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HomeMy WebLinkAboutComprehensive Annual Financial Report September 30, 2021                 CITY OF FRIENDSWOOD, TEXAS      ANNUAL COMPREHENSIVE  FINANCIAL REPORT  FOR THE FISCAL YEAR ENDED      September 30, 2021                                    Officials Issuing Report:    Morad Kabiri  City Manager    Katina Hampton  Director of Administrative Services            City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  TABLE OF CONTENTS        Page  Introductory Section  Letter of Transmittal i  Principal Officials v  GFOA Certificate of Achievement vi  Organizational Chart vii    Financial Section   Independent Auditor’s Report 3  Management’s Discussion and Analysis 7  Basic Financial Statements:  Government‐Wide Financial Statements:  Statement of Net Position 21  Statement of Activities 22  Fund Financial Statements:  Balance Sheet ‐ Governmental Funds 24  Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 25  Statement of Revenues, Expenditures, and Changes in Fund Balances ‐ Governmental Funds 26  Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of  Governmental Funds to the Statement of Activities 27  Statement of Net Position ‐ Proprietary Funds 28  Statement of Revenues, Expenses and Changes in Net Position ‐ Proprietary Funds 31  Statement of Cash Flows ‐ Proprietary Funds 32  Notes to the Financial Statements  35  Required Supplementary Information:  Schedule of Revenues, Expenditures, and Changes in Fund Balances ‐ Budget and Actual ‐   General Fund 72  Notes to Budgetary Schedule Information 80  Schedule of Changes in the Net Pension Liability and Related Ratios ‐ Texas Municipal Retirement  System 82  Schedule of City Contributions ‐ Texas Municipal Retirement System 84  Notes to Schedule of Contributions 85  Schedule of Changes in the Total OPEB Liability and Related Ratios ‐ Texas Municipal Retirement  System Supplemental Death Benefits Fund 86  Schedule of Changes in the Total OPEB Liability and Related Ratios ‐ City of Friendswood Retiree  Health Care Plan 87       CITY OF FRIENDSWOOD, TEXAS  TABLE OF CONTENTS (continued)          City of Friendswood 2021 ACFR   Page  Financial Section (continued)  Other Supplementary Information:  Combining and Individual Fund Statements and Schedules:   Combining Balance Sheet ‐ Nonmajor Governmental Funds 92  Combining Statement of Revenues, Expenditures and Changes in Fund Balances ‐ Nonmajor  Governmental Funds 95  Schedule of Revenue, Expenditures and Changes in Fund Balances ‐ Budget and Actual:   Police Investigation 98  Fire/EMS Donation 99  Municipal Court 100  CDBG – DR Harris County 101  TWDB Flood Mitigation Acquisition 102  Hazard Mitigation  103  CDBG – DR Galveston County 104  1776 Park 105  Sidewalk Installation 106  Park Land Dedication  107  Street Improvement 108  Debt Service  109  Bond Construction 110     Page Table  Unaudited Statistical Section  Net Position by Component  114 1  Changes in Net Position 116 2  Fund Balances of Governmental Funds 120 3  Changes in Fund Balances of Governmental Funds 122 4  Assessed Value and Taxable Value of Property 124 5  Direct and Overlapping Property Tax Rates 126 6  Principal Property Taxpayers 127 7  Property Tax Levies and Collections 128 8  Ratios of Outstanding Debt by Type 129 9  Ratio of Net General Bonded Debt Outstanding 130 10  Direct and Overlapping Governmental Activities Debt 131 11  Legal Debt Margin Information 132 12  Pledged Revenue Coverage 133 13  Demographic and Economic Statistics 134 14  Principal Employers 135 15  Full‐Time Equivalent City Government Employees by Function/ Program 136 16  Operating Indicators by Function/ Program 138 17  Capital Asset Statistics by Function/ Program 140 18      City of Friendswood 2021 ACFR  INTRODUCTORY SECTION      City of Friendswood 2021 ACFR       i City of Friendswood 2021 ACFR          March 22, 2022      The Honorable Mayor, Members of the City Council, and the Citizens of Friendswood:    The Annual Comprehensive Financial Report (ACFR) of the City of Friendswood for the fiscal year ended September 30, 2021,  is hereby submitted.  Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation,  including all disclosures, rests with the City.  To the best of our knowledge and belief, the enclosed data is accurate in all  material respects and is reported in a manner designed to present fairly the financial position and results of operations of the  various funds of the City.  All disclosures necessary to enable the reader to gain an understanding of the City’s financial  activities have been included.    This report consists of management’s representations concerning the finances of the City.   Consequently, management  assumes full responsibility for the completeness and reliability of all of the information presented in this report.  To provide  a reasonable basis for making these representations, management of the City has established a comprehensive internal  control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile  sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted  Accounting Principles (GAAP).   Because the cost of internal controls should not outweigh their benefits, the City’s  comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that  the financial statements will be free from material misstatement.   As management, we assert that, to the best of our  knowledge and belief, this financial report is complete and reliable in all material respects.        The City Charter requires an annual audit of the financial statements of all of the various funds of the City by independent  certified public accountants.  The accounting firm of Whitley Penn LLP has performed such an audit.  The goal of the  independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended  September 30, 2021 are free of material misstatement.  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 City’s  financial statements for the fiscal year ended September 30, 2021, are fairly presented in conformity with GAAP.  The  independent auditors’ report is presented as the first component of the financial section of this report        ii City of Friendswood 2021 ACFR  GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial  statements in the form of Management’s Discussion and Analysis (MD&A).  This letter of transmittal is designed to  complement MD&A and should be read in conjunction with it.  The City’s MD&A can be found immediately following the  report of the independent auditors.        PROFILE OF THE CITY    Established in 1895 as a Quaker colony, the City of Friendswood is rich in heritage.  The City was incorporated in 1960 and  chartered a home‐rule city under Texas law in 1971.  The City operates under a Council‐Manager form of government.  Policy‐ making and legislative authority are vested in a governing council consisting of the Mayor and six (6) Council Members.  The  Mayor and Council are responsible, among other things, for passing ordinances, adopting the budget, appointing board and  committee members and hiring the City Manager, City Attorney, Municipal Judge, and City Secretary.  The City Manager is  responsible for carrying out the policies and ordinances of the City Council and overseeing the day‐to‐day operations of the  City government, and for appointing heads of various departments.  The Mayor and Council are elected on an at‐large, non‐ partisan basis.  The Mayor and Council are elected to serve no more than four consecutive three‐year terms.    The City provides a full range of municipal services including public safety (police, fire and emergency medical), maintenance  of streets and infrastructure, sanitation services, maintenance of the treated waste distribution system and both sanitary and  storm sewer collection transmission systems, recreational activities and cultural events as well as general administrative  services.    FACTORS AFFECTING FINANCIAL CONDITION    Location  Encompassing 21 square miles, Friendswood is located in southeast Texas near the Texas Gulf Coast, between downtown  Houston and Galveston, spanning across two counties – northern Galveston County and southern Harris County. The current  estimated population is 41,916.   Residents and visitors can access Friendswood through FM 2351, FM 518, and FM 528 (NASA  Parkway).  Hobby Airport and Ellington Airport are located within a 15 minute drive from Friendswood, and Bush Intercontinental  Airport is just 45 minutes away.  Major sectors of the area’s economic base include aerospace, specialty chemicals, health care,  retail, and tourism.    Community   Friendswood has been nationally recognized as one of the best places to live in the country. With low tax rates, outstanding  public education, and the lowest crime rate in the region, Friendswood is the perfect place to live, work, and play.  The city  features beautiful parks and lush landscaping, along with a championship golf course. Children academically excel via two  superior public school systems – Friendswood ISD and Clear Creek ISD.  These attributes perfectly match Friendswood’s affluent  resident base of well‐educated, high‐income families.  More than 50% of residents work in executive, professional, and  managerial positions and generate an average household income of over $145,000, one of the highest in the Houston area.         Business  Friendswood is the perfect choice for many types of commercial enterprises.  Target markets include professional offices, retail,  commercial, and light industrial developments.  A key City focus is to encourage redevelopment of the downtown area and  development of the City’s panhandle area.  City leaders have approved special tools and incentives to revitalize downtown to  promote mixed‐use, multi‐story developments with pedestrian streetscapes and other amenities.  The City offers competitive  business incentives, including a municipal grant program, tax abatement that includes “green” development, freeport tax  exemption, and downtown development fee waivers.      Quality Lifestyle  As with any city, the goal is planning for continued quality growth to create a well‐balanced community.  Friendswood offers  single‐family residential housing in pleasant park‐like settings, tucked‐away from the busy stream of vehicular traffic.   Friendswood is committed to attracting more local enterprises that will complement and enhance the unique community  environment that has been carefully built over the past 100 years; one that has come to be cherished by residents and business  owners alike.        iii City of Friendswood 2021 ACFR  LONG TERM PLANNING    Budgeting Controls  The objective of the City’s budgetary controls is to ensure compliance with legal provisions embodied in the annual  appropriated budget approved by Council.  The charter requires the City Manager to submit a proposed budget and an  accompanying message to the City Council on or before August 1.  The council shall review and revise as deemed appropriate  prior to general circulation for the public hearing.  The Public Notice and Hearing must be posted in the city hall and published  in the official newspaper.  The budget must be adopted by the 15th of September or as soon thereafter as practical.  The City  legally adopts annual budgets for the General, Special Revenue and Debt Service Funds.  Annual and project budgets are also  adopted for the Proprietary and Capital Projects Funds, respectively.     The level of budgetary control; that is, the level at which expenditures cannot legally exceed the appropriated amount, is  established by department within a fund.  The City also maintains an encumbrance accounting system as one technique of  accomplishing budgetary control.  Encumbrances lapse at fiscal year end, but can be re‐appropriated through a budget  amendment the following fiscal year.  The City Manager is authorized to transfer budgeted amounts within departments in  any fund, but revisions that increase the total expenditures of any fund or transfers between departments must be approved  by Council.     Multi‐Year Financial Planning  A Multi‐Year financial plan (MYFP) was developed in 2006.  Originally, staff was directed to develop a plan to forecast the  City’s financial condition through 2020, the projected build‐out date.  The first version of this plan was drafted and later  reduced in scope to a five year projection.      The MYFP is based on the City’s strategic planning efforts, including the Comprehensive Land Use Plan, Vision 2020 and the  Capital Improvements Plan.  Departmental operational plans funding requirements to provide programs and services are  included in the MYFP as well.  Funding needs and available resources, both current and alternative revenue enhancements,  are identified.  Expenditures are projected based on departmental needs assessments and are organized based on “one‐time”  and “on‐going” expenditures.  In collaboration with Council, the plan is updated at least annually and serves as the basis of  budget development.      Relevant Financial Policies   As part of the annual budget process, the City adopts Financial Management Policy Statements that establish a framework  for fiscal decision making and that ensure that financial resources are available to meet the present and future needs of its  citizens.  These statements provide guidelines for financial planning and management, addressing every major financial  function and process.           iv City of Friendswood 2021 ACFR  Most importantly, the Financial Management Policy requires that the City maintain the General Fund unassigned fund balance  at a minimum of 90 days of prior year audited operating expenditures.   Any unassigned funds after the fiscal year‐end audit  will be allowed to accumulate to build this 90‐day reserve.  After the General Fund has gathered sufficient resources,  additional unassigned funds will be allowed to accumulate for future General Fund capital improvements.        The Financial Management Policy also requires the minimum working capital in the Water and Sewer Fund be 90 days of prior  year audited operating expenditures.  Any unrestricted funds after the fiscal year‐end audit will be allowed to accumulate to  build this 90‐day reserve.  After these funds have gathered sufficient resources, additional unrestricted funds will be allowed  to accumulate in working capital for future utility /operating fund capital improvements.            Awards  The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial  Reporting to the City of Friendswood for its annual comprehensive financial report for the fiscal year ended September 30,  2020.  This was the thirty‐third consecutive year that the City has received this prestigious award.  In order to be awarded a  Certificate of Achievement, the City published an easily readable and efficiently organized annual comprehensive financial  report.  This report satisfied both generally accepted accounting principles and applicable legal requirements.    A Certificate of Achievement is valid for a period of one year only.  We believe that our current annual comprehensive financial  report continues to meet the Certificate of Achievement program’s requirements and we are submitting it to the GFOA to  determine its eligibility for another certificate.    Acknowledgements  The preparation of the annual comprehensive financial report was made possible by the dedicated service of the entire staff  of the Administrative Services Department.  Each member of the department has my sincere appreciation for the  contributions made in the preparation of this report.    In closing, I also express my thanks to the Mayor, members of the City Council and the City Manager for their leadership,  interest and support in conducting the financial operations of the City in a responsible and progressive manner.    Sincerely,      Katina Hampton   Director of Administrative Services           v City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  PRINCIPAL OFFICIALS  September 30, 2021      Elected Officials  Position  Term Expires  Mike Foreman  Mayor  May 2024  Steve Rockey  Council Member ‐ Position No. 1  May 2024  Sally Branson  Council Member ‐ Position No. 2  May 2023  Trish Hanks  Council Member ‐ Position No. 3  May 2024  Robert J. Griffon  Council Member ‐ Position No. 4  May 2022  John H. Scott  Council Member ‐ Position No. 5  May 2023  Brent Erenwert  Council Member ‐ Position No. 6  May 2022      Key Staff  Position  Morad Kabiri  City Manager  Steven Rhea  Assistant City Manager  Katina Hampton  Director of Administrative Services  Aubrey Harbin  Director of Community Development  Jildardo Arias  Director of Engineering  Matt Riley  Library Director  Brian Mansfield  Fire Marshal/Emergency Management Coordinator  Haley Brown  Director of Human Resources  James O’Brien  Director of Information Technology  Rene Ibarra  Director of Public Works  James Toney  Director of Parks and Recreation  Leticia Brysch  City Secretary  Robert B. Wieners  Police Chief  Karen Horner  City Attorney  James W. Woltz  Judge ‐ Municipal Court          vi City of Friendswood 2021 ACFR         vii City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  ORGANIZATIONAL CHART             viii City of Friendswood 2021 ACFR       1 City of Friendswood 2021 ACFR  FINANCIAL SECTION      2 City of Friendswood 2021 ACFR      +RXVWRQ2IߓFH 3737 Buffalo Speedway Suite 1600 Houston, Texas 77098 713.621.1515 Main whitleypenn.com 3 City of Friendswood 2021 ACFR INDEPENDENT AUDITOR’S REPORT The Honorable Mayor and Members of the City Council City of Friendswood, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, businessͲtype activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information ofCity of Friendswood, Texas (the “City”), as of and for the year ended September 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accountingprinciples 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 did not audit the financial statementsofWestRanch ManagementDistrict, which isadiscretely presentedcomponentunit.Thosefinancialstatements were audited by other auditors whose report thereon has been furnished to us, and our opinion , insofar as it related to the amountsincludedfortheWestRanchManagementDistrict,isbasedsolelyonthereportoftheotherauditors.Weconducted 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 from 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,aswellasevaluating theoverallpresentation ofthefinancialstatements.ThefinancialstatementsoftheWest Ranch Management District were not audited in accordance with Government Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. TheHonorableMayorand MembersoftheCityCouncil CityofFriendswood,Texas    4CityofFriendswood2021ACFR Opinions  Inouropinion,basedonourauditandthereportoftheotherauditors,thefinancialstatementsreferredtoabovepresent fairly,inallmaterialrespects,therespectivefinancialpositionofthegovernmentalactivities,businessͲtypeactivities,the aggregatediscretelypresentedcomponentunits,eachmajorfund,andtheaggregateremainingfundinformationoftheCity, asofSeptember30,2021,andtherespectivechangesinfinancialpositionand,whereapplicable,cashflowsthereofforthe yearthenendedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.  OtherMatters  RequiredSupplementaryInformation  AccountingprinciplesgenerallyacceptedintheUnitedStatesofAmericarequirethatthemanagement’sdiscussionand analysis,budgetarycomparisoninformation,pensionsystemsupplementaryinformationandotherpostͲemployment benefitsupplementaryinformation,aslistedinthetableofcontents,bepresentedtosupplementthebasicfinancial statements.Suchinformation,althoughnotapartofthebasicfinancialstatements,isrequiredbytheGovernmental AccountingStandardsBoard,whoconsidersittobeanessentialpartoffinancialreportingforplacingthebasicfinancial statementsinanappropriateoperational,economic,orhistoricalcontext.Wehaveappliedcertainlimitedproceduresto therequiredsupplementaryinformationinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStatesof America,whichconsistedofinquiriesofmanagementaboutthemethodsofpreparingtheinformationandcomparingthe informationforconsistencywithmanagement’sresponsestoourinquiries,thebasicfinancialstatements,andother knowledgeweobtainedduringourauditofthebasicfinancialstatements.Wedonotexpressanopinionorprovideany assuranceontheinformationbecausethelimitedproceduresdonotprovideuswithsufficientevidencetoexpressanopinion orprovideanyassurance.  OtherInformation  OurauditwasconductedforthepurposeofformingopinionsonthefinancialstatementsthatcollectivelycomprisetheCity’s basicfinancialstatements.Theintroductorysection,combiningandindividualnonmajorfundfinancialstatements, budgetaryschedules,andstatisticalsection,arepresentedforpurposesofadditionalanalysisandarenotarequiredpartof thebasicfinancialstatements.  Thecombiningandindividualnonmajorfundfinancialstatementsandbudgetaryschedulesaretheresponsibilityof managementandwerederivedfromandrelatesdirectlytotheunderlyingaccountingandotherrecordsusedtopreparethe basicfinancialstatements.Suchinformationhasbeensubjectedtotheauditingproceduresappliedintheauditofthebasic financialstatementsandcertainadditionalprocedures,includingcomparingandreconcilingsuchinformationdirectlytothe underlyingaccountingandotherrecordsusedtopreparethebasicfinancialstatementsortothebasicfinancialstatements themselves,andotheradditionalproceduresinaccordancewithauditingstandardsgenerallyacceptedintheUnitedStates ofAmerica.Inouropinion,thecombiningandindividualnonmajorfundfinancialstatementsandbudgetaryschedulesare fairlystated,inallmaterialrespects,inrelationtothebasicfinancialstatementsasawhole.  Theintroductoryandstatisticalsectionshavenotbeensubjectedtotheauditingproceduresappliedintheauditofthebasic financialstatementsand,accordingly,wedonotexpressanopinionorprovideanyassuranceonthem.   TheHonorableMayorand MembersoftheCityCouncil CityofFriendswood,Texas    5CityofFriendswood2021ACFR OtherReportingRequiredByGovernmentAuditingStandards  InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdatedMarch22,2022,onour considerationoftheCity'sinternalcontroloverfinancialreportingandonourtestsofitscompliancewithcertainprovisions oflaws,regulations,contracts,andgrantagreementsandothermatters.Thepurposeofthatreportistodescribethescope ofourtestingofinternalcontroloverfinancialreportingandcomplianceandtheresultsofthattesting,andnottoprovide anopiniononinternalcontroloverfinancialreportingoroncompliance.Thatreportisanintegralpartofanauditperformed inaccordancewithGovernmentAuditingStandardsinconsideringtheCity’sinternalcontroloverfinancialreportingand complianceandhasbeenissuedunderseparatecover.    Houston,Texas March22,2022        6 City of Friendswood 2021 ACFR       7 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS       As management of the City of Friendswood, Texas (“the City”), we offer readers of the City’s financial statements this  narrative overview and analysis of the financial activities of the City for the fiscal year ended September 30, 2021.  Please  read this information in conjunction with the basic financial statements that follow this section.    Financial Highlights    Some of the City’s financial highlights for the fiscal year ending September 30, 2021 include:     The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources  at the close of the most recent fiscal year by $128,235,461.     The City’s total net position increased during the year by $9,206,750.  The City’s net pension and total OPEB liabilities  were $9.7 million and $1.9 million, respectively. The net pension liability decreased by $840 thousand and the total  OPEB liability increased by $123 thousand compared to the prior year.     As of the close of the current fiscal year, the City reported unrestricted net position of $16,870,336.     Program revenues of $28,512,908 reduced the net cost of the City’s functions to be financed from the City’s general  revenues to $22,446,592 .    Overview of the Financial Statements      This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements.  The basic financial  statements are comprised of three components: 1) government‐wide financial statements, 2) fund financial statements, and  3) notes to the financial statements.  This report also includes supplementary information intended to furnish additional  detail to support the basic financial statements themselves.    CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          8 City of Friendswood 2021 ACFR  Government‐wide Financial Statements    The government‐wide financial statements report information for the City as a whole.  These statements include transactions  and balances relating to all assets, including infrastructure capital assets.  These statements are designed to provide  information about cost of services, operating results, and financial position of the City as an economic entity.  The Statement  of Net Position and the Statement of Activities, which appear first in the City’s financial statements, report information on  the City’s activities that enable the reader to understand the financial condition of the City.  These statements are prepared  using the accrual basis of accounting, which is similar to the accounting used by most private‐sector companies.  All of the  current year’s revenues and expenses are taken into account even if cash has not yet changed hands.    The Statement of Net Position presents information on all of the City’s assets and deferred outflows of resources and liabilities  and deferred inflows of resources with the difference reported as net position.  Over time, increases or decreases in the net  position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.  Other non‐ financial factors, such as the City’s property tax base and the condition of the City’s infrastructure, need to be considered in  order to assess the overall health of the City.    The Statement of Activities presents information showing how the City’s net position changed during the most recent fiscal  year.  All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of  the timing of related cash flows – the accrual method rather than modified accrual that is used in the fund level statements.    Both of the government‐wide financial statements distinguish functions of the City that are principally supported by taxes  and intergovernmental revenues (governmental activities) from functions that are intended to recover all or significant  portion of their costs through user fees (business‐type activities).     Governmental activities – Most of the City’s basic services are reported here including general government (mayor  and council, city secretary, city manager, administrative services, human resources, and information technology);  public safety (police and fire marshal); engineering (capital projects administration); public works (streets and  drainage); community development (building inspection and planning and zoning); parks and recreation (parks,  facility operations and community activities) and library.  Interest payments on the City’s debt are also reported  here.  Property tax, sales tax, franchise taxes, municipal court fines and permit fees finance most of the activities.     Business‐type activities – Services involving a fee for those services, which include the City’s water and sewer  system are reported here.    Component Units – activities include activities of the West Ranch Management District and Friendswood Downtown  Economic Development Corporation.    Fund Financial Statements    A fund is a self‐balancing set of accounts that is used to maintain control over resources that have been segregated for specific  activities or objectives.  The City uses fund accounting to ensure and demonstrate compliance with finance‐related legal  requirements.  The City uses two fund types – governmental and proprietary.       CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          9 City of Friendswood 2021 ACFR  Governmental Funds    Governmental funds are used to account for essentially the same functions reported as governmental activities in the  government‐wide financial statements with the exclusion of internal service fund activity.  However, unlike the government‐ wide financial statements, governmental funds 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 the  City’s near‐term financing requirements.    Because the focus of the 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 financial decisions.  Both the governmental fund balance sheet and the governmental statement of  revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between  governmental funds and governmental activities.    The City maintains fifteen governmental funds.  Information is presented separately in the governmental funds balance sheet  and the governmental fund statement of revenues, expenditures, and changes in fund balance for the General Fund,  Coronavirus State and Local Fiscal Recovery Fund, and Bond Construction Fund, which are considered to be major funds.  The  other twelve funds are combined into a single, aggregated presentation.  Individual fund data for each of these non‐major  governmental funds is provided in the form of combining statements found in this report.    Proprietary Funds    The City maintains two types of proprietary funds: enterprise and internal service funds.  Enterprise funds are used to report  the same functions presented as business‐type activities in the government‐wide financial statements.  The City uses an  enterprise fund to account for its operation in water distribution and wastewater collection/treatment along with its water  and wastewater impact fees, and water construction projects.  Management would note that trash collection services are  provided by a franchise agreement.    Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various  functions.  The City uses an internal service fund to account for fleet management services.  Because these services  predominately benefit governmental rather than business‐type functions, they have been included within the governmental  activities in the government‐wide financial statements.    Notes to the Financial Statements    The notes to the financial statements provide additional information that is essential to a full understanding of the data  provided in the government‐wide fund financial statements.  The notes are the last section of the basic financial statements.    Other Information    In addition to the basic financial statements and accompanying notes, this report also presents certain Required  Supplementary Information (“RSI”).  The City adopts an annual appropriated budget for its General Fund.  A budgetary  comparison schedule has been provided as RSI to demonstrate compliance with this budget.  RSI can be found after the notes  to the financial statements.  The RSI also includes schedules related to the City’s progress in funding its obligation to provide  pension and other post‐employment benefits to its employees.      The combining and individual nonmajor fund financial statements and budgetary schedules that further support the  information in the financial statements are presented immediately following the required supplementary information.     CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          10 City of Friendswood 2021 ACFR  GOVERNMENT‐WIDE FINANCIAL ANALYSIS    Statement of Net Position    As noted earlier, net position may serve over time as a useful indicator of a government’s financial position.  For the City,  assets and deferred outflows of resources exceed liabilities and deferred inflows of resources by $128,235,461 as of  September 30, 2021 in the primary government, which is an increase in the City’s overall financial position compared to the  prior year.    The largest portion of the City’s net position (82.0%) reflects its investments in capital assets (e.g., land, buildings and  improvements, machinery and equipment, infrastructure, water and sewer system, construction in progress and water  rights); less any debt outstanding used to acquire those assets.  The City uses these capital assets to provide services to  citizens; consequently, these assets are not available for future spending.  Although the City’s investment in its capital assets  is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other  resources, since the assets themselves cannot be used to liquidate these liabilities.    The following table reflects the condensed Statement of Net Position.    Governmental Activities Business Type  Activities Totals 2021 2020 2021 2020 2021 2020 Current and other assets 44,538,331$     26,111,095$     48,888,658$   33,820,399$   93,426,989$      59,931,494$       Capital  assets 108,518,265     105,843,302     62,808,555      62,204,855      171,326,820      168,048,157       Total  Assets 153,056,596     131,954,397     111,697,213   96,025,254      264,753,809      227,979,651       Deferred outflows  of resources 2,969,271         3,381,110          1,023,421        1,097,676        3,992,692          4,478,786           Total  assets and deferred     outflows  of resources 156,025,867     135,335,507     112,720,634   97,122,930      268,746,501      232,458,437       Long‐term liabilities 62,989,424       51,912,775       64,349,995      52,001,595      127,339,419      103,914,370       Other Liabilities 8,080,805         4,971,167          2,429,773        1,895,345        10,510,578        6,866,512           Total  Liabilities 71,070,229       56,883,942       66,779,768      53,896,940      137,849,997      110,780,882       Deferred inflows of resources 2,336,852         2,290,897          324,191           357,947           2,661,043          2,648,844           Net position: Net investment in capital  assets 72,240,727       68,990,597       32,910,959      32,242,803      105,151,686      101,233,400       Restricted 3,491,974         4,606,124          2,721,465        2,186,731        6,213,439          6,792,855           Unrestricted 6,886,085         2,563,947          9,984,251        8,438,509        16,870,336        11,002,456         Total  Net Position 82,618,786$     76,160,668$     45,616,675$   42,868,043$   128,235,461$   119,028,711$                                                                                                                                                     A portion of the primary government’s net position, $6,213,439 or 4.8%, represents resources that are subject to external  restrictions on how they may be used.  These restrictions include monies accounted for in special revenue funds for which  the use is legally restricted and capital project funds.  The remaining balance of unrestricted net position, $16,870,336 or  13.2%, may be used to meet the City’s ongoing obligations to citizens and creditors.   CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          11 City of Friendswood 2021 ACFR  The following table provides a summary of the City’s changes in net position.    Governmental Activities Business Type  Activities Totals 2021 2020 2021 2020 2021 2020 Revenues Program Revenues: Charges  for services 2,853,702$       2,215,721$       17,919,751$   16,638,758$   20,773,453$      18,854,479$       Operating grants  and     contributions 3,874,866         3,430,645           ‐                         22,602              3,874,866          3,453,247           Capital  grants  and     contributions 3,864,589         708,306              ‐                          ‐                         3,864,589          708,306               General  Revenues: Property taxes 19,163,858       18,731,549        ‐                          ‐                         19,163,858        18,731,549         Sales  and alcohol taxes 9,915,046         8,846,359           ‐                          ‐                         9,915,046          8,846,359           Franchise taxes 2,090,001         2,142,660           ‐                          ‐                         2,090,001          2,142,660           Investment earnings 50,805               880,606             43,099              347,518           93,904                1,228,124           Miscellaneous 390,533             269,855              ‐                          ‐                         390,533              269,855               Total Revenues 42,203,400       37,225,701       17,962,850      17,008,878      60,166,250        54,234,579         Expenses General  government 5,867,654         6,119,806           ‐                          ‐                         5,867,654          6,119,806           Public safety 15,645,527       15,501,734        ‐                          ‐                         15,645,527        15,501,734         Public works 7,160,229         8,840,113           ‐                          ‐                         7,160,229          8,840,113           Engineering 506,959             434,976              ‐                          ‐                         506,959              434,976               Community  development 1,035,202         1,122,506           ‐                          ‐                         1,035,202          1,122,506           Parks  and recreation 4,604,943         4,439,511           ‐                          ‐                         4,604,943          4,439,511           Library services 1,221,740         1,214,130           ‐                          ‐                         1,221,740          1,214,130           Water and sewer ‐                           ‐                           11,864,245      12,071,159      11,864,245        12,071,159         Interest on long‐term debt 1,244,881         1,055,889          1,808,120        1,733,123        3,053,001          2,789,012           Total Expenses 37,287,135       38,728,665       13,672,365      13,804,282      50,959,500        52,532,947         Increase (decrease) in net position before transfers 4,916,265         (1,502,964)        4,290,485        3,204,596        9,206,750          1,701,632           Transfers 1,541,853         1,434,829          (1,541,853)       (1,434,829)        ‐                            ‐                            Change in net position 6,458,118         (68,135)              2,748,632        1,769,767        9,206,750          1,701,632           Net Position ‐ Beginning 76,160,668       76,228,803       42,868,043      41,098,276      119,028,711      117,327,079       Net Position ‐ Ending 82,618,786$     76,160,668$     45,616,675$   42,868,043$   128,235,461$   119,028,711$      Governmental Activities    Governmental activities increased the City’s net position by $6,458,118.  Key elements of this change are as follows:     Property taxes continue to be the City’s largest revenue source.  Property tax revenue increased by $432,309 primarily  due to new construction within the City.   Sales and alcohol tax revenue remained strong during fiscal year 2021, providing a 12.08% increase for the year, from  $8.8 million to $9.9 million.   This increase is primarily a result of new businesses that opened during the prior fiscal  year which included several fast‐food establishments.      Operating grants and contributions increased $444 thousand from prior year.  This increase is primarily a result of the  City being awarded $2.2 million in public assistance grant funds related to Hurricane Harvey offset by $1.9 million in  Cares Act funds received in prior year.   Capital grants and contributions increased $3,156,283 from prior year.  In the current year, the City received  Community Development Block Grant Disaster Recovery funds for projects in both the Galveston and Harris County  sides of the City.  In addition, funds were received from FEMA as a result of Hurricane Harvey and Hazard Mitigation  Grant Program funds and Flood Mitigation Assistance funds were received for the acquisition and demolition of  flood‐prone properties.       CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          12 City of Friendswood 2021 ACFR   Overall, total expenses decreased $1.4 million from the prior year. The largest decrease of $1.68 million was in Public  Works which was primarily a result of a decrease in street improvement expenses in the current fiscal year.     Charges  for  services 7%Operating grants  and  contributions 9% Capital  grants and  contributions 9% Property taxes 45% Sales and  alcohol  taxes 24% Franchise taxes 5% Investment  earnings 0% Miscellaneous 1% Governmental Activities  ‐Revenues   General  government 16% Public safety 42% Public works 19% Engineering 2% Community  development 3% Parks  and  recreation 12% Library services 3% Interest on long‐ term  debt 3% Governmental Activities  ‐Expenses      CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          13 City of Friendswood 2021 ACFR  Business‐Type Activities    Business‐type activities increased the City’s net position by $2,748,632.  Key elements of this change are as follows:     Revenues increased by $1.0 million or 5.6% resulting from an increase in utility rates. The largest increase in rates  was related to sewer charges.  Expenses decreased $132 thousand which was primarily a result of management’s  decision not to purchase additional wastewater capacity at the Blackhawk Wastewater Treatment Facility, offset  by an increase in the cost of purchased water.          FINANCIAL ANALYSIS OF THE CITY’S FUNDS    As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance‐related legal requirements.  Governmental Funds    The focus of the City’s governmental funds is to provide information on near‐term inflows, outflows and balances of  spendable resources. Such information is useful in assessing the City’s financing requirements.  In particular, unassigned fund  balance may serve as a useful measure of the City’s net resources available for spending at the end of the year.    At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balance of $35,178,448.   Approximately 33.51% of this amount or $11,787,428 is unassigned fund balance; however, $7.3 million is set aside for the  90‐day operating reserve, as set forth in the City’s financial policies.      ‐  2,000,000  4,000,000  6,000,000  8,000,000  10,000,000  12,000,000  14,000,000  16,000,000  18,000,000  20,000,000 2021 2020 Operating Revenues Operating Expenses CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          14 City of Friendswood 2021 ACFR  The remaining $23,391,020 is nonspendable, restricted, or assigned as follows:    1.04%‐Nonspendable Prepaid items 355,011$            Permanent fund 11,101                Total  Nonspendable 366,112$            53.17%‐Restricted Public education  and government channels 597,908$            Debt service 10,608                Municipal  court operations 274,538              Public safety operations 785,094              Capital  projects 17,035,848        Total  Restricted 18,703,996$      12.28%‐Assigned Subsequent year's  budget appropriation of  fund balance 1,798,058$        Capital  projects 2,522,854           Total  Assigned 4,320,912$          The General Fund is the chief operating fund of the City.  At the end of the current fiscal year, total fund balance reached  $17.2 million of which unassigned fund balance of the General Fund was $12.0 million.  As a measure of the General Fund’s  liquidity, it may be useful to compare both unassigned and total fund balance to total fund expenditures.  Unassigned fund  balance represents 35.9% of total General Fund expenditures, while total fund balance represents 51.8 percent of that same  amount.  At year end, the City’s operating reserve was $7.3 million, representing 25% of total General Fund expenditures,  excluding capital expenditures.    Key differences between last year’s General Fund activity and this year’s include:     $1.5 million increase in total revenues – This increase is primarily related to an increase in sales tax revenue as a  result of new businesses that opened during the prior fiscal year which included several fast‐food establishments.     Intergovernmental revenue increased $465 thousand as a result of an increase in public assistance grants related to  Hurricane Harvey offset by Cares Act funds received in prior year.   $3.3 million increase in total expenditures ‐ This increase can primarily be attributed to $1.7 million increase in capital  outlay. In the current year, the City purchased a building to house the Public Works, Engineering and the Operations  Division of Parks and Recreation. The total cost of the building funded by the general fund was $2.9 million which  consisted of grant funds received as a result of Hurricane Harvey, insurance proceeds and general fund balance. In  addition public works expenditures increased $680 as a result of repairs and maintenance in the streets division,  public safety expenditures increased $645 thousand as a result of increased personnel costs and parks and recreation  expenditures increased $289 thousand as a result of programs and events cancelled in prior year being reinstated.    The Coronavirus State and Local Fiscal Recovery Fund received $5.0 million in funding, this amount is unearned revenue and  will be expended in fiscal year 2022.     The fund balance of the Bond Construction Fund was $15,212,515, an increase of $12,331,479 compared to the prior year.   The increase was a result of the issuance of debt of $13,185,000 for capital projects, offset by the costs incurred on those  projects during the fiscal year.   CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          15 City of Friendswood 2021 ACFR  Other non‐major governmental funds fund balance increased by $2.7 million.   This increase is primarily a result of a sales tax  collections for the Street Improvement fund exceeding improvement cost by $1.2 million and revenue recognition of $1.8  million for grant funds.  The Debt Service Fund had a total fund balance of $10,608 at the end of the fiscal year, all of which  is restricted for the payment of debt service.  The net decrease in the Debt Service fund balance during the year was $21,301.    Proprietary Funds    The City’s proprietary funds financial statements provide the same type of information found in the government‐wide  financial statements, but in more detail.    At the end of the year, unrestricted net position was $ 10.0 million for the Water and Sewer Fund.  The total increase in the  net position of the Water and Sewer Fund was $2,748,632.  Other factors concerning the finances of this fund have already  been addressed in the discussion of the City’s business‐type activities.    Unrestricted net position of the Internal Service Fund was $707,399.  The net position of the Internal Service Fund increased  by $366,044 resulting from lease revenue from the City’s participating funds.    General Fund Budgetary Highlights    The City made revisions to the original appropriations approved by the City Council.  Budgeted revenues increased by  $1,668,284 or 5.82% and expenditures were increased by $8,149,947 or 26.53% .    Total revenues were above budget by $1,373,121.  The more significant variances are detailed below:     $224,757 below budget in property taxes due to protested property values being lower than anticipated.   $893,744 over budget in intergovernmental revenue as a result of federal funds received from FEMA for Hurricane  Harvey related expenditures.   $568,200 over budget in sales and mixed beverage taxes as a result of new businesses that opened in previous  fiscal year which included several fast‐food establishments.   $317,524 above budget in fines and forfeitures due to increase in number of tickets written for traffic violations.   $124,624 below budget in permits due to a decrease in residential growth.    $132,649 below budget in investment earnings due to decline in interest rates as a result of the economic  downturn.    Total expenditures of the General Fund were  below the final expenditure budget. The more significant variances are detailed  below:     $455,670 below budget in general government expenditures as a result of a decrease in other services and charges  (legal, contract, consulting, etc.) as well as a decrease in personnel costs.      $340,280 below budget in public safety expenditures as a result of personnel vacancies.         $171,080 below budget in public works due to personnel vacancies and a decrease in streets and drainage repairs.       $105,194 below budget in community development as a result of a decrease in other services and decrease in  personnel costs in the planning and zoning and inspections and code enforcement divisions.     $547,092 below budget in parks and recreation due to a decrease in repairs and maintenance as a result of  maintenance projects not being completed in the fiscal year.   Personnel costs were also down in all divisions.    $2,893,705 below budget in capital improvements due to projects either not being started or completed in the  current fiscal year.   These projects are primarily related to facility and streets improvements.  CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          16 City of Friendswood 2021 ACFR  Capital Assets    The City’s investment in capital assets (net of accumulated depreciation) for its governmental and business‐type activities as  of September 30, 2021 is $171.3 million.  The investment in capital assets include land, buildings and improvements,  machinery and equipment, infrastructure, water and sewer system, water rights and construction in progress.    Major capital events during the year included the following:     Business‐type improvements include substantial completion of Lift Station #23 re‐construction, ($3,573,900), water  and sewer utilities for Blackhawk Boulevard Phase II ($407,600), and water and sewer utilities for Friendswood Lakes  Boulevard ($438,900). The City also acquired two bypass pumps with the completion of LS#23 valued at $250,000.   To accommodate future flood mitigation projects, the City purchased two buyout properties using grant funding for  $480,000 as well as three additional properties for $872,000.   Heavy equipment purchases included a dump truck and field drag machine for a total cost of $137,633.   The City accepted completion of Blackhawk Boulevard Phase II. The total project cost was $5,408,915. Street  construction comprised $5,001,342 of the total cost; water and sewer related construction cost $407,573.   The City’s $5.5 million portion for the Imperial Estates Inline Detention Pond cost‐share project was recorded as  Construction in Progress at 9/30/2020. Work performed by the Galveston County Consolidated Drainage District was  substantially complete (95%) and was recoded to an asset as of 9/30/2021.   Friendswood Lakes Boulevard was completed as a cost‐share project between the City of Friendswood and County  of Galveston. The total project cost for the City was $1,194,307 split between governmental activities (street  construction and drainage ‐ $755,490) and business‐type activities (water and sewer utilities ‐ $438,817).   Several improvements were made to City parks including the relocation of the disc golf course to Stevenson Park for  $15,528, construction of a monument entrance sign at the Dog Park for $27,825 and construction of a dumpster  enclosure at the Sportspark for $11,754.   The old Food Lion grocery store was purchased for $3.768 million to house Public Works, Engineering and Parks and  Recreation departments after the old Public Works facility was flooded during Hurricane Harvey. A portion  ($788,000) of the building’s acquisition price was funded with grant funds and a section of the building will be  converted into an emergency shelter.   Office renovations for City Secretary (CSO) and a portion of Administrative Services (ASO) departments were  completed for $127,900. An executive conference room was converted to A PEG channel studio for $6,500.   The City made some significant upgrades towards technological capabilities during the year. Some of the completed  projects include: installation of fiber optic cables from and between the Library and Stevenson Park to City Hall,  purchase of audio/visual equipment in Council Chambers to record and broadcast meetings/events, acquisition of  new servers and equipment for City Hall, Public Safety Building, Blackhawk Building and the Library, and the purchase  of new network monitoring software. The total cost for these upgrades was $490,305.   The City purchased 24 new vehicles. Public Safety received 17 of the new vehicles and also completed upfitting to a  vehicle purchased in FY20 for a total cost of $940,745. Public Works purchased a new vehicle with a cost of $30,729.  The Parks department purchased three vehicles for a total cost of $125,965. Three EMS vehicles were purchased for  $143,813.   The following major projects are in Construction in Progress at the end of fiscal year 2021: Blackhawk Emergency  Shelter, Blackhawk Building Renovation, Fire Station #2, Public Safety Building, Centennial Park Wall, Utility  Relocation at Clear Creek Utility Bridge, Forest Bend Detention Pond, 42” Southeast Transmission Water Line, Lift  Station Mitigation Program, Sanitary Sewer Assessment – Phase V & VI, and Automated Water Meter installation  CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          17 City of Friendswood 2021 ACFR  2021 2020 2021 2020 2021 2020 Land 29,695,765$       28,344,769$       319,473$            319,473$            30,015,238$       28,664,242$        Buildings and improvements 23,862,519 21,644,179         338,606               358,363               24,201,125         22,002,542          Machinery and equipment 7,014,572 6,503,500           2,658,943           2,600,356           9,673,515           9,103,856            Infrastructure 46,509,824 38,014,849         36,904,531         34,251,770         83,414,355         72,266,619          Water rights ‐                             ‐                            19,716,695         19,716,695         19,716,695         19,716,695          Construction in progress 1,435,585 11,336,005         2,870,307 4,958,198 4,305,892           16,294,203          108,518,265$     105,843,302$     62,808,555$       62,204,855$       171,326,820$     168,048,157$      Governmental Activities Business‐type Activities Totals   More detailed information on the City’s capital assets is presented in Note 4 to the financial statements.    Debt Administration    At the end of the current fiscal year, the City had a total bonded debt, premiums and capital lease obligation of $114.5 million.    2021 2020 2021 2020 2021 2020 General obligation bonds 46,265,000$       35,390,000$       20,300,000$       22,380,000$       66,565,000$       57,770,000$        Revenue bonds ‐                             ‐                            37,080,000         24,325,000         37,080,000         24,325,000          Premium on bond issuance 3,544,357           2,668,822           5,666,291           3,920,243           9,210,648           6,589,065            Capital leases 1,681,709           1,861,762            ‐                             ‐                            1,681,709           1,861,762            51,491,066$       39,920,584$       63,046,291$       50,625,243$       114,537,357$     90,545,827$        Governmental Activities Business‐type Activities Totals   The City’s General Obligation and Revenue Bonds bond ratings are listed below:    Standard   & Poor's   General Obligation Bonds        AA+  Revenues Bonds        AA‐    More detailed information about the City’s outstanding debt can be found in Note 5 to the financial statements.     CITY OF FRIENDSWOOD, TEXAS  MANAGEMENT’S DISCUSSION AND ANALYSIS (continued)          18 City of Friendswood 2021 ACFR  Economic Factors and Next Year’s Budgets and Rates    Friendswood continues to experience moderate growth.   The City’s current population is estimated to be 41,916.   Friendswood is expected to reach build out with an estimated population of 58,012.  The City is continuing to focus on  economic development initiatives, including the revitalization of downtown and a large residential and commercial  development called West Ranch.  The West Ranch residential development is currently under way, with commercial  construction scheduled to follow as the area’s residential population grows.  Other residential developments are in planning  phases for next fiscal year.    The City’s largest single source of revenue in the General Fund continues to be ad valorem taxes.  The adopted budget for  fiscal year 2022 has a tax rate of $0.487314 per $100 taxable value.  This rate consists of a maintenance and operation (M&O)  tax rate of $0.385147 and an interest and sinking (debt service) tax rate of $0.102167.   The rate was set based on a net  assessed value of $4,243,567,347.   This is an increase of $278,976,966 above certified values including supplemental rolls for  tax year 2020.   The City’s financial management policy sets the guideline to maintain the fund balance and net position of  the various operating funds at levels sufficient to protect the City’s creditworthiness as well as its financial position from  unforeseeable emergencies.       The City second largest source of revenue in the General Fund is sales tax.  The City anticipates an increase in this revenue  stream from the prior year and has adjusted the budget from $7,261,012 to $8,095,816.    The franchise fees budget decreased  from $2,101,190 to $1,925,828 and the budget for license and permits has been decreased from $874,049 to $823,839.   If  all projections are accurate, the total General Fund unassigned fund balance net of the 90 day operating requirement ($7.3  million) is estimated to be approximately $6.1 million at September 30, 2022.       Water revenues are budgeted at $8,200,503 which is a decrease of $26,986 in revenues, or 0.32 percent.   Sewer revenues  are budgeted at $8,877,468 which is an increase of $1,378,008 or 18.37 percent.   Water and Sewer Fund net position, net of  the 90 day operating requirement ($2.4 million) is projected to be $1.8 million at the end of fiscal year 2022.     Pursuant to the City’s financial management policy, funds in excess of the 90 day operating reserve are designated for future  capital improvements.      Requests for Information    The financial report is designed to provide our citizens, customers, investors, and creditors with a general overview of the  City’s finance and to show the City’s accountability for the money it receives.  If you have questions about this report or need  additional information, contact Administrative Services, P.O. Box 1288, Friendswood, Texas 77549‐1288, or call Katina  Hampton at 281‐996‐3221, or email khampton@friendswood.com.    Separately issued financial statements for the West Ranch Management District can be obtained by writing to: West Ranch  Management District, a Component Unity of the City of Friendswood, c/o Allen Boone Humphries LLP, 3200 Southwest  Freeway, Suite 2600, Houston, Texas 77027.     19 City of Friendswood 2021 ACFR  BASIC FINANCIAL STATEMENTS    20 City of Friendswood 2021 ACFR          See notes to the financial statements. 21 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  STATEMENT OF NET POSITION  September 30, 2021       Governmental  Activities   Business‐type  Activities  Total   West Ranch  Management  District   Friendswood  Downtown EDC  Assets Cash and cash equivalents 8,049,301$            4,120,731$              12,170,032$          523,322$              705,229$              Investments 31,217,392            8,184,690                39,402,082            5,263,469             1,401,031             Receivables, net of allowances Taxes 2,725,756               ‐                                2,725,756              19,132                  125,897                Customer accounts 424,351                 3,455,179                3,879,530               ‐                              ‐                             Other 509,927                  ‐                                509,927                  ‐                              ‐                             Accrued interest 7,709                      4,445                        12,154                    10                          640                        Due from other governments 1,248,884               ‐                                1,248,884               ‐                              ‐                             Prepaid items 355,011                 62,870                      417,881                 311                         ‐                             Working capital deposit ‐                              563,405                   563,405                  ‐                              ‐                             Restricted investments ‐                              32,497,338              32,497,338             ‐                              ‐                             Capital Assets: Non‐depreciable 31,131,350            22,906,475              54,037,825            7,762,414              ‐                             Depreciable, net 77,386,915            39,902,080              117,288,995          366,930                 ‐                             Total Capital Assets 108,518,265          62,808,555              171,326,820          8,129,344              ‐                             Total Assets 153,056,596          111,697,213            264,753,809          13,935,588          2,232,797             Deferred Outflows of Resources Deferred loss on issuance of refunding bonds 61,221                    651,357                   712,578                 300,189                 ‐                             Deferred outflow of resources for pensions 2,564,439              320,952                   2,885,391               ‐                              ‐                             Deferred outflow of resources for OPEB 343,611                 51,112                      394,723                  ‐                              ‐                             Total Deferred Outflows of Resources 2,969,271              1,023,421                3,992,692              300,189                 ‐                             Total Assets and Deferred     Outflows of Resources 156,025,867          112,720,634            268,746,501          14,235,777          2,232,797             Liabilities Accounts payable 1,614,806              1,133,659                2,748,465              34,019                   ‐                             Accrued liabilities 887,621                 96,128                      983,749                  ‐                              ‐                             Retainage payable ‐                              193,128                   193,128                  ‐                              ‐                             Accrued interest 124,805                 188,509                   313,314                 280,481                 ‐                             Unearned revenue 4,991,651              264,473                   5,256,124               ‐                              ‐                             Customer deposits ‐                              553,876                   553,876                  ‐                              ‐                             Due to other governments 461,922                  ‐                                461,922                  ‐                              ‐                             Noncurrent liabilities: Due within one year 3,039,958              3,138,556                6,178,514              965,000                 ‐                             Due in more than one year 49,447,399            60,025,514              109,472,913          20,993,501           ‐                             Net pension liability 8,806,296              934,333                   9,740,629               ‐                              ‐                             Total OPEB liability 1,695,771              251,592                   1,947,363               ‐                              ‐                             Total Liabilities 71,070,229            66,779,768              137,849,997          22,273,001           ‐                             Deferred Inflows of Resources Deferred gain on issuance of refunding bonds 60,107                    30,324                      90,431                     ‐                              ‐                             Deferred Inflows of resources for pensions 1,995,352              249,728                   2,245,080               ‐                              ‐                             Deferred Inflows of resources for OPEB 281,393                 44,139                      325,532                  ‐                              ‐                             Total Deferred Inflows of Resources 2,336,852              324,191                   2,661,043               ‐                              ‐                             Net Position Net investment in capital assets 72,240,727            32,910,959              105,151,686          2,710,520              ‐                             Restricted for: Public education and government channels 597,908                  ‐                                597,908                  ‐                              ‐                             Debt service ‐                              2,514,577                2,514,577              2,114,449              ‐                             Municipal court operations 274,538                  ‐                                274,538                  ‐                              ‐                             Economic development ‐                               ‐                                 ‐                               ‐                             2,232,797             Public safety 785,094                  ‐                                785,094                  ‐                              ‐                             Community development ‐ nonexpendable 11,101                     ‐                                11,101                     ‐                              ‐                             Capital projects 1,823,333              206,888                   2,030,221              54,616                   ‐                             Unrestricted 6,886,085              9,984,251                16,870,336            (12,916,809)          ‐                             Total Net Position 82,618,786$          45,616,675$            128,235,461$       (8,037,224)$         2,232,797$           Primary Government Component Units       See notes to the financial statements. 22 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 2  STATEMENT OF ACTIVITIES   For the Year Ended September 30, 2021      Functions/Programs Expenses  Charges for  Services   Operating Grants  and Contributions   Capital Grants  and Contributions  Primary government Governmental Activities: General government 5,867,654$         871,362$           16,000$                  ‐$                             Public safety 15,645,527         1,372,432          3,840,601               ‐                               Public works 7,160,229           225,419               ‐                              3,864,589               Engineering 506,959                ‐                            ‐                               ‐                               Community development 1,035,202            ‐                            ‐                               ‐                               Parks and recreation 4,604,943           384,489              18,265                     ‐                               Library services 1,221,740            ‐                            ‐                               ‐                               Interest on long‐term debt 1,244,881            ‐                            ‐                               ‐                               Total Governmental Activities 37,287,135         2,853,702          3,874,866              3,864,589               Business‐type Activities: Water and sewer 13,672,365         17,919,751         ‐                               ‐                               Total Business‐type Activities 13,672,365         17,919,751         ‐                               ‐                               Total Primary Government 50,959,500         20,773,453        3,874,866              3,864,589               Component Units West Ranch Management District 962,888                ‐                            ‐                               ‐                               Friendswood Downtown EDC 46,003                  ‐                            ‐                               ‐                               Total Component Units 1,008,891$          ‐$                         ‐$                             ‐$                             Program Revenues     See notes to the financial statements. 23 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 2  STATEMENT OF ACTIVITIES   For the Year Ended September 30, 2021       Net (Expense) Revenue and Changes in Net Position Functions/Programs  Governmental  Activities   Business‐type  Activities Total  West Ranch  Management  District   Friendswood  Downtown EDC  Primary government Governmental Activities: General government (4,980,292)$              ‐$                          (4,980,292)$           ‐$                             ‐$                           Public safety (10,432,494)              ‐                            (10,432,494)           ‐                               ‐                             Public works (3,070,221)                ‐                            (3,070,221)              ‐                               ‐                             Engineering (506,959)                    ‐                            (506,959)                 ‐                               ‐                             Community development (1,035,202)                ‐                            (1,035,202)              ‐                               ‐                             Parks and recreation (4,202,189)                ‐                            (4,202,189)              ‐                               ‐                             Library services (1,221,740)                ‐                            (1,221,740)              ‐                               ‐                             Interest on long‐term debt (1,244,881)                ‐                            (1,244,881)              ‐                               ‐                             Total Governmental Activities (26,693,978)              ‐                            (26,693,978)           ‐                               ‐                             Business‐type Activities: Water and sewer ‐                                 4,247,386            4,247,386               ‐                               ‐                             Total Business‐type Activities ‐                                 4,247,386            4,247,386               ‐                               ‐                             Total Primary Government (26,693,978)             4,247,386            (22,446,592)           ‐                               ‐                             Component Units West Ranch Management District (962,888)                 ‐                             Friendswood Downtown EDC ‐                              (46,003)                 Total Component Units (962,888)                (46,003)                 General revenues: Taxes: Property taxes 19,163,858                ‐                            19,163,858            2,809,865               ‐                             Franchise and other taxes 2,090,001                  ‐                            2,090,001               ‐                               ‐                             Sales taxes 9,915,046                  ‐                            9,915,046               ‐                              653,729                Interest 50,805                      43,099                 93,904                    3,878                      4,282                    Miscellaneous 390,533                     ‐                            390,533                  ‐                               ‐                             Transfers 1,541,853                 (1,541,853)           ‐                               ‐                               ‐                             Total General Revenues and Transfers 33,152,096               (1,498,754)          31,653,342            2,813,743              658,011                Change in net position 6,458,118                 2,748,632            9,206,750              1,850,855              612,008                Net Position ‐ Beginning 76,160,668               42,868,043         119,028,711          (9,888,079)             1,620,789             Net Position ‐ Ending 82,618,786$            45,616,675$       128,235,461$       (8,037,224)$          2,232,797$          Primary Government Component Units         See notes to the financial statements. 24 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  BALANCE SHEET  September 30, 2021       General Fund   Coronavirus State  and Local Fiscal  Recovery Fund   Bond  Construction   Total Nonmajor  Governmental  Funds  Total  Governmental  Funds Assets Cash and cash equivalents 5,134,131$            1,671,180$              ‐$                         1,006,638$            7,811,949$             Investments 9,765,853              3,320,020               15,845,109         1,814,879              30,745,861             Receivables, net of allowance: Taxes receivables 2,302,505               ‐                                 ‐                            423,251                 2,725,756               Customer accounts 421,637                  ‐                                 ‐                            2,714                      424,351                  Other receivables 506,354                  ‐                                 ‐                            3,573                      509,927                  Accrued interest 5,844                      448                           ‐                            1,163                      7,455                       Due from other funds 1,783,098               ‐                                 ‐                             ‐                              1,783,098               Due from other governments 216,197                  ‐                                 ‐                             ‐                              216,197                  Prepaid items 355,011                  ‐                                 ‐                            1,032,687              1,387,698               Total Assets 20,490,630$          4,991,648$             15,845,109$       4,284,905$            45,612,292$                                       Liabilities, Deferred Inflows and Fund Balances                             Liabilities:                            Accounts payable 1,365,198$             ‐$                              191,887$            153,485$               1,710,570$             Accrued liabilities 772,644                  ‐                                 ‐                            943                         773,587                  Due to other governments 468,454                  ‐                                 ‐                             ‐                              468,454                  Customer deposits 10,000                     ‐                                 ‐                             ‐                              10,000                     Due to other funds ‐                               ‐                                440,707               1,342,391              1,783,098               Unearned revenue ‐                              4,991,648                ‐                             ‐                              4,991,648               Total Liabilities 2,616,296              4,991,648               632,594               1,496,819              9,737,357               Deferred Inflows of Resources: Unavailable revenue 647,189                  ‐                                 ‐                            49,298                    696,487                  Total Deferred Inflows of resources 647,189                  ‐                                 ‐                            49,298                    696,487                  Fund Balances: Nonspendable: Prepaid items 355,011                  ‐                                 ‐                             ‐                              355,011                  Permanent fund ‐                               ‐                                 ‐                            11,101                    11,101                     Restricted: Public education and government channels 597,908                  ‐                                 ‐                             ‐                              597,908                  Municipal court operations ‐                               ‐                                 ‐                            274,538                 274,538                  Debt service ‐                               ‐                                 ‐                            10,608                    10,608                     Public safety ‐                               ‐                                 ‐                            785,094                 785,094                  Capital projects ‐                               ‐                                15,212,515         1,823,333              17,035,848             Assigned: Subsequent year's budget appropriation of fund  balance 1,798,058               ‐                                 ‐                             ‐                              1,798,058               Capital projects 2,522,854               ‐                                 ‐                             ‐                              2,522,854               Unassigned 11,953,314             ‐                                 ‐                            (165,886)                11,787,428             Total Fund Balances 17,227,145             ‐                                15,212,515         2,738,788              35,178,448             Total Liabilities, Deferred Inflows of Resources,     and Fund Balances 20,490,630$          4,991,648$             15,845,109$       4,284,905$            45,612,292$                 See notes to the financial statements. 25 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET   TO THE STATEMENT OF NET POSITION  September 30, 2021      Total fund balance, governmental funds 35,178,448$           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 fund financial statement, but are reported in the governmental activities of the Statement of Net Position. 106,518,943           The assets and liabilities of certain internal service funds are not included in the fund financial statement, but are  included in the governmental activities of the Statement of Net Position. 2,706,718               Some liabilities are not due and payable in the current period and are not included in the fund financial statement,  but are included in the governmental activities of the Statement of Net Position. Bonds and certificates of obligation payable (46,265,000)           Capital leases payable (1,681,809)              Compensated absences (996,190)                 Accrued interest payable (124,805)                 Unamortized premium on bonds (3,544,358)              Unavailable revenues in the governmental fund statements is recognized as revenue in the government‐wide  financial statements.696,487                  Deferred gain on refunding (60,107)                   Deferred loss on refunding 61,221                     Certain other long‐term assets and liabilities are not available to pay current period expenditures and therefore are  not reported in this fund financial statement, but are reported in the governmental activities of the Statement of  Net Position. Net pension liability (8,806,296)              Total OPEB liabilty (1,695,771)              Deferred outflows and inflows of resources related to the net pension liability 569,087                  Deferred outflows and inflows of resources related to the total OPEB liability 62,218                     Net Position of Governmental Activities in the Statement of Net Position 82,618,786$                 See notes to the financial statements. 26 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  GOVERNMENTAL FUNDS  For the Year Ended September 30, 2021      General Fund Coronavirus  State and Local  Fiscal Recovery  Fund Bond  Construction Total Nonmajor  Governmental  Funds Total  Governmental  Funds Revenues Property taxes 15,267,421$                  ‐$                         ‐$                          3,701,687$           18,969,108$           Sales taxes 7,953,859                      ‐                           ‐                            1,961,187              9,915,046               Franchise fees and other 2,090,001                      ‐                           ‐                             ‐                              2,090,001               Fines and forfeitures 1,117,224                      ‐                           ‐                            101,872                 1,219,096               Permits and fees 1,617,433                      ‐                           ‐                            51,600                   1,669,033               Intergovernmental 3,448,210                      ‐                           ‐                            4,047,761              7,495,971               Investment earnings 35,951                           ‐                          2,749                   9,909                     48,609                     Donations 55,881                           ‐                           ‐                            209,057                 264,938                  Miscellaneous 124,627                         ‐                           ‐                             ‐                              124,627                  Total Revenues 31,710,607                    ‐                          2,749                   10,083,073           41,796,429             Expenditures Current: General government 5,544,348                      ‐                           ‐                            46,900                   5,591,248               Public safety 14,799,066                    ‐                           ‐                            98,399                   14,897,465             Public works 2,603,627                      ‐                          7,500                   2,001,669              4,612,796               Engineering 507,933                         ‐                           ‐                             ‐                              507,933                  Community development 1,131,498                      ‐                           ‐                             ‐                              1,131,498               Parks and recreation 3,715,517                      ‐                           ‐                             ‐                              3,715,517               Library services 1,223,726                      ‐                           ‐                             ‐                              1,223,726               Debt service: Principal ‐                                      ‐                           ‐                            2,556,282              2,556,282               Interest and other charges ‐                                      ‐                          162,444               1,405,028              1,567,472               Capital outlay 3,752,551                      ‐                          1,763,771            1,521,168              7,037,490               Total Expenditures 33,278,266                    ‐                          1,933,715            7,629,446              42,841,427             Excess (deficiency) of revenues over     (under) expenditures (1,567,659)                     ‐                          (1,930,966)          2,453,627              (1,044,998)              Other Financing Sources (Uses) Issuance of refunding bonds ‐                                      ‐                           ‐                            3,050,000              3,050,000               Issuance of capital‐related debt ‐                                      ‐                          13,185,000          ‐                              13,185,000             Issuance of capital leases 306,329                         ‐                           ‐                             ‐                              306,329                  Premium on bond issuance ‐                                      ‐                          1,173,884            277,572                 1,451,456               Insurance recoveries 175,351                         ‐                           ‐                             ‐                              175,351                  Transfers in 1,541,853                      ‐                           ‐                            210,062                 1,751,915               Transfers out (113,623)                        ‐                          (96,439)                 ‐                              (210,062)                 Sale of capital assets 12,870                           ‐                           ‐                            8,400                     21,270                     Payments to refunding bond escrow agent ‐                                      ‐                           ‐                            (3,321,347)            (3,321,347)              Total Other Financing Sources (Uses)1,922,780                      ‐                          14,262,445         224,687                 16,409,912             Net change in fund balances 355,121                         ‐                          12,331,479         2,678,314              15,364,914             Fund Balances ‐ Beginning 16,872,024                    ‐                          2,881,036            60,474                   19,813,534             Fund Balances ‐ Ending 17,227,145$                  ‐$                        15,212,515$       2,738,788$           35,178,448$                 See notes to the financial statements. 27 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  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, 2021      Net Change in Fund Balances ‐ Total Governmental Funds 15,364,914$          Amounts reported for Governmental Activities in the Statement of Activities are different because: Governmental funds report outlays for capital assets as expenditures because such outlays use current  financial resources.  In contrast,  the Statement of Activities reports only a portion of the outlay as expense.   The outlay is allocated over the assets' estimated useful lives as depreciation expense for the period. Capital outlay 7,567,544              Depreciation expense (5,472,068)             Governmental funds only report the proceeds from the disposal of capital assets and not the difference  between the carrying value and the accumulated depreciation of the asset.  This is the amount by which the  carrying value exceeded the accumulated depreciation.                    (2,970) Governmental funds do not present revenues that are not available to pay current obligations.  In contrast,  such revenues are reported in the Statement of Activities when earned.  Unavailable property tax revenue and other revenues 194,753                  Governmental funds report proceeds from long‐term debt as current financial resources. In contrast, the  Statement of Activities treats such issuance of debt as a liability.  Governmental funds report repayment of  long‐term debt principal as an expenditure, In contrast, the Statement of Activities treats such repayments as  a reduction in long‐term liabilities. Debt service principal 2,556,282              Payments to escrow agent for payment of refunded bonds 3,321,347              Proceeds from issuance of long‐term debt (16,235,000)           Proceeds from capital leases (306,329)                Premium from issuance of long‐term debt (1,451,456)             Contributions are treated as expenditures in the fund based financial statements, but are treated as  reductions in the City's net pension/OBEB liability in the statement of net position. This amount is the  difference between contributions and net pension/OPEB expense (revenue) for the current fiscal year. Pension 458,211                  OPEB (82,140)                   Some expenses reported in the statement of activities do not require the use of current financial resources  and these are not reported as expenditures in governmental funds:  (Increase) decrease in accrued interest (25,653)                   (Increase) decrease in compensated absences (143,601)                Amortization of deferred loss on refunding (21,950)                   Amortization of deferred gain on refunding 4,294                      Amortization of premium on bonds 365,899                  Internal service fund is used by management to charge the cost of fleet management to individual funds.   The change in net position of the internal service fund is included in the governmental activities in the  statement of activities.366,041                  Change in Net Position of Governmental Activities 6,458,118$                  See notes to the financial statements. 28 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 2  STATEMENT OF NET POSITION  PROPRIETARY FUNDS  September 30, 2021      Business‐Type Activities  Enterprise Fund Governmental Activities Water and Sewer Internal Service Assets Current Assets Cash and cash equivalents 4,120,731$                           237,352$                               Investments 8,184,690                             471,531                                 Accounts receivable, net of allowance: Customer accounts 3,455,179                              ‐                                              Accrued interest 4,445                                     254                                         Prepaids and other assets 62,870                                   ‐                                              Restricted investments 32,497,338                            ‐                                              Total Current Assets 48,325,253                           709,137                                 Non‐current Assets Working capital deposit 563,405                                 ‐                                              Capital Assets: Land 319,473                                 ‐                                              Construction in progress 2,870,307                              ‐                                              Water rights 19,716,695                            ‐                                              Buildings and improvements 683,906                                 ‐                                              Machinery and equipment 7,725,245                             4,609,925                              Water and sewer systems 74,199,822                            ‐                                              Accumulated depreciation (42,706,893)                         (2,610,603)                             Total Capital Assets 62,808,555                           1,999,322                              Total Non‐current Assets 63,371,960                           1,999,322                              Total Assets 111,697,213                        2,708,459                              Deferred Outflows of Resources Deferred loss on bond refunding 651,357 ‐                                              Deferred outflows ‐ pension related 320,952 ‐                                              Deferred outflows ‐ OPEB related 51,112 ‐                                              Total Deferred Outflows of Resources 1,023,421                              ‐                                              Total Assets and Deferred     Outflows of Resources 112,720,634                        2,708,459                                    See notes to the financial statements. 29 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 2  STATEMENT OF NET POSITION  PROPRIETARY FUNDS  September 30, 2021      Business‐Type Activities  Enterprise Fund Governmental Activities Water and Sewer Internal Service Liabilities Current Liabilities Accounts payable 1,133,659$                           1,738$                                   Accrued liabilities 94,185                                   ‐                                              Accrued interest 188,509                                 ‐                                              Unearned revenue 264,473                                 ‐                                              Customer deposits 555,819                                 ‐                                              Retainage payable 193,128                                 ‐                                              Compensated absences 23,556 ‐                                              Bonds and other long‐term debt payable 3,115,000                              ‐                                              Total Current Liabilities 5,568,329                             1,738                                      Non‐current Liabilities Compensated absences 94,223                                   ‐                                              Net Pension liability 934,333                                 ‐                                              Total OPEB liability 251,592                                 ‐                                              Bonds and other long‐term debt payable 59,931,291                            ‐                                              Total Non‐current Liabilities 61,211,439                            ‐                                              Total Liabilities 66,779,768                           1,738                                      Deferred Inflows of Resources Deferred gain on issuance of refunding bonds 30,324 ‐                                              Deferred inflows ‐ pension related 249,728 ‐                                              Deferred inflows of resources for OPEB 44,139 ‐                                              Total Deferred Inflows of Resources 324,191                                 ‐                                              Total Liabilities and Deferred Inflows of Resources 67,103,959                           1,738                                      Net Position Net investment in capital assets 32,910,959                           1,999,322                              Restricted for capital projects 206,888                                 ‐                                              Restricted for debt service 2,514,577 ‐                                              Unrestricted 9,984,251                             707,399                                 Total Net Position 45,616,675$                        2,706,721$                                 30 City of Friendswood 2021 ACFR      See notes to the financial statements. 31 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS   STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION  PROPRIETARY FUNDS  For the Year Ended September 30, 2021      Business‐Type  Activities Enterprise  Fund Governmental  Activities Water and Sewer Internal Service Operating Revenues Charges for services 17,514,259$              782,590$                   Miscellaneous 176,584                      44,250                       Total Operating Revenues 17,690,843                826,840                     Operating Expenses Personnel services 2,535,062                    ‐                                  Sewer operations 1,875,837                    ‐                                  Water purchases 3,239,840                    ‐                                  Repairs and maintenance 967,864                       ‐                                  Supplies 130,066                       ‐                                  Other services and charges 941,656                       ‐                                  Depreciation 1,995,734                   479,366                     Total Operating Expenses 11,686,059                479,366                     Operating income 6,004,784                   347,474                     Non‐Operating Revenues (Expenses) Investment income 43,099                        2,196                         Gain on disposal of capital assets ‐                                   16,374                       Insurance proceeds 228,908                       ‐                                  Interest expense (1,808,120)                  ‐                                  Bond Issuance Costs (178,186)                      ‐                                  Total Non‐Operating Revenues (Expenses)(1,714,299)                 18,570                       Income before transfers 4,290,485                   366,044                     Transfers out (1,541,853)                  ‐                                  Change in net position 2,748,632                   366,044                     Net position ‐ Beginning 42,868,043                2,340,677                 Total Net Position ‐ Ending 45,616,675$              2,706,721$                   See notes to the financial statements. 32 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 2  COMBINING STATEMENT OF CASH FLOWS  PROPRIETARY FUNDS  For the Year Ended September 30, 2021      Business‐Type  Activities Enterprise  Fund Governmental  Activities Water and Sewer Internal Service Cash flows from operating activities Cash received from customers 17,809,458$                  ‐$                                     Receipts from interfund charges for fleet management ‐                                      826,840                          Cash payments to suppliers for goods and services (6,866,901)                    1,738                              Cash payments to employees for services (2,628,118)                     ‐                                       Net cash provided by operating activities 8,314,439                      828,578                          Cash flows from noncapital financing activities Transfers out to other funds (1,541,853)                     ‐                                       Net cash (used) by noncapital      financing activities (1,541,853)                     ‐                                       Cash flows from capital and related      financing activities Acquisition and construction of property,     plant and equipment (2,745,553)                    (1,061,823)                     Disposal of capital assets ‐                                      16,374                            Proceeds from issuance of bonds 15,838,303                    ‐                                       Repayment of debt (3,015,000)                     ‐                                       Interest paid on debt (1,777,832)                     ‐                                       Net cash provided (used) by capital and     related financing activities 8,299,918                      (1,045,449)                     Cash flows from investing activities Purchase of investments 166,848                         320,623                          Investment income 56,245                           3,301                              Net cash provided (used) by investing activities 223,093                         323,924                          Net increase (decrease) in cash and     cash equivalents 15,295,597                   107,053                          Cash and Cash Equivalents, Beginning 21,322,472                   130,299                          Cash and Cash Equivalents, Ending 36,618,069$                 237,352$                        Reconciliation of Total Cash and Cash Equivalents Current assets ‐ cash and cash equivalents 4,120,731$                   237,352$                        Restricted assets ‐ cash and cash equivalents 32,497,338                    ‐                                       36,618,069$                 237,352$                              See notes to the financial statements. 33 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 2  COMBINING STATEMENT OF CASH FLOWS  PROPRIETARY FUNDS  For the Year Ended September 30, 2021      Business‐type  Activities ‐ Enterprise  Funds Governmental  Activities Water and Sewer Internal Service Reconciliation of operating income to net cash     provided (used) by operating activities: Operating income (loss) 6,004,784$                   347,474$                        Adjustments to reconcile operating     income to net cash provided (used)     by operating activities: Depreciation 1,995,734                      479,366                          Change in assets, deferred inflows and outflows, and liabilities: Decrease (increase) in customer receivable 106,262                          ‐                                       Decrease (increase) in prepaids and other assets (10,297)                           ‐                                       Decrease (increase) in deferred outflow for pensions 29,196                            ‐                                       Decrease (increase) in deferred outflow for OPEB (18,880)                           Increase (decrease) in accounts payable 286,491                         1,738                              Increase (decrease) in accrued liabilities 12,168                            ‐                                       Increase (decrease) in customer deposits 12,353                            ‐                                       Increase (decrease) in deferred inflows for pensions (47,408)                           ‐                                       Increase (decrease) in deferred inflows for OPEB 16,684                            ‐                                       Increase (decrease) in total OPEB liability 13,764                            ‐                                       Increase (decrease) in net pension liability (93,424)                           ‐                                       Increase (decrease) in compensated absences 7,012                              ‐                                       Total Adjustments 2,309,655                      481,104                          Net cash provided (used) by operating activities 8,314,439$                   828,578$                              See notes to the financial statements. 34 City of Friendswood 2021 ACFR         35 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS      Note 1. Summary of Significant Accounting Policies    The City of Friendswood, Texas (“the City”) was incorporated on October 15, 1960.  The City charter provides for a City County‐ City manager form of government.  The Mayor and six Council members are elected from the City at large serving three‐year  terms.  The City Council is the principal legislative body of the City.  The City Manager is appointed by a majority vote of the  City Council and is responsible to the Council for the administration of all the affairs of the City.  The City Manager is  responsible for law enforcement, appointment and removal of department directors and employees, supervision and control  of all City departments, and preparation of the annual budget.  The Mayor resides at meetings of the City Council and can  vote.  The City provides the following services: public safety, streets, parks and recreation, library, water and sewer,  sanitation, planning and zoning, building inspection, code enforcement, and general administrative services.    A. Reporting Entity    The City is an independent political subdivision of the State of Texas governed by an elected six‐ member Council and Mayor  and is considered a primary government.  As required by generally accepted accounting principles, these financial statements  have been prepared based on considerations regarding the potential for inclusion of other entities, organizations, or functions  as part of the City’s financial reporting entity.  Based on these considerations, the West Ranch Management District and  Friendswood Downtown Economic Development Corporation have been included in the City’s reporting entity as discretely  presented component units.  Additionally, as the City is considered a primary government for financial reporting purposes,  its activities are not considered a part of any other governmental or other type of reporting entity.    Consideration regarding the potential for inclusion of other entities, organizations, or functions in the City’s financial reporting  entity is based on criteria prescribed by general accepted accounting principles.  These same criteria are evaluated in  considering whether the City is a part of any other governmental or other type of reporting entity.  The overriding elements  associated with prescribed criteria considered in determining that the City’s financial reporting entity status is that of a  primary government are that it has a separately elected governing body; it is legally separate; and it is financial independent  of other state and local governments.  Additional prescribed criteria under generally accepted accounting principles include  considerations pertaining to organizations for which the primary government is financially accountable; and considerations  pertaining to other organizations for which the nature and significance of the relationship with the primary government are  such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.    The West Ranch Management District (“the District”), a discretely presented component unit, was created under Section 59,  Article XVI of the Texas Constitution added by an Act of the 79th Legislature of the State of Texas, effective June 17, 2005, in  accordance with the Texas Water Code, Chapter 54.  The District operates in accordance with Chapters 3837, Texas Special  District Local Laws Code, Chapters 49 and 54 of the Texas Water Code and Chapter 375 of the Texas Local Government Code,  and is subject to the continuing supervision of the Texas Commission on Environmental Quality.  The District was created to  promote and encourage employment and the public welfare within the District.  The affairs of the District are managed by a  Board of Directors composed of persons appointed by the City Council.  The City is financially accountable for the District  because City Council must approve any debt issuances.  Complete financial statements from the component may be obtained  at the District’s administrative office.    The Friendswood Downtown Economic Development Corporation (“FDEDC”) was incorporated August 1, 2016 as a nonprofit  economic development corporation under the Development Corporation Act.  The citizens of Friendswood voted to pass a  one‐ half cent sales tax dedicated to support and enhance the welfare and prosperity of the citizens of the City and of this  State by promotion of economic development and growth by encouraging the development of new business enterprises and  the retention or expansion of existing business enterprises.  CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         36 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    A. Reporting Entity (continued)    To serve this purpose, the Corporation shall have the authority and power of a Type B corporation to undertake projects as  described in Subchapter C of Chapter 501 of the Local Government Code and Chapter 505 of the Local Government Code,  including undertaking projects as authorized by law, including but not limited to projects to promote new or expanded  business enterprises in the downtown area as defined by the City of Friendswood Downtown District Map, including but not  limited to streets, targeted infrastructure, paved sidewalks, pedestrian amenities including lighting, benches, signage, and  other related public improvements, and the maintenance and operations expenses for any of the above‐described projects.   A separate governing board oversees FDEDC, which is appointed by Friendswood City Council, and consists of members of  City Council, City’s management, and individuals from the community.  The City can remove appointed board members and  approves the FDEDC’s budget.  The FDEDC is reported as a discretely presented component unit because the governing body  is not identical to the governing body of the City, the FDEDC does not solely serve the City, and the City has the ability to  impose its will on FDEDC.  Complete financial statements of the FDEDC may be obtained by contacting FDEDC’s administration  office.    B. 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 activities of the primary government and its component unit.  For the most part, the effect of interfund  activity has been removed from these statements.  Governmental activities, which normally are supported by taxes and  intergovernmental revenue, are reported separately from business‐type activities, which rely to a significant extent on fees  and charges for support.  Likewise, the primary governmental is reported separately from certain legally separate component  units for which the primary government is financial accountable.    The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset  by program revenue.  Direct expenses are those that are clearly identifiable with a specific function or segment.  Program  revenue includes 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  operations or capital requirements of a particular function or segment.  Taxes and other items not properly included among  program revenue are reported instead as general revenue.    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.       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         37 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation    The government‐wide financial statements are reported using the economic 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 government considered revenue to be available if 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 judgements,  are recorded only when payment is due.    Property taxes, franchise taxes, sales taxes, and interest associated with the current fiscal period are all considered to be  susceptible to accrual and, accordingly, have been recognized as revenue of the current fiscal period.  All of revenue items  are considered to be measurable and available only when cash is received by the City.    The City reports the following major governmental funds:    The General Fund is the City’s primary operating fund.  It accounts for all financial resources of the general  government, except those required to be accounted for in another fund.     The Coronavirus State and Local Fiscal Recovery Fund is used to account for federal funds related to the fiscal  recovery of Coronavirus. Funds will be used for water and sewer infrastructure projects.     The Bond Construction Fund is used to account for the construction of public facilities, and park, street and drainage  improvements that are funded by the proceeds from Permanent Improvement Bonds.    Other governmental funds is a summarization of all the non‐major governmental funds.    The City reports the following major enterprise fund:    The Water and Sewer Fund is used to account for the activities of the City’s water and wastewater operations.    Additionally, the City reports the following fund type:    The Internal Service Fund is used to account for fleet management services provided to other departments of the  City on a cost reimbursement basis.    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 City’s water and sewer 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.    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 Water and Sewer enterprise fund and of the City’s internal  service fund are charges to customers for sales and services.  Operating expenses for the enterprise fund and internal service  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.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         38 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance     Cash and Investments    Cash and investments include cash on hand, deposits with financial institutions, short‐term investments in a state‐managed  public funds investment pool account (TexPool), and a privately managed public funds investment pool (Texas Class).  Other  investments consist mainly of U.S. government treasury bills, treasury notes and other U.S. government obligations.   Restricted cash and investments are assets restricted for specific use.  Restricted includes cash deposits with financial  institutions and investment pools.    The City maintains a pooled cash and investments account for all funds of the City.  Each fund’s positive equity in the pooled  cash account is presented as “cash and investments” in the financial statements.  Negative equity balances are reclassified  and are reflected as interfund accounts payable.  Interest income and interest expense are allocated monthly to each  respective individual fund based on their representative fund balances.    The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short‐term investments with  original maturities of three months or less from the date of acquisition.    Investments for the City are reported at fair value, except for the position in investment pools.  The City’s investment in pools  are reported at the net asset value per share (which approximates fair value) even though it is calculated using the amortized  cost method.    TexPool and Texas Class have a redemption notice period of one day and may redeem daily.  The investment pool’s authority  may only impose restrictions on redemptions in the event of a general suspension of trading on major securities markets,  general banking moratorium or national state of emergency that affects the pool’s liquidity.    Property Taxes    All trade and property tax receivables are shown net of an allowance for uncollectible accounts.  Management estimates an  allowance for trade accounts receivable based on past experience, historical losses, and other pertinent factors.    The City’s property taxes are levied annually in October on the basis of the Appraisal District’s assessed values as of January  1 of that calendar year.  Appraised values are established by the Appraisal District at market value and assessed at 100% of  appraised value less exemptions.  The City’s property taxes are billed and collected by Galveston County.  Such taxes are  applicable to the fiscal year in which they are levied and become delinquent with an enforceable lien on property on February  1 of the subsequent calendar year.    Property taxes are prorated between operations and debt service based on rates adopted for the year of the levy.  For the  current year, the City levied property taxes of $0.487313 per $100 of assessed valuation that were prorated between  operations and debt service in the amounts of $0.392152 and $0.095161, respectively.  The resulting tax levies were  approximately $15.1 and $3.7 million for operations and debt service, respectively, based on a total taxable valuation of  approximately $3.9 billion for the 2020 tax year.    West Ranch Management District bond resolutions require that the District levy and collect an ad valorem debt service tax  sufficient to pay interest and principal on bonds when due.  During the year ended July 31, 2021, the District levied an ad  valorem tax at the rate of $0.2050 per $100 of assessed valuation, which resulted in tax levy of $1.3 million on the taxable  valuation of approximately $648.0 million for the 2020 tax year.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         39 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (continued)    Interfund Receivables/Payables    Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year  are referred to as either “due to/from other funds” (i.e., the 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.”    Prepaid Items    Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both  government‐wide and fund financial statements.  The City applies the consumption method in accounting for prepaid items  in the governmental funds.    Restricted Assets    Certain proceeds of the City’s enterprise fund revenue bonds, 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.    Contract with West Ranch Management District    The District approved a contract with the City effective August 15, 2005, as amended.  Under the terms of the contract, the  District is to pay for construction of water distribution, sanitary sewer, drainage, transportation, education and recreation  facilities to serve the District.    The District shall be the owner of the system until the system is completed, approved by the City and conveyed to it, at which  time ownership will vest in the City.  The District will own and operate these facilities to serve the District.  Pursuant to the  contract, the District shall have a security interest therein until all bonds issued by the District are retired.    Capital assets, which include property, plant, equipment, infrastructure, and water rights, are reported in the applicable  governmental or business‐type activities columns in the government‐ wide financial statements.  The City defines capital  assets as assets with an initial, individual cost of more than $5,000 and an estimated historical cost if actual historical cost is  not available.  Donated capital assets are recorded at acquisition cost, which is the price that would be paid to acquire an  asset with equivalent service potential at the acquisition date.  The City’s water rights have an indefinite life.    The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are  not capitalized.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         40 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (continued)    Capital Assets     The City’s property, plant and equipment are depreciated using the straight‐line method over the following useful lives:    Buildings and improvements 20‐50 years  Machinery and equipment 5 ‐ 10 years  Infrastructure 40‐50 years  Water and sewer system 40‐50 years    The West Ranch Management District’s capital assets are depreciated using the straight‐line method over estimated useful  lives of 10 to 45 years.    Compensated Absences    The City’s employees earn vacation and sick leave, which may either be taken or accumulated, up to certain amounts, until  paid upon resignation or retirement.  All vacation and sick leave pay is accrued when incurred in the government‐wide and  proprietary fund financial statements.  A liability for these amounts is reported in the governmental funds only if they have  matured, for example, as a result of employee resignations and retirements.    Long‐term Debt    In the government‐wide financial statements and proprietary fund types in the fund financial statements, long‐term debt and  other long‐term obligations are reported as liabilities in the applicable governmental activities, business‐type activities, or  proprietary fund type statement of net position.  Bond premiums and discounts are deferred and amortized over the life of  the bonds using the straight‐line method, which approximates the effective interest method.  Bonds payable are reported  net of the applicable bond premium or discount.  Bond issuance cost are expenses in the period incurred.    Deferred Outflows/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.  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 City has the following items that qualify for reporting in this category:     Deferred loss on refunding debt ‐ A deferred loss on refunding results from the difference in the carrying value of  refunded debt and its reacquisition price.  This amount is deferred and amortized over the shorter of the life of the  refunded or refunding debt.     Deferred outflows of resources for pension ‐ Reported in the government‐wide financial statement of net position, this  deferred outflow results from pension plan contributions made after the measurement date of the net pension liability  and the results of 1) differences between projected and actual earnings on pension plan investments; 2) changes in  actuarial assumptions; 3) differences between expected and actual actuarial experiences; and 4) changes in the City’s  proportional share of pension liabilities. The deferred outflows of resources related to pensions resulting from City  contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the  next fiscal year. The deferred outflows resulting from differences between projected and actual earnings on pension plan  investments will be amortized over a closed five year period. The remaining pension related deferred outflows will be  amortized over the expected remaining service lives of all employees five year period.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         41 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (continued)    Deferred Outflows/Inflows of Resources (continued)      Deferred outflows of resources for other post‐employment benefits (OPEB) ‐ Reported in the government wide financial  statement of net position, these deferred outflows result from OPEB plan contributions made after the measurement  date of the total OPEB liability and the results of changes in assumptions and other inputs. The deferred outflows of  resources resulting from City contributions subsequent to the measurement date will be recognized as a reduction of  the total OPEB liability in the next fiscal year. The other OPEB related outflow will be amortized over the expected  remaining service lives of all employees (active and inactive employees) who are provided with OPEB benefits.    In addition to liabilities, the statement of financial position and/or balance sheet will sometimes report a separate section for  deferred inflows of resources.  This separate financial statement element, deferred inflows of resources, represents an  acquisition of net position or balance sheet that applies to a future period(s) and so will not be recognized as an inflow of  resources (revenue) until that time.     Deferred inflows of resources for unavailable revenues ‐ Reported only in the governmental funds balance sheet,  unavailable revenues arise under the modified accrual basis of accounting. These amounts are deferred and recognized  as an inflow of resources in the period that the amounts become available.     Deferred inflows of resources for pension ‐ Reported in the government wide financial statement of net position, these  deferred inflows result primarily from changes in actuarial assumptions. These pension related deferred inflows will be  amortized over the expected remaining service lives of all employees (active and inactive employees) that are provided  with pensions through the pension plan.     Deferred inflows of resources for gain on issuance of refunding bonds ‐ Reported in the government wide financial  statement of net position, these deferred inflows result primarily from differences from 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.     Deferred inflows of resources for OPEB ‐ Reported in the government wide financial statement of net position, this  deferred inflow results primarily from 1) changes in actuarial assumptions; and 2) differences between expected and  actual actuarial experiences. These OPEB related deferred inflows will be amortized over the expected remaining service  lives of all employees (active and inactive employees) that are provided with OPEB through the OPEB plans.    Pension    For purposes of measuring the net pension liability, pension related deferred outflows and inflows of resources, and pension  expense, City specific information about its Fiduciary Net Position in the Texas Municipal Retirement System (TMRS) and  additions to/deductions from TMRS’s Fiduciary Net Position have been determined on the same basis as they are reported  by TMRS.  For this purpose, plan contributions are recognized in the period that compensation is reported for the employee,  which is when contributions are legally due.  Benefit payments and refunds are recognized when due and payable in  accordance with the benefit terms.  Investments are reported at fair value.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         42 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (continued)    Other Post‐Employment Benefits (OPEB)    The City provides its retirees the opportunity to maintain health insurance coverage by participating in the City’s insurance  plan. The City reports the total liability for this plan on the government‐wide and proprietary fund financial statements. The  actual cost recorded in the governmental fund financial statements is the cost of the health benefits incurred on behalf of  the retirees less the premiums collected from the retirees. Information regarding the City’s total liability for this plan is  obtained through a report prepared by Gabriel Roeder Smith & Company, the City’s third‐party actuary, in compliance with  GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.    Additionally, the City participates in a defined‐benefit group‐term life insurance plan, both for current and retired employees,  administered by the Texas Municipal Retirement System (TMRS). The City reports the total liability for this plan on the  government‐wide and proprietary fund financial statements. Information regarding the City’s total OPEB liability is obtained  from TMRS through a report prepared for the City by TMRS’ consulting actuary, Gabriel Roeder Smith & Company, in  compliance with GASB Statement No.75.    Fund Balance    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 City 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:    Non‐spendable – includes amounts that cannot be spent because they are either not in spendable form, or, for legal  or contractual reasons, must be kept intact.  This classification includes prepaid items, note receivable and the fund  balance of the City’s permanent fund.    Restricted – includes fund balance amounts that are constrained for specific purposes which are imposed by providers,  such as creditors or amounts restricted due to constitutional provision or enabling legislation.  This classification  includes retirement of long‐term debt, construction programs, City ordinances, and other federal and state grants.    Committed – includes fund balance amounts that are constrained for specific purposes that are internally imposed by  the City through formal action in an open meeting of the highest level of decision making authority.  Committed fund  balance is reported pursuant to resolution passes by the City Council.    Assigned – includes fund balance amounts that are self‐imposed by the City to be used for particular purpose.  Fund  balance can be assigned by the City Council or the City Manager, pursuant to the City’s fund balance policy.  At  September 30, 2021, the City’s assigned fund balance included amounts assigned for encumbrances and capital  projects.    Unassigned – includes residual positive fund balance within the general fund which has not been classified within the  other above mentioned categories.  Unassigned fund balance may also include negative balances for any governmental  fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         43 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    D. Assets, Liabilities, Deferred Outflows/Inflows and Net Position/Fund Balance (continued)    Fund Balance (continue)    When both restricted and unrestricted fund balances are available for use, it is the City’s policy to use restricted fund balance  first, then unrestricted fund balance.  Furthermore, committed fund balances are reduced first, followed by assigned amounts  and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted  fund balance classifications are available.    The City has established a minimum fund balance policy whereby the City’s unassigned general fund balance will be  maintained at levels sufficient to protect the City’s creditworthiness, as well as its financial position, from unforeseeable  emergencies.  The City will strive to maintain the unassigned general fund balance at a minimum of 90 days of prior year  audited operating expenditures.    Net Position    Government‐Wide Financial Statements:    The Statement of Net Position includes the following categories of net position:    Net investment in capital assets – the component unit of net position that reports the difference between capital assets  less both the accumulated depreciation and the outstanding balance of debt, net of premiums and discounts, that is  directly attributable to the acquisition, construction or improvement of these capital assets.    Restricted – Net position is reported as restricted when there are limitations imposed on its use either through the  enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors, or laws or  regulations of other governments.    Unrestricted – the difference between assets, deferred outflows and inflows, and liabilities that are not reported in  any of the classifications above.    Use of Estimates    The preparation of financial statements, in conformity with generally accepted accounting principles, requires management  to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent  liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting  period.  Actual amounts could differ materially from those estimates.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         44 City of Friendswood 2021 ACFR  Note 1. Summary of Significant Accounting Policies (continued)    E. Implementation of New Accounting Standards    GASB No. 84 Fiduciary Activities was issued in January 2017 and effective for periods beginning December 15, 2019. This  standard establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria  generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom  a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment  benefit arrangements that are fiduciary activities. The requirements of this Statement will enhance consistency and  comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and  (2) clarifying whether and how business‐type activities should report their fiduciary activities. This standard must be applied  retroactively and as such beginning net position and/or fund balance have been restated. The City has evaluated the effects  of this standard and has determined that implementation is not required or not material}.     GASB No. 90 Majority Equity Interests, an amendment of GASB Statements No. 14 and No. 61 was issued in August 2018 and  effective for periods beginning December 15, 2019. The primary objectives of this Statement are to improve consistency in  the measurement and comparability of the financial statement presentation of majority equity interests in legally separate  organizations and to improve the relevance of financial statement information for certain component units. An equity interest  is a financial interest in a legally separate organization evidenced by the ownership of shares of the organization’s stock or by  otherwise having an explicit, measurable right to the net resources of the organization that is usually  based on an investment  of financial or capital resources by a government. An equity interest is explicit and measurable if the government has a present  or future claim to the net resources of the entity and the method for measuring the government’s share of the entity’s net  resources is determinable. The City has determined that this Statement does not have an effect on the financial statements  as of September 30, 2021.    GASB No. 98 The Annual Comprehensive Financial Report.  This statement was issued in October 2021 and establishes the  term annual comprehensive financial report and its acronym ACFR.  The new term and acronym replace instances of  comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local  governments.  This statement is effective for fiscal years ending after December 31, 2021, but earlier application is  encouraged.  The City implemented this statement in fiscal year 2021.       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         45 City of Friendswood 2021 ACFR  Note 2. Cash and Investments    Under provisions of state and local statutes, the City’s investment policies, and provisions of the City’s depository contract  with an area financial institution, the City is authorized to place available deposits and investments in the following:    1. Obligations of the U.S., it’s agencies and instrumentalities;  2. Certificates of Deposit issued by state and national banks or savings or loan associations domiciled in this  state that are guaranteed or incurred by the Federal Deposit Insurance Corporation or collateralized in  accordance with Section 2256.010, the Texas Government Code, in face amounts not to exceed $100,000;  3. No‐load money market mutual funds; and  4. TexPool, Lone State Investment Pool and Texas CLASS.    The City Council has adopted a written investment policy regarding the investments of its funds as defined by the Public Funds  Investment Act of 1995 (Chapter 2256, Texas Government Code).  The investments of the City are in compliance with the  Council’s investment policies.  The City did not have any derivative investment products during the current year.  All significant  legal and contractual provisions for investments were complied with during the year.    At September 30, 2021 the carrying amount of the City and Friendswood Downtown Economic Development Corporation’s  deposits was $705,229 and the bank balance of $705,229.    As of September 30, 2021 the City and Friendswood Downtown Economic Development Corporation held the following  investments.    Reported Weighted Value of Average Investments Maturity (Days) Investment pools: TexPool 6,826,992$          34 Texas CLASS 60,948,163          27 Total investment pools 67,775,155           Debt Securities: Federal Farm Credit Bonds 3,008,078            73 Federal Home Loan Bank Bonds 2,018,412            60 Federal  National Mortgage Association 498,806                939 Total debt securities 5,525,296             Total investments 73,300,451$           The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting  principles.  The hierarchy is based on the valuation inputs used to measure the fair value of the asset.  Level 1 inputs are  quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs  are significant unobservable inputs. The valuation techniques used in the fair value measurement are based on quoted market  closing prices for Level 2 inputs.       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         46 City of Friendswood 2021 ACFR  Note 2. Cash and Investments (continued)     The City has the following recurring fair value measurements as of September 30, 2021:    Fair Value /  Amortized Cost Level 1 Inputs Level 2 Inputs Level 3 Inputs Investment Securities: Federal Farm Credit Bank 3,008,078$          ‐$                      3,008,078$         ‐$                       Federal Home Loan Bank 2,018,412             ‐                        2,018,412           ‐                         Federal National Mortgage Assoc. 498,806                ‐                        498,806              ‐                         Total Investment Securities 5,525,296$          ‐$                      5,525,296$         ‐$                         The City invests in Texas Local Government Investment Pool (TexPool), which was created under the Interlocal Cooperation  Act, Texas Government Code Ann.  Chapter 791 and the Texas Public Funds Investment Act.  The Texas Treasury Safekeeping  Trust Company (“the Trust”) is trustee of TexPool and is a limited purpose trust company authorized pursuant to Texas  Government Code Ann.  Section 404.103 for which the Texas State Comptroller is sole officer, director and shareholder.  The  advisory board of TexPool is composed of members appointed pursuant to the requirements of the Texas Public Funds  Investment Act.    The City invests in Texas CLASS Investment Pool which was established in 1996 pursuant to the Texas Public Funds Investment  Act.  The pool is governed by a 7‐member board of trustees, who are elected by pool participants.  The Cutwater Investor  Services Corp. serves as the pools program administrator and Wells Fargo Bank Texas, NA, serves as custodian.    Interest Rate Risk.  In accordance with its investment policy, the City manages its exposure to declines in fair values by  structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations and invest  operating funds primarily in short‐term securities.    Custodial Credit Risk.  In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may not be  returned.  State statutes require that all deposits in financial institutions be fully collateralized by U.S.  Government  obligations or its agencies and instrumentalities or direct obligations of Texas or its agencies and instrumentalities that have  a fair value of not less than the principal amount of deposits.  As of September 30, 2021, all of the City’s cash deposits with  financial institutions were collateralized with securities held by the pledging financial institution in the City’s name.    Credit Risk    Credit Risk.  It is the City’s policy to limit its investments to investment types with an investment quality rating not less than  A or its equivalent by a nationally recognized statistical rating organization.  The City’s investments as of September 30, 2021,  were rated as follows:  Credit Quality Investment Type: Rating Rating Agency Investment Pools: Texas CLASS AAAm Standard & Poor's TexPool AAAm Standard & Poor's Debt Securities: Federal Home Loan Mortgage Corp. Aaa Moody's Investor Service Federal Home Loan Bank Aaa Moody's Investor Service Federal Farm Credit Bank Aaa Moody's Investor Service Federal National Mortgage Association Aaa Moody's Investor Service      CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         47 City of Friendswood 2021 ACFR  Note 3. Receivables and Deferred Inflows of Resources    Receivables as of September 30, 2021 for the City’s individual major funds and nonmajor funds in the aggregate including the  applicable allowances for uncollectible accounts, are as follows:    Proprietary Fund  General Nonmajor Water and Sewer  Total  Receivables: Property taxes 226,141$           43,795$               ‐$                              269,936$               Penalties and interest 131,942              21,432                 ‐                                153,374                 Sales tax 1,515,752          377,691               ‐                                1,893,443              Franchise taxes 536,614               ‐                            ‐                                536,614                 Customer accounts 298,868 3,450                  3,734,338                4,036,656              Court fines 849,732               ‐                            ‐                                849,732                 Other 506,354 3,573                   ‐                                509,927                 Gross receivables 4,065,403          449,941              3,734,338                8,249,682              Less: allowance for     uncollectibles (834,907)            (20,403)               (279,159)                  (1,134,469)             Net total receivables 3,230,496$        429,538$            3,455,179$              7,115,213$            Governmental Funds   Governmental funds reported 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, the various components of  deferred inflows of resources for unavailable revenues reported in the governmental funds were as follows:    Deferred Inflows of Resources General Fund: Delinquent property taxes 149,182$                  Property tax penalties and interest 100,990 Court fines 169,947 Grants 218,904 Miscellaneous 8,166 Total General Fund 647,189                    Nonmajor funds: Delinquent property taxes 29,911                      Property tax penalties and interest 15,631 Court fines 3,756 Total nonmajor funds 49,298                      Total governmental funds 696,487$                     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         48 City of Friendswood 2021 ACFR  Note 4. Capital Assets    Capital assets activity for the primary government for the fiscal year ended September 30, 2021, is as follows:    Governmental activities  Beginning Balance    Increases   Reclassification/ Decreases  Ending Balance  Capital assets, not being depreciated: Land 28,344,769$              1,350,996$           ‐$                              29,695,765$               Construction in progress 11,336,006                 1,479,762             (11,380,183)             1,435,585                    Total capital assets, not being depreciated 39,680,775                 2,830,758             (11,380,183)             31,131,350                  Capital assets, being depreciated: Buildings and improvements 41,833,118                 3,914,626             31,033                      45,778,777                  Machinery and equipment 17,308,556                 1,999,598             (264,624)                  19,043,530                  Infrastructure 93,797,056                  ‐                             11,256,832              105,053,888               Total capital assets, being depreciated 152,938,730              5,914,224             11,023,241              169,876,195               Less accumulated depreciation for: Buildings & improvements (20,188,939)               (1,736,669)           9,350                        (21,916,258)                Machinery and equipment (10,805,057)               (1,452,908)           229,007                   (12,028,958)                Infrastructure (55,782,207)               (2,761,857)            ‐                                (58,544,064)                Total accumulated depreciation (86,776,203)               (5,951,434)           238,357                   (92,489,280)                Total capital assets ‐ being depreciated 66,162,527                 (37,210)                 11,261,598              77,386,915                  Governmental capital assets, net 105,843,302$            2,793,548$          (118,585)$                108,518,265$                 Business‐type activities  Beginning Balance    Increases   Reclassification/  Decreases  Ending Balance  Capital assets, not being depreciated: Land 319,473$                     ‐$                            ‐$                              319,473$                     Water rights 19,716,695                  ‐                              ‐                                19,716,695                  Construction in progress 4,958,198                   2,582,386             (4,670,277)               2,870,307                    Total capital assets, not being depreciated 24,994,366                 2,582,386             (4,670,277)               22,906,475                  Capital assets, being depreciated: Buildings and improvements 683,906                       ‐                              ‐                                683,906                       Machinery and equipment 7,494,793                   267,198                (36,746)                    7,725,245                    Water and sewer system 69,779,545                  ‐                             4,420,277                74,199,822                  Total capital assets, being depreciated 77,958,244                 267,198                4,383,531                82,608,973                  Less accumulated depreciation for: Buildings and improvements (325,543)                     (19,757)                  ‐                                (345,300)                      Machinery and equipment (4,894,437)                  (208,461)               36,596                      (5,066,302)                   Water and sewer system (35,527,775)               (1,767,516)            ‐                                (37,295,291)                Total accumulated depreciation (40,747,755)               (1,995,734)           36,596                      (42,706,893)                Total capital assets ‐ being depreciated 37,210,489                 (1,728,536)           4,420,127                39,902,080                  Business‐type capital assets, net 62,204,855$              853,850$              (250,150)$                62,808,555$                 CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         49 City of Friendswood 2021 ACFR  Note 4. Capital Assets (continued)    Capital assets activity for the discretely presented component units is as follows:    Component Unit  Beginning Balance  Increases   Reclassification/ Decreases  Ending Balance  Capital assets, not being depreciated: Land 7,758,982$                 3,432$                   ‐$                              7,762,414$                  Total capital assets, not being depreciated 7,758,982                   3,432                     ‐                                7,762,414                    Capital assets, being depreciated: Water production and distribution facilities 483,467                       ‐                              ‐                                483,467                       Total capital assets, being depreciated 483,467                       ‐                              ‐                                483,467                       Less accumulated depreciation for: Water production and distribution facilities (105,792)                     (10,745)                  ‐                                (116,537)                      Total accumulated depreciation (105,792)                     (10,745)                  ‐                                (116,537)                      Total capital assets ‐ being depreciated 377,675                      (10,745)                  ‐                                366,930                       Component Unit capital assets, net 8,136,657$                 (7,313)$                  ‐$                              8,129,344$                    Depreciation    Depreciation expense was charged to functions/programs of the City as follows:     Depreciation  Expense  Primary government Governmental activities: General government 323,221$                     Public safety 1,176,723                    Public works 3,041,987                    Community development 6,891                            Parks and recreation 923,246                       Capital assets held by the City's internal service fund are  charged to the various functions based on their usage 479,366                       Total Governmental activities 5,951,434                    Business‐type activities: Water and sewer 1,995,734                    Total Business‐type activities:1,995,734                    Total primary government 7,947,168$                     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         50 City of Friendswood 2021 ACFR  Note 4. Capital Assets (continued)    Construction commitments    The City has active construction projects as of September 30, 2021.  At year end, the City’s commitments with contractors  were as follows:    Projects Construction  Commitment Construction in  Progress Remaining  Commitment Governmental funds: Parks Master Plan 146,200$                    88,200$                58,000$                    Blackhawk Emergency Shelter 36,475                        2,042                    34,433                       Blackhawk Building Renovation 250,190                      15,178                  235,012                    Fire Station #2 536,314                      375,862                160,452                    Public Safety Building 533,867                      387,139                146,728                    Centennial Wall 420,089                      3,900                    416,189                    Utility Relocation at Clear Creek Utility Bridge 212,500                      195,850                16,650                       Forest Bend Detention Pond 435,048                      367,414                67,634                       2,570,683                   1,435,585             1,135,098                 Enterprise funds: 42" SE Transmission Water Line Phase I & II 2,241,632                   2,241,632              ‐                                 Lift Station Mitigation Program (ON HOLD) 677,939                      170,154                507,785                    Sanitary Sewer Assessment ‐ Phase V & VI 219,499                      188,662                30,837                       Automated Water Meters 8,995,300                   269,859                8,725,441                 12,134,370                 2,870,307             9,264,063                 Total Commitments 14,705,053$              4,305,892$          10,399,161$               The remaining commitment amounts were encumbered at year end.  The encumbrances and related appropriation lapse at  the end of the fiscal year, but they are re‐appropriated and become a part of the subsequent year’s budget because  performance under the executory contract is expected in the next year. At year end, the amount of significant encumbrances  expected to be honored upon performance by the vendors in the next year were $1,798,058 for General Fund.    Note 5. Long‐term Debt    The City issues a variety of long‐term debt instruments in order to acquire and/or construct major capital facilities and  equipment for governmental and business‐type activities. These instruments include general obligation bonds, certificates of  obligation, revenue bonds, and capital leases. These debt obligations are secured by either future tax revenue, water and  sewer system revenue, or liens on property and equipment. Debt obligations that are intended to be repaid from water and  sewer system revenue have been recorded as business‐type activities. All other long‐term obligations of the City are  considered to be governmental type activities.    Federal Arbitrage    The Tax Reform Act of 1986 instituted certain arbitrage restrictions consisting of complex regulations with respect to issuance  of tax‐exempt bonds after August 3l, 1986. Arbitrage regulations deal with the investment of tax‐exempt bond proceeds at  an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be  retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least  every five years for applicable bond issues. Accordingly, there is the risk that if such calculations are not performed, or are  not performed correctly, a substantial liability to the City could result. The City periodically engages an arbitrage consultant  to perform the calculations in accordance with the rules and regulations of the IRS. There was no liability for arbitrage  recorded as of year‐end.   CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         51 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    Bonds Payable and Certificates of Obligation    The following schedule summarizes the terms of the City’s general obligation bonds, combination tax and revenue bonds,  and certificates of obligation outstanding and their corresponding allocations to the governmental and business‐type  activities at September 30, 2021:    Original Issue Final Interest Governmental Business‐Type  General Obligation Bonds: Amount Maturity Rates Activities Activities 2014 General Obligation Refunding 8,805,000$         2028 2.0% ‐ 4.0% 1,990,000$          5,785,000$           2015 General Obligation Refunding 9,595,000            2030 2.0% ‐ 3.0%6,940,000              ‐                               2016 General Obligation Permanent     Improvement and Refunding 19,095,000         2031 2.0% ‐ 5.0% 6,760,000             6,835,000             2016A General Obligation Refunding 9,765,000            2034 2.0% ‐ 4.0%‐                             7,680,000             2017 General Obligation Bonds 5,605,000            2031 2.0% ‐ 4.0%4,695,000              ‐                               2020 General Obligation and Refunding   Bonds  10,465,000         2050 2.0% ‐ 4.0% 9,645,000              ‐                               2021 General Obligation and Refunding  Bonds 16,235,000         2051 2.375% ‐ 4.0% 16,235,000           ‐                              Total general obligation bonds 46,265,000          20,300,000           Revenue Bonds: 2016 Waterworks and Sewer System 5,735,000            2036 2.0% ‐ 4.0%‐                             4,590,000             2018 Waterworks and Sewer System 20,170,000         2038 4.0% ‐ 5.0%‐                             18,800,000           2021 Waterworks and Sewer System 13,690,000         2041 3.0% ‐ 4.0%‐                             13,690,000           Total revenue bonds ‐                             37,080,000            Total 46,265,000$        57,380,000$           Annual debt service requirements for the City’s bonds and revenue bonds are as follows:    Fiscal Year Principal Interest Principal Interest Total 2022 2,315,000$          1,588,982$                3,115,000$        2,208,425$        9,227,407$           2023 2,400,000            1,508,907                   3,225,000           2,096,600          9,230,507             2024 2,485,000            1,424,207                   3,345,000           1,973,275          9,227,482             2025 2,575,000            1,333,470                   3,485,000           1,837,125          9,230,595             2026 2,670,000            1,239,670                   3,685,000           1,687,950          9,282,620             2027‐2031 15,275,000          4,485,221                   19,120,000        5,882,125          44,762,346           2032‐2036 5,490,000            2,275,605                   14,110,000        2,504,800          24,380,405           2037‐2041 5,175,000            1,398,755                   7,295,000           451,700             14,320,455           2042‐2046 3,845,000            772,255                       ‐                            ‐                          4,617,255             2047‐2051 4,035,000            244,572                       ‐                            ‐                          4,279,572             46,265,000$        16,271,644$              57,380,000$      18,642,000$     138,558,644$       Governmental Activities Business‐type Activities   CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         52 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    Bonds Payable and Certificates of Obligation (continued)    Changes in the City’s long‐term liability activity for the year ended September 30, 2021, are as follows:     Beginning  Balance  Additions  Reductions  Ending Balance  Due Within One  Year  Primary Government Governmental activities: General obligation bonds 35,390,000$       16,235,000$     (5,360,000)$            46,265,000$        2,315,000$           Premium on bond issuance 2,668,822            1,451,455          (575,919)                 3,544,358              ‐                              Capital lease 1,861,762            306,229             (486,182)                 1,681,809             525,720                 Compensated absences 852,589               1,015,759          (872,158)                 996,190                199,238                     Governmental activity        Long‐term liabilities 40,773,173$       19,008,443$     (7,294,259)$            52,487,357$        3,039,958$            Beginning  Balance  Additions  Reductions  Ending Balance  Due Within One  Year  Business‐type activities: Revenue bonds 24,325,000 13,690,000$     (935,000)$               37,080,000$        1,450,000$           General obligation bonds 22,380,000          ‐                          (2,080,000)              20,300,000          1,665,000             Premium on bond issuance 3,920,243            2,148,303          (402,255)                 5,666,291              ‐                              Compensated absences 110,767               110,126             (103,114)                 117,779                23,556                   Business‐type activity   Long‐term liabilities 50,736,010$       15,948,429$     (3,520,369)$            63,164,070$        3,138,556$           Total Primary government 91,509,183$       34,956,872$     (10,814,628)$          115,651,427$      6,178,514$             The City issued General Obligation Improvement and Refunding Bonds, Series 2021 in June 2021 in the amount of  $16,235,000.  The bonds bear interest from 3.00 percent to 4.00 percent and are due in annual installments ranging from  $185,000 to $1.010,000 through September 2051.  Proceeds of the bonds will be used to make certain drainage  improvements, expand the public safety building, construct  new fire station and training filed, refunding certain outstanding  obligations and to pay the costs of issuance of the bonds.  City will deposit certain proceeds of the sale of the bonds with the  paying agent, such funds will be held by the paying agent and will be irrevocably pledged to the payment of principal of the  refunded obligations to provide for future debt service on $3,290,000 of the General Obligation Refunding Bonds, Series  2012. As a result, the refunded bonds are considered to be defeased and the related liability for the bonds has been removed  from the City’s liabilities. The net carrying amount exceeded the reacquisition price of the old debt by $210,021, which is also  known as refunding deferred charge (gain). This amount is being netted against the new debt and amortized over the life of  the new debt, which was equal or shorter than the refunded debt. This resulted in an economic gain (difference between  present values of the old and new debt service payment) of $213,107.    The Water and Sewer System Revenue Bonds, Series 2021 were issued in February 2021 in the amount of $13,690,000. The  bonds bear interest from 3.0 percent to 4.0 percent and are due in annual installments ranging from $470,000 to $915,000  through March 2041. Proceeds of the bonds will be used to make certain System extensions and improvements, to fund a  deposit to the Reserve Fund and to pay the costs of issuance of the bonds.    The compensated absences, net pension liability and total OPEB liabilities attributable to the governmental activities will be  liquidated primarily by the General Fund.   CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         53 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    West Ranch Management District    The following schedule summarizes the terms of the West Ranch Management District’s general obligation bonds at July 31,  2021:    Amounts Interest Range of Callable  General Obligation Bonds: Outstanding Rates Maturities Date * Series 2010 160,000$              4.20% 2021‐2022 September 1, 2021  Road Series 2010A 90,000                  4.20% ‐ 4.35% 2021‐2022 September 1, 2021  Road Series 2013 755,000                2.00% ‐ 3.00% 2021‐2028 September 1, 2021  Series 2013 1,105,000             3.00% ‐ 5.00% 2021‐2040 September 1, 2021  Road Series 2014 1,910,000             2.00% ‐ 3.75% 2021‐2040 September 1, 2022 Series 2015 4,270,000             1.30% ‐ 4.125% 2021‐2030 September 1, 2023 Series 2016 2,080,000             3.00% ‐ 4.00% 2031‐2040 September 1, 2024 Refunding Series 2016 790,000                2.00% ‐ 4.00% 2021‐2026 September 1, 2024 Series 2020 9,040,000             2.00% ‐ 4.00% 2021‐2040 September 1, 2025 Refunding Series 2016 1,550,000             2.00% ‐ 4.00% 2021‐2040 September 1, 2025 Total general obligation bonds 21,750,000$           * Or any date thereafter, callable at par plus accrued interest to the date of redemption.    Annual debt service requirements for the District’s bonds are as follows:    Fiscal Year Principal Interest Total 2022 965,000$               657,354$            1,622,354$           2023 995,000                 625,525               1,620,525             2024 1,025,000              592,441               1,617,441             2025 1,065,000              555,713               1,620,713             2026 1,110,000              2,191,730           3,301,730             2027‐2031 6,010,000              1,346,044           7,356,044             2032‐2036 4,920,000              609,966               5,529,966             2037‐2041 5,660,000              18,509                 5,678,509             21,750,000$         6,597,282$         28,347,282$           The District’s bonds are payable from the proceeds of an ad valorem tax levied upon all property within the District subject  to taxation, without limitation as to rate or amount.   CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         54 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    West Ranch Management District (continued)    Changes in the discretely presented component units’ long‐term liabilities for the year end July 31, 2021, are as follows:    West Ranch Management District  Beginning  Balance  Increase  Decrease  Ending Balance   Due Within One  Year  Component Unit General obligation bonds 22,600,000$        ‐$                        (850,000)$              21,750,000$         965,000$              Discount on bonds (296,793)               ‐                          19,064                    (277,729)                ‐                              Premium on bonds 85,598                  ‐                          (8,968)                     76,630                    ‐                              Developer advances 40,000                  ‐                           ‐                               40,000                    ‐                              Due to developer 369,600                ‐                           ‐                               369,600                 ‐                              Total 22,798,405$        ‐$                        (839,904)$              21,958,501$         965,000$                  At July 31, 2021, the District had $3,775,000 of unlimited tax bonds and recreational facilities' bonds authorized, but unissued,  for the purposes of acquiring, constructing and improving recreational facilities, transportation, education, and the water,  sanitary sewer and drainage systems within the District.    A developer of the District has advanced $40,000 to the District for operating expenses.  The District has agreed to pay these  amounts, plus interest, to the extent approved by the Commission from the proceeds of future bond sales.  These amounts  have been recorded in the financial statements as long‐term liabilities.  The District is currently unable to estimate when  bonds will be issued to pay this liability.    The developer of the District has constructed underground utilities on behalf of the District.  The District’s engineer estimates  reimbursable costs for completed projects are $369,600.  The District has agreed to reimburse the developers for these  amounts, plus interest, to the extent approved by the Texas Commission on Environmental Quality from the proceeds of  future bond sales.  These amounts have been recorded in the financial statements as long‐term liabilities.    Defeasance of Bonds    The City defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide future debt service  payments on the old bonds.  Accordingly, the trust account assets and liabilities for the defeased bonds are not included in  the City’s financial statements.  On September 30, 2021, the City has no bonds considered defeased that were outstanding.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         55 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    Capital Leases    During the current fiscal year, the City entered into a three‐year lease agreement as lessee for the acquisition and use  information technology equipment.  An initial lease liability was recorded in the amount of $306,229 during the current fiscal  year. The City is required to make annual principal and interest payments of $106,262.  The lease has an interest rate of  2.08%.    The City has entered into capital lease agreements in order to purchase machinery and equipment for public works, police  fire departments and information technology.  The assets acquired through these lease agreements are as follows:    Asset  Governmental  Activities  Machinery and equipment 3,037,647$              Less: accumulated depreciation (792,070)                  Total 2,245,577$                The following is a summary of future lease payments due on this machinery and equipment:    Fiscal Year Amount 2022 558,630$               2023 454,449                 2024 454,449                 2025 120,739                 2026 89,789                   2027 89,789                   Minimum lease payments 1,767,845              Less amount representing interest (86,136)                  Total 1,681,709$                  CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         56 City of Friendswood 2021 ACFR  Note 5. Long‐term Debt (continued)    Pledged Revenues    On February 1, 2016, the City issued $5,735,000 in Waterworks and Sewer System Revenue Bonds, Series 2016 and on  December 3, 2018 issued $20,170,000 in Waterworks and Sewer System Revenue Bonds, Series 2018 and on February 4, 2021  issued $13,690,000 in Water and Sewer System Revenue Bonds, Series 2021.  These bonds represent special obligations of  the City and are payable solely from a first lien on and pledge of the net revenues of the City’s waterworks and sanitary sewer  system.  The proceeds of the bonds were and are to be used to finance sanitary sewer and waterworks system extensions  and improvements.  The outstanding revenue bonds have a final maturity of March 1, 2036 for the 2016 bonds, March 1,  2038 for the 2018 bonds and March 1, 2041 for the 2021 bonds.  The City will commit revenues each year the bonds are  outstanding.  At September 30, 2021, the remaining principal on the series 2016, 2018 and 2021 bonds was $4,590,000,  $18,800,000 and $13,650,000, respectively.  Principal and interest payments for the fiscal year were $935,000 and  $1,285,705, respectively.  Net pledged revenue in 2021 produced 391 percent of the current debt service requirement.    Note 6. Interfund Balances and Transfers    Due to/from Other Funds    The City had interfund receivable or payable balances at September 30, 2021 is as follows:    Due  from other funds Due to other funds Amount Purpose General  Fund Bond Construction Fund 440,707$               Expenditures  funded by General  Fund pending  reimbursement. General  Fund Nonmajor governmental  funds 1,342,391              Expenditures  funded by General  Fund pending grant  reimbursement. Total 1,783,098$                Interfund Transfers    The composition of interfund transfers for the year ended September 30, 2021, is as follows:    Transfer In Transfer Out Amount Purpose General Fund Water and Sewer 1,541,853$             Budgeted annual transfer for indirect water and sewer costs by  the General Fund Nonmajor governmental funds Bond Construction Fund 96,439 2020 Bond funds and close out of 2015 Bond Construction  Fund Nonmajor governmental funds General Fund 113,623 Funds for HMGP Acquisition & Demolition Project and CDBG ‐  DR Galveston County 1,751,915$                   CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         57 City of Friendswood 2021 ACFR  Note 7. Employee Retirement System    Texas Municipal Retirement System    Plan Description and Provisions    The City 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 a report (ACFR) that can be obtained at www.tmrs.com.    All eligible employees of the City are required to participate in TMRS.    Benefits Provided    TMRS provides retirement, disability, and death benefits.  Benefit provisions are adopted by the governing body of the City, within  the options available in the state statutes governing TMRS.    At retirement, the benefit is calculated as if the sum of the employee’s contributions, with interest, and the city‐financed monetary  credits with interest were used to purchase an annuity.  Members may choose to receive their retirement benefit in one of seven  actuarially equivalent 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.    The City has approved an annually repeating (automatic) basis monetary credit referred to as an updated service credit (USC) which  is a theoretical amount which takes into account salary increases or plan improvements. If at any time during their career an  employee earns a USC, this amount remains in their account earning interest at 5% until retirement. At retirement, the benefit is  calculated as if the sum of the employee's accumulated contributions with interest and the employer match plus employer‐financed  monetary credits, such as USC, with interest were used to purchase an annuity. Additionally, City provides on an annually repeating  (automatic) basis cost of living adjustments (COLA) for retirees equal to a percentage of the change in the consumer price index  (CPI).      A summary of plan provisions for the City are as follows:    Employee deposit rate: 7%  Matching ratio (City to employee): 2 to 1  Years required for vesting: 5  Service retirement eligibility: Vested at age 60 or 20 years at  any age  Updated Service Credit: 100% Repeating  Annuity increase to retirees 50% of CPI; Repeating  Supplement death benefit – active    Employees and retirees    Yes       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         58 City of Friendswood 2021 ACFR  Note 7.  Employee Retirement System (continued)    Employees covered by benefit terms    At the December 31, 2020 valuation and measurement date, the following employees were covered by the benefit terms:    Inactive employees or beneficiaries currently receiving benefits 136  Inactive employees entitled to but not yet receiving benefits  128  Active employees 218  Total 482  Contributions    The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the City matching  percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the City.  Under the State law governing  TMRS, the contribution rate for each City is determined annually by the consulting 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 City were required to contribute 7.0% of their annual gross earnings during the fiscal year.  The contribution rates  for the City were 15.84% and 16.55% in calendar years 2020 and 2021, respectively.  The City’s contributions to TMRS for the year  ended September 30, 2021, were $2,721,688 and were equal to the required contributions.    Net Pension Liability    The City’s Net Pension Liability (NPL) was measured as of December 31, 2020, and the Total Pension Liability (TPL) used to  calculate the Net Pension Liability was determined by an actuarial valuation as of that date.    Actuarial Assumptions    The Total Pension Liability in the December 31, 2020 actuarial valuation was determined using the following actuarial  assumptions:    Actuarial cost method: Entry age normal  Amortization method: Level percentage of payroll, closed  Remaining amortization period: 25 years  Asset valuation method: 10 year smoothed market; 12% soft corridor  Inflation: 2.50%   Salary increases: 3.50% to 11.50% including inflation  Investment rate of return: 6.75%       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         59 City of Friendswood 2021 ACFR  Note 7.  Employee Retirement System (continued)    Actuarial Assumptions (continued)    Salary increases are based on a service‐related table. Mortality rates for active members are based on the PUB (10) mortality  tables with the Public Safety table used for males and the General Employee table used for females. Mortality rates for healthy  retirees and beneficiaries are based on the Gender distinct 2019 Municipal Retirees of Texas mortality tables. The rates for  actives, healthy retirees and beneficiaries are projected on a fully generational basis by Scale UMP to account for future mortality  improvements. For disabled annuitants, the same mortality tables for healthy retirees is used with a 4‐ year set‐forward for  males and a 3‐year set‐forward for females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and  females respectively, to reflect the impairment for younger members who become disabled. The rates are projected on a fully  generational basis by Scale UMP to account for future mortality improvements subject to the floor.    The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS over the four‐ year period from December 31, 2014, to December 31, 2018. They were adopted in 2019 and first used in the December 31,  2019, actuarial valuation. The post‐retirement mortality assumption for annuity purchase rates is based on the Mortality  Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. Plan assets are managed on a total  return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short‐term  and long‐term funding needs of TMRS.    The long‐term expected rate of return on pension plan investments was determined using a building block method in which best  estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation)  are developed for each major asset class. These ranges are combined to produce the long‐term expected rate of return by  weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.  In  determining their best estimate of a recommended investment return assumption under the various alternative asset allocation  portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative)  and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and best estimates of  real rates of return for each major asset class in fiscal year 2020 are summarized in the table below:    Target Allocation Long‐Term  Expected Real Rate  of Return  (Arithmetic) Global Equity 30.0% 5.30% Core Fixed Income 10.0% 1.25% Non‐Core Fixed Income 20.0% 4.14% Real Return 10.0% 3.85% Real Estate 10.0% 4.00% Absolute Return 10.0% 3.48% Private Equity 10.0% 7.75% Total 100.0%      CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         60 City of Friendswood 2021 ACFR  Note 7.  Employee Retirement System (continued)    Discount Rate    The discount rate used to measure the Total Pension Liability was 6.75%.  The projection of cash flows used to determine the  discount rate assumed that employee and employer contributions will be made at the rates specified in statue.  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.    Changes in the Net Pension Liability    Increase (Decrease) Total Pension  Liability Plan Fiduciary Net  Position Net Pension  Liability Balance at 12/31/2019 85,826,200$         75,245,684$           10,580,516$         Changes for the year: Service Cost 2,979,569              ‐                                2,979,569             Interest (on the Total Pension Liability) 5,780,980               ‐                                5,780,980             Difference between expected and  actual experience (146,825)                 ‐                                (146,825)               Changes of assumptions ‐                               ‐                                 ‐                              Benefit payments, including refunds of  employee contributions (3,343,679)            (3,343,679)               ‐                              Contributions – employer ‐                              2,620,564               (2,620,564)            Contributions – employee ‐                              1,158,078               (1,158,078)            Net investment income ‐                              5,713,369               (5,713,369)            Administrative Expense ‐                              (36,958)                    36,958                   Other ‐                              (1,442)                      1,442                     Balance at 12/31/2020 91,096,245$         81,355,616$           9,740,629$             Sensitivity of the Net Pension Liability to Changes in the Discount Rate    The following presents the net pension liability (asset) of the City, calculated using the discount rate of 6.75%, as well as what  the City’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  Discount Rate (5.75%)  Current Single Rate  Discount Rate (6.75%)  1% Increase in Discount  Rate (7.75%) City's net pension liability 22,715,813$                  9,740,629$                          (903,647)$                             CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         61 City of Friendswood 2021 ACFR  Note 7.  Employee Retirement System (continued)    Pension Plan Fiduciary Net Position    Detailed information about the pension plan’s Fiduciary Net Position is available in a separately issued TMRS financial  report.  That report may be obtained on the Internet at www.tmrs.com.    Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions    For the year ended September 30, 2021, the City recognized a pension expense of $2,151,840.    At September 30, 2021, the City reported deferred outflows and inflows of resources related to pensions from the  following sources:  Deferred  Outflows of  Resources Deferred Inflows  of Resources Difference in expected and actual     economic experience 668,780$               (125,365)$                Changes in actuarial assumptions 213,121                  ‐                                 Difference between projected and     actual investment earnings ‐                              (2,119,715)               Contributions subsequent to the     measurement date 2,003,490               ‐                                 Total 2,885,391$           (2,245,080)$               The $2,003,490 reported as deferred outflows of resources related to pension resulting from contributions subsequent to  the measurement date will be recognized as a reduction of the net pension liability for the year ending September 30,  2022.  Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in  pension expenses as follows:    Net Deferred Outflows  (Inflows) of Resources 2022 (478,340)$                             2023 360,940                                 2024 (1,101,745)                            2025 (144,034)                                Total (1,363,179)$                               CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         62 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions    TMRS Supplemental Death Benefits Fund    Benefit Plan Description    The City’s single‐employer defined benefit group‐term life insurance plan is operated by the Texas Municipal Retirement  System (TMRS) via the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance, to provide group‐term  life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue  participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January  1.    The death benefit for active employees provides a lump‐sum payment approximately equal to the employee’s annual  salary (calculated based on the employee’s actual earnings, for the 12‐month period preceding the month of death);  retired employees are insured for $7,500; this coverage is another post‐employment benefit (OPEB). As the SDBF covers  both active and retiree participants, with no segregation of assets, the SDBF is considered to be an unfunded OPEB plan  (i.e. no assets are accumulated).    Membership in the plan as of the measurement date of December 31, 2020 was as follows:    Inactive employees currently receiving benefits      92  Inactive employees entitled to but not yet receiving benefits     32  Active employees       218   Total        342    Contributions    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 city (currently 0.19% of covered payroll). 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 intent is not to  prefund retiree term life insurance during employees’ entire careers. As such, contributions are utilized to fund active  member deaths on a pay‐as‐you‐go basis; any excess contributions and investment income over payments then become  net position available for benefits.    Discount Rate    The TMRS SDBF program is treated as unfunded OPEB plan because the SDBF trust covers both active employees and  retirees and the assets are not segregated for these groups. Under GASB Statement No. 75, the discount rate for an  unfunded OPEB plan should be based on 20‐year tax‐exempt AA or higher Municipal Bonds. Therefore, a discount rate of  2.00% based on the Fidelity Index’s “20‐Year Municipal  GO AA Index” rate as of December 31, 2020.        CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         63 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    TMRS Supplemental Death Benefits Fund (continued)    Actuarial Assumptions    The City’s total OPEB liability was measured at December 31, 2020 and was determined by an actuarial valuation as of that  date using the following actuarial assumptions:    Valuation Date:    December 31, 2020    Methods and Assumptions:     Inflation:    2.50%  Salary Increases:     3.50% to 11.50%, including inflation  Discount rate *:  2.00%   Retirees’ share of benefit related costs: $0  Administrative expenses: All administrative expenses are paid through the Pension Trust and accounted  for under reporting requirements under GASB Statement No. 68.  Mortality rates – service retirees:  2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on  a fully generational basis with scale UMP.  Mortality rates – disabled retirees: 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set‐forward  for males and a 3 year set‐forward for females. In addition, a 3.5% and 3%  minimum mortality rate will be applied to reflect the impairment for younger  members who become disabled for males and females, respectively. The rates  are projected on a fully generational basis by Scale UMP to account for future  mortality improvements subject to the floor.    *The discount rate was based on the Fidelity Index’s “20‐Year Municipal GO AA Index” rate as of December 31, 2020.    Note: The actuarial assumptions used in the December 31, 2020 valuation were based on the results of an actuarial  experience study for the period December 31, 2014 to December 31, 2018.       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         64 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    TMRS Supplemental Death Benefits Fund (continued)    Actuarial Assumptions (continued)     Changes in the Total OPEB Liability    Service cost 36,397$                      Interest 20,150                        Changes of benefit terms ‐                                   Difference between expected and actual experience (48,181)                       Changes of assumptions 115,737                      Benefit payments (4,963)                         Net change in total OPEB liability 119,140                      Total OPEB liability ‐ beginning 717,014                      Total OPEB liability ‐ ending 836,154$                      Ending total OPEB liability is $836,154 as of December 31, 2020. Changes of assumptions reflect a change in the discount  rate from 3.75% as of December 31, 2019 to 2.00 as of December 31, 2020.    Sensitivity Analysis    The following presents the total OPEB liability of the employer, calculated using the discount rate of 2.00%, as well as what  the City’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (1.00%)  or 1 percentage point higher (3.00%) than the current rate. Note that the healthcare cost trend rate does not affect the  total OPEB liability, so sensitivity to the healthcare cost trend rate is not shown.    1% Decrease to 1.00% Current Discount Rate  Assumption 2.00% 1% Increase to  3.00% 1,033,308$                      836,154$                      686,512$                   OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB Activity    For the year ended September 30, 2021, the City recognized OPEB expense of $76,408 related to the TMRS Supplemental  Death Benefit Fund and OPEB expense of $82,601 related to the City’s retiree healthcare plan for total OPEB expense of  $159,009.  As of September 30, 2021, the City reported deferred outflows of resources related to OPEB from the following  sources:    Deferred Outflows of  Resources Deferred Inflows of  Resources Differences between expected    and actual experience ‐$                                       (85,450)$                           Changes in assumptions and other inputs 172,902                             ‐                                         Contributions made subsequent to     the measurement date 3,632                                  ‐                                         Total 176,534$                          (85,450)$                             CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         65 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    TMRS Supplemental Death Benefits Fund (continued)    OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB Activity  (continued)    The $3,632 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the  measurement date will be recognized as a reduction of the total OPEB liability for the year ending September 30, 2022.   Other amounts reported as deferred outflows and inflows of resources related to OPEB, excluding contributions  subsequent to the measurement date, will be recognized in OPEB expenses as follows:     Net Deferred  Outflows (Inflows) of  Resources 2022 19,861$                        2023 19,861                          2024 14,415                          2025 17,570                          2026 13,457                          Thereafter 2,288                             Total 87,452$                                                           Retiree Health Care Plan (RHCP)    Plan Description    The City’s defined benefit OPEB plan, City of Friendswood Retiree Health Care Plan (RHCP), provides OPEB through an implicit  healthcare premium for retirees for all permanent full‐time employees of the City. RHCP is a single‐employer defined benefit  OPEB plan administered by the City. At this time, no assets are accumulated in a trust to fund the future requirements of the  RHCP.    Benefits provided     RHCP provides access to post retirement employees by offering a “blended premium” structure, that is, the overall health  care premiums for active employees and non‐Medicare retirees, are stated in terms of a single “blended premium”. The  difference between the underlying retiree claims and the blended overall health care premium is referred to as an “implicit”  subsidy. Because the underlying claims costs for a non‐Medicare retiree are on average higher than the blended premium,  there is a positive implicit subsidy for the non‐Medicare retirees.     Employees covered by benefit terms. At December 31, 2020, the following employees were covered by the benefit terms:    Retirees and beneficiaries 7  Inactive, nonretired members 0  Active members 204  Total 211     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         66 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    Retiree Health Care Plan (RHCP) (continued)    Total OPEB Liability     The City’s total OPEB liability of $1,111,209 was measured as of December 31, 2020, and was determined by an actuarial  valuation as of December 31, 2020.    Actuarial assumptions and methods     The total OPEB liability in the December 31, 2020 actuarial valuation was determined using the following actuarial  assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:    Valuation Date:    December 31, 2020    Methods and Assumptions:     Actuarial Cost Method:      Individual Entry‐Age Normal  Discount Rate:     2.00% as of December 31, 2020  Inflation:    2.50%  Salary Increases:     3.50% to 11.50%, including inflation  Demographic Assumptions:  Based on the experience study covering the four year period ending December  31, 2018 as conducted for the Texas Municipal Retirement System (TMRS)   Mortality:  For healthy retirees, the gender‐distinct 2019 Municipal Retirees of Texas  mortality tables are used. The rate are projected on a fully generational basis  using the ultimate mortality improvement rates in the MP tables published  through 2019 to account for future mortality improvements.  Health Care Trend Rates:  Initial rate of 6.80% declining to an ultimate rate of 4.25% after 12 years.  Participation Rates:  It was assumed 20% of employees retiring at the age of 50 or over would choose  to receive retiree health care coverage through the City. Employees retiring  before the age of 50 were not assumed to elect coverage.  Other Information:     Notes: The discount rate changed from 2.75% as of December 31, 2019 to 2.00% as of  December 31, 2020.    Discount Rate    For plans that do not have formal assets, the discount rate should equal the tax‐exempt municipal bond rate based on an  index of 20‐year general obligation bonds with an average AA credit rating as of the measurement date. For the purpose of  this valuation, the municipal bond rate is 2.00% (based on the daily rate closest to but not later than the measurement date  of the Fidelity “20‐Year Municipal GO AA Index”). The discount rate was 2.75% as of the prior measurement date.     CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         67 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    Retiree Health Care Plan (RHCP) (continued)    Plan Assets    There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.    Changes in the Total OPEB Liability    Service cost 60,972$                      Interest 30,484                        Changes of benefit terms ‐                                   Difference between expected and actual experience (104,038)                     Changes of assumptions 75,401                        Benefit payments (59,267)                       Net change in total OPEB liability 3,552                           Total OPEB liability ‐ beginning 1,107,657                   Total OPEB liability ‐ ending 1,111,209$                   The ending Total OPEB Liability was $1,111,209 as of December 31, 2020.    Sensitivity of the total OPEB liability to changes in the discount rate    The following presents the plan’s total OPEB liability, calculated using a discount rate of 2.75%, as well as what the plan’s  total OPEB liability would be if it were calculated using a discount rate that is one percent lower or one percent higher:    1% Decrease to 1.00% Current Discount Rate  Assumption 2.00% 1% Increase to  3.00% 1,219,905$                   1,111,209$                   1,011,662$               Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates    The following presents the plan’s total OPEB liability, calculated using the assumed trend rates as well as what the plan’s total  OPEB liability would be if it were calculated using a trend rate that is one percent lower or one percent higher:    1% Decrease Current Healthcare  Cost Trend Rate  Assumption 1% Increase 984,806$                      1,111,209$                   1,261,976$                CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         68 City of Friendswood 2021 ACFR  Note 8. Post Employee Benefits Other Than Pensions (continued)    Retiree Health Care Plan (RHCP) (continued)    OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB     For the year ended September 30, 2021, the City recognized OPEB expense of $82,601 related to the City’s retiree  healthcare plan and OPEB expense of $76,408 related to the TMRS Supplemental Death Benefit Fund for a total OPEB  expense of $159,009.  At September 30, 2021, the City reported deferred outflows of resources and deferred inflows of  resources related to OPEB from the following sources:    Deferred Outflows of  Resources Deferred Inflows of  Resources Differences between expected    and actual experience 9,619$                               (240,082)$                        Changes assumptions 171,452                             ‐                                         Contributions subsequent to     the measurement date 37,118                                ‐                                         Total 218,189$                          (240,082)$                            The $37,118 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the  measurement date will be recognized as a reduction of the total OPEB liability for the year ending September 30, 2021.   Other amounts reported as deferred outflows and inflows of resources related to OPEB, excluding contributions  subsequent to the measurement date, will be recognized in OPEB expenses as follows:    Fiscal Year Net Deferred Outflows  (Inflows) of Resources 2022 (8,855)$                              2023 (8,855)                                2024 (8,855)                                2025 (8,855)                                2026 (8,855)                                Thereafter (14,736)                              Total (59,011)$                                                                       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         69 City of Friendswood 2021 ACFR  Note 9. Commitments and Contingencies    Southeast Water Purification Plant    The City has entered into a contract with the City of Houston for construction, operating and maintaining a water purification  plant known as Southeast Water Purification Plant.  The City’s pro rata share of the actual pumping construction costs is 1.33  percent.    The City began receiving water from the plant on October 15, 1990.  The City is billed on a monthly basis for the actual gallons  of water received times the City’s pro rata share of actual costs.  At the end of each quarter, the City of Houston computes  the total operation and maintenance expenses for the quarter just ended, recalculates the cost per one thousand gallons,  and adjusts previous billings on the next invoice.    The relationship of the parties is of a fiduciary character, no partnership or joint venture is created by this contract.    Blackhawk Regional Wastewater Treatment Facility    On December 12, 1974, the City entered into an agreement with Gulf Coast Waste Disposal Authority to construct the  Blackhawk Regional Wastewater Treatment Facility.  The Blackhawk Wastewater Treatment Facility was constructed in the  early 1980s and is a regional wastewater treatment plant serving MUD 55, Baybrook MUD 1, City of Houston and the City of  Friendswood.  The plant has a capacity of 9.25 million gallons per day (MGD) and is operated and maintained by Gulf Coast  Waste Disposal Authority.  Friendswood is the majority owner having 52.465% or 4.853 MGD of its capacity.    As a part of the contract with Gulf Coast Waste Disposal Authority, the City and all participants pay their share of operational  costs and expenses (direct and indirect) incurred monthly at the Blackhawk Wastewater Treatment Facility based upon actual  flows.  This includes the maintenance of the plant and the creation and maintenance of reasonable reserves for repairs and  other contingencies.  Capital expenditures on the other hand shall be the responsibility of all participants based upon their  purchased capacity in the plant.  For Friendswood, that equates to 52.465% for capital projects identified and approved at  the plant.    Federal and State Programs    The City recognizes grant monies received as reimbursement for costs incurred in certain federal and state programs it  administers as revenue.  Amounts received or receivable from grantor agencies are subject to audit and adjustment by  grantor agencies.  Any disallowed claims, including amounts already collected, may constitute a liability of the applicable  funds.  The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time  although the City expects such amounts, if any, to be immaterial.    Risk Management    The City 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 City’s risk management program encompasses obtaining property and  liability insurance through Texas Municipal League (TML), an Intergovernmental Risk Pool.  The City has not had any significant  reduction in insurance coverage and the amounts of insurance settlements have not exceeded insurance coverage for any of  the last three years.  The participation of the City in TML is limited to payment of premiums.  During the year ended September  30, 2021, the City paid premiums to TML for provision of various liability, property and casualty insurance.  The City has  various deductible amounts ranging from $500 to $5,000 on various policies.       CITY OF FRIENDSWOOD, TEXAS  NOTES TO THE FINANCIAL STATEMENTS (continued)         70 City of Friendswood 2021 ACFR  Note 9. Commitments and Contingencies (continued)    The City also provides workers’ compensation insurance on its employees through TML.  Workers’ compensation is subject  to change when audited by TML.  At year‐end, September 30, 2021, the City believed the amounts paid on workers’  compensation would not change significantly from the amounts recorded.    During the year ended September 30, 2021, employees of the City were covered by a health and dental insurance plan.  The  City pays 90% of the monthly premium of employees choosing individual coverage only.  The City pays 70% of the monthly  premium for employees choosing to cover themselves and their dependents.    Note 10 – Deficit Fund Balance    As of September 30, 2021, the CDBG – DR Harris County Special Revenue fund had a fund balance deficit of $165,866. The  City plans to record revenue in the future to cover the deficits for the fund.           71 City of Friendswood 2021 ACFR  REQUIRED SUPPLEMENTARY INFORMATION     72 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Revenues Property taxes 15,883,312$            15,492,178$         15,267,421$         (224,757)$                 Sales and alcohol taxes 7,319,052                7,385,659             7,953,859              568,200                     Franchise taxes 2,101,190                2,101,190             2,090,001              (11,189)                      Fines and forfeitures 799,700                    799,700                1,117,224              317,524                     Permits and fees 1,742,057                1,742,057             1,617,433              (124,624)                   Intergovernmental 606,603                    2,554,466             3,448,210              893,744                     Investment earnings 168,600                    168,600                35,951                   (132,649)                   Donations 17,750                      62,400                   55,881                   (6,519)                        Miscellaneous 30,938                      31,236                   124,627                 93,391                       Total Revenues 28,669,202              30,337,486           31,710,607           1,373,121                 Expenditures General Government: Mayor and Council ‐ Governing Body: Supplies and maintenance 8,750                        17,513                   14,444                   3,069                         Other services and charges 84,850                      63,259                   43,892                   19,367                       Total Governing Body 93,600                      80,772                   58,336                   22,436                       Mayor and Council ‐ City Attorney: Personnel services 264,642                    264,642                249,817                 14,825                       Supplies 450                           186                         ‐                              186                            Other services and charges 21,270                      10,756                   5,449                     5,307                         Total City Attorney 286,362                    275,584                255,266                 20,318                       City Manager ‐ Administration: Personnel services 830,719                    820,719                791,856                 28,863                       Supplies 21,780                      24,393                   12,844                   11,549                       Other services and charges 39,100                      53,250                   31,548                   21,702                       Total Administration 891,599                    898,362                836,248                 62,114                       City Manager ‐ Economic Development: Personnel services 186,251                     ‐                              ‐                               ‐                                  Supplies 5,000                        5,000                     1,452                     3,548                         Other services and charges 59,820                      156,197                129,006                 27,191                       Total Economic Development 251,071                    161,197                130,458                 30,739                       City Secretary ‐ Municipal Clerk: Personnel services 352,911 352,911 339,568 13,343                       Supplies 5,740 22,368 20,928 1,440                         Other services and charges 18,470 15,483 15,218 265                            Total Municipal Clerk 377,121 390,762 375,714 15,048                       Budgeted Amounts      73 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) General Government (continued): City Secretary ‐ Election Services: Supplies 1,128$                      776$                      608$                       168$                          Other services and charges 38,920                      67,555                   67,543                   12                               Total Election Services 40,048                      68,331                   68,151                   180                            City Secretary ‐ Records Management: Personnel services 84,149                      83,649                   64,892                   18,757                       Supplies 970                           686                        627                         59                               Other services and charges 22,890                      17,070                   16,525                   545                            Total Records Management 108,009                    101,405                82,044                   19,361                       Administrative Services ‐ Finance: Personnel services 1,052,856                995,719                993,696                 2,023                         Supplies 9,050                        24,796                   23,236                   1,560                         Other services and charges 117,145                    94,430                   79,469                   14,961                       Total Finance 1,179,051                1,114,945             1,096,401              18,544                       Administrative Services ‐ Other Admin: Other services and charges 167,895                    167,929                163,449                 4,480                         Total 0ther Admin 167,895                    167,929                163,449                 4,480                         Administrative Services ‐ Municipal Court: Personnel services 406,795                    406,795                400,646                 6,149                         Supplies 5,780                        5,780                     5,000                     780                            Other services and charges 28,715                      27,296                   27,986                   (690)                           Total Municipal Court 441,290                    439,871                433,632                 6,239                         Human Resources ‐ Administration: Personnel services 410,319                    410,319                385,350                 24,969                       Supplies 11,700                      14,700                   8,788                     5,912                         Other services and charges 75,512                      69,392                   25,542                   43,850                       Total Administration 497,531                    494,411                419,680                 74,731                       Human Resources ‐ Insurance: Other services and charges 223,830                    229,166                215,730                 13,436                       Total Insurance 223,830                    229,166                215,730                 13,436                       Budgeted Amounts      74 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 3 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) General Government (continued): Human resources ‐ Risk Management: Personnel services 147,360$                  147,360$              143,817$               3,543$                       Supplies 10,960                      14,246                   9,980                     4,266                         Other services and charges 29,780                      15,987                   8,127                     7,860                         Total Risk Management 188,100                    177,593                161,924                 15,669                       Information Technology ‐ Administration: Personnel services 594,323                    594,323                610,521                 (16,198)                      Supplies 77,750                      72,073                   25,773                   46,300                       Repairs and maintenance 65,530                      65,220                   34,524                   30,696                       Other services and charges 540,186                    668,074                576,497                 91,577                       Total Administration 1,277,789                1,399,690             1,247,315              152,375                     Total General Government 6,023,296                6,000,018             5,544,348              455,670                     Public Safety: Police Department ‐ Administration: Personnel services 895,536                    898,703                808,576                 90,127                       Supplies 28,750                      28,750                   18,852                   9,898                         Repairs and maintenance 41,000                      41,000                   6,670                     34,330                       Other services and charges 102,309                    101,953                85,749                   16,204                       Total Administration 1,067,595                1,070,406             919,847                 150,559                     Police Department ‐ Communications: Personnel services 1,214,352                1,234,378             1,153,178              81,200                       Supplies 9,700                        9,700                     5,960                     3,740                         Repairs and maintenance 36,250                      36,250                   17,593                   18,657                       Other services and charges 21,480                      19,187                   12,576                   6,611                         Total Communications 1,281,782                1,299,515             1,189,307              110,208                     Police Department ‐ Patrol: Personnel services 6,112,066                6,212,977             5,904,839              308,138                     Supplies 298,840                    309,366                241,532                 67,834                       Repairs and maintenance 220,060                    237,595                157,621                 79,974                       Other services and charges 555,329                    541,727                511,697                 30,030                       Total Patrol 7,186,295                7,301,665             6,815,689              485,976                     Police Department ‐ Patrol ‐ DOT Program: Personnel services 107,440                    107,525                116,622                 (9,097)                        Supplies 4,480                        4,480                     3,444                     1,036                         Repairs and maintenance 1,250                        1,250                     453                         797                            Other services and charges 15,816                      14,980                   14,085                   895                            Total Patrol ‐ DOT Program 128,986                    128,235                134,604                 (6,369)                        Budgeted Amounts      75 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 4 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) Public Safety (continued): Police Department ‐ Criminal Investigation: Personnel services 1,819,548$              1,861,778$           1,785,190$           76,588$                     Supplies 50,450                      54,900                   40,898                   14,002                       Repairs and maintenance 49,600                      36,165                   14,953                   21,212                       Other services and charges 126,613                    123,620                111,706                 11,914                       Total Criminal Investigation 2,046,211                2,076,463             1,952,747              123,716                     Police Department ‐ Animal Control: Personnel services 320,563                    330,751                342,331                 (11,580)                      Supplies 32,500                      31,044                   23,259                   7,785                         Repairs and maintenance 12,000                      11,487                   3,586                     7,901                         Other services and charges 69,963                      71,051                   56,667                   14,384                       Total Animal Services 435,026                    444,333                425,843                 18,490                       Fire Marshal ‐ Administration: Personnel services 823,535                    809,459                825,517                 (16,058)                      Supplies 29,950                      38,554                   36,771                   1,783                         Repairs and maintenance 5,500                        6,700                     6,557                     143                            Other services and charges 77,405                      84,973                   78,964                   6,009                         Total Administration 936,390                    939,686                947,809                 (8,123)                        Fire Marshal ‐ Emergency Management: Personnel services 77,793                      91,869                   93,156                   (1,287)                        Supplies 25,050                      24,950                   24,096                   854                            Repairs and maintenance 3,000                        3,000                     2,860                     140                            Other services and charges 47,530                      31,124                   19,192                   11,932                       Total Emergency Management 153,373                    150,943                139,304                 11,639                       Fire Marshal ‐ Fire/EMS Administration: Other services and charges 1,730,100                1,708,100             1,722,935              (14,835)                      Total Fire/EMS Administration 1,730,100                1,708,100             1,722,935              (14,835)                      Fire Marshal ‐ Storm: Personnel services ‐                                  ‐                             284,330                 (284,330)                   Supplies ‐                                  ‐                             30,228                   (30,228)                      Repairs and maintenance ‐                                  ‐                             545                         (545)                           Other services and charges ‐                                  ‐                             97,298                   (97,298)                      Total Storm ‐                                  ‐                             412,401                 (412,401)                   Fire Marshal ‐ Public Safety Health: Personnel services ‐                                  ‐                              ‐                               ‐                                  Supplies ‐                                 20,000                   118,907                 (98,907)                      Other services and charges ‐                                  ‐                             19,673                   (19,673)                      Total Public Safety Health ‐                                 20,000                   138,580                 (118,580)                   Total Public Safety 14,965,758              15,139,346           14,799,066           340,280                     Budgeted Amounts      76 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 5 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) Public Works: Administration: Personnel services 246,774$                  246,774$              238,997$               7,777$                       Supplies 3,910                        3,910                     2,658                     1,252                         Other services and charges 10,485                      8,835                     1,562                     7,273                         Total Administration 261,169                    259,519                243,217                 16,302                       Streets: Personnel services 833,214                    833,214                780,856                 52,358                       Supplies 100,000                    107,700                93,248                   14,452                       Repairs and maintenance 143,830                    762,250                730,201                 32,049                       Other services and charges 416,556                    419,885                438,049                 (18,164)                      Total Streets 1,493,600                2,123,049             2,042,354              80,695                       Drainage: Personnel services 313,036                    313,036                249,734                 63,302                       Supplies 12,310                      12,810                   10,617                   2,193                         Repairs and maintenance 55,300                      46,103                   39,429                   6,674                         Other services and charges 19,983                      20,190                   18,276                   1,914                         Total Drainage 400,629                    392,139                318,056                 74,083                       Total Public Works 2,155,398                2,774,707             2,603,627              171,080                     Engineering: Capital Projects Administration: Personnel services 440,434                    440,934                464,454                 (23,520)                      Supplies 13,050                      13,405                   13,631                   (226)                           Repairs and maintenance 2,000                        2,900                     1,797                     1,103                         Other services and charges 33,131                      45,886                   28,051                   17,835                       Total Capital Projects Administration: 488,615                    503,125                507,933                 (4,808)                        Total Engineering 488,615                    503,125                507,933                 (4,808)                        Community Development: Administration: Personnel services 353,625                    353,625                351,673                 1,952                         Supplies 9,180                        9,180                     6,457                     2,723                         Other services and charges 20,190                      16,450                   5,860                     10,590                       Total Administration 382,995                    379,255                363,990                 15,265                       Budgeted Amounts      77 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 6 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) Community Development (continued): Planning and Zoning: Personnel services 307,284$                  307,284$              286,837$               20,447$                     Supplies 3,900                        3,900                     2,789                     1,111                         Other services and charges 55,675                      51,042                   33,994                   17,048                       Total Planning and Zoning 366,859                    362,226                323,620                 38,606                       Inspection and Code Enforcement: Personnel services 427,787                    427,787                410,495                 17,292                       Supplies 10,420                      10,420                   7,082                     3,338                         Repairs and maintenance 3,650                        3,650                     2,130                     1,520                         Other services and charges 57,570                      53,354                   24,181                   29,173                       Total Inspection and Code Enforcement 499,427                    495,211                443,888                 51,323                       Total Community Development 1,249,281                1,236,692             1,131,498              105,194                     Parks and recreation: Administration: Personnel services 283,486                    283,486                281,882                 1,604                         Supplies 4,750                        4,750                     3,621                     1,129                         Repairs and maintenance 32,595                      30,662                   23,287                   7,375                         Total Administration 320,831                    318,898                308,790                 10,108                       Recreation Programs: Personnel services 327,531                    327,531                295,176                 32,355                       Supplies 20,525                      22,525                   20,136                   2,389                         Other services and charges 116,070                    116,469                94,878                   21,591                       Total Recreation programs 464,126                    466,525                410,190                 56,335                       July 4th Program: Personnel services 30,423                      30,423                   34,030                   (3,607)                        Supplies 4,150                        5,330                     5,330                      ‐                                  Other services and charges 89,080                      91,140                   88,146                   2,994                         Total July 4th Program 123,653                    126,893                127,506                 (613)                           Summer Day Camp Program: Personnel services 114,319                    114,319                94,186                   20,133                       Supplies 16,250                      16,250                   14,725                   1,525                         Other services and charges 43,150                      43,025                   37,062                   5,963                         Total Summer Day Camp Program 173,719                    173,594                145,973                 27,621                       Budgeted Amounts      78 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 7 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) Parks and recreation (continued): Keep Friendswood Beautiful committee: Supplies 13,200$                    11,886$                11,791$                 95$                            Repairs and maintenance 2,500                        3,338                     3,338                      ‐                                  Other services and charges 34,025                      33,731                   33,459                   272                            Total Keep Friendswood Beautiful committee 49,725                      48,955                   48,588                   367                            Stevenson Park pool: Personnel services 74,860                      74,860                   54,635                   20,225                       Supplies 25,700                      26,159                   24,448                   1,711                         Repairs and maintenance 5,000                        5,401                     5,327                     74                               Other services and charges 26,840                      25,944                   21,021                   4,923                         Total Stevenson park pool 132,400                    132,364                105,431                 26,933                       Senior Activity Center: Personnel services 181,193                    181,193                171,044                 10,149                       Supplies 10,890                      10,890                   4,641                     6,249                         Repairs and maintenance 2,000                        3,000                     2,870                     130                            Other services and charges 17,680                      16,592                   5,897                     10,695                       Total Senior Activity Center 211,763                    211,675                184,452                 27,223                       Park Operations: Personnel services 769,677                    769,677                730,960                 38,717                       Supplies 78,480                      84,249                   76,853                   7,396                         Repairs and maintenance 164,100                    140,148                126,557                 13,591                       Other services and charges 506,332                    554,889                536,531                 18,358                       Total Park Operations 1,518,589                1,548,963             1,470,901              78,062                       Facility Operations: Supplies 29,000                      32,206                   28,944                   3,262                         Repairs and maintenance 182,210                    502,590                217,373                 285,217                     Other services and charges 830,595                    699,946                667,369                 32,577                       Total Facility Operations 1,041,805                1,234,742             913,686                 321,056                     Total parks and recreation 4,036,611                4,262,609             3,715,517              547,092                     Library: Administration: Personnel services 1,094,359                1,094,359             1,066,488              27,871                       Supplies 157,185                    163,325                128,274                 35,051                       Repairs and maintenance 440                           980                        800                         180                            Other services and charges 21,112                      39,585                   28,164                   11,421                       Total Administration 1,273,096                1,298,249             1,223,726              74,523                       Total library 1,273,096                1,298,249             1,223,726              74,523                       Budgeted Amounts      79 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 8 of 8  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –  BUDGET AND ACTUAL (WITH VARIANCES)  GENERAL FUND  For the Year Ended September 30, 2021      Variance with Final budget ‐  Actual Positive Original Final Amounts (Negative) Expenditures (continued) Capital improvements: Repairs and Maintenace ‐$                          1,007,000$           7,000$                   1,000,000$               Other services and charges ‐                            3,254                     3,253                     1                                 Capital outlay 519,000                    6,636,002             3,742,298              2,893,704                 Total capital improvements 519,000                    7,646,256             3,752,551              2,893,705                 Total Expenditures 30,711,055              38,861,002           33,278,266           4,582,736                 Excess (deficiency) of revenues over      expenditures (2,041,853)               (8,523,516)            (1,567,659)            6,955,857                 Other Financing Sources (Uses) Insurance recoveries ‐                                 106,244                175,351                 69,107                       Sale of capital assets ‐                                 4,000                     12,870                   8,870                         Issuance of capital lease ‐                                 275,727                306,329                 30,602                       Transfers in 1,541,853                1,541,853             1,541,853               ‐                                  Transfers out ‐                                 (106,395)               (113,623)                (7,228)                        Total Other Financing Sources (Uses)1,541,853                1,821,429             1,922,780              101,351                     Net change in fund balances (500,000)                  (6,702,087)            355,121                 7,057,208                 Fund Balances ‐ Beginning 16,872,024              16,872,024           16,872,024            ‐                                  Fund Balances ‐ Ending 16,372,024$            10,169,937$         17,227,145$         7,057,208$               Budgeted Amounts        80 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  Page 1 of 2  NOTES TO BUDGETARY SCHEDULE  For the Year Ended September 30, 2021      Budgetary Basis of Accounting    Annual budgets are adopted on a basis consistent with generally accepted accounting principles.    Budgetary Information    The City’s Code of Ordinances establishes the following framework for the preparation and format of the City’s annual budget:    Content    The budget shall provide a complete financial plan of all City funds and activities and, except as required by law or this Charter,  shall be in such form as the City Manager deems desirable or the Council may require.  The budget shall begin with a clear  general summary of its contents; shall show in details all estimated income, the proposed property tax levy, and all proposed  expenditures for the ensuing fiscal years, including debt service and an itemized estimate of the expense of conducting each  Department of the City.  The proposed budget expenditures shall not exceed the total of estimated income.  It shall also  include, in separate sections:    1) Tax levies, rates and collections for the preceding five years.    2) The amount required for interest on the City’s debts, for sinking fund and for maturing serial bonds.    3) The total amount of outstanding City debts, with a schedule of maturities on bond issues.    4) Anticipated net surplus of deficit for the ensuing fiscal year of each utility owned or operated by the City and the  proposed method of its disposition, subsidiary budgets for each such utility giving detailed income and expenditure  information shall be attached as appendices to the budget.    5) A capital program, which may be revised and extended each year to indicate capital improvements pending or in  process of construction or acquisition, and shall include the following items which shall be attached as appendices  to the budget:    a) A summary of proposed programs;    b) A list of all capital improvements which are proposed to be undertaken during the five fiscal years next ensuing,  with appropriate supporting information as to the necessity for such improvements;    c) Cost estimates, method of financing and recommended time schedules from each such improvement; and    d) The estimated annual cost of operating and maintaining the facilities to bid constructed or acquired.    6) Such other information as may be required by the Council.    Submission    On or before the first day of August of each year, the City Manager shall submit to the Council a proposed budget and an  accompanying message.  The Council shall review the proposed budget and revise as deemed appropriate prior to general  circulation for public hearing.  CITY OF FRIENDSWOOD, TEXAS  Page 2 of 2  NOTES TO BUDGETARY SCHEDULE   For the Year Ended September 30, 2021         81 City of Friendswood 2021 ACFR  Public Notice and Hearing    The Council shall post in the City Hall and publish in the official newspaper a general summary of their proposed budget and  a notice stating:    1) The times and places where copies of the message and budget are available for inspection by the public; and    2) The time and place, not less than ten nor more than 30 days after such publication, for a public hearing on the  budget.    Amendment Before Adoption    After the public hearing, the Council may adopt the budget with or without amendment.  In amending the budget, it may add  or increase programs or amounts and may delete or decrease any programs or amounts, except expenditures required by  law or for debt service or for estimated cash deficit, provided that no amendment to the budget shall increase the authorized  expenditures to an amount greater than the total of estimated income plus funds available from prior years.    If the Council fails to adopt an annual budget before the start of the fiscal year to which it applies, appropriations of the last  budget adopted shall be considered as adopted for the current fiscal year on a month to month, pro rata basis, until the  annual budget is adopted.  Adoption of the budget shall require an affirmative vote of at least a majority of all members of  the Council.  Adoption of the budget shall constitute appropriations of the amounts specified therein as expenditures from  the funds indicated.    Amendments After Adoption    At any time during the fiscal year, the City Manager may transfer part or all of any unencumbered appropriation balance  among programs within a department, division, or office, and, upon written request by the City Manager, the Council may be  by ordinance transfer part or all of any unencumbered appropriation balance from one department, office, or agency to  another.    No appropriation for debt service may be reduced or transferred and no appropriation may be reduced below any amount  required by law to be appropriated or by more than the amount of the unencumbered balance thereof.  The City Council  made supplemental budgetary appropriation changes during the fiscal year.  The reported budgetary data has been revised  for these amendments legally authorized during the year.    Excess of Expenditures over Appropriations    For the year ended September 30, 2021, expenditures exceeded appropriations in the following departments (the legal level  of budgetary control):    Police – Patrol DOT Program  $      6,369  Fire Marshall – Administration  $      8,123  Fire Marshall Fire/EMS Administration $    14,835  Fire Marshall – Storm    $  412,401  Fire Marshall Public Safety Health  $  118,580  Engineering    $      4,808  Parks – July 4th program    $         613           82 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 2  SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS  TEXAS MUNICIPAL RETIREMENT SYSTEM  Last Seven Measurement Years      2020 2019 2018 2017 A. Total pension liability 1. Service Cost 2,979,569$          2,738,906$          2,626,099$          2,505,392$           2. Interest (on the Total Pension Liability) 5,780,980            5,345,140            5,044,613            4,755,782             3. Difference between expected and actual experience (146,825)              1,150,459            59,617                  (60,180)                 4. Changes of assumptions ‐                             378,973                 ‐                              ‐                              5. Benefit payments, including refunds of employee contributions (3,343,679)           (3,210,157)           (3,458,824)           (2,505,921)            6. Net change in total pension liability 5,270,045            6,403,321            4,271,505            4,695,073             7. Total pension liability – beginning 85,826,200          79,422,879          75,151,374          70,456,304           8. Total pension liability – ending 91,096,245          85,826,200          79,422,879          75,151,377           B. Plan fiduciary net position 1. Contributions – employer 2,620,564            2,395,398            2,305,344            2,182,093             2. Contributions – employee 1,158,078            1,068,692            1,025,248            987,399                 3. Net investment income 5,713,369            10,053,454          (2,013,270)           8,104,390             4. Benefit payments, including refunds of employee contributions (3,343,679)           (3,210,157)           (3,458,824)           (2,505,921)            5. Administrative Expense (36,958)                (56,778)                (38,892)                (41,987)                 6. Other (1,442)                   (1,704)                   (2,032)                   (2,127)                    7. Net change in plan fiduciary net position 6,109,932            10,248,905          (2,182,426)           8,723,847             8. Plan fiduciary net position – beginning 75,245,684          64,996,779          67,179,205          58,455,358           9. Plan fiduciary net position – ending 81,355,616          75,245,684          64,996,779          67,179,205           C. Net pension liability (A.9 – B.9) 9,740,629$          10,580,516$        14,426,100$        7,972,172$           D. Plan fiduciary net position as a percentage of the      total pension liability 89.31% 87.67% 81.84% 89.39% E. Covered payroll 16,543,970$        15,267,034$        14,646,398$        14,098,997$         F. Net position liability as a percentage of covered     payroll 58.88% 69.30% 98.50% 56.54% Note: Ten years of data should be presented in this schedule but data was unavailable prior to 2014.          83 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 2  SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS  TEXAS MUNICIPAL RETIREMENT SYSTEM  Last Seven Measurement Years      2016 2015 2014 A. Total pension liability 1. Service Cost 2,334,817$          2,204,299$          2,018,353$          2. Interest (on the Total Pension Liability) 4,435,987            4,317,394            4,084,392             3. Difference between expected and actual experience 366,687                (1,032,789)           (736,093)               4. Changes of assumptions ‐                             847,469                 ‐                             5. Benefit payments, including refunds of employee contributions (2,464,107)           (2,256,734)           (2,005,311)           6. Net change in total pension liability 4,673,384            4,079,639            3,361,341             7. Total pension liability – beginning 65,782,920          61,703,281          58,341,940          8. Total pension liability – ending 70,456,304          65,782,920          61,703,281          B. Plan fiduciary net position 1. Contributions – employer 2,037,849            1,998,038            1,867,782             2. Contributions – employee 923,896                886,669                829,598                3. Net investment income 3,672,583            79,202                  2,868,842             4. Benefit payments, including refunds of employee contributions (2,464,107)           (2,256,734)           (2,005,311)           5. Administrative Expense (41,467)                (48,239)                (29,949)                 6. Other (2,234)                   (2,383)                   (2,462)                   7. Net change in plan fiduciary net position 4,126,520            656,553                3,528,500             8. Plan fiduciary net position – beginning 54,328,838          53,672,285          50,143,785          9. Plan fiduciary net position – ending 58,455,358          54,328,838          53,672,285          C. Net pension liability (A.9 – B.9) 12,000,946$        11,454,082$        8,030,996$          D. Plan fiduciary net position as a percentage of the      total pension liability 82.97% 82.59% 86.98% E. Covered payroll 13,198,512$        12,653,842$        11,851,396$        F. Net position liability as a percentage of covered     payroll 90.93% 90.52% 67.76% Note: Ten years of data should be presented in this schedule but data was unavailable prior to 2014.       84 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF CITY CONTRIBUTIONS  TEXAS MUNICIPAL RETIREMENT SYSTEM  Last Eight Fiscal Years      2021 2020 2019 2018 2017 Actuarially required contributions 2,721,688$       2,485,117$       2,376,185$       2,255,270$       2,161,617$        Contributions in relation to the  actuarially required contributions 2,721,688         2,485,117         2,376,185         2,255,270         2,161,617          Contribution deficiency (excess)‐$                        ‐$                        ‐$                        ‐$                        ‐$                        City's covered payroll 16,639,755$     15,724,041$    15,133,171$    14,385,208$    13,986,135$     Contributions as a percentage of  covered payroll 16.36% 15.80% 15.70% 15.68% 15.46% 2016 2015 2014 Actuarially required contributions 2,100,698$       1,960,652$       1,847,375$        Contributions in relation to the  actuarially required contributions 2,100,698         1,960,652         1,847,375          Contribution deficiency (excess)‐$                        ‐$                        ‐$                        City's covered payroll 13,525,613$     12,423,310$    11,781,281$     Contributions as a percentage of  covered payroll 15.53% 15.78% 15.68% Note: Ten years of data should be presented in this schedule but data was unavailable prior to 2014.       85 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  NOTES TO SCHEDULE OF CONTRIBUTIONS  For the Year Ended September 30, 2021      Valuation Date: Actuarially determined contribution rates are calculated as of December 31  and become effective in January 13 months later.  Methods and Assumptions Used to Determine Contribution Rates:    Actuarial Cost Method  Entry Age Normal  Amortization Method Level Percentage of Payroll, Closed  Remaining Amortization  Period  25 years  Asset Valuation Method  10 Year smoothed market; 12% soft corridor  Inflation  2.50%  Salary Increases  3.50% to 11.50% including inflation  Investment Rate of Return 6.75%  Retirement Age  Experience‐based table of rates that are specific to the City's plan of  benefits.  Last updated for the 2019 valuation pursuant to an experience  study of the period 2014 – 2018  Mortality  Post‐retirement: 2019 Municipal Retirees of Texas Mortality Tables. The  rates are projected on a fully generational basis with scale UMP. Pre‐ retirement: 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.  Other Information: There were no benefit changes during the year.       86 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS  TEXAS MUNICIPAL RETIREMENT SYSTEM SUPPLEMENTAL DEATH BENEFITS FUND  Last Four Measurement Years      2020 2019 2018 2017 Service cost 36,397$                   27,481$                   30,757$                   26,788$                    Interest 20,150                     23,199                     20,933                     20,384                      Difference between expected and actual experience (48,181)                    (60,356)                    (7,425)                       ‐                                 Changes of assumptions 115,737                   118,183                   (43,775)                    49,777                      Benefit payments ** (4,963)                      (6,107)                      (5,859)                      (5,640)                       Net change in total OPEB liability 119,140                   102,400                   (5,369)                      91,309                      Total OPEB liability ‐ beginning 717,014                   614,614                   619,983                   528,674                    Total OPEB liability ‐ ending 836,154$                 717,014$                 614,614$                 619,983$                  Covered payroll 16,543,970$           15,267,034$           14,646,398$           14,098,997$            Total OPEB liability as a percentage of covered payroll 5.05% 4.70% 4.20% 4.40%  ** Due to the SDBF being considered an unfunded OPEB plan under GASB 75, benefit payments        are treated as being equal to the employer's yearly contributions for retirees. Amounts presented are for each measurement year, which end the preceding    December 31 of the City's fiscal year end. Total OPEB liability is calculated using a new methodology and will be presented     prospectively in accordance with GASB 75. Ten years of data should be presented in this schedule but data was unavailable     prior to 2017.    Notes to Required Supplementary Information:    Changes of assumptions:    Changes of assumptions and other inputs reflect the effects of changes in the discount rate each period.  The following are the discount rates used in each period:         2020  2.00%       2019  2.75%          87 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS  CITY OF FRIENDSWOOD RETIREE HEALTH CARE PLAN  Last Four Measurement Years      2020 2019 2018 2017 Service cost 60,972$                 46,995$                53,919$                   44,637$                    Interest 30,484                   36,314                   37,843                     39,497                      Difference between expected and actual experience (104,038)                8,768                     (214,124)                 4,573                        Changes of assumptions 75,401                   86,718                   7,071                       51,765                      Benefit payments (59,267)                  (52,896)                 (38,566)                    (38,414)                     Net change in total OPEB liability 3,552                     125,899                (153,857)                 102,058                    Total OPEB liability ‐ beginning 1,107,657              981,758                1,135,615               1,033,557                Total OPEB liability ‐ ending 1,111,209$           1,107,657$           981,758$                 1,135,615$              Covered payroll 16,543,973$         15,267,037$         14,646,402$           12,035,859$            Total OPEB liability as a percentage of covered payroll 6.72% 7.26% 6.70% 9.44% Total OPEB liability is calculated using a new methodology and will be presented     prospectively in accordance with GASB 75. Ten years of data should be presented in this schedule but data was unavailable     prior to 2017.   Notes to Required Supplementary Information:    Methods and Assumptions Used to Determine Contribution Rates:    The demographic assumptions are based on the assumptions that were developed for the defined benefit plan in which the  City participates (TMRS). The assumptions are based on the experience study covering the four year period ending December  31, 2014 as conducted for the Texas Municipal Retirement System (TMRS).    Assumption changes:    1.  The discount rate decreased from 2.75% as of December 31, 2019 to 2.00% as of December 31, 2020. This change increased  the total OPEB liability.    2.  The health care trend rates were updated to better reflect the plan’s anticipated experience.         88 City of Friendswood 2021 ACFR       89 City of Friendswood 2021 ACFR  COMBINING AND INDIVIDUAL FUND   FINANCIAL STATEMENTS AND SCHEDULES      90 City of Friendswood 2021 ACFR  NONMAJOR  GOVERNMENTAL FUNDS      The Special Revenue Funds are used to account for specific revenue sources (other than major capital projects) that are  legally restricted to expenditures for specified purposes.    Police Investigation Fund – This fund is used to account for revenues that are restricted to police investigation  expenditures.    Fire/EMS Donation Fund – This fund accounts for revenues that are restricted for Fire/EMS capital outlays and debt  repayments.    Municipal Court Fund – This fund accounts for revenues that are restricted for court technology and building security.   In 1999, the state legislature authorized a court technology and court security fee for municipal court fines.  In 2019,  the state legislature authorized additional fees for truancy and jury services.    Community Development Block Grant (CDBG) – Disaster Recovery (DR) Harris County – This fund is used to account  for revenues that are restricted to the Community Development Block Grant – Disaster Recovery expenditures. Funds  will be used for the Harris County side of the City.    Texas Water Development Board Flood Mitigation Acquisition Grant – This fund is used to account for revenues that  are restricted for the FEMA Flood Mitigation Assistance Grant Program.  The funds will be used for the acquisition and  demolition of properties in flood‐prone areas.    Hazard Mitigation Grant Program – This fund is used to account for federal grants that are restricted to the acquisition  and demolition of flood‐prone residential structures located within the City.    Community Development Block Grant (CDBG) – Disaster Recovery (DR) Galveston County – This fund is used to  account for revenues that are restricted to the Community Development Block Grant – Disaster Recovery expenditures.  Funds will be used for the Galveston County side of the City.    Debt Service Funds are used to account for the accumulation of resources that are restricted, committed, or assigned for the  repayment of principal and interest on long‐term obligations of the governmental funds.    Debt Service Fund – This fund is used to account for the accumulation of resources for the payment of general long‐ term debt principal, interest and related costs.    The Permanent Fund is used to report resources that are legally restricted to the extent that only earnings, not principal, may  be used for purposes that support the City’s programs.    1776 Park Fund – This fund is used to account for assets held by the City in a trustee capacity and the earnings benefit  this City Park.          91 City of Friendswood 2021 ACFR  NONMAJOR  GOVERNMENTAL FUNDS (continued)      Capital Projects Funds are used to account for the acquisition and construction of major capital facilities.    Sidewalk Installation Fund – This fund is used to account for receipts from developers to install sidewalks in  neighborhood developments.    Park Land Dedication Fund – This fund is used to account for receipts from developers to build or enhance  neighborhood and community parks.    Street Improvement Fund – This fund is used to record sales tax revenue collected for City’s streets maintenance and  improvements.      MAJOR  GOVERNMENTAL FUNDS      Coronavirus State and Local Fiscal Recovery Fund – This fund is used to account for federal funds related to the fiscal  recovery of Coronavirus.  Funds will be used for water and sewer infrastructure projects.    Capital Projects Funds are used to account for the acquisition and construction of major capital facilities.    Bond Construction Fund – is used to account for the construction of public facilities, and park, street and drainage  improvements that are funded by the proceeds from Permanent Improvement Bonds.       92 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 3  COMBINING BALANCE SHEET  NONMAJOR GOVERNMENTAL FUNDS  September 30, 2021      Special Revenue Funds  Police  Investigation   Fires/EMS  Donation   Municipal  Court   CDBG ‐ DR  Harris County  Assets Cash and cash equivalents 68,507$                 199,687$        91,955$          35,134$              Investments 134,108                 396,706          182,681          69,800                Receivables, net of allowance: Taxes receivable ‐                               ‐                        ‐                        ‐                           Customer accounts ‐                              2,714               ‐                        ‐                           Other receivables ‐                               ‐                       3,573               ‐                           Accrued interest 71                           256                  85                     ‐                           Due from other governments ‐                               ‐                        ‐                       5,316                  Total Assets 202,686$               599,363$        278,294$        110,250$            Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable 16,955$                  ‐$                      ‐$                     19,342$              Accrued liabilities ‐                               ‐                        ‐                        ‐                           Due to other funds ‐                               ‐                        ‐                       256,794              Total Liabilities 16,955                     ‐                        ‐                       276,136              Deferred Inflows of Resources: Unavailable revenue ‐                               ‐                       3,756               ‐                           Total Deferred Inflows ‐                               ‐                       3,756               ‐                           Fund Balances: Nonspendable: Permanent fund ‐                               ‐                        ‐                        ‐                           Restricted: Municipal court operations ‐                               ‐                       274,538           ‐                           Debt service ‐                               ‐                        ‐                        ‐                           Public safety 185,731                 599,363           ‐                        ‐                           Capital projects ‐                               ‐                        ‐                        ‐                           Unassigned ‐                               ‐                        ‐                       (165,886)             Total Fund Balances 185,731                 599,363          274,538          (165,886)             Total Liabilities, Deferred Inflows of     Resources, and Fund Balances 202,686$               599,363$        278,294$        110,250$                   93 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 3  COMBINING BALANCE SHEET  NONMAJOR GOVERNMENTAL FUNDS  September 30, 2021       TWDB Flood  Mitigation  Acquisition  Grant   HMGP  Acquisition &  Demolition  Project   CDBG ‐ DR  Galveston  County  Debt Service Fund  Assets Cash and cash equivalents ‐$                       92,092$               28,214$               3,437$                     Investments ‐                          ‐                            56,051                 6,828                       Receivables, net of allowance: Taxes receivable ‐                          ‐                             ‐                            45,560                     Customer accounts ‐                          ‐                             ‐                             ‐                                Other receivables ‐                          ‐                             ‐                             ‐                                Accrued interest ‐                          ‐                             ‐                            325                           Due from other governments 280,699            609,629               137,043                ‐                                Total Assets 280,699$          701,721$            221,308$             56,150$                   Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable ‐$                       117,188$             ‐$                           ‐$                              Accrued liabilities ‐                          ‐                            943                        ‐                                Due to other funds 280,699            584,533               220,365                ‐                                Total Liabilities 280,699            701,721               221,308                ‐                                Deferred Inflows of Resources: Unavailable revenue ‐                          ‐                             ‐                            45,542                     Total Deferred Inflows ‐                          ‐                             ‐                            45,542                     Fund Balances: Nonspendable: Permanent fund ‐                          ‐                             ‐                             ‐                                Restricted: Municipal court operations ‐                          ‐                             ‐                             ‐                                Debt service ‐                          ‐                             ‐                            10,608                     Public safety ‐                          ‐                             ‐                             ‐                                Capital projects ‐                          ‐                             ‐                             ‐                                Unassigned ‐                          ‐                             ‐                             ‐                                Total Fund Balances ‐                          ‐                             ‐                            10,608                     Total Liabilities, Deferred Inflows of     Resources, and Fund Balances 280,699$          701,721$            221,308$             56,150$                   Special Revenue Funds        94 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 3 of 3  COMBINING BALANCE SHEET  NONMAJOR GOVERNMENTAL FUNDS  September 30, 2021      Permanent  1776 Park Fund   Sidewalk  Install Fund   Park Land  Dedication Funds   Street  Improvements  Fund   Total Nonmajor  Governmental  Funds  Assets Cash and cash equivalents 3,716$                   14,633$           35,585$                  433,678$                 1,006,638$             Investments 7,381                     29,072             70,693                    861,559                   1,814,879               Receivables, net of allowance: Taxes receivable ‐                               ‐                         ‐                               377,691                   423,251                  Customer accounts ‐                               ‐                         ‐                                ‐                                2,714                       Other receivables ‐                               ‐                         ‐                                ‐                                3,573                       Accrued interest 4                             15                     45                            362                           1,163                       Due from other governments ‐                               ‐                         ‐                                ‐                            1,032,687               Total Assets 11,101$                 43,720$           106,323$               1,673,290$              4,284,905$                                         Liabilities, Deferred Inflows of Resources, and Fund Balances                             Liabilities: Accounts payable ‐$                            ‐$                       ‐$                              ‐$                              153,485$                Accrued liabilities ‐                               ‐                         ‐                                ‐                                943                          Due to other funds ‐                               ‐                         ‐                                ‐                                1,342,391               Total Liabilities ‐                               ‐                         ‐                                ‐                                1,496,819               Deferred Inflows of Resources: Unavailable revenue ‐                               ‐                         ‐                                ‐                                49,298                     Total Deferred Inflows ‐                               ‐                         ‐                                ‐                                49,298                     Fund Balances: Nonspendable: Permanent fund 11,101                    ‐                         ‐                                ‐                                11,101                     Restricted: Municipal court operations ‐                               ‐                         ‐                                ‐                                274,538                  Debt service ‐                               ‐                         ‐                                ‐                                10,608                     Public safety ‐                               ‐                         ‐                                ‐                                785,094                  Capital projects ‐                              43,720             106,323                  1,673,290                1,823,333               Unassigned ‐                               ‐                         ‐                                ‐                                (165,886)                 Total Fund Balances 11,101                   43,720             106,323                  1,673,290                2,738,788               Total Liabilities, Deferred Inflows of     Resources, and Fund Balances 11,101$                 43,720$           106,323$               1,673,290$              4,284,905$             Capital Projects Funds           95 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 1 of 3  COMBINING STATEMENT OF REVENUES, EXPENDITURES  AND CHANGES IN FUND BALANCES  NONMAJOR GOVERNMENTAL FUNDS  For the Year Ended September 30, 2021      Special Revenue Funds  Police  Investigation   Fires/EMS  Donation  Municipal Court   CDBG ‐ DR  Harris County  Revenues Property taxes ‐$                           ‐$                           ‐$                           ‐$                           Sales taxes ‐                             ‐                             ‐                             ‐                             Fines and forfeitures 16,162                  ‐                            85,710                  ‐                             Permits and fees ‐                             ‐                             ‐                             ‐                             Intergovernmental ‐                             ‐                             ‐                            973,186                Donations ‐                            209,057                ‐                             ‐                             Investment earnings 590                       2,061                   605                        ‐                             Total Revenues 16,752                 211,118               86,315                 973,186                Expenditures Current: General government ‐                             ‐                            46,900                  ‐                             Public safety 14,493                 83,906                  ‐                             ‐                             Public works ‐                             ‐                             ‐                            347,730                Debt Service: Principal ‐                            117,503                ‐                             ‐                             Interest and other charges ‐                            15,331                  ‐                             ‐                             Capital Outlay 17,884                 164,222                ‐                            787,748                Total Expenditures 32,377                 380,962               46,900                 1,135,478             Excess (deficiency) of revenues over      (under) expenditures (15,625)                (169,844)              39,415                 (162,292)               Other Financing Sources (Uses) Issuance of refunding bonds ‐                             ‐                             ‐                             ‐                             Premium on issuance of bonds ‐                             ‐                             ‐                             ‐                             Transfers in ‐                             ‐                             ‐                             ‐                             Sale of capital assets ‐                            8,400                    ‐                             ‐                             Payments to refunding bond escrow agent ‐                             ‐                             ‐                             ‐                             Total Other Financing Sources (Uses)‐                            8,400                    ‐                             ‐                             Net change in fund balances (15,625)                (161,444)              39,415                 (162,292)               Fund Balances ‐ Beginning 201,356               760,807               235,123               (3,594)                   Fund Balances ‐ Ending 185,731$             599,363$             274,538$             (165,886)$                   96 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 2 of 3  COMBINING STATEMENT OF REVENUES, EXPENDITURES  AND CHANGES IN FUND BALANCES  NONMAJOR GOVERNMENTAL FUNDS  For the Year Ended September 30, 2021       TWDB Flood  Mitigation  Acquisition  Grant   HMGP  Acquisition &  Demolition  Project   CDBG ‐ DR  Galveston  County  Debt Service Fund  Revenues Property taxes ‐$                           ‐$                            ‐$                         3,701,687$             Sales taxes ‐                             ‐                             ‐                             ‐                                Fines and forfeitures ‐                             ‐                             ‐                             ‐                                Permits and fees ‐                             ‐                              ‐                             ‐                                Intergovernmental 1,979,213            925,619                169,743                ‐                                Donations ‐                             ‐                              ‐                             ‐                                Investment earnings ‐                             ‐                              ‐                            2,824                       Total Revenues 1,979,213            925,619                169,743               3,704,511               Expenditures Current: General government ‐                             ‐                              ‐                             ‐                                Public safety ‐                             ‐                              ‐                             ‐                                Public works 281,550               373,292                230,638                ‐                                Debt Service: Principal ‐                             ‐                              ‐                            2,438,779               Interest and other charges ‐                             ‐                              ‐                            1,389,697               Capital Outlay ‐                            479,569                 ‐                             ‐                                Total Expenditures 281,550               852,861                230,638               3,828,476               Excess (deficiency) of revenues over      (under) expenditures 1,697,663            72,758                  (60,895)               (123,965)                 Other Financing Sources (Uses) Issuance of refunding bonds ‐                             ‐                              ‐                            3,050,000               Premium on issuance of bonds ‐                             ‐                              ‐                            277,572                   Transfers in ‐                            52,728                  60,895                 96,439                     Sale of capital assets ‐                             ‐                              ‐                             ‐                                Payments to refunding bond escrow agent ‐                             ‐                              ‐                            (3,321,347)              Total Other Financing Sources (Uses)‐                            52,728                  60,895                 102,664                   Net change in fund balances 1,697,663            125,486                 ‐                            (21,301)                    Fund Balances ‐ Beginning (1,697,663)           (125,486)                ‐                            31,909                     Fund Balances ‐ Ending ‐$                           ‐$                            ‐$                         10,608$                   Special Revenue Funds           97 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Page 3 of 3  COMBINING STATEMENT OF REVENUES, EXPENDITURES  AND CHANGES IN FUND BALANCES  NONMAJOR GOVERNMENTAL FUNDS  For the Year Ended September 30, 2021      Permanent  1776 Park Fund   Sidewalk Install  Fund   Park Land  Dedication Funds   Street  Improvements  Fund   Total Nonmajor  Governmental  Funds  Revenues Property taxes ‐$                            ‐$                              ‐$                              3,701,687$             Sales taxes ‐                               ‐                               ‐                               1,961,187                1,961,187               Fines and forfeitures ‐                               ‐                               ‐                               ‐                                101,872                  Permits and fees ‐                               ‐                              51,600                     ‐                                51,600                     Intergovernmental ‐                               ‐                               ‐                                ‐                                4,047,761               Donations ‐                               ‐                               ‐                                ‐                                209,057                  Investment earnings 31                           115                        351                         3,332                        9,909                       Total Revenues 31                           115                        51,951                    1,964,519                10,083,073             Expenditures Current: General government ‐                               ‐                               ‐                                ‐                                46,900                     Public safety ‐                               ‐                               ‐                                ‐                                98,399                     Public works ‐                               ‐                               ‐                               768,459                   2,001,669               Debt Service: Principal ‐                               ‐                               ‐                                ‐                                2,556,282               Interest and other charges ‐                               ‐                               ‐                                ‐                                1,405,028               Capital Outlay ‐                               ‐                              71,745                     ‐                                1,521,168               Total Expenditures ‐                               ‐                              71,745                    768,459                   7,629,446               Excess (deficiency) of revenues over      (under) expenditures 31                           115                        (19,794)                   1,196,060                2,453,627               Other Financing Sources (Uses) Issuance of refunding bonds ‐                               ‐                               ‐                                ‐                                3,050,000               Premium on issuance of bonds ‐                               ‐                               ‐                                ‐                                277,572                  Transfers in ‐                               ‐                               ‐                                ‐                                210,062                  Sale of capital assets ‐                               ‐                               ‐                                ‐                                8,400                       Payments to refunding bond escrow agent ‐                               ‐                               ‐                                ‐                                (3,321,347)              Total Other Financing Sources (Uses)‐                               ‐                               ‐                                ‐                                224,687                  Net change in fund balances 31                           115                        (19,794)                   1,196,060                2,678,314               Fund Balances ‐ Beginning 11,070                   43,605                   126,117                  477,230                   60,474                     Fund Balances ‐ Ending 11,101$                 43,720$                 106,323$               1,673,290$              2,738,788$             Capital Projects Funds        98 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  POLICE INVESTIGATION  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Fines and forfeitures ‐$                           ‐$                          16,162$               16,162$                Investment earnings 1,425                   1,425                   590                       (835)                      Total Revenues 1,425                   1,425                   16,752                 15,327                  Expenditures Current: Public safety ‐                            14,493                 14,493                  ‐                             Capital outlay ‐                            17,884                 17,884                  ‐                             Total Expenditures ‐                            32,377                 32,377                  ‐                             Net change in fund balances 1,425                   (30,952)                (15,625)                15,327                  Fund Balances ‐ Beginning 201,356               201,356               201,356                ‐                             Fund Balances ‐ Ending 202,781$             170,404$             185,731$             15,327$                     99 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  FIRE/EMS DONATION  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Donations 215,000$             215,000$             209,057$             (5,943)$                 Investment earnings 2,150                   2,150                   2,061                   (89)                         Total Revenues 217,150               217,150               211,118               (6,032)                   Expenditures Current: Public safety 65,075                 83,906                 83,906                  ‐                             Debt service: Principal 116,923               116,923               117,503               (580)                      Interest and other charges 15,909                 15,909                 15,331                 578                        Capital outlay 169,000               169,601               164,222               5,379                    Total Expenditures 366,907               386,339               380,962               5,377                    Excess (deficiency) of revenues over      expenditures (149,757)              (169,189)              (169,844)              (655)                      Other Financing Sources (Uses) Sale of capital assets ‐                            601                       8,400                   7,799                    Total Other Financing Sources (Uses)‐                            601                       8,400                   7,799                    Net change in fund balances (149,757)              (168,588)              (161,444)              7,144                    Fund Balances ‐ Beginning 760,807               760,807               760,807                ‐                             Fund Balances ‐ Ending 611,050$             592,219$             599,363$             7,144$                         100 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  MUNICIPAL COURT  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Fines and forfeitures 49,000$               49,000$               85,710$               36,710$                Investment earnings 1,850                   1,850                   605                       (1,245)                   Total Revenues 50,850                 50,850                 86,315                 35,465                  Expenditures Current: General government 47,552                 49,190                 46,900                 2,290                    Total Expenditures 47,552                 49,190                 46,900                 2,290                    Net change in fund balances 3,298                   1,660                   39,415                 37,755                  Fund Balances ‐ Beginning 235,123               235,123               235,123                ‐                             Fund Balances ‐ Ending 238,421$             236,783$             274,538$             37,755$                       101 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  CDBG – DR HARRIS COUNTY  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Intergovernmental ‐$                          967,871$             973,186$             5,315$                  Total Revenues ‐                        967,871               973,186               5,315                    Expenditures Current: Public works ‐                            180,123               347,730               (167,607)               Capital outlay ‐                            787,748               787,748                ‐                             Total Expenditures ‐                            967,871               1,135,478            (167,607)               Net change in fund balances ‐                             ‐                            (162,292)              (162,292)               Fund Balances ‐ Beginning (3,594)                  (3,594)                  (3,594)                   ‐                             Fund Balances ‐ Ending (3,594)$                (3,594)$                (165,886)$           (162,292)$                      102 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  TWDB FLOOD MITIGATION ACQUISION GRANT  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Intergovernmental ‐$                           ‐$                          1,979,213$         1,979,213$          Total Revenues ‐                             ‐                        1,979,213            1,979,213             Expenditures Current: Public works ‐                             ‐                            281,550               (281,550)               Total Expenditures ‐                             ‐                            281,550               (281,550)               Net change in fund balances ‐                             ‐                            1,697,663            1,697,663             Fund Balances ‐ Beginning (1,697,663)          (1,697,663)          (1,697,663)           ‐                             Fund Balances ‐ Ending (1,697,663)$        (1,697,663)$         ‐$                          1,697,663$                    103 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  HAZARD MITIGATION GRANT PROGRAM  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Intergovernmental ‐$                          377,397$             925,619$             548,222$              Total Revenues ‐                            377,397               925,619               548,222                Expenditures Current: Public works ‐                            94,348                 373,292               (278,944)               Capital outlay ‐                            283,049               479,569               (196,520)               Total Expenditures ‐                            377,397               852,861               (475,464)               Excess (deficiency) of revenues over      expenditures ‐                             ‐                            72,758                 72,758                  Other Financing Sources (Uses) Transfers in ‐                             ‐                            52,728                 52,728                  Total Other Financing Sources (Uses)‐                             ‐                            52,728                 52,728                  Net change in fund balances ‐                             ‐                            125,486               125,486                Fund Balances ‐ Beginning (125,486)              (125,486)              (125,486)               ‐                             Fund Balances ‐ Ending (125,486)$           (125,486)$            ‐$                          125,486$                        104 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  CDBG ‐ DR GALVESTON COUNTY  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Intergovernmental ‐$                          32,700$               169,743$             137,043$              Total Revenues ‐                            32,700                 169,743               137,043                Expenditures Current: Public works ‐                            93,595                 230,638               (137,043)               Total Expenditures ‐                            93,595                 230,638               (137,043)               Excess (deficiency) of revenues over      expenditures ‐                            (60,895)                (60,895)                 ‐                             Other Financing Sources (Uses) Transfers in ‐                            60,895                 60,895                  ‐                             Total Other Financing Sources (Uses)‐                            60,895                 60,895                  ‐                             Net change in fund balances ‐                             ‐                             ‐                             ‐                             Fund Balances ‐ Beginning ‐                             ‐                             ‐                             ‐                             Fund Balances ‐ Ending ‐$                           ‐$                           ‐$                           ‐$                                     105 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  1776 PARK  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Investment earnings 185$                    185$                    31$                       (154)$              Total Revenues 185                       185                       31                         (154)                Expenditures Current ‐                             ‐                             ‐                             ‐                       Total Expenditures ‐                             ‐                             ‐                             ‐                       Net change in fund balances 185                       185                       31                         (154)                Fund Balances ‐ Beginning 11,070                 11,070                 11,070                  ‐                       Fund Balances ‐ Ending 11,255$               11,255$               11,101$               (154)$                        106 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  SIDEWALK INSTALLATION  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Investment earnings 245$                    245$                    115$                    (130)$                    Total Revenues 245                       245                       115                       (130)                      Expenditures Current ‐                             ‐                             ‐                             ‐                             Total Expenditures ‐                             ‐                             ‐                             ‐                             Net change in fund balances 245                       245                       115                       (130)                      Fund Balances ‐ Beginning 43,605                 43,605                 43,605                  ‐                             Fund Balances ‐ Ending 43,850$               43,850$               43,720$               (130)$                           107 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  PARK LAND DEDICATION  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Permit and fees 50,000$               50,000$               51,600$               1,600$               Investment earnings 775                       775                       351                       (424)                   Total Revenues 50,775                 50,775                 51,951                 1,176                 Expenditures Current: Capital outlay ‐                            74,474                 71,745                 2,729                 Total Expenditures ‐                            74,474                 71,745                 2,729                 Net change in fund balances 50,775                 (23,699)                (19,794)                3,905                 Fund Balances ‐ Beginning 126,117               126,117               126,117                ‐                          Fund Balances ‐ Ending 176,892$             102,418$             106,323$             3,905$                      108 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  STREET IMPROVEMENT  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Sales taxes 1,815,271$         1,815,271$         1,961,187$         145,916$              Investment earnings 19,800                 19,800                 3,332                   (16,468)                 Total Revenues 1,835,071            1,835,071            1,964,519            129,448                Expenditures Public works ‐                            768,459               768,459                ‐                             Total Expenditures ‐                            768,459               768,459                ‐                             Net change in fund balances 1,835,071            1,066,612            1,196,060            129,448                Fund Balances ‐ Beginning 477,230               477,230               477,230                ‐                             Fund Balances ‐ Ending 2,312,301$         1,543,842$         1,673,290$         129,448$                     109 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  DEBT SERVICE FUND  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Property taxes 3,749,088$         3,749,088$         3,701,687$         (47,401)$                 Investment earnings 9,075                   9,075                   2,824                   (6,251)                     Total Revenues 3,758,163            3,758,163            3,704,511            (53,652)                   Expenditures Debt service: Principal 2,438,779            2,438,779            2,438,779             ‐                               Interest and other charges 1,290,310            1,386,750            1,389,697            (2,947)                     Total Expenditures 3,729,089            3,825,529            3,828,476            (2,947)                     Excess (deficiency) of revenues over      expenditures 29,074                 (67,366)                (123,965)              (56,599)                   Other Financing Sources (Uses) Issuance of refunding bonds ‐                             ‐                            3,050,000            3,050,000               Premium on bond issuance ‐                             ‐                            277,572               277,572                  Transfers in ‐                            96,440                 96,439                 (1)                             Payments to refunding bond escrow agent ‐                             ‐                            (3,321,347)          (3,321,347)              Total Other Financing Sources ‐                            96,440                 102,664               6,224                       Net change in fund balances 29,074                 29,074                 (21,301)                (50,375)                   Fund Balances ‐ Beginning 31,909                 31,909                 31,909                  ‐                               Fund Balances ‐ Ending 60,983$               60,983$               10,608$               (50,375)$                           110 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES  BUDGET AND ACTUAL  BOND CONSTRUCTION  For the Year Ended September 30, 2021      Original Budget Final Budget Actual Amounts Variance with  Final Budget ‐  Positive  (Negative) Revenues Investment earnings 40,000$               40,000$               2,749$                 (37,251)$               Total Revenues 40,000                 40,000                 2,749                   (37,251)                 Expenditures Current: Public works ‐                             ‐                            7,500                   (7,500)                   Debt service: Bond issuance costs ‐                            162,444               162,444                ‐                             Capital outlay ‐                            16,690,450         1,763,771            14,926,679          Total Expenditures ‐                            16,852,894         1,933,715            14,919,179          Excess (deficiency) of revenues over      expenditures 40,000                 (16,812,894)        (1,930,966)          14,881,928          Other Financing Sources (Uses) Issuance of capital‐related debt ‐                            13,185,000         13,185,000          ‐                             Premium on issuance of bonds ‐                            1,173,884            1,173,884             ‐                             Transfers out ‐                            (96,440)                (96,439)                1                            Total Other Financing Sources (Uses)‐                            14,262,444         14,262,445         1                            Net change in fund balances 40,000                 (2,550,450)          12,331,479         14,881,929          Fund Balances ‐ Beginning 2,881,036            2,881,036            2,881,036             ‐                             Fund Balances ‐ Ending 2,921,036$         330,586$             15,212,515$       14,881,929$               111 City of Friendswood 2021 ACFR  STATISTICAL SECTION  (Unaudited)     112 City of Friendswood 2021 ACFR         113 City of Friendswood 2021 ACFR  STATISTICAL SECTION  (Unaudited)    This part of the City of Friendswood’s annual comprehensive 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 government’s overall financial health.    Contents Pages    Financial Trends  114  These schedules contain trend information to help the reader understand how the  government’s financial performance and well‐being have changed over time.     Revenue Capacity 124  These schedules contain information to help the reader assess the government’s most  significant local revenue source, the property tax.     Debt Capacity 129  These schedules present information to help the reader assess the affordability of the  government’s current levels of outstanding debt and the government’s ability to issue  additional debt in the future.     Demographic and Economic Information  134  This schedule offers demographic and economic indicators to help the reader understand  the environment within which the government’s financial activities take place.     Operating Information  138  These schedules contain service and infrastructure data to help the reader understand how  the information in the government’s financial report relates to the services the government  provides and activities it performs.        Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial  reports for the relevant year.       114 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 1  NET POSITION BY COMPONENT Page 1 of 2  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2021 2020 2019 2018 2017 Governmental Activities Net investment in capital assets 72,240,727$          68,990,597$          66,823,023$          68,320,682$          72,631,192$           Restricted 3,491,974              4,606,124              4,003,468              4,085,999              2,534,312               Unrestricted 6,886,085              2,563,947              5,402,312              6,248,751              5,532,198               Total governmental activities net position 82,618,786$          76,160,668$          76,228,803$          78,655,432$          80,697,702$           Business‐type activities Net investment in capital assets 32,910,959$          32,242,803$          27,038,046$          27,088,280$          29,305,429$           Restricted 2,721,465              2,186,731              1,982,666              582,697                 260,703                  Unrestricted 9,984,251              8,438,509              12,077,564            13,620,211            10,584,764             Total business‐type activities net position 45,616,675$          42,868,043$          41,098,276$          41,291,188$          40,150,896$           Primary government Net investment in capital assets 105,151,686$       101,233,400$       93,861,069$          95,408,962$          101,936,621$        Restricted 6,213,439              6,792,855              5,986,134              4,668,696              2,795,015               Unrestricted 16,870,336            11,002,456            17,479,876            19,868,962            16,116,962             Total Primary government net positions 128,235,461$       119,028,711$       117,327,079$       119,946,620$       120,848,598$                115 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 1  NET POSITION BY COMPONENT Page 2 of 2  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2016 2015 2014 2013 2012 Governmental Activities Net investment in capital assets 73,588,484$          73,611,490$          65,404,791$          65,056,180$          65,582,783$           Restricted 1,405,907              1,179,764              653,496                 718,275                 872,869                  Unrestricted 5,579,677              5,901,505              10,798,907            9,565,406              8,828,132               Total governmental activities net position 80,574,068$          80,692,759$          76,857,194$          75,339,861$          75,283,784$           Business‐type activities Net investment in capital assets 28,322,718$          26,628,714$          24,495,816$          22,961,547$          25,618,823$           Restricted 99,006                    27,468                    90,395                    176,882                 786,600                  Unrestricted 10,238,993            12,040,181            14,818,104            16,790,183            13,032,798             Total business‐type activities net position 38,660,717$          38,696,363$          39,404,315$          39,928,612$          39,438,221$           Primary government Net investment in capital assets 101,911,202$       100,240,204$       89,900,607$          88,017,727$          91,201,606$           Restricted 1,504,913              1,207,232              743,891                 895,157                 1,659,469               Unrestricted 15,818,670            17,941,686            25,617,011            26,355,589            21,860,930             Total Primary government net positions 119,234,785$       119,389,122$       116,261,509$       115,268,473$       114,722,005$             116 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 2  CHANGES IN NET POSITION Page 1 of 4  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2021 2020 2019 2018 2017 Expenses Governmental Activities: General government 5,867,654$         6,119,806$         5,912,467$         5,734,611$         5,128,399$          Public safety 15,645,527         15,501,734         15,134,465         17,538,040         15,861,719          Public works 7,160,229            8,840,113           7,897,373            6,267,824            4,429,664             Engineering 506,959               434,976                ‐                             ‐                             ‐                             Community development 1,035,202            1,122,506           1,359,878            945,701               1,495,001             Parks and recreation 4,604,943            4,439,511           4,839,076            4,554,114            3,459,053             Library services 1,221,740            1,214,130           1,257,970            1,210,207            1,215,683             Interest and fiscal charges 1,244,881            1,055,889           923,350               953,509               953,146                Total Government Activities Expenses 37,287,135         38,728,665         37,324,579         37,204,006         32,542,665          Business‐Type Activities: Water and wastewater 11,864,245         12,071,159         11,507,880         9,019,197            8,502,218             Interest and other 1,808,120            1,733,123           1,579,182            1,029,715            1,086,278             Total Business‐Type Activities 13,672,365         13,804,282         13,087,062         10,048,912         9,588,496             Total Primary Government Expenses 50,959,500$       52,532,947$       50,411,641$       47,252,918$       42,131,161$        Program Revenues Governmental activities: Charges for services: General government 871,362$             930,686$            751,112$             861,271$             1,004,968$          Public safety 1,372,432            871,714               811,768               868,761               35,007                  Public works 225,419               222,337               236,352               213,042               242,184                Community development ‐                            9,275                   6,841                    ‐                            1,036,741             Parks and recreation 384,489               181,709               341,560               344,064               387,915                Library services ‐                             ‐                             ‐                             ‐                            30,600                  Operating grants and contributions 3,874,866            3,430,645           1,842,704            4,924,228            2,591,025             Capital grants and contributions 3,864,589            708,306                ‐                             ‐                            219,808                Total Governmental Activities Program Revenues:10,593,157         6,354,672           3,990,337            7,211,366            5,548,248             Business‐Type Activities: Charges for services: Water and wastewater 17,919,751         16,638,758         13,669,552         12,183,711         12,295,441          Operating grants and contributions ‐                            22,602                  ‐                             ‐                             ‐                             Total Business‐Type activities Program Revenues 17,919,751         16,661,360         13,669,552         12,183,711         12,295,441          Total Primary Government Program Revenues 28,512,908$       23,016,032$       17,659,889$       19,395,077$       17,843,689$        Net (Expense) Revenues Governmental activities (26,693,978)        (32,373,993)        (33,334,242)        (29,992,640)        (26,994,417)         Business‐type activities                               4,247,386            2,857,078           582,490               2,134,799            2,706,945             Total Primary Government Net Expense (22,446,592)$      (29,516,915)$      (32,751,752)$      (27,857,841)$      (24,287,472)$               117 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 2  CHANGES IN NET POSITION Page 2 of 4  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2016 2015 2014 2013 2012 Expenses Governmental Activities: General government 4,736,867$         5,410,643$         4,589,795$         4,679,339$         4,737,702$          Public safety 13,101,691         11,763,659         11,236,402         10,800,130         10,736,805          Public works 4,429,482            3,933,288            3,921,658            4,385,090           3,738,111            Engineering ‐                             ‐                             ‐                             ‐                             ‐                             Community development 1,577,813            1,406,288            1,097,075            1,207,264           1,520,401            Parks and recreation 3,080,453            2,869,345            3,356,587            3,260,931           3,227,731            Library services 1,134,859            1,026,967            1,093,043            1,002,801           1,004,303            Interest and fiscal charges 862,654               730,614               630,542               703,275               757,011                Total Government Activities Expenses 28,923,819         27,140,804         25,925,102         26,038,830         25,722,064          Business‐Type Activities: Water and wastewater 7,975,920            7,629,711            7,995,106            7,681,366           6,902,279            Interest and other 1,642,723            1,524,276            1,514,804            1,590,395           1,638,495            Total Business‐Type Activities 9,618,643            9,153,987            9,509,910            9,271,761           8,540,774            Total Primary Government Expenses 38,542,462$       36,294,791$       35,435,012$       35,310,591$       34,262,838$        Program Revenues Governmental activities: Charges for services: General government 1,002,022$         807,245$             912,910$             989,190$            1,167,619$          Public safety 28,760                 30,275                 31,620                 34,944                 39,661                  Public works 174,568               190,099               193,064               186,504               171,890                Community development 949,011               843,648               877,132               825,366               730,211                Parks and recreation 286,727               280,046               315,702               316,047               271,912                Library services 27,532                 33,699                 36,081                 36,686                 39,543                  Operating grants and contributions 800,151               660,633               843,995               644,458               648,058                Capital grants and contributions 318,657               3,225,672            1,202,376            543,763               527,288                Total Governmental Activities Program Revenues:3,587,428            6,071,317            4,412,880            3,576,958           3,596,182            Business‐Type Activities: Charges for services: Water and wastewater 11,319,801         11,020,029         11,117,391         11,462,779         11,258,216          Operating grants and contributions ‐                             ‐                             ‐                             ‐                             ‐                             Total Business‐Type activities Program Revenues 11,319,801         11,020,029         11,117,391         11,462,779         11,258,216          Total Primary Government Program Revenues 14,907,229$       17,091,346$       15,530,271$       15,039,737$       14,854,398$        Net (Expense) Revenues Governmental activities (25,336,391)        (21,069,487)        (21,502,222)        (22,461,872)        (22,126,882)         Business‐type activities                               1,701,158            1,866,042            1,607,481            2,191,018           2,717,442            Total Primary Government Net Expense (23,635,233)$      (19,203,445)$      (19,894,741)$      (20,270,854)$      (19,409,440)$               118 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 2  CHANGES IN NET POSITION Page 3 of 4  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2021 2020 2019 2018 2017 General Revenues and Other Changes in Net Position Governmental activities:  Taxes: Property taxes 19,163,858$       18,731,549$       18,111,247$       17,608,094$       17,270,647$        Sales taxes 9,915,046            8,846,359           8,407,249            7,965,662            6,482,367             Franchise and other taxes 2,090,001            2,142,660           2,054,395            1,617,121            1,661,654             Other ‐                             ‐                             ‐                             ‐                             ‐                             Investment earnings 50,805                 880,606               526,867               321,468               187,001                Gain (loss) on disposal of capital assets ‐                             ‐                             ‐                             ‐                            25,999                  Miscellaneous 390,533               269,855               351,165               263,245               131,639                Transfers 1,541,853            1,434,829           1,456,690            1,554,849            1,358,744             Total Governmental Activities 33,152,096         32,305,858         30,907,613         29,330,439         27,118,051          Business‐Type Activities: Investment earnings 43,099                 347,518               681,288               200,449               141,978                Gain (loss) on disposal of capital assets ‐                             ‐                             ‐                             ‐                             ‐                             Miscellaneous ‐                             ‐                             ‐                             ‐                             ‐                             Transfers (1,541,853)          (1,434,829)          (1,456,690)          (1,554,849)          (1,358,744)           Total Business‐Type Activities (1,498,754)          (1,087,311)          (775,402)              (1,354,400)          (1,216,766)           Total Primary Government 31,653,342         31,218,547         30,132,211         27,976,039         25,901,285          Change in Net Position Governmental activities 6,458,118            (68,135)               (2,426,629)          (662,201)              123,634                Business‐type activities 2,748,632            1,769,767           (192,912)              780,399               1,490,179             Total Primary Government 9,206,750$         1,701,632$         (2,619,541)$        118,198$             1,613,813$               119 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 2  CHANGES IN NET POSITION Page 4 of 4  LAST TEN FISCAL YEARS   (Accrual Basis of Accounting)      2016 2015 2014 2013 2012 General Revenues and Other Changes in Net Position Governmental activities:  Taxes: Property taxes 16,350,101$       15,574,684$       14,864,284$       14,630,961$       14,165,599$        Sales taxes 5,393,920            5,291,186            4,693,484            4,293,794           3,907,577            Franchise and other taxes 1,779,234            1,726,557            1,673,615            1,583,258           1,556,556            Other ‐                             ‐                            32,799                 24,974                 23,356                  Investment earnings 149,003               79,071                 109,849               88,510                 137,202                Gain (loss) on disposal of capital assets 19,564                  ‐                            34,359                 43,788                 17,601                  Miscellaneous 128,813               108,306               84,275                 78,682                 147,457                Transfers 1,397,065            1,226,205            1,799,344            1,773,982           1,725,141            Total Governmental Activities 25,217,700         24,006,009         23,292,009         22,517,949         21,680,489          Business‐Type Activities: Investment earnings 95,825                 49,138                 40,713                 37,565                 82,853                  Gain (loss) on disposal of capital assets 7,569                    ‐                             ‐                             ‐                            7,000                    Miscellaneous ‐                            7,839                    ‐                            35,790                  ‐                             Transfers (1,397,065)          (1,226,205)          (1,799,344)          (1,773,982)          (1,725,141)           Total Business‐Type Activities (1,293,671)          (1,169,228)          (1,758,631)          (1,700,627)          (1,635,288)           Total Primary Government 23,924,029         22,836,781         21,533,378         20,817,322         20,045,201          Change in Net Position Governmental activities (118,691)              2,936,522            1,789,787            56,077                 (446,393)              Business‐type activities 407,487               696,814               (151,150)              490,391               1,082,154            Total Primary Government 288,796$             3,633,336$         1,638,637$         546,468$            635,761$                  120 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 3  FUND BALANCES OF GOVERNMENTAL FUNDS Page 1 of 2  LAST TEN FISCAL YEARS   (Modified Accrual Basis of Accounting)      2021 2020 2019 2018 2017 General fund Nonspendable 355,011$             255,796$                 378,736$             371,610$             434,750$              Restricted 597,908               650,424                   727,704               631,971               667,271                Committed ‐                             ‐                                 ‐                             ‐                             ‐                             Assigned 4,320,912            2,591,745                2,508,234            4,229,725            2,893,697             Unassigned 11,953,314         13,374,059              10,608,815         9,052,000            9,547,039             Total General Fund 17,227,145         16,872,024              14,223,489         14,285,306         13,542,757          All Other Governmental Funds Nonspendable 11,101                 11,070                      24,738                 24,307                 31,869                  Restricted 18,106,088         4,757,183                5,568,395            9,304,724            8,464,859             Unassigned (165,886)              (1,826,743)                ‐                             ‐                             ‐                             Total Other Governmental Funds 17,951,303         2,941,510                5,593,133            9,329,031            8,496,728             Total Fund Balances of  Governmental Funds 35,178,448$       19,813,534$            19,816,622$       23,614,337$       22,039,485$                121 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 3  FUND BALANCES OF GOVERNMENTAL FUNDS Page 2 of 2  LAST TEN FISCAL YEARS   (Modified Accrual Basis of Accounting)      2016 2015 2014 2013 2012 General fund Nonspendable 646,778$              822,226$              143,201$              122,927$              99,874$                 Restricted 626,229                518,119                 400,411                281,826                173,015                 Committed 3,612                    685,486                  ‐                              ‐                              ‐                              Assigned 2,706,897             2,773,419             1,421,875             487,201                434,931                 Unassigned 9,776,031             8,760,424             10,554,183          9,714,206             9,379,399              Total General Fund 13,759,547          13,559,674           12,519,670          10,606,160          10,087,219           All Other Governmental Funds Nonspendable 31,721                  31,378                   31,241                  31,137                  31,027                   Restricted 8,165,349             6,539,985             666,317                995,269                2,184,855              Unassigned (193,750)                ‐                              (239,078)                ‐                              ‐                              Total Other Governmental Funds 8,003,320             6,571,363             458,480                1,026,406             2,215,882              Total Fund Balances of  Governmental Funds 21,762,867$        20,131,037$         12,978,150$        11,632,566$        12,303,101$              122 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 4  CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Page 1 of 2  LAST TEN FISCAL YEARS   (Modified Accrual Basis of Accounting)      2021 2020 2019 2018 2017 Revenues Taxes 30,974,155$          29,712,771$          28,389,651$          27,247,421$        25,509,760$         Fines and forfeitures 1,219,096              780,717                 866,812                 957,671                1,023,556              Permits and fees 1,669,033              1,504,555              1,483,554              1,566,656             1,708,357              Intergovernmental 7,495,971              3,828,898              1,576,838              4,398,836             1,763,974              Investment earnings 48,609                    274,405                 518,221                 313,793                184,127                 Donations 264,938                 274,945                 290,069                 396,010                434,164                 Miscellaneous 124,627                 719,721                 18,777                    181,017                165,619                 Total revenues 41,796,429            37,096,012            33,143,922            35,061,404          30,789,557           Expenditures General government 5,591,248              5,690,428              5,336,269              5,440,888             4,975,926              Public safety 14,897,465            14,306,864            13,545,539            16,868,931          14,751,381           Public works 4,612,796              6,021,313              4,127,539              2,157,277             2,160,152              Engineering 507,933                 434,976                  ‐                               ‐                              ‐                              Community development 1,131,498              1,139,566              1,099,154              985,309                893,663                 Parks and recreation 3,715,517              3,426,521              3,796,589              3,511,146             3,339,864              Library services 1,223,726              1,182,289              1,204,415              1,200,512             1,172,245              Capital outlay 7,037,490              12,865,475            6,219,243              2,615,538             8,429,200              Debt principal payment 2,556,282              2,221,257              2,168,876              2,137,284             1,813,130              Interest and other charges 1,567,472              1,285,807              1,112,127              1,145,400             1,170,958              Total expenditures 42,841,427            48,574,496            38,609,751            36,062,285          38,706,519           Excess of revenues over (under) expenditures (1,044,998)             (11,478,484)          (5,465,829)             (1,000,881)           (7,916,962)            Other Financing Sources (Uses) Sale of capital assets 21,270                    72,568                    6,614                      9,135                    12,757                   Insurance recoveries 175,351                 8,548                      235,443                 725,304                25,999                   Issuance of capital related debt 13,185,000            7,795,000               ‐                              485,305                5,605,000              Issuance of capital lease 306,329                 1,791,015               ‐                               ‐                             756,006                 Refunding bonds issued 3,050,000              2,065,000               ‐                               ‐                              ‐                              Payment to refunding escrow agent (3,321,347)             (2,372,262)              ‐                               ‐                              ‐                              Premium on issuance of debt 1,451,456              753,840                  ‐                               ‐                             435,074                 Transfers in 1,751,915              1,584,985              1,473,591              1,402,989             1,364,399              Transfers out (210,062)                (223,298)                (47,534)                  (47,000)                 (5,655)                    Total other financing sources (uses)16,409,912            11,475,396            1,668,114              2,575,733             8,193,580              Net change in fund balances 15,364,914$          (3,088)$                  (3,797,715)$          1,574,852$          276,618$               Debt service as a percentage of noncapital expenditures 11.7% 9.9% 10.1% 9.8% 9.9%        123 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 4  CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS Page 2 of 2  LAST TEN FISCAL YEARS   (Modified Accrual Basis of Accounting)      2016 2015 2014 2013 2012 Revenues Taxes 23,533,294$        22,513,317$        21,335,527$        20,563,848$        19,630,172$         Fines and forfeitures 873,872                907,557                860,257                939,380                1,037,880              Permits and fees 1,450,939             1,349,264             1,385,898             1,327,918             1,174,013              Intergovernmental 664,427                3,536,980             1,791,451             918,641                1,077,890              Investment earnings 147,403                77,947                  109,117                87,330                  135,483                 Donations 257,724                349,325                349,166                363,413                306,119                 Miscellaneous 79,435                  72,837                  54,989                  84,673                  41,410                   Total revenues 27,007,094          28,807,227          25,886,405          24,285,203          23,402,967           Expenditures General government 4,385,321             5,343,160             4,306,143             4,250,320             4,322,631              Public safety 12,135,956          11,348,346          10,599,575          10,234,811          10,201,010           Public works 2,118,572             2,066,349             1,689,987             2,204,176             1,702,119              Engineering ‐                              ‐                              ‐                              ‐                              ‐                              Community development 954,103                925,947                1,092,982             1,207,264             1,520,401              Parks and recreation 3,032,979             2,917,857             2,772,072             2,675,813             2,622,970              Library services 1,096,614             1,036,843             1,083,043             1,002,801             1,004,303              Capital outlay 9,332,400             7,255,229             2,500,254             1,942,746             3,705,622              Debt principal payment 1,570,176             1,272,823             1,668,692             1,721,983             1,562,088              Interest and other charges 921,982                776,340                662,718                712,822                899,709                 Total expenditures 35,548,103          32,942,894          26,375,466          25,952,736          27,540,853           Excess of revenues over (under) expenditures (8,541,009)           (4,135,667)           (489,061)               (1,667,533)           (4,137,886)            Other Financing Sources (Uses) Sale of capital assets 2,743                    99                          6,325                    27,566                  9,250                     Insurance recoveries 19,564                  39,257                  28,886                  48,132                  105,502                 Issuance of capital related debt 7,345,000             9,595,000              ‐                              ‐                             8,890,000              Issuance of capital lease ‐                              ‐                              ‐                             147,318                464,270                 Refunding bonds issued ‐                             2,840,000              ‐                              ‐                              ‐                              Payment to refunding escrow agent ‐                             (3,058,663)            ‐                              ‐                             (9,425,538)            Premium on issuance of debt 1,484,593             646,746                 ‐                              ‐                             563,666                 Transfers in 1,503,442             1,544,662             1,799,344             1,973,106             1,970,819              Transfers out (182,503)               (318,457)                ‐                             (199,124)               (245,678)                Total other financing sources (uses)10,172,839          11,288,644          1,834,555             1,996,998             2,332,291              Net change in fund balances 1,631,830$          7,152,977$          1,345,494$          329,465$              (1,805,595)$          Debt service as a percentage of noncapital expenditures 9.2% 7.5% 9.8% 10.0% 9.8%     124 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 5  ASSESSED VALUE AND TAXABLE VALUE OF PROPERTY Page 1 of 2  LAST TEN FISCAL YEARS  (Unaudited)        Commercial Total  Fiscal Tax Residential and Industrial Other Assessed Year Year Property Property Property Value 2012 2011 2,584,070,993$      280,043,373$       230,531,859$       3,094,646,225$       2013 2012 2,622,105,658      286,288,277       235,960,049       3,144,353,984       2014 2013 2,695,532,057      294,316,218       238,127,209       3,227,975,484       2015 2014 2,850,404,776      300,533,643       237,028,723       3,387,967,142       2016 2015 3,156,205,930      335,006,408       206,365,157       3,697,577,495       2017 2016 3,546,622,242      320,646,912       230,805,066       4,098,074,220       2018 2017 3,795,456,220      222,328,923       376,053,145       4,393,838,288       2019 2018 3,749,539,307      227,659,302       352,044,261       4,329,242,870       2020 2019 4,078,991,715      241,927,251       414,739,865       4,735,658,831       2021 2020 4,526,853,385      290,599,941       451,358,776       5,268,812,102         Source: Galveston Central Appraisal District, Harris County Appraisal District, and City of Friendswood       records.    Note: Property in the City of Friendswood is reassessed once every two years on average. (Source: Galveston Central  Appraisal District)  Tax rates per $100 of assessed value.  Residential property includes both single‐family and multi‐family properties.        125 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 5  ASSESSED VALUE AND TAXABLE VALUE OF PROPERTY Page 2 of 2  LAST TEN FISCAL YEARS  (Unaudited)      Less: Total Exemptions and Total Direct Fiscal Tax  Tax Exempt Taxable Tax Year Year Property Value Rate 2012 2011 706,059,683$      2,388,586,542$   0.59020$    2013 2012 710,718,423      2,433,635,561   0.59700      2014 2013 724,153,848      2,503,821,636   0.59140      2015 2014 761,444,427      2,626,522,715   0.59140      2016 2015 776,779,458      2,920,798,037   0.56870      2017 2016 977,353,948      3,120,720,272   0.54600      2018 2017 894,716,055      3,499,122,233   0.52735      2019 2018 955,005,811      3,374,237,059   0.53240      2020 2019 1,066,920,381   3,668,738,450   0.52140      2021 2020 1,349,948,370   3,918,863,732   0.48740          126 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 6  DIRECT AND OVERLAPPING PROPERTY TAX RATES  Last Ten Fiscal Years  (Unaudited)  (rate per $100 of assessed value)      Fiscal Year Friendswood Clear Creek Galveston County Ended Debt Total Independent Independent Consolidate Drainage Galveston Harris September 30, General Service Direct School District School District District County County 2012 0.5218$            0.0684$            0.5902$            1.3670$            1.3600$            0.1400$                          0.6129$            0.62998$           2013 0.5307               0.0663               0.5970               1.3670               1.3600               0.1400                            0.5999               0.62998             2014 0.5303               0.0611               0.5914               1.3670               1.4000               0.1400                            0.5837               0.62998             2015 0.5303               0.0611               0.5914               1.3670               1.4000               0.1350                            0.5788               0.62998             2016 0.4972               0.0715               0.5687               1.3670               1.4000               0.1150                            0.5612               0.62998             2017 0.4620               0.0840               0.5460               1.3870               1.4000               0.1120                            0.5462               0.62998             2018 0.4323               0.0950               0.5273               1.3670               1.4000               0.1080                            0.5461               0.62998             2019 0.4372               0.0952               0.5324               1.3670               1.4000               0.1080                            0.5298               0.62998             2020 0.4322               0.0893               0.5214               1.2594               1.3100               0.1122                            0.5044               0.61170             2021 0.3922               0.0952               0.4874               1.3440               1.2659               0.1131                            0.4651               0.59920             Source:  Galveston County Tax Assessor/Collector and City of Friendswood records.  Note:Overlapping rates are those of local and county governments that apply to property owners within the City of Friendswood. Not all overlapping rates apply to all property owners. Overlapping rates for Friendswood Independent School District, Galveston County Consolidated Drainage District and Galveston County apply only to residents whose property is in Galveston County. Overlapping rates for Clear Creek Independent School District and Harris County apply only to residents whose property is in Harris County. City Direct Rates Overlapping Rates         127 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 7  PRINCIPAL PROPERTY TAX PAYERS  CURRENT AND NINE YEARS AGO  (Unaudited)      Percentage Percentage of Total City of Total City Taxable Taxable Taxable Assessed Taxable Assessed Taxpayer Value Rank Value Value Rank Value Reserve at Autumn Creek LTD 32,597,042$          1 0.83%         15,468,170$          10.65%          Bellevue at Clear Creek LP 22,640,000          2 0.58%          ‐                                ‐             Texas‐New Mexico Power Co. 19,960,100          3 0.51%         10,429,910            30.44%          Kroger Co. 12,914,814          4 0.33%         13,227,856            20.55%          Bay Meadows LLP 9,069,143            5 0.23%          ‐                                ‐                     Tannos Land Holding III LLC 8,524,060            6 0.22%          ‐                                ‐                     A‐S 108 Friendswood Crossing LP 8,316,140            7 0.21%          ‐                                ‐                     The Beldon Friendswood LLC 8,000,150            8 0.20%          ‐                                ‐                     Baywood Apartments LTD 7,431,980            9 0.19%          ‐                                ‐                     Frontier Land V P L L 6,885,000            10 0.18%          ‐                                ‐                     Autumn Creek Dev LTD ‐                                             ‐            9,627,310            40.40%          G&I VI Sky Hawk LP ‐                                             ‐            8,807,817            50.37%          H E Butt Grocery Company ‐                                             ‐            8,334,390              60.35%          HCP Friendswood LLC ‐                                             ‐            6,995,240            70.29%          MB Friendswood Parkwood ‐                                             ‐            5,861,410            80.25%          Friendswood Retirement ‐                                             ‐            5,507,771            90.23%          Buzbee Family LTD Partnership ‐                                             ‐            5,288,460            10 0.22%          Total 136,338,429        3.48%         89,548,334          3.75%          All other taxpayers 3,782,525,303    96.52%      2,299,038,208    96.25%       3,918,863,732$    100.00% 2,388,586,542$    100.00%     Source:  Galveston Central Appraisal District and Harris County Appraisal District. 2021 2012         128 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 8  PROPERTY TAX LEVIES AND COLLECTIONS  LAST TEN FISCAL YEARS  (Unaudited)      Collections Fiscal Year Taxes Levied (adjustments) Ended for the Percentage in Subsequent Percentage September 30, Fiscal Year Amount of Levy Years Amount of Levy 2012 14,068,660$     13,916,558$     99.51% 142,252$          14,058,810$     99.93% 2013 14,454,404     14,361,379     99.63% 82,502            14,443,881       99.93% 2014 14,747,526     14,656,257     99.38% 80,610            14,736,867       99.93% 2015 15,424,948     15,306,943     99.23% 104,171          15,411,114       99.91% 2016 16,431,153     16,264,080     98.98% 153,949          16,418,029       99.92% 2017 17,014,685     16,922,419     99.46% 78,475            17,000,894       99.92% 2018 17,633,192     17,554,220     99.55% 63,212            17,617,432       99.91% 2019 17,952,134     17,756,864     98.91% 170,593          17,927,457       99.86% 2020 18,682,563     18,605,868     99.59% 32,533               18,605,868       99.59% 2021 18,879,840     18,877,842     99.99%‐                          18,877,842       99.99% Source:  Galveston County Tax Assessor/Collector and City of Friendswood records.  Collected within the Fiscal Year of the Levy Total Collections to Date        129 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 9  RATIOS OF OUTSTANDING DEBY BT TYPE  LAST TEN FISCAL YEARS  (Unaudited)      General General Water Total Percentage Fiscal Obligation Capital Obligation Revenue Primary of Personal Per Year Bonds Leases Bonds Bonds Government Income Capita  2012 21,605,000$      975,726$      ‐$                       34,115,000$    56,695,726$      0.42% 1,498$    2013 20,230,000        876,981        ‐                         32,995,000      54,101,981        0.37% 1,410    2014 18,815,000        623,407        ‐                         31,830,000      51,268,407        0.35% 1,318    2015 24,525,285        360,584       9,875,671        24,663,416      59,424,956        0.40% 1,510    2016 31,768,805        180,408       33,238,357      6,109,871        71,297,441        0.46% 1,793    2017 36,067,806        668,284       31,160,729      5,871,129        73,767,948        0.47% 1,818    2018 34,065,657        791,305       29,028,108    5,627,385        69,512,455      0.42% 1,695    2019 32,023,508        436,620       26,845,483    27,039,600      86,345,211      0.49% 2,093    2020 38,058,822        1,861,762    24,587,858    26,037,385      90,545,827      0.49% 2,175    2021 49,809,357        1,681,709    22,310,234    40,736,057      114,537,357    0.57% 2,733    Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Table 14 for personal income and population data. These ratios are calculated using personal income and  population for the prior calendar year. Governmental Activities Business‐Type Activities         130 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 10  RATIOS OF NET GENERAL BONDED DEBY OUTSTANDING  LAST TEN FISCAL YEARS  (Unaudited)      General Less Debt  Net Percentage of Fiscal Taxable Obligation Service General Taxable  Value Per Year Population Value Bonds * Funds Bonded Debt Property Capita  2012 37,839 2,388,586,542$   22,402,761$       193,714$       21,411,286$   0.90% 566$              2013 38,369 2,433,635,561      20,967,293          134,339         20,095,661     0.83% 524                2014 38,911 2,503,821,636      19,491,826          130,147         18,684,853     0.75% 480                2015 39,458 2,626,522,715      34,400,956          147,193         34,253,763     1.30% 868                2016 39,767 2,920,798,037      65,007,162          159,686         64,847,476     2.22% 1,631             2017 40,570 3,120,720,272      67,228,535          115,152         67,113,383     2.15% 1,654             2018 41,003 3,499,122,233      63,093,765           ‐                       63,093,765     1.80% 1,539             2019 41,253 3,374,237,059      58,868,991          18,302            58,850,689     1.74% 1,427             2020 41,637 3,668,738,450      62,646,680          31,909            62,614,771     1.71% 1,504             2021 41,916 3,918,863,732      72,119,591          10,608            72,108,983     1.84% 1,720             Note:Details regarding the City's  outstanding debt can be found in the notes  to  the financial  statements.                 *  Includes both Governmental  Activities  and Business‐type Activities General Bonded Debt  Outstanding         131 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 11  DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT  AS OF SEPTEMBER 30, 2021  (Unaudited)      Estimated Estimated Share  of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt Debt  repaid with property taxes Friendswood Independent School  District 201,285,000$            100.00% 201,285,000$        Clear Creek  Independent School  District 1,144,627,346           2.939% 33,640,598            Galveston County 210,083,000              8.199% 17,224,705            Harris  County 2,697,314,000           0.149% 4,018,998               Subtotal, overlapping debt 256,169,301          City direct debt 51,491,066          Total direct  and overlapping debt 307,660,367$        Source: Information was  obtained from either  the governmental  unit's  website or the finance department of the governmental  unit. Notes: Overlapping governments  are those that coincide, at least in part, with the geographic  boundaries  of the City. This  schedule estimates  the portion of the outstanding debt of those overlapping governments  that is borne  by the residents and businesses of the City of Friendswood. The City’s  share of the debt of the overlapping  governments  is based on the ratio of the assessed value of the City’s  own property to  that of each of the  other governments. This  process  recognizes that, when considering the City's  ability to issue and repay  long‐term debt, the entire debt burden borne by the residents and businesses  should be taken  into account.  However, this  does  not imply that every  taxpayer  is a  resident‐‐and therefore responsible for  repaying the  debt‐‐of each  overlapping government.      132 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS  Table 12  LEGAL DEBT MARGIN INFORMATION  (UNAUDITED)      As a City Council‐City Manager form of government, the City of Friendswood is not limited by law in the    amount of debt it may issue. The City's charter states: Article 11, Section 5 of the State of Texas Constitution states in part: "but no tax for any purpose shall ever be lawful for any one year, which shall exceed two and one‐half   percent of the taxable property of such city" The tax rate for fiscal year ended September 30, 2021 is $0.4873 per $100 of assessed valuation with assessed  valuation being 100% of market value. "In keeping with the Constitution of the State of Texas and not contrary thereto, the City of Friendswood shall have the power to borrow money on the credit of the City for any public purpose not now or hereafter prohibited by the Constitution and laws of the State of Texas, and shall have the right to issue all tax bonds, revenue bonds, funding and refunding bonds, time warrants and other evidence of indebtedness as now authorized or as may hereafter be authorized to be issued by cities and towns by the laws of the State of Texas."        133 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 13  PLEDGED REVENUE COVERAGE  LAST TEN FISCAL YEARS  (Unaudited)      Utility Less: Net Fiscal Service Operating Available Debt Service  Year Charges Expenses Revenue Principal Interest Coverage 2012 11,258,216$     5,361,567$       5,896,649$       1,090,000$       1,589,565$       2.20 2013 11,462,779       6,113,276         5,349,503         1,120,000         1,548,303         2.00 2014 11,117,391       6,376,510         4,740,881         1,165,000         1,504,006         1.78 2015 11,020,029       6,220,331         4,799,698         1,205,000         1,153,522         2.04 2016 11,319,801       6,361,229         4,958,572          ‐                          481,140            10.31 2017 12,295,441       6,911,675         5,383,766         220,000            184,100            13.32 2018 12,183,711       7,205,293         4,978,418         225,000            179,250            12.32 2019 13,130,943       9,378,672         3,752,271         230,000            787,319            3.69 2020 16,638,758       10,050,967       6,587,791         905,000            952,470            3.55 2021 17,690,843       9,690,325         8,000,518         935,000            1,113,685         3.91 Notes:Details regarding the City's outstanding debt can be found in the notes to the financial statements.  Operating expenses do not include interest, depreciation or amortization expenses. Waterworks and Sewer Revenue Bonds      134 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 14  DEMOGRAPHIC AND ECONOMIC STATISTICS  LAST TEN CALENDAR YEARS  (Unaudited)      Per Capita Calendar Estimated Personal Personal Unemployment Year Population Income Income Rate 2012 37,839 13,651,835,000$    45,433$          5.0% 2013 38,369 14,475,816,000    47,186          4.5% 2014 38,911 14,741,197,000    46,917          3.4% 2015 39,358 14,774,880,000    47,011          3.7% 2016 39,767 15,463,890,000    47,991          4.9% 2017 40,570 15,682,608,000    47,605          4.7% 2018 41,003 16,443,373,000    49,079          4.3% 2019 41,253 17,497,755,000    51,785          3.2% 2020 41,637 18,561,154,000    54,250          5.9%(1) 2021 41,916 19,994,969,000    57,941          3.9% Sources:Population information was provided from past financial reports. Unemployment rates, personal income and per capita personal income were obtained from the U.S. Department of Labor Bureau of Labor Statistics website or the Texas Workforce Commission website. (1) Increase in unemployment rate is a result of the COVID‐19 pandemic.      135 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 15  PRINCIPAL EMPLOYERS  CURRENT YEAR AND NINE YEARS AGO  (Unaudited)      Percentage Estimated of Total Estimated Employer Employees Employment Rank Employees Rank Friendswood ISD 804          3.91%         1689          1 HEB 500          2.43%         2349          2 City of Friendswood 250          1.21%         3239          4 Clear Creek ISD 190          0.92%         4177          5 Kroger 165          0.80%         5287          3 Friendship Haven Nursing Home 115          0.56%         6125          6 McDonalds 100          0.49%         774            8 U.S. Post Office 75            0.36%         866            9 Morada  (formerly Atria )71            0.34%         965            10 UTMB 57            0.28%         10 62            11 Total 2,327         11.31%      2,133          Source: City Manager's Office Note:  Percentage of total employment is based on total City employment of 20,581 for 2021. Total City employment for 2012 is not available. 20122021      136 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 16  FULL‐TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Page 1 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Full‐time Equivalent Employees as of September 30 2012 2013 2014 2015 2016 Function/Program General Government: City Attorney ‐                   ‐                   ‐                  1.00         1.00               City Manager 4.65         4.15         4.15         4.55         5.40               City Secretary 5.00         5.00         5.00         5.00         5.00               Administrative Services 28.20       28.20       28.70       28.70       27.70             Human Resources ‐                   ‐                   ‐                   ‐                   ‐                        Information Technology ‐                   ‐                   ‐                   ‐                   ‐                        Public Safety: Police 80.40       81.40       82.40       85.72       86.72             Fire marshal and fire 6.10         6.10         6.50         6.60         6.60               Public Works 19.33       20.33       26.33       25.33       29.00             Community Development 16.89       16.89       10.89       10.89       11.70             Engineering ‐                   ‐                   ‐                   ‐                   ‐                        Parks and Recreation 19.28       19.20       19.03       19.63       19.63             Library 14.72       14.37       14.37       14.62       14.62             Water 10.30       9.30         9.30         8.30         8.30               Sewer 9.00         9.00         9.00         8.00         8.00               Total City Employees: 213.87     213.94     215.67     218.34     223.67           Source:  City of Friendswood Budget Documents Notes:   In‐house City Attorney added to staff in fiscal year 2015. In fiscal year 2019,  Engineering became an independent department, separate from Public Works. In fiscal year 2020,  Human Resources and Information Technology became independent departments, separate from Administrative Services.             137 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 16  FULL‐TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Page 2 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Full‐time Equivalent Employees as of September 30 2017 2018 2019 2020 2021 Function/Program General Government: City Attorney 1.00         2.10         2.10         2.10         2.10                   City Manager 5.40         5.40         5.00         6.00         6.00                   City Secretary 5.00         5.00         5.00         4.00         4.00                   Administrative Services 27.70       27.60       27.60       18.60       18.60                 Human Resources ‐                   ‐                   ‐                  5.00         5.00                   Information Technology ‐                   ‐                   ‐                  5.00         5.00                   Public Safety: Police 88.72       87.72       90.38       90.38       90.38                 Fire marshal and fire 6.60         6.60         7.20         7.20         7.20                   Public Works 26.00       27.00       23.00       23.00       23.00                 Community Development 11.70       10.70       10.70       10.70       10.70                 Engineering ‐                   ‐                  6.00         7.00         7.00                   Parks and Recreation 20.90       21.90       23.10       24.50       24.90                 Library 14.97       14.97       14.97       14.97       14.97                 Water 8.30         9.30         9.30         9.30         9.30                   Sewer 11.00       10.00       11.00       11.00       11.00                 Total City Employees: 227.29     228.29     235.35     238.75     239.15               Source:  City of Friendswood Budget Documents Notes:   In‐house City Attorney added to staff in fiscal year 2015. In fiscal year 2019,  Engineering became an independent department, separate from Public Works. In fiscal year 2020,  Human Resources and Information Technology became independent departments, separate from Administrative Services.      138 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 17  OPERATING INDICATORS BY FUNCTION/PROGRAM Page 1 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Fiscal Year 2012 2013 2014 2015 2016 Function/Program Community Development: Building permits issued 1,317          1,469          1,395          1,377          1,865           Building inspections conducted 10,486       11,470       10,611       12,145       11,026        Police: Physical arrests 1,885          1,601          1,596          1,479          1,464           Parking violations 61               107             58               63               44                Traffic violations 6,518          5,718          5,815          4,540          5,001           Fire Marshal: Inspections 1,616          1,673          1,427          1,512          1,354           Fire: Emergency responses 2,975          2,993          3,261          3,258          3,303           Fires extinguished 86               86               116             78               76                Parks and Recreation: Recreation participants 16,068       18,607       15,178       16,153       21,369        Facility reservations 493             686             728             1,443          1,444           Library: Volumes in collection 125,251     133,865     141,383     133,165     147,726      Total volumes borrowed 355,447     367,948     367,452     350,145     301,158      Water: New connections 185             189             193              ‐                     183              Water main breaks 112             193             149             57               46                Average daily consumption 4,584          5,577          5,171          4,970          4,963           (thousands of gallons) Peak daily consumption 10,896       11,505       9,917          12,623       10,472        Sewer: Average daily sewage treatment 2,968          2,956          2,867          3,306          3,382           (thousands of gallons) Maximum daily flow 10,777       10,401       10,770       11,237       12,188        (thousands of gallons) Source: Various City departments and prior year ACFRs         139 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 17  OPERATING INDICATORS BY FUNCTION/PROGRAM Page 2 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Fiscal Year 2017 2018 2019 2020 2021 Function/Program Community Development: Building permits issued 2,177          2,788          1,465          1,605          1,658           Building inspections conducted 12,134       14,157       9,251          9,124          9,998           Police: Physical arrests 903             1,145          1,190          847             1,368           Parking violations 61               15               26               17               36                Traffic violations 3,669          6,785          4,468          8,807          11,081        Fire Marshal:  Inspections 1,233          1,139          1,448          1,146          1,730           Fire: Emergency responses 3,599          3,720          3,655          3,650          4,405           Fires extinguished 75               80               80               65               92                Parks and Recreation: Recreation participants 20,556       18,299       19,657       6,027          16,907        Facility reservations 1,004          2,123          3,293          3,166          1,033           Library: Volumes in collection 100,678     102,852     101,532     99,930       101,061      Total volumes borrowed 341,048     348,554     342,592     271,078     340,478      Water: New connections 137             125             169             185             92                Water main breaks 44               116             84               41               49                Average daily consumption 5,282          5,455          5,129          5,319          5,064           (thousands of gallons) Peak daily consumption 10,110       9,475          9,390          9,927          14,041        Sewer: Average daily sewage treatment 3,286          3,117          3,345          3,113          3,255           (thousands of gallons) Maximum daily flow 12,766       10,370       12,491       10,520       11,006        (thousands of gallons) Source: Various City departments and prior year ACFRs      140 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 18  CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Page 1 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Fiscal Year 2012 2013 2014 2015 2016 Function/Program Police Stations 1             1             1             1             1              Patrol units 25           26           27           29           31            Fire Stations 4             4             4             4             4              Public Works Streets ‐ paved (miles) 164        165        167        169        172         Streets ‐ unpaved (miles) 2             2             2             2             2              Traffic signals 3             3             3             3             3              Parks and Recreation Acreage 189        189        189        232        266         Parks 8             8             8             8             9              Swimming pool 1             1             1             1             1              Tennis courts 4             4             4             4             4              Library 1             1             1             1             1              Water Water mains (miles) 186        187        207        209        212         Fire hydrants 1,588     1,608     1,610     1,631     1,672      Connections 12,711   12,929   13,093   13,289   13,482    Storage capacity 7,500     7,500     8,000     8,100     7,850      (thousands of gallons) Sewer Sanitary sewers (miles) 162        163        194        195        198         Connections 11,828   12,072   12,236   12,407   12,378    Storm sewers (miles) 100        100        105        106        109         Treatment capacity 4,850     4,850     12,000   9,250     9,250      (thousands of gallons) Source:  Various City departments and prior year ACFRs.     141 City of Friendswood 2021 ACFR  CITY OF FRIENDSWOOD, TEXAS Table 18  CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Page 2 of 2  LAST TEN CALENDAR YEARS  (Unaudited)      Fiscal Year 2017 2018 2019 2020 2021 Function/Program Police Stations 1             1             1             1             1 Patrol units 32           34           33           31 38 Fire Stations 4             4             4             4             4 Public Works Streets ‐ paved (miles) 174        176        176        185        221 Streets ‐ unpaved (miles) 2             2             2             2             2 Traffic signals 3             3             3             3             3 Parks and Recreation Acreage 266        266        266        266        273 Parks 9             9             10           10           10 Swimming pool 1             1             1             1             1 Tennis courts 4             4             4             4             4 Library 1             1             1             1             1 Water Water mains (miles) 214        216        216        216        222 Fire hydrants 1,690     1,707     1,707     1,713     1,747 Connections 13,619   13,744   13,913   14,098   14,192 Storage capacity 7,850     7,850     7,850     7,850     7,850 (thousands of gallons) Sewer Sanitary sewers (miles) 200        202        202        202        182 Connections 12,588   12,721   12,870   13,029   13,132 Storm sewers (miles) 110        112        112        112        117 Treatment capacity 9,250     9,250     9,250     9,250     9,250 (thousands of gallons) Source:  Various City departments and prior year ACFRs.       142 City of Friendswood 2021 ACFR