ 6,555,048$ Public Safety 1,801,585 1,883,424 1,978,803 2,190,050 2,381,437 2,737,084 3,063,003 3,133,733 3,489,071 3,991,114 Cultural and Recreation 122,400 111,765 113,924 123,541 129,970 187,274 217,489 184,685 299,815 282,512 Public Works 470,054 216,901 267,973 955,794 1,081,996 1,102,636 1,634,549 1,820,908 1,368,049 1,326,090 Economic Development 680,823 546,039 626,423 147,680 171,757 141,779 163,578 469,852 306,982 150,037 Visitor Services 356,365 475,719 521,521 493,087 665,936 740,835 737,071 885,654 927,670 802,244 Education 4,884,985 6,193,560 5,803,611 7,147,411 8,598,261 9,516,287 8,566,295 6,568,453 9,523,906 9,979,674 Interest on long-term debt1,127,913 897,573 1,031,328 998,951 1,022,201 990,413 1,401,199 1,184,818 1,131,485 1,103,925 Total governmental activities expenses11,922,951 12,843,471 12,950,368 14,841,101 17,197,274 19,907,865 21,499,486 19,024,234 23,138,381 24,190,644 Business-type activities:Water and Sewer 2,794,235 3,098,466 3,356,466 3,690,137 4,861,529 5,519,116 4,893,075 7,049,946 7,544,125 6,407,650 Cemetery5,604 6,282 5,328 7,121 7,297 7,831 8,021 9,754 10,628 21,734 Total business-type activities expenses2,799,839 3,104,748 3,361,794 3,697,258 4,868,826 5,526,947 4,901,096 7,059,700 7,554,753 6,429,384 Total primary government program expenses14,722,790$ 15,948,219$ 16,312,162$ 18,538,359$ 22,066,100$ 25,434,812$ 26,400,582$ 26,083,934$ 30,693,134$ 30,620,028$ PROGRAM REVENUESGovernmental activities:Fees, fines, and charges for services:General Government 721,157$ 673,090$ 774,909$ 33,975$ 110,778$ 789,457$ 73,180$ 137,805$ 91,845$ 318,140$ Public Safety 140,600 142,402 182,154 848,772 887,919 932,017 783,681 782,833 984,268 649,795 Public Works 292,572 407,328 659,246 1,022,769 936,245 1,789,776 3,338,541 2,027,613 5,419,039 1,587,839 Education 99,638 195,059 182,220 222,270 531,090 283,077 275,759 247,721 313,741 90,123 Operating grants and contributions 728,242 5,269,841 4,907,472 6,592,642 7,615,653 7,863,168 8,047,113 7,044,597 9,166,821 9,725,263 Capital grants and contributions425,900 - 5,897,456 80,472 19,983,078 269,185 3,485,255 424,948 1,861,623 280,000 Total governmental activities program revenues2,408,109 6,687,720 12,603,457 8,800,900 30,064,763 11,926,680 16,003,529 10,665,517 17,837,337 12,651,160 Business-type activities:Charges for services:Water and Sewer 3,078,868 2,934,842 3,157,332 3,428,702 3,549,775 3,968,086 4,815,635 5,794,818 5,374,118 6,410,755 Cemetery 13,300 4,500 5,510 7,749 13,620 11,115 9,964 29,440 30,745 67,578 Operating grants and contributions - 24,423 - - - - - - - - Capital grants and contributions- - - - - - 50,000 1,271 54 - Total business-type activities program revenues3,092,168 2,963,765 3,162,842 3,436,451 3,563,395 3,979,201 4,875,599 5,825,529 5,404,917 6,478,333 Total primary government program revenues5,500,277$ 9,651,485$ 15,766,299$ 12,237,351$ 33,628,158$ 15,905,881$ 20,879,128$ 16,491,046$ 23,242,254$ 19,129,493$ Fiscal Year Town of Westlake Exhibit S-2 Changes in Net Position Last Ten Years – Concluded Accrual Basis of Accounting – Unaudited 119 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020NET (EXPENSE) REVENUESGovernmental activities 9,514,842)$( 6,155,751)$( 346,911)$( 6,040,201)$( 12,867,489$ 7,981,185)$( 5,495,957)$( 8,358,717)$( 5,301,044)$( 11,539,484)$( Business-type activities292,329 140,983)( 198,952)( 260,807)( 1,305,431)( 1,547,746)( 25,497)( 1,234,171)( 2,149,836)( 48,949 Total primary government net expense9,222,513)( 6,296,734)( 545,863)( 6,301,008)( 11,562,058 9,528,931)( 5,521,454)( 9,592,888)( 7,450,880)( 11,490,535)( GENERAL REVENUES AND OTHER CHANGES IN NET POSITIONGovernmental activities:TaxesSales 4,609,626 3,657,274 4,375,397 4,725,845 4,925,428 4,609,523 4,650,744 6,003,605 8,032,671 7,378,900 Property 1,260,112$ 1,441,238 1,366,633 1,367,069 1,438,969 1,476,355 1,576,750 1,629,640 1,956,630 2,411,279 Hotel Occupancy 527,261 590,853 709,578 796,481 872,179 822,490 751,601 849,167 861,710 369,145 Mixed Beverage 19,721 38,286 39,727 51,602 59,184 61,476 68,432 62,347 66,923 41,949 Franchise 586,836 664,991 734,935 795,322 963,040 930,043 818,423 779,506 964,239 972,520 Unrestricted grants and contributions 3,744,757 - - - - - - - - - Investment earnings 46,248 33,353 24,218 26,713 28,904 55,600 182,095 356,076 517,128 260,003 Miscellaneous 691,345 1,112,858 1,023,149 246,633 198,199 241,501 278,071 215,076 142,230 72,688 Transfers 145,216 45,507 485,591)( 43,399 323,100 264,578 169,316 71,466 207,213 77,158 Extraordinary item 56,704 124,346)( - - - - - - - - Special item - 67,760 - - - - - - - - Gain on sale of capital assets7,000 - - - - - - - - - Total governmental activities11,631,122 7,527,774 7,788,046 8,053,064 8,809,003 8,461,566 8,495,432 9,966,883 12,748,744 11,583,642 Business-type activities:Investment earnings 9,929 10,077 6,552 7,114 7,083 13,095 28,684 79,961 110,208 62,177 Miscellaneous 145,666 84,780 224,995 - - - - - - - Transfers145,216)( 45,507)( 485,591 43,399)( 323,100)( 264,578)( 169,316)( 71,466)( 207,213)( 77,158)( Total business-type activities10,379 49,350 717,138 36,285)( 316,017)( 251,483)( 140,632)( 8,495 97,005)( 14,981)( Total primary government11,641,501 7,577,124 8,505,184 8,016,779 8,492,986 8,210,083 8,354,800 9,975,378 12,651,739 11,568,661 CHANGE IN NET POSITIONGovernmental activities 2,116,280 1,372,023 7,441,135 2,012,863 21,676,492 480,381 2,999,475 1,608,166 7,447,700 44,158 Business-type activities302,708 91,633)( 518,186 297,092)( 1,621,448)( 1,799,229)( 166,129)( 1,225,676)( 2,246,841)( 33,968 Total primary government2,418,988$ 1,280,390$ 7,959,321$ 1,715,771$ 20,055,044$ 1,318,848)$( 2,833,346$ 382,490$ 5,200,859$ 78,126$ Source: Annual financial reports Fiscal Year Town of Westlake Exhibit S-3 Fund Balances Governmental Funds Last Ten Years Modified Accrual Basis of Accounting – Unaudited 120 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020General fundNonspendable: Prepaid items 62,020$ 6,856$ 6,906$ 8,821$ 13,334$ 12,794$ 18,705$ 19,253$ 19,302$ 41,586$ Restricted for:Court security and technology 186,776 192,768 194,422 193,082 203,173 238,636 219,693 203,173 237,804 203,173 Committed for: Future projects 219,687 49,941 74,941 80,442 80,442 335,322 335,392 80,442 80,442 80,442 Assigned for: Future equipment 22,000 22,000 24,000 - - - - - - - Unassigned3,524,911 4,992,240 6,751,362 7,671,173 7,383,601 9,092,721 10,363,702 10,493,380 14,900,650 16,265,309 Total general fund4,015,394$ 5,263,805$ 7,051,631$ 7,953,518$ 7,680,550$ 9,679,473$ 10,937,492$ 10,796,248$ 15,238,198$ 16,590,510$ All other governmental fundsNonspendablePrepaid items 33,511$ 60,963$ 62,635$ 80,118$ 83,359$ 68,718$ 243,401$ 56,397$ 196,074$ 83,440$ Restricted for:Tourism 1,109,365 1,052,546 1,025,891 1,107,520 1,081,009 1,003,636 791,308 781,775 734,938 416,064Future projects 4,647,863 3,594,379 10,370,914 1,751,405 13,632 13,679 13,789 14,141 14,543 14,719Debt service 7,505 22,657 1,482 1,081 20,916 30,468 11,963 28,798 44,683150,518Education 885,365 758,127 931,094 993,998 1,592,227 1,098,359 729,709 1,068,117 1,323,663 1,685,116Economic development 267,577 178,384 - - - - - - - - Capital projects funds - - - - 17,713,788 8,501,489 15,080,456 7,292,917 6,070,774 4,580,448 Total all other governmental funds6,951,186$ 5,667,056$ 12,392,016$ 3,934,122$ 20,504,931$ 10,716,349$ 16,870,626$ 9,242,145$ 8,384,675$ 6,930,305$ Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Uponfurther consideration, the 4B 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 reportsFiscal Year Town of Westlake Exhibit S-4 Changes in Fund Balances Governmental Funds Last Ten Years – Continued Modified Accrual Basis of Accounting – Unaudited 121 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020REVENUES Taxes 7,000,690$ 6,393,472$ 7,226,180$ 7,722,606$ 8,252,748$ 7,902,983$ 7,867,015$ 9,321,321$ 11,881,784$ 11,174,378$ Licenses, fees and permits 530,646 598,394 944,735 1,175,075 1,200,790 2,715,236 3,521,686 2,314,933 5,873,529 1,996,834Fines and penalties 605,705 622,338 695,167 730,441 734,152 796,014673,716 633,318 616,451 492,435State program revenues 3,945,658 4,369,635 4,696,540 5,269,641 6,173,418 6,543,782 6,603,358 7,217,383 7,415,219 8,011,061Federal program revenues 337,508 152,351 81,958 80,103 87,797 98,564140,152 114,797 110,248 137,910Investment earnings 46,248 33,353 24,218 26,713 28,904 55,600182,095 356,076 517,128 260,003Contributions - 732,535 5,916,014 82,446 18,785,953 283,684728,887 494,131 1,253,200 292,860Other revenues980,816 1,323,237 1,274,826 1,665,003 2,471,191 1,542,835 2,863,801 1,735,201 1,804,309 1,837,744 Total revenues13,447,271 14,225,315 20,859,638 16,752,028 37,734,953 19,938,698 22,580,710 22,187,160 29,471,868 24,203,225 EXPENDITURES General government 1,733,324 1,878,885 1,910,545 2,236,360 2,411,239 3,280,507 4,596,827 3,672,933 5,330,174 5,169,039 Public safety 1,842,751 2,224,469 1,967,584 2,146,587 2,490,551 2,453,857 2,684,244 2,992,727 3,269,778 3,512,456 Cultural and recreation 122,400 111,765 113,924 123,541 130,322 185,923164,720 183,816 272,146 264,248 Public works 326,749 391,115 532,675 615,781 744,028 773,751784,279 675,550 593,830 622,307 Economic development 706,391 243,939 296,565 147,685 171,757 141,779163,578 469,852 306,982 203,407 Visitor services 356,365 475,719 521,521 493,082 670,157 725,971717,055 875,322 904,689 781,883 Education 4,884,985 6,193,560 5,762,652 7,143,678 7,938,501 9,245,592 8,819,174 9,012,348 8,996,714 9,845,685 Capital Outlay 1,023,772 1,110,476 7,601,631 9,964,047 5,274,282 9,561,954 7,082,844 9,407,447 3,525,437 1,627,548Capital Project Debt servicePrincipal 555,000 668,000 2,955,000 1,004,677 1,130,762 1,150,490 1,124,697 1,555,677 1,766,131 1,837,638 Interest and other fiscal charges 1,083,377 952,027 830,425 1,116,489 977,412 947,411 1,105,376 1,182,679 1,128,720 1,103,853 Bond issuance cost36,446 148,891 185,699 69,283 - - 368,278 - - - Total expenditures12,671,560 14,398,846 22,678,221 25,061,210 21,939,011 28,467,235 27,611,072 30,028,351 26,094,601 24,968,064 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES775,711$ 173,531)$( 1,818,583)$( 8,309,182)$( 15,795,942$ 8,528,537)$( 5,030,362)$( 7,841,191)$( 3,377,267$ 764,839)$( Fiscal Year Town of Westlake Exhibit S-4 Changes in Fund Balances Governmental Funds Last Ten Years – Continued Modified Accrual Basis of Accounting – Unaudited 122 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020OTHER FINANCING SOURCES (USES):Proceeds from sale of land -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Sale of assets 7,000 - - - - - 1,200,000 - - - Issuance of debt 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 of capital lease - - - 239,009 16,740474,300 - - - 585,623 Notes payable issued 50,000 - - 401,484 162,059 - - - - - Certificate of obligations issued - - - - - - 10,710,000 - - - Special item - 67,760 40,959 - - - - - - - Extraordinary item 56,704 124,346)( 40,959)( - - - - - - - Transfers in 7,082,163 2,121,099 2,104,929 3,094,211 4,617,896 2,485,227 3,621,066 3,949,085 3,902,325 2,673,972Transfers out6,936,947)( 2,075,592)( 2,590,520)( 3,050,812)( (4,294,796)(2,220,649)(3,451,750)(3,877,619)(3,695,112)(2,596,814) Total other financing sources (uses)2,353,920 137,812 10,331,369 753,175 501,899 738,878 12,442,658 71,466 207,213 662,781 NET CHANGES IN FUND BALANCES3,129,631$ 35,719)$( 8,512,786$ 7,556,007)$( 16,297,841$ 7,789,659)$( 7,412,296$ 7,769,725)$( 3,584,480$ 102,058)$( DEBT SERVICE AS A PERCENTAGE OF NONCAPITAL EXPENDITURES14.1% 12.5% 25.3% 14.4% 12.8% 11.1% 12.4% 12.9% 13.0% 12.5% Note: Economic Development Funds were classified as special revenue funds through FY 2002 and considered discretely presented component units through FY 2007. Uponfurther consideration, the 4B Economic Development Corporation and Lone Star Public Facility Corporation funds are now classified as blended component units. Source: Annual Financial Reports Fiscal Year Town of Westlake Exhibit S-5 Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Modified Accrual Basis of Accounting – Unaudited 123 Less: Total Taxable TotalFiscal Real Personal Tax-Exempt Assessed DirectYear Property Property Property Value Tax Rate2011 951,070,355$ 70,569,170$ 143,856,142$ 877,783,383$ 0.15684 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 2019 1,558,408,769 139,762,420 400,628,631 1,297,542,558 0.15600 2020 1,388,137,170 121,646,081 322,005,656 1,187,777,595 0.16018 Source: Tarrant County Appraisal DistrictDenton Central Appraisal DistrictAppraised Value Town of Westlake Exhibit S-6 Principal Property Tax Payers Current and Eight Years Ago – Unaudited 124 PercentagePercentageTaxable of Total Town Taxable of Total TownAssessed Taxable Assessed Taxable Taxpayer Value Rank Assessed Value Taxpayer Value Rank Assessed ValueSOL Westlake LP 108,461,277$ 1 9.13% Maguire Thomas Partners, etal 150,235,546$ 1 15.85% CS Kinross Lake Parkway LLC 89,456,385 2 7.53% FMR Texas, LLC/LTD Partnership 77,754,274 2 8.20% FMR Texas I LLC/FMR Texas Ltd. Partnership 78,687,737 3 6.62% DCLI, LLC 76,847,119 3 8.11% Dallas MTA LP 69,507,181 4 5.85% Corelogic Real Estate 18,050,838 4 1.90% DCLI, LLC 50,970,395 5 4.29% Lexington TNI Westlake LP 16,560,450 5 1.75% BRE Solana LLC 48,965,793 6 4.12% Marsh USA, Inc. 10,030,377 6 1.06% HMC Solana LLC 36,573,910 7 3.08% First American Leasing 8,804,230 7 0.93% Magruire Partners - Solana Land LP 31,142,724 8 2.62% Levi Strauss & Co. 8,637,483 8 0.91% Lexington TNI Westlake LP 17,700,814 9 1.49% Westlake Terra, LLC 6,808,002 9 0.72% Quail Hollow Development II LLC 9,838,111 10 0.83% Louco Investment Partners LP 6,467,500 10 0.68% Total 541,304,327$ 45.56% Total 380,195,819$ 40.11% CY Taxable Value 1,209,080,303 877,783,383 Source: Tarrant County Appraisal DistrictNote: (1) Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an ad valorem tax. (2) Total Taxable Assessed Value including real and personal property for tax year 2011 (fiscal year 2012) is $945,488,875. (3) Total Taxable Assessed Value including real and personal property for tax year 2019 (fiscal year 2020) is $1,187,777,59.20122020 Town of Westlake Exhibit S-7 Property Tax Levies and Collections Last Ten Fiscal Years – Unaudited 125 CollectionsTaxes Levied Adjusted Net of RefundsFiscal for the Adjustments Taxes Levied Percent in Subsequent PercentageYear Fiscal Year to Levy for Fiscal Year Amount of Levy Years Amount of Levy 2011 1,409,956$ 47,560$ 1,362,396$ 1,356,050$ 99.53% 4,136$ 1,360,186$ 99.84% 2012 1,486,968 45,693 1,441,275 1,437,908 99.77% 3,367 1,441,275 100.00% 2013 1,398,777 43,314 1,355,463 1,352,097 99.75% 3,366 1,355,463 100.00% 2014 1,405,819 44,761 1,361,058 1,350,639 99.23% 10,182 1,360,821 99.98% 2015 1,450,674 43,948 1,406,726 1,405,148 99.89% 1,179 1,406,327 99.97%2016 1,482,989 40,244 1,442,745 1,441,536 99.92% 1,052 1,442,588 99.99%2017 1,573,803 11,749 1,562,054 1,536,921 98.39% 25,133 1,562,054 100.00%2018 1,661,110 30,810 1,630,300 1,624,655 99.65% (8,127) 1,616,528 99.16%2019 2,007,359 40,698 1,966,661 1,953,575 99.33% (8,858) 1,944,717 98.88%2020 2,454,143 88,265 2,365,878 2,392,470 101.12% 4,498 2,396,968 101.31%Source: Tarrant County Appraisal District Denton Central Appraisal Districtof the Levy to DateCollected within theFiscal Year Total Collections Town of Westlake Exhibit S-8 Direct and Overlapping Property Tax Rates (Per $100 of Assessed Value) Last Ten Fiscal Years – Unaudited 126 Operating/ Tarrant Tarrant Trophy Total Fiscal General Debt Service Total (A) Carroll Northwest Keller DentonTarrant County County Club Direct andYear Fund Fund Direct ISD ISD ISD County County College Dist Hospital Dist. MUD #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 2019 0.13201 0.02399 0.15600 1.38000 1.49000 1.51000 0.22557 0.02340 0.13607 0.22443 0.11618 5.26165 2020 0.11453 0.04565 0.16018 1.30000 1.42000 1.40830 0.22528 0.23400 0.13607 0.22443 0.11618 5.22444 Notes: Prior to fiscal year ended September 30, 2011, the Town of Westlake did not assess an advalorem tax. Overlapping rates are those of local and county governments that apply to property owners within the Town of Westlake. Not all overlapping rates apply to allTown'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 islocated within the geographic boundaries of the county and school district)Source: Tarrant County Appraisal District Denton Central Appraisal DistrictSchool Districts CountiesTown Direct RatesOverlapping Rates Town of Westlake Exhibit S-9 Taxable Sales by Industry Type Last Ten Fiscal Years – Unaudited 127 NAICS Industry Type 2011 2012 2013 2014 2015 2016 2017 2018 2019 202011 Agriculture, Forestry, Fishing and Hunting 60$ 38$ 163$ 731$ 775$ 2,083$ 1,685$ 4,303$ 336$ 196$ 21 Mining 4,260 3,050 335 15 714 655 128 5 - 11 22 Utilities 180,032 171,131 176,622 204,280 191,031 138,331 147,000 180,564 183,347 179,545 23 Construction 132,780 139,000 365,049 239,888 216,546 230,067 340,077 1,294,092 2,249,378 1,385,998 31-33 Manufacturing 402,062 526,755 295,660 375,905 234,651 209,128 86,798 113,487 284,939 350,447 42 Wholesale Trade 145,631 134,466 59,571 421,371 515,602 356,946 339,854 278,054 533,723 406,321 44-45 Retail 707,553 1,106,427 1,132,811 962,244 1,332,659 415,356 458,833 428,355 523,021 737,764 48-49 Transportation and Warehousing 316 1,156 3,662 1,962 3,550 1,107 1,133 567 624 1,723 51 Information 508,609 367,298 378,221 623,828 567,685 551,172 387,714 817,086 793,755 764,753 52 Financial and Insurance 73,455 27,857 75,529 505,585 295,622 754,386 509,201 709,787 835,150 352,872 53 Real Estate and Rental and Leasing 210,158 215,754 457,693 493,570 708,747 940,971 999,118 675,273 928,259 884,229 54 Professional, Scientific, and Technical Services 231,526 221,331 536,971 242,069 193,145 287,066 261,704 309,704 519,447 596,913 56 Admin and Support and Waste Mgmt & Rem Srv 65,045 39,027 110,686 103,340 50,264 125,033 85,430 93,967 98,927 76,437 61 Education Services 1,675,351 356,689 373,117 153,279 201,761 230,775 220,078 555,159 577,530 424,882 62 Health Care and Social Assistance 170 106 251 11,018 2,887 228 398 999 592 692 71 Arts, Entertainment and Recreation 206,050 204,456 184,687 191,343 189,027 201,391 241,107 216,403 266,915 460,281 72 Accommodation and Food Services 175,938 93,123 204,044 221,061 246,755 230,615 233,769 228,003 226,361 122,585 81 Other Services (except Public Administration) 4,632 9,805 13,156 17,412 8,965 3,167 2,963 2,772 2,329 4,285 92 Public Administration1 135 295 27,243 - - 1 1,391 1,656 1,717 4,723,629$ 3,617,604$ 4,368,523$ 4,796,144$ 4,960,386$ 4,678,477$ 4,316,991$ 5,909,966$ 8,026,289$ 6,751,651$ Town direct sales tax rate 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Note:Source: Texas State Comptroller reportsDue to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the Town's sales tax revenueFiscal Year Town of Westlake Exhibit S-10 Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years – Unaudited 128 Percentage General Certificates of Actual Fiscal Obligation of Taxable Per Year Bonds Obligation Tax Notes Total Sales Capita 2011 8,962,656$ 12,210,000$ -$ 21,172,656$ 9.19% 19,918 2012 16,770,000 4,877,000 - 21,647,000 11.84% 19,519 2013 16,590,000 13,622,000 - 30,212,000 13.81% 26,271 2014 18,260,000 11,044,000 - 29,304,000 12.40% 24,750 2015 17,480,000 11,046,131 - 28,526,131 11.58% 22,409 2016 17,091,659 10,739,306 - 27,830,965 11.30% 20,080 2017 15,267,000 18,460,700 1,530,000 33,727,700 14.50% 22,697 2018 15,457,018 19,361,251 1,328,000 36,146,269 15.54% 23,200 2019 14,504,400 20,957,422 1,116,000 36,577,822 12.19% 22,719 2020 13,512,294 20,341,544 901,000 34,754,838 9.42% 20,886 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. General Bonded Debt Outstanding 0 5 10 15 20 25 30 35 40 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Millions General Obligation Bonds Certificates of Obligation Tax Notes Town of Westlake Exhibit S-11 Ratios of Outstanding Debt by Type Last Ten Fiscal Years – Unaudited 129 General Certificates Other Certificates Total PercentageFiscal Obligation of Capital Contractual of Primary of Personal PerYear Bonds Obligation Leases Loans Obligations Obligation Government Income Capita2011 16,770,000$ 4,877,000$ -$ -$ 50,000$ 5,580,380$ -$ 27,277,380$ 23% 25,661 2012 16,770,000 4,877,000 - - 34,075 5,498,668 - 27,179,743 20% 24,508 2013 16,590,000 13,622,000 - - 18,150 5,412,149 - 35,642,299 24% 30,993 2014 18,260,000 10,029,800 - 237,378 437,253 5,320,824 1,014,200 35,299,455 22% 25,576 2015 17,480,000 9,759,250 - 154,347 357,041 5,226,294 1,286,881 34,263,813 23% 32,150 2016 17,091,659 9,736,953 - 563,045 275,101 5,126,958 971,300 33,765,016 19% 29,812 2017 15,457,018 19,361,251 1,328,000 162,004 238,404 5,156,839 949,300 42,652,816 23% 28,703 2018 15,457,018 18,432,779 1,328,000 162,004 201,737 4,913,865 956,009 41,451,412 20% 28,308 2019 14,504,400 17,930,135 1,116,000 - 165,050 4,800,109 3,027,287 41,542,981 20% 28,765 2020 13,512,294 14,424,079 901,000 398,012 128,373 4,679,944 2,917,465 36,961,167 17% 23,246 Note:See Table 13 for personal income and population data. 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.Governmental ActivitiesBusiness-TypeActivitiesTax Notes010203040502011 2012 2013 2014 2015 2016 2017 2018 2019 2020MillionsGeneral Obligation BondsCertificates of ObligationCapital LeasesLoansBusiness‐Type ActivitiesBT Certificates of ObligationTax Notes Town of Westlake Exhibit S-12 Direct and Overlapping Governmental Activities Debt As of September 30, 2020 –Unaudited 130 Amount of Debt Outstanding As of Percent (1) Amount Carroll ISD 346,705,000$ 9/30/2020 5.94% 20,594,277$ Denton County 611,835,000 9/30/2020 0.08% 489,468 Keller ISD 992,714,060 9/30/2020 4.09% 40,602,005 Northwest ISD 1,065,295,272 9/30/2020 #1.90% 20,240,610 Tarrant County 240,445,000 9/30/2020 0.71% 1,707,160 Tarrant County Hospital District 264,175,000 9/30/2020 0.71% 1,875,643 Trophy Club MUD#1 16,135,000 9/30/2020 0.71% 114,559 Total Overlapping Debt 7,205,000 9/30/2020 30.46% 85,623,721 Town of Westlake Outstanding Debt 36,961,167 Total Direct & Overlapping Debt 122,584,888$ Source: Texas Municipal Report prepared by employees of the Municipal Advisory Council of Texas ("MAC") Note: (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. Overlapping 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. Taxing Body Town of Westlake Exhibit S-13 Demographic and Economic Statistics Last Ten Fiscal Years – Unaudited 131 Year Population Income Income Age Enrollment Rate 2011 1063 110,487$ 117,447,681$ 41.5 530 6.2% 2012 1109 112,697 138,423,531 41.8 630 6.0% 2013 1,150 114,951 147,292,890 41.4 658 5.0% 2014 1,184 117,250 160,462,095 41.2 697 4.0% 2015 1,273 119,595 144,111,592 41.8 812 4.1% 2016 1,386 121,987 173,419,076 41.7 825 3.2% 2017 1,486 124,427 162,998,462 41.5 830 3.4% 2018 1,558 126,915 197,733,767 41.2 856 3.4% 2019 1,610 129,453 208,420,020 41.2 869 3.1% 2020 1,664 132,042 219,718,715 42.8 890 7.7% Sources: Municipal Advisory Council of Texas - Population United States Census - Median Age Tarrant County Unemployment Rate information taken from Texas Workforce Commission. USA.com - Per Capita Income source North Central Texas Council of Governments 1063 1109 1150 1184 1273 1386 1486 1558 1610 1664 0 500 1000 1500 2000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Estimated Population Town of Westlake Exhibit S-14 Principal Employers Current and Ten Years Ago – Unaudited 132 2010PercentagePercentageof Estimatedof EstimatedTotal TownTotal TownEmployer Employees Employment Employer Employees EmploymentSchwab 7,500 41.07% Fidelity Investments 3,600 41.63% Fidelity Investments 5,400 29.57% Core Logic 2,400 27.76% Travelocity 880 4.82% Wells Fargo 950 6.94% Wells Fargo 617 3.38% Chrysler Financial 600 10.99% Deloitte 500 2.74% McKesson Corporation 187 2.16% Sabre JLL Facilities 500 2.74% Marriott Solana Hotel 150 1.73% Core-Mark 434 2.38% Walco International 159 1.84% Verizon 405 2.22% Vaquero Club 132 1.53% Solera 330 1.81% Levi Strauss 92 1.06% Goosehead Insurance 239 1.31% Town of Westlake/Westlake Academy83 0.96% Sound Physicians 173 0.95% All Other Businesses 294 3.00% Marriott 143 0.78%Town of Westlake/Westlake Academy 142 0.78%All Other Businesses 999 5.47% Total 18,262 100% Total 8,647 100%Source: Cushman &Wakefield tenant records and contact with employers of the Town2020 Town of Westlake Exhibit S-15 Full-Time Equivalent Town Government Employees by Function/Program Last Ten Fiscal Years – Unaudited 133 Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020General government Town Manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00Deputy Town Manager 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.00 1.00Assistant Town Manager 0.00 0.00 0.75 0.90 1.00 0.90 1.00 1.00 1.00 1.00 Assistant to Town Manager 1.00 0.75 0.00 0.00 0.00 0.50 0.50 0.75 0.000.00 Administrative 0.75 0.75 1.00 0.50 0.50 0.00 1.50 1.00 1.00 1.00 Building official 1.33 1.33 1.50 1.66 1.66 3.17 4.00 4.00 4.00 4.00 Town secretary 1.00 1.00 1.00 1.00 1.25 1.25 1.50 1.50 1.50 1.00Facilities/Grounds maintenance1.08 0.83 1.00 1.09 1.34 1.58 0.50 1.75 1.00 0.83 Municipal 4.50 3.75 4.75 5.10 5.00 4.60 4.00 3.50 4.25 4.00 Finance 3.00 3.00 3.00 4.00 4.00 4.25 4.00 4.00 4.00 3.00Payroll/Human Resources 1.33 1.33 2.00 2.00 2.00 2.00 2.00 2.00 2.00 1.00Information Technology 0.00 0.00 0.00 1.00 1.00 1.00 1.00 2.00 2.00 2.00Public safety (EMS) 9.00 9.00 10.00 13.25 14.25 14.25 11.00 15.50 15.50 15.00 Culture and recreation 0.75 0.50 0.75 0.84 0.84 0.84 0.50 0.50 1.00 0.83 Public works 1.50 2.00 3.00 2.66 2.66 2.67 3.00 4.00 4.00 4.00 Marketing and public affairs 0.00 1.00 1.00 2.00 2.00 2.00 2.00 2.00 2.001.00 Education 59.44 67.48 76.18 91.18 93.65 95.31 95.05 98.00 95.00 101.00 Total 85.68 93.72 106.93 128.18 132.15 135.32 132.55 142.50140.25 141.66Source: Prior Town budgets and Academy personnel recordsNote: 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.Fiscal Year Town of Westlake Exhibit S-16 Operating Indicators by Function/Program Last Ten Fiscal Years – Unaudited 134 Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020General governmentPermits issued 70 85 132 144 159 218 217 259 250 193Permit values 21,173,592$ 29,481,047$ 50,544,048$ 59,358,904$ 80,011,354$ 87,307,794$ 262,690,940$ 311,013,915$ 332,197,798$ 65,739,881$ Police (Contract with Keller PD)Motor vehicle stops 9,829 12,221 9,993 9,579 10,432 11,109 10,718 8,3397,729 7,457Traffic accident investigations 348 343 322 341 398 461 386 333 327 219Part I crimes 30 39 9 15 20 13 22 31 14 48DWI arrests 80506955626670502533Fire/EMSFire runs 191 181 238 211 211 257 248 320 235 308Ambulance runs 264 266 286 240 253 288 269 202 206 128Inspections 71 54 96 286 261 246 290 188 227 103Public Works - GeneralStreet resurfacing (LF) 3,800 30,000 - - - - 6,000 - - 5,012 Potholes repaired 36 6 2 6 20 20 10 5 8 10Public Works - UtilityNumber of water accounts 500 568 614 651 713 752 810 835 762 773Water main breaks 4 4 3 1 1 - - 1 2 4 Avg daily consumption MG (water) 1.200 1.100 1.090 1.045 1.021 1.122 1.233 1.400 1.209 1.000Peak daily consumption MG (water) 2.540 2.600 2.480 2.690 2.770 1.5861.646 1.564 2.709 2.709System capacity - MG (water) 1.685 1.685 1.685 2.685 2.685 2.685 2.6852.685 2.685 2.685Water purchased (in gallons x 000) 443,222 407,305 401,457 381,482 372,838 409,817 450,208 510,931 441,352 462,529Water sold (in gallons x 1000) 385,320 376,496 357,297 347,148 360,000 350,000 419,520 470,168 422,635 492,376WastewaterNumber of new sewer connections 245 292 325 350 384 403 454 503 541 545Avg daily sewage treatment 0.163 0.136 0.151 0.208 0.166 0.132 0.176 1.171 1.171 0.210 (thousands of gallons)Source: Various Town departmentsNotes: N/A represents information that is unavailable.Fiscal Year Town of Westlake Exhibit S-17 Capital Asset Statistics by Function/Program Last Ten Fiscal Years – Unaudited 135 Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020FireStations 1111111111Public Works - UtilityPump station 1111111111Lift station 3333333333Telecommunications Duct Bank (LF) 57,783 57,783 57,783 59,936 66,08466,084 82,231 82,231 82,231 86,711Telecommunications Duct Bank Manholes 122 122 122 122 140 140 140 140 140160Water Water mains (LF) 130,000 137,891 137,891 142,694 148,117 148,117 181,393 181,393 181,393 188,387Fire hydrants 188 191 191 201 214 214 256 256 256 267Storage capacity MG 1,685 1,685 1,685 2,685 2,685 2,685 2,685 2,685 2,685 2,685WastewaterSanitary sewers (LF) 94,000 94,000 94,000 98,964 104,373 104,373 123,168 123,168 123,168 128,923Manholes 304 304 304 326 355 355 444 444 444 467Public Works - UtilityStreets (miles) 10.80 10.25 10.25 10.25 10.50 10.42 10.42 10.42 10.84 10.84Traffic signals (school zone flashers) 2 2 2 2 2 2 2.0 2.0 2.0 2.0 Parks and recreationOpen Space (acres) 25 25 25 27 27 27 27.0 27.0 27.0 27.0 Playgrounds 2 2 2 2 2 2.0 2.0 2.0 2.0 2.0 Softball/soccer field 1 1 1 1 1 1.0 1.0 1.0 1.0 1.0 Football field 1 1 1 1 1 1.0 1.0 1.0 1.0 1.0 Public trails (miles) 5.0 5.0 5.0 7.0 8.5 8.5 8.5 15.0 16.0 16.0 Source: Various Town departmentsNote: No capital asset indicators are available for the general government.Note: The amount of roads decreased in FY 2011-2012 due to a portion of road being dedicated to TxDotFiscal Year