CITY OF THRALL, TEXAS Audited Fimancial Statements Independent Auditor's Report And Supplemental Schedules For the Year Ended September,30,2 2021    CITY OF THRALL, TEXAS ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2021  FINANCIAL SECTION  PAGE 1-2 3-8  Independent Auditor's Report on Financial Statements. Management's Discussion and Analysis.. Basic Financial Statements:  Government-wide Financial Statements: Statement of Net Position.. Statement of Activities. Fund Financial Statements  10 11  Balance Sheet-G Governmenta. Funds.. Reconciliation oft the Governmental Funds Balance Sheet To the Statement of Net Position.. Statement of Revenues, Expenditures, and Changes in Fund Balances-G Governmental Funds..  12 13 14 15 16 17 18-19 20-39 40 41 42  Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds tot the Statement of Activities...  Statement of Net Position - Proprietary Funds.. Statement of Revenues, Expenses and Changesi in Fund Net Position- Proprietary Funds.. Statement of Cash Flows- - Proprietary Funds..  Notes to the Financial Statements. Required Supplementary Information:  Budgetary Comparison! Statement = General Fund.. Schedule of changes in Net Position Liability and Related Ratios..  Schedule of Contributions. Compliance and Internal Control Section  Report on Internal Control over Financial Reporting and On Compliance and Other Matters Based on an Audit of    Financial Statements Performed in Accordance with Governmental Auditing Standards..  43  The Accounting) Firm of 1 Donald L. Allman, CPA,PC CERTIFIED! PUBLIC. ACCOUNTANT  Donald L Allman, CPA, PC 4749 Williams Drive, Ste. 322 Georgetown, Texas7 78633 Email: almamnadmalmancmaicom  Independent Auditor's Report  To the Honorable Mayor and City Council Report on the Financial Statements  City ofThrall, Texas  Wehave: audited the accompanying financials statements oft the governmental: activities, thel business-type activities, each major fund, and the aggregate remaining fund information of the City of Thrall, Texas as of and for they year ended September 30, 2021, and the related notes to thet financial statements, which collectively comprise the City of Thrall, Texas' basici financial statements as listed int the table of contents. Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or  Management's Responsibility for the Financial Statements  error.  Auditor's Responsibility  Our responsibility is to express opinions on thesei financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted int the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General oft the United States. Those: standards require that we plan and perform the audit to obtain reasonable assurance about whether thei financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of thet financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial Wel believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for MEMBER1 TEXASS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS! & AMERICANI INSTITUTE OF CERTIFIED PUBLICA ACCOUNTANTS 4749Williams Drive, Ste. 322, GEORGETOWN, TEXAS7 78633512422370FAX: 512-240-5460 WEBSITE www.donalmanspa.om  statements. out audit opinions.  1    Opinions  Inc our opinion, the financial statements, referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each majorf fund, and the aggregate remaining fund information of the City of Thrall, Texas as of September 30, 2020, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted int the United! States of America.  Other Matters  Required: Supplementary Information  Accounting principles generally accepted the United States of America require that the management's discussion and analysis, budgetary comparison information, and Schedule of Changes in Net Pension Liability and Related Ratios and Schedule of Contributions on pages 4-10, and pages 43-45 be presented to supplement the basic financial statements. Suchi information, although not a part of thel basici financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Wel have applied certain limited procedures to the required supplementaryi informationi in accordance with auditing standards generally acceptedi int the United! States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained curing our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.  Other Reporting Required by Government Auditing Standards  Inaccordance with Government. Auditing Standards, we have alsoi issued our report dated March 24, 2022 on our consideration of the City of Thrall, Texas' internal control over financial reporting and on our tests ofi its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that reporti is to describe the scope of our testing ofinternal control overt financial reporting and compliance: and the results of thatt testing, and nott to provide an opinion on internal control over financial reporting on or compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Thrall, Texas' internal control  over financial reporting and compliance. V Donald L. Allman, CPA, PC Georgetown, TX March 24, 2022  Respertfulysubmittes,  2    City ofThrall, Texas Management! 'sl Discussion and Analysis  September 30, 2021  Our discussion and analysis of the City's financial performance provides an overview of the City's financial activities for the fiscal year ended September 30, 2021. Please read iti in conjunction with the  city's financial statements, which follow this section.  Financial Highlights  The City's total net position decreased by $(46,936) for the year in comparison to the prior year The Proprietary Fund reported a net income of $5,986 before transfers for the fiscal year ended September 30, 2021. The General Fund reported a net loss of $(52,922) before transfers for the The City'sGovermmental Funds balance reporteda la neti increase cof$62,959 for the fiscal year ended  decrease of$(151,069).  fiscal year ended September 30, 2021.  September 30, 2021. Using this Annual Report  This annual report presents the following three components of the financial statements. 1. Government-wide financial statements provide information for the City as av whole. 2. Fund financial statements provide detailed information for the City'ss significant funds. 3. Notes to the financial statements provide additional information that is essential to This report also contains other supplementary information in addition to the basic financial statements. This information includes a1 management's discussion and analysis anda al budgetary The government-wide, financial statements are designed to provide readers with al broad overview The Statement of Net Position presents information on all oft the assets and liabilities oft the City. The difference between assets and liabilities is presorted as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the  understanding the government-wide and fund financial statements.  comparison schedule.  ofthe City's finances, in ai manner similar to aj private-sector business.  City isi improving or deteriorating. Government-Wide Financial Statements  The Statement of Activities presents information on how the City'si net position changed during the most recent fiscal year. This statement is presented using the accrual basis of accounting, which means that all of the current year's revenues and expenses are taken into account regardless of  when the cash is received or paid.  3    City ofThrall, Texas  Management: 's Discussion and. Analysis (Continued)  September. 30, 2021  Both the Statement ofl Net Position and the Statement of Activities present information for the following:  Governmental activities include general government, public safety, health, highways, streets, sanitation, community improvements, planning and zoning, judicial, general administrative, and other services are  authorized by its code of ordinances andi its citizens. Business activities include water and sewer services.  Both oft the government-wide financial statements distinguish functions ofthe City that are principally supported by taxes andi intergovermental revenues (governmental activities) from functions that are intended toi recover all or as significant portion of their costs through user fees and charges (business-type activities). The government-wide: financial statements begin on page 11. The following table is a summary of net position  as of September 30, 2021:  Government-Wide Net Position  Govemmental Activities 2021  Business-type Activities 2021  Total Primary Government 2021 3,528,499 3,832,367 4,306,957 4,404,428 11,684 194,061 1,819,442 1,848,313 2,013,503 2,067,921 110,667 1,746,888 2,258,902 246,036 201,547  2020  2020  2020  Current and otherassets Capitalassets Totalassets Deferred outflows ofresources Current liabilities Long-term) liabilities Totall liabilities Deferred inflows ofresources Net position: Neti investment in capital assets Restricted Unrestricted Total net position  298,227 $261,106 $ 480,231 $ 310,955 $ 778,458 $ 572,061  1,427,940 1,450,758 1,726,167 1,711,864 5,840 118,329 134,929 1,463,309 1,468,814 1,581,638 1,603,743 55,335  2,100,559 2,381,609 2,580,790 2,692,564 5,844 75,732 356,133 431,865 55,332 1,735,300 1,993,367 47,552 316,585  4,608 52,160  4,611 84,679 379,499 464,178 52,159 49,868 137,603  9,219 219,608 104,319 231,474 (248,969)  11,588 265,535 198,484 181,606 (115,038) (386,572)  95,034 $ 60,569 $ 2,099,437 $2,180,838 $ 2,194,471 $2,241,407  Capital assets decreased by $(67,977) due to depreciation for governmental activities. Capital assets decreased Long-term liabilities of the City reflected scheduled payments on bonds, loans and capital lease debt which reduced the outstanding principal balances of debt by $(23,366) in the General Fund and decreased by $(5,505)  by$(81,050) due to depreciation for business-type activities.  in the Proprietary Fund.  4    City ofThrall, Texas  Management* 's Discussion and Analysis (Continued)  September. 30, 2021  Government-wide Changes in Net Position  Governmental Activities 2021 2020 709,388 751,080 87,387 98,020 34,465 (89,567) 150,136  Business-type Activities 2021 654,026 5,986 (87,387) (81,401)  Total Primary Govemment 2021  2020  2020 1,245,398 (151,069) (151,069) 2,392,476  Change in net position Totalrevenues Totale expenses Transfers  656,466 $ 563,493 $ 660,012 $ 530,836 $ 1,316,478 $ 1,094,329  494,318 1,363,414 36,518 (98,020) (61,502)  Change before transfers (52,922) (187,587)  (46,936) (46,936)  Change in net position Prior Period Adjustment Net position- -beginning 60,569  2,180,838 2,242,340 2,241,407  Net position-ending $ 95,034 $ 60,569 $ 2,099,437 $2,180,838 $2,194,471 $ 2,241,407 The specific changes ini revenues and expenses are: shown int thet tables that follow, along with a discussion of the  events giving rise to those changes.  Governmental Activities 2021 2020  Business-type Activities 2021  Total Primary Govemment 2021  2020  2020  Revenues Programrevenues: Charges forservices Operating grants and contributions Interest income Generalrevenues: Property taxes Sales tax Franchise taxes Other general revenues Total revenues  $ 68,695 $ 47,596 $ 538,481 $ 530,604 $ 607,176 $ 578,200  3,540 241 307,562 160,201 37,075 79,152  7,024 295 275,869 185,044 37,358 10,307 5  249  232  490 307,562 160,201 37,075 200,434  527 275,869 185,044 37,358 10,307  121,282  $ 656,466 $ 563,493 $ 660,012 $ 530,836 $ 1,316,478 $ 1,094,329    CityofThrall, Texas  Management's Discussion and Analysis (Continued)  September. 30, 2021  Govermental Activities 2021 2020 555,744 $ 564,317 $ 56,941 71,267 19,740 19,740 14,431 14,431 54,854 81,325  Business-type Activities 2021  Total Primary Government 2021 555,744 $ 564,317 56,941 19,740 14,431 654,026  2020 $  2020 71,267 19,740 14,431 494,318  Expenses General govemment Publicsafety Municipalcourt Park Public Works Streets Waterand wastewater Totalexpenses  654,026  494,318  $ 701,710 $ 751,080 $ 654,026 $ 494,318 $1,355,736 $ 1,245,398  Expenses increased in the Water & Sewer Fund in correlation to the increase in Water & Sewer usage.  Financial Analysis of the City's Funds  The general fund had a very small change overall, due to transferring money from the proprietary fund. The investment in capital assets decreased $(253,947), restricted funds increased $16,878, and unrestricted fund The utility fund reported a change ini net] position of$(81,401)1 for the year, compared to $(61,502) in thej previous year. Thei investmenti inc capital assets decreaseds $(258,067),1 restricted: assets decreased! $(2,316), andi unrestricted  balance increased $271,534, for an overall net increase in net position of$34,465.  fund balance increased $178,982.  6    City of Thrall, Texas  Management: 's Discussion and. Analysis (Continued) General Fund Budgetary Highlights  September. 30, 2021  The budgetary comparison statement reflects a significant unfavorable variance on the line for municipal court revenues and a positive variance on the lines for property tax income sales tax income. The City's budget had a negative variance for actual general government expenses compared to budgeted general government expenses.  Capital Asset and Debt Administration  Capital Assets  The following capital asset information is presentedi net of depreciation. More detailedi information can be found  on pages 29 and 30i in the notes to the financial statements.  Govemmental Activities 2021 2020  Business-type Activities 2021 200,000 1,955,349 401 10,600  Total Primary Government 2021 200,000 1,955,349 22,731 83,357 1,329,882  2020 200,000 1,833,763 506 13,131  2020  Land and CNN Construction inj progress Distribution and collection systems Buildings and mprovements Equipment Infrastructure  $ 2,971 $ 2,971 $ 134,209 $ 134,209 $ 137,180 $ 137,180  1,833,763 65,498 64,659 1,331,267  22,330 72,757 1,329,882 1,331,267  64,992 51,528  Totals at historical cost $1,427,940 $1,450,758 $ 2,300,559 $2,181,609 $3,728,499 $ 3,632,367  7    City ofThrall, Texas  Management! 's Discussion and Analysis (Continued)  September. 30, 2021  Debt  More detailed information on1 the City'sdebto canl bei found onj pages. 31-33i int the notes to thei financial statements.  Govemmental Activities 2021 2020 91,232 68,322  Business-type Activities 2021  Total Primary Government 2021 91,232  2020  2020 68,322  Revenue bonds Loans payable Capital leases payable Totals  $1,410,000 $1,435,000 $ 365,259 $ 388,242 $ 1,775,259 $ 1,823,242 $1,501,232 $1,503,322 $ 365,259 $ 388,242 $ 1,866,491 $ 1,891,564  Economic Factors and Next Year's Budgets and Rates Council to provide additional funds as needed. Contacting the City's Financial Management  Increases in wastewater and water rates charged to users and other revenue sources will be considered by the  This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. Ifyou have questions about this report or need additional financial information, please direct your requests to the City  Secretary, City ofThrall, P.O. Box 346, Thrall, Texas, 76578.  8    (THIS PAGE LEFT BLANK INTENTIALLY)  9    City yofThrall," Texas Statement ofl Net Position  Asofs September. 30, 2021  Primary Government Activities  Govemmental Business-type  Activities $  Total  ASSEIS  Cash and cash equivalents (note 2) Receivables (net, where applicable, ofallowances foruncollectibles): Accounts receivables Property taxes, sales taxes & franchise fees Fines receivable Internal balances Restricted cash (note 2) Capitala assets (note 5): Land and CCN Construction inj progress Other capitalassets, net ofdepreciation Total assets Deferred Outflows ofResources LIABILITIES Accounts payable Accrued liabilities Customer deposits Noncurrent liabilities (note 7): TotalOPEB Liability Net Pension Liability Due within one, year Due in more than one: year Totall liabilities Deferred Inflows ofResources NETI POSITION Neti investment in capital assets Restricted for: Debt service Sales taxstreet repairs Municipal court Police training Park project Construction Unrestricted (deficit)  71,786 $ 429,896 $ 501,682  50,335  50,335 27,957 198,484 137,180 3,391,319 4,306,957 11,684 37,563 62,178 9,184 21,481 16,606 85,136 1,781,355 2,013,503 110,667 1,746,888 149,643 82,815 7,283 2,630 3,665 201,547 2,194,471  27,957 198,484 2,971 1,424,969 1,726,167 5,840 34,656 26,706 10,741 8,303 56,967 1,444,265 1,581,638 55,335 11,588 103,691 82,815 7,283 2,630 2,065 (115,038) $  134,209 1,966,350 2,580,790 5,844 2,907 35,472 9,184 10,740 8,303 28,169 337,090 431,865 55,332 1,735,300 45,952  1,600 316,585  Total net position  95,034 $ 2,099,437  The accompanying notes are an integral part ofthe financial statements.  10            City ofThrall, Texas Balance Shet-Govermental. Funds  As of September. 30, 2021  Debt Fund  Special Funds  Total Funds - 71,786 9,653 18,305 198,484  General Fund 7 71,786 $ 9,653 18,305  Service Revenue Governmental  ASSEIS Cash and cash equivalents Receivables (net, where applicable, of allowances for uncollectibles): Sales Tax & Franchise Fees Property taxes Fines receivable Due from other funds Restricted cash  103,691  94,793 94,793 $298,228  Total assets  $99,744 $103,691  LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES  Liabilities Accounts payable Accrued liabilities Total liabilities Deferred Inflows of Resources Deferred property tax revenue Deferred fine revenue Total deferred inflows of resources Fund Balances: Nonspendable Restricted for: Debt Service Committed for: Sales tax street repairs Committed for: Court Tech & Security Committed for: Police training Committed for: Park project Committed for Construction Total fund balances  34,656 26,706 $61,362 18,305 18,305  34,656 26,706 $61,362 18,305 18,305 103,691 82,815 7,283 2,630 2,065 20,077 218,561  103,691  82,815 7,283 2,630 2,065 94,793 94,793 $298,228  Unassigned  20,077 20,077 $99,744 $103,691  103,691  Total liabilities, deferred inflows of resources, and fund balances  The accompanying notes are an integral part oft the financial statements.  12    City ofThrall, Texas tot the Statement ofl Net Position  Reconciliation oft the Governmental. Funds Balance Sheet  Aso of September 30, 2021  Total Fund Balance Governmental. Funds: Deferred Inflows are: not included in governmental funds Net Pension Liability is not included in governmental funds Net Opeb liability is noti included in governmental funds Amounts reported for governmental activities in the Statement of Net Position are different because: Deferred Outflows not included in governmental funds Differences in property tax revenues and deferred revenues the current period and therefore are not reported in the funds. Long-term liabiities are not due and payable in the current period and therefore have not been included int the fund financial statements. Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. (See Note 6) Net Position of Governmental Activities  218,561 (55,335) (8,303). (10,741) (1,019) 5,840 19,323 (1,501,232) 1,427,940 $ 95,034  The accompanying notes are an integral part of thej financial. statements.  13    City ofThrall, Texas Statement of Revenues, Expenditures and Changes in Fundl Balances Governmental. Funds  For the Year Ended: September. 30, 2021  Revised and Restated for transfer from general fund to debt service  Debt Fund  Special Fund  Total Funds 308,580 160,201 37,075 49,267 79,942 241 635,306 469,877 33,173 32,772 21,441 45,159 602,422 32,884 48,900 (57,464) (48,748) (123,090) 210,477 30,075 62,959 155,602  General Fund 308,580 160,201 37,075 49,267 79,942 241 635,306  Service Revenue Governmental  REVENUES Property taxes, penalties, and interest Sales tax Franchise taxes Municipal court fines Grant income Miscellaneous Investment earnings EXPENDITURES Current: General government Public safety Municipal court & Parks Public Works Streets Capital Outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING: SOURCES (USES) Loan Proceeds received Interest expense paid Transfers out  Total revenues  469,877 33,173 32,772 21,441 45,159 602,422 32,884 48,900 (123,090) 87,387 13,197 46,081 (26,004) 106,212 20,077 $103,691  (57,464) (48,748) 103,691 (2,521) (2,521)  Debt principal paid Transfers in  19,399 19,399 75,394 94,793 $ 218,561  Total other financing sources (uses) Net change in fund balances  Fund balances beginning Fund balances - ending  The accompanying notes are an integral part of thej financial statements  14    City ofThrall, Texas Reconciliation of the Statement of1 Revenues Expenditures and Changes in Fund Balances- Governmental, Funds tot the Statement ofActivities  For the Year Ended. September 30, 2021  Net change in fund balances - total governmental funds  $  62,959  Amounts reported for governmental activities in the statement of activities Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their  are different because:  estimated useful lives as depreciation expense. Add back capital outlays. Subtract depreciation expense. OPEB expense not included in govermental funds Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Add deferred property tax revenues at the end of the year. Subtract deferred property tax revenues at the beginning of the year. Add noncurrent receivables at the end of the year Subcontract noncurrent receivables at the beginning of the year Transfers outside of Governmental. Funds not included Long-term debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Repayment of debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of  45,159 (67,977) (2,046)  Property tax revenues: Fine revenues:  18,305 (19,323)  net position.  Subtract current period debt issued. Add back principal payments on long-term debt. Total Pension Expense is not included in Governmental, Funds Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures  (48,900) 48,745 (4,699) 2,242  in governmental funds. Compensated absences:  Subtract noncurrent liability at the end oft the year. Add noncurrent liability at the beginning of the year. Change in net position of governmental activities.  $  34,465  The accompanying notes are an integral part of thej financial statements.  15    City ofThrall, Texas Statement ofl Net Position Proprietary. Fund  As of September. 30, 2021  Business-type Activities Enterprise Funds $ 429,896 50,335 $ 480,231  ASSETS Current assets: Cash and cash equivalents Receivables (net, where applicable, of allowances for uncollectibles): Accounts receivable Total current assets Noncurrent assets: Restricted cash Capital assets: Land and CCN Other capital assets, net of depreciation Total noncurrent assets Total assets  134,209 1,966,350 2,100,559 2,580,790 5,844 2,907 34,404 9,184 28,169 74,664 8,303 10,740 1,068 337,090 357,201 431,865 55,332 1,735,300 47,552 316,585 $ 2,099,437  Deferred Outflows of Resources LIABILITIES Current liabilities Accounts payable Accrued liabilities Due to other funds Customer deposits Long-term debt Noncurrent liabilities: Net Pension Liability Total OPEBI Liability Accrued vacation Long-term debt Deferred Inflows of Resources NETPOSITION Net investment in capital assets Restricted for debt service Unrestricted (deficit)  Total curremt liabilities  Total noncurrent liabilities Total liabilities  Total met position  The accompanying notes are an integral part oft thej financial statements.  16    City ofThrall, Texas Statement of Revenues, Expenses, and Changes inl Netl Position Proprietary Funds  For the Year Ended September. 30, 2021  Business-type Activities Enterprise Funds $ 538,481 538,481 111,075 126,208 3,380 2,417 8,679 20,429 153,711 6,744 81,050 513,693 24,788 232 (19,034) (18,802) 5,986 (87,387) (81,401) 2,180,838 - 2,099,437  OPERATING REVENUES Miscellaneous OPERATING EXPENSES Water purchased Salaries and benefits Professional fees Office expense Utilities Repairs and maintenance Miscellaneous Total Pension & OPEB Expense Depreciation  Charges for services (pledged for revenue debt)  Total operating revenues  Total operating expenses Operating income (loss)  NON-OPERATING REVENUES (EXPENSES) Interest and investment revenue Interest expense  Total nonoperating revenues (expenses) Net income (loss) before contributions and transfers  Capital contributions - grants Capital contributions - recovery fees Transfers in Prior Period OPEB. Adjustment Net position beginning Net position - ending  Change in net position  The accompanying notes are an integral part oft the) financial statements.  17    City ofThrall, Texas Statement of Cash Flows Proprietary Fund  Fort the Year Ended September. 30, 2021 Business-type Activities Enterprise Funds  CASH FLOWS FROMOPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees  $ 538,481 (313,825) (126,208) 98,448 (87,387) (87,387) 200,000 (19,034) (22,983) 157,983  Net cash provided (used) by operating activities  CASH FLOWS FROM NONCAPITAL FINANCING. ACTIVITIES Transfers from other funds  Net cash provided (used) by noncapital financing activities  CASH FLOWS FROM CAPITAL. AND RELATED FINANCING ACTIVITIES Capital assets acquired Bond proceeds received Interest payments on outstanding debt Principal payments on outstanding debt CASH FLOWS FROMI INVESTING Interest and investment revenue: received  Net cash provided (used) by capital and related financing activities  ACTIVITIES  232 232 169,276 260,620 $ 429,896  Net cash provided (used) by investing activities Net increase (decrease) in cash and cash equivalents  Balances - beginning of the year Balances - end of the year  The accompanying notes are an integral part oft thej financial statements.  18    City ofThrall, Texas Statement of Cash Flows Proprietary Fund (Continued)  For the Year Ended: September. 30, 2021  Business-type Activities Enterprise Funds  Reconciliation of operating income (loss) to net cash provided (used) by operating activities: Operating income (loss) Adjustments to reconcile operating income to net cash provided (used) by operating activities: Depreciation Changes in assets and liabilities: Increase in Accounts receivable Increase in Accounts payable Increase in Accrued liabilities Decrease in Customer deposits Increase in Accrued vacation Net cash provided (used) by operating activities  $  24,788  81,050 895 9,823 (24,851) 4,699 2,044 98,448  Total Pension Expense is a non cash expense  $  The accompanying notes are an integral part oft thej financial statements.  19    City ofThrall, Texas Notes to the Financial. Statements  September 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  The City of Thrall, Texas (the City), isa a general law city in Williamson County which is incorporatedi in the State of Texas. The City operates undera Council form of government and provides such services as: publics safety, highways and streets, sanitation, culture-recreation, public improvements, planning and zoning, general administrative, and The accounting policies oft the City conform to generally accepted accounting principles applicable to governments as promulgated by the Governmental Accounting Standards Board (GASB). The following is a summary of the  water and wastewater services.  significant policies.  A. GOVERNMENT-WIDE FINANCIAL STATEMENTS  The Statement of Net Position and the Statement of Activities are government-wide financial statements. The government-wide financial statements provide information about the activities of the City as a whole presenting all assets, liabilities, and changes in net position oft the City. These statements are prepared using the accrual basis of Separate rows and columns are used in the government-wide statements to distinguish between governmental activities and busines-ypeactivities, with at total column for the primary government as a whole.  accounting.  B. SCOPE OF THEI REPORTING ENTITY  The City has used the criteria detailed in GASB Statement 14 as amended by GASB 61 to determine whether or not certain entities should bei included in the accompanying financial statements. The definition oft the reporting entity is based primarily ont thei notion of financial accountability.. Aj primary government is financially accountable forl legally separate organizations ifi its officials appoint a voting majority of an organization's governing body and either iti is able to impose its will on that organization or there is aj potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. There were no legally separate organizations which should be treated as component units oft the City for the year ended September 30, 2015.  C.FUNDI FINANCIAL STATEMENTS  Fund financial statements are used to present more detailed information about the City's most significant funds. Separate fund financial statements are prepared for governmental funds and proprietary funds. The City has no fiduciary funds. The governmental and proprietary fund financial statements place an emphasis oni major funds. Those funds which are determined to be major funds are presented in separate columns, with all nonmajor funds being aggregated and displayed in a single column. Interfund receivable and payable balances and transfer between funds  have not been eliminated in the fund financial statements.  20    CityofThrall, Texas Notes tot the Financial Statements (Continued)  September. 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  FUNDI FINANCIAL STATEMENTS (Continued) The City has reported the following major governmental funds.  General Fund - The General Fund accounts for all revenues and expenditures oft the City which are: not accounted for in other funds. It receives a greater variety and number oft taxes and other general revenues than any other fund. The General Fund's resources also finance a wider range of activities than any other fund. Major functions financed by the General Fund include administration, public safety, municipal court, sanitation, park maintenance and street  maintenance.  The City has no other governmental funds besides the general fund. The City has reported the following major proprietary funds.  Utility System Fund - This fund's function is to provide for a source of supply of water, and its distribution to customers and to provide for the sanitary collection, treatment and disposal of sewage on a user charge basis.  The City has no other proprietary funds besides the utility fund. The City has no internal service funds or fiduciary fund types. D. MEASUREMENT FOCUS ANDI BASIS OF ACCOUNTING  Measurement focus refers to whether aj particular type oft transaction willl be recorded in thei financial statements. The economic resources measurement focus recognizes all resources and obligations and the changesi ini them. The current financial resources measurement focus recognizes only current resources and obligations and transactions affecting current resources and obligations. Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurement  made, regardless oft the measurement focus applied. Government-wide financial statements  The government-wide financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, and liabilities resulting from nonexchange transactions are recognized in accordance with the requirements specific to the class ofr nonexchange transaction. For the government-wide financial statements prepared on the accrual basis,  property tax revenues are: recognized int the period for which the taxes are levied.  21    CityofThrall, Texas Notes to the Financial Statements (Continued)  September. 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (Continued)  Fund financial statements - governmental funds  The fund financial statements for the governmental funds are prepared using the current financial resources measurement focus and the modified accrual basis ofaccounting. This measurement focus affects the accounting and reporting treatment of capital assets and long-term liabilities. The capital assets and long-term liabilities of the governmental activities are not recorded on the balance sheet oft the fund financial statements oft the governmental funds. Transactions fort the purchase ofassets, thei issuance ofdebt, and the payment of debt principal are reflectedin the governmental funds, but they are reported on the statement of revenues, expenditures, and changes in fund The modified accrual basis of accounting recognizes revenues in the accounting period in which they become measurable and available and recognizes expendituresi in the accounting period in which thei fund liabilityi isi incurred, While the City expects all taxes on real property to ultimately be collectible, the bulk of delinquent property taxes receivable at the end of the fiscal year are: not anticipated to be collected soon enough thereafter to be used to pay liabilities ofthe current period. Therefore, revenue from delinquent property taxes receivable is not recognized in the Fines receivable but not past due at the end of the fiscal year may be subsequently reduced when the offender attends a defensive driving course, provides proof ofinsurance, has the offense dismissed by the municipal court, or serves jail time. Current fines receivable thus do not meet the measurability criterion required tol bes susceptible to accrual. As significant portion of past due fines receivable: is not anticipated tol be collected soon enough the meet the criterion  balances as capital outlay and debt service principal expenditures and proceeds from debt. except for unmatured interest on general long-term debt, which recognized when due.  fund financial statements unless collected during the current period.  that the revenue be available.  Fund financial statements - proprietary funds and the accrual basis ofaccounting. E. CASHANDCASH EQUIVALENTS  Thei fund financial statements fort thej proprietary funds are prepared using the economic resources measurement focus  Cash and cash equivalents for purposes of the statement of cash flows represent demand accounts and petty cash. Certificates of deposit, U.S. government debt securities, money market mutual funds, and investments in local government investment pools are recorded as investments and are not treated as cash or cash equivalents.  22    City ofThrall, Texas Notes to the Financial Statements (Continued)  September. 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  F. INVESTMENTS  The City had no investments at September 30, 2021. The City is authorized to invest in certificates of deposit at the City's depository bank, obligations oft the United States of America, and investment pools and no-load money market mutual funds which meet the conditions of the State ofTexas Public Funds Investment Act. Money market mutual funds must bei no-load funds which are regulated by the Securities andl Exchange Commission, have a dollar-weighted average stated maturity of90 days or fewer, and include the investment objective of the maintenance ofas stable net  asset value of$1 for each share. G. I RECEIVABLES  Unbilled service receivables have been accrued in the proprietary funds to record the estimated amount of revenues earned but not billed as of the end oft the fiscal year. The estimate is based on the pro rata number of days in the  billing cycle before and after the fiscal year end.  H. CAPITAL ASSETS  Capital assets are defined by the City as assets with an estimated useful life in excess oftwo years. All capital assets are valued at historical cost or estimated! historical cost ifactuall historical cost ifnot available. Donated capital assets Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful  are valued at their estimated fair market value on the date donated.  lives are as follows:  Infrastructure Distribution & Collection Buildings and Improvements Machinery and Equipment  20 years 24-50 years 20-40 years 5-20 years  I. ACCUMULATED UNPAID PAID' TIME OFF  Paid time offmay be accumulated by employees at the rate of8 801 hours after 1 yearofservice, 1601 hours for2 21 through 4 years of service, and 200 hours with 5 or more years of service. Accrued, unused paid time offi is included in an employee'sfi final pay. Thet total liability for the governmental fund'saccumulated, paid time offof$ 6,708i isr reflected int the government-wide: financial statements. None ofit is reported in the fund financial statements because none of  iti is considered to be a current liability.  23    City ofThrall, Texas Notes tot thel Financial. Statements (Continued)  September 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  J. LONG-TERMI DEBT  In the government-wide financial statements, bonds payable are reported net of any applicable bond premium or discount. Bond premiums and discounts are deferred and amortized over the life of the bonds as an adjustment to In the fund financial statements of governmental funds, the face amount of debti issued and any premium received are reported as other financing sources, while discounts on debt issued are reported as other financing uses, andi issuance  interest expense. Bond issuance costs are reported as expenses when incurred.  costs are reported as debt service expenditures. K. COMMITED FUND BALANCE  The government's) highest level of decision-making authority is the City Council, and a formal resolution of the City  Council is required to establish or rescind ai fund balance commitment. L. USE OF RESTRICTED RESOURCES AND COMMITED RESOURCES  When an expense isi incurred: forj purposes for which both restricted: fund balance or net position and unrestricted fund balance or net position are available, City policy is to first apply restricted resources. When an expense is incurred forj purposes for which both committed fund balance and unassigned fund balance are available, City policy is to first  apply committed resources. M. INTERNAL, ACTIVITY  The City does not maintain any internal service funds or use the general fund to charge other funds or programs for centralized expenses, and there are not administrative overhead charges which would need tol be either eliminated or  disclosed as being included in direct expenses. N. PROGRAM REVENUES AND INDIRECT EXPENSES  The government-wide: statement ofactivitiesi is presentedi ina ai format thati identifies the net cost ofthe City'sindividual functions. The expenses of each function are reduced by the functions program revenues. Program revenues are revenues which derive directly from the program itselfa and include charges fors services, program-specific operating Some governmental functions such as administration are in essence indirect expenses of other functions. Governments are not required to allocate those indirect expenses to other functions, but ift they do, indirect expenses should be presented in a separate column from direct expenses. The City has chosen not to allocate those indirect  grants and contributions, andj program specific capital grants and contributions.  expenses.  24    City ofThrall, Texas Notes tot the Financial Statements (Continued)  September. 30, 2021  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. OPERATING ANDI NONOPERATING REVENUES AND EXPENSES  The City's policy in distinguishing proprietary fund operating and nonoperating revenues and expenses follows the guidance for distinguishing types of cash flows. Transactions for capital and related financing activities, noncapital financing activities, or investing activities are normally not treated as operating revenues or expenses.  P. ESTIMATES  Preparation of financial statements in conformity with generally accepted accounting principles requires the use of management's estimates. Items for which estimates are necessary include the amount of receivables which may not be collectible, inventory obsolescence, and service lives and salvage values of depreciable assets. Estimates also  include the likelihood ofl loss and potential loss amount from contingencies such as litigation.  2 DEPOSITS ANDI INVESTMENTS Custodial Credit Risk of Deposits  Custodial credit risk is the risk that in the event ofal bank failure, the City's deposits may not bei returned to it. The City maintains a depository contract which requires its bank to pledge securities to the City in an amount sufficient to secure the total amount of the City's funds on deposit, less any portion of the deposit balance which is secured by FDIC coverage. The carrying amount of the City's deposits was $700,166 at year end and the bank balance was $700,166. Oft the bank balance, $250,000 was insured by federal depository insurance and the remaining $450,166 was collateralized with securities held by the City's agent (safekeeping bank) in the City'sr name.  3 RECEIVABLES  Receivables are recorded net ofallowances for uncollectible accounts as follows:  Allowance for Uncollectibles $  Gross Receivables $  Net Receivables $ $ 18,305 6,897 $ 2,755 (305) 50,335  General Fund Accounts receivable Property taxes receivable Sales tax receivable Fines & Franchise fees receivable Utility System Fund Utility accounts receivable  18,305 6,897 2,755 50,640  25    City ofThrall, Texas Notes tot the Financial: Statements (Continued) 4 AD VALOREM PROFEKIYTAAES  September. 30, 2021  Property taxes are levied on October 1 on assessed values as of. January 1 for all real and personal property located in the City. Taxes are due in January of the following year and become delinquent on February 1.On January 1 ofeach year, a tax lien attaches to property to secure the payment of all taxes, penalties, andi interest ultimately imposed. The October 1, 2020 levy was based upon 100 percent of the assessed market value of $51,454,144. The maximum tax rate permitted by the Constitution oft the State ofTexas is $2.50 per $100.00 of assessed valuation. The tax rate for the October 1, 2020 levy was $.597740 for a levy of $307,562. Current Ift the effective tax rate excluding tax rates for bonds and other contractual obligations and adjusted for new improvements, exceeds the rate for the previous year by more than 8 percent, qualified voters oft the City may petition for an election to determine whether to limit the tax rate to noi more than 8j percent above the tax rate of the previous year. The county-wide Appraisal District is required under the Property Tax Code to assess all property within the Appraisal District on the basis of 100 percent ofi its appraised value. The value of property within the Appraisal District must be reviewed: at least every five years. The City may challenge appraised values established by the Appraisal District through various appeals and, ifr necessary, legal action.  property taxes receivable is $7,271 and delinquent property taxes receivable are $11,034.  5 C CAPITAL ASSETS  Primary Government  Beginning Balance $ 2,971 $ 2,971 229,085 358,324 1,523,329 2,110,738 (164,093) (306,796) (192,062) (662,951) 1,447,787 $ 1,719 23,768 33,413 9,077 $ 67,977 26  Ending $ 2,971 2,971 229,085 403,483 1,523,329 2,155,897 (206,755) (330,726) (193,447) (730,928) 1,424,969 $1,427,940  Additions Retirement Balance  Governmental activities: Land Construction in progress Total undepreciated assets Other capital assets: Buildings and improvements Equipment & Vehicles Infrastructure  $  45,159 45,159 (42,662) (23,930) (1,385) (67,977) (22,818)  Total other capital assets at historical cost Less accumulated depreciation for: Buildings and improvements Equipment & Vehicles Infrastructure Total accumulated depreciation Other capital assets, net Governmental activities capital assets, net General government Public safety Public Works Streets Parks Totalgovermental functions  $1,450,758 $ (22,818) $  Depreciation expense for governmental activities was charged as follows:    CityofThrall, Texas Notes to the Financial Statements (Continued) CAPITAL ASSETS (Continued)  September. 30, 2021  Primary Government Additions Retirement  Beginning Balance 114,209 $ 20,000 200,000 334,209 3,651,394 200,000 4,203 153,951 3,809,548 200,000 (1,817,631) (78,414) (3,697) (140,820) (1,962,148) (81,050) 1,847,400 118,950  Ending Balance $ 114,209 20,000 134,209 3,851,394 4,203 153,951 4,009,548 (1,896,045) (3,802) (143,351) (2,043,198) 1,966,350  Business-type activities: Land Cert of convenience and necessity (CCN) Construction inj progress Total undepreciated assets Other capital assets: Distribution and collection systems Buildings and improvements Equipment Total other capital assets at historical cost Less accumulated depreciation for: Distribution and collection systems Buildings and improvements Equipment Totalaccumulated depreciation Other capital assets, net Business-type activities capital assets, net  $ (200,000) (200,000)  (105) (2,531)  $2,181,609 $118,950 $(200,000) $2 2,100,559  INTERFUND RECEIVABLES AND PAYABLES AND' TRANSFERS  Charges for garbage service are billed and collected with water and sewer charges and are deposited first into the utility fund bank account, andi then the garbage portion is transferred to the general fund bank account. The September transfer was madei in October. Thei followingi is as summary ofa amounts due from and duet to other funds byi individual  major fund.  Payments to the City'sr retirement plan were made from the general fund, but withholdings from employees were recorded in both the utility fund and the general fund. Thej portion of the payment made from the general fund  that should have been made from the utility funds has been recorded as a transfer.  27    CityofThrall,' Texas Notes tot thel Financial: Statements (Continued) 7 LONG-TERM, DEBT  September 30, 2021  Long-term debt at September 30, 2021, is composed ofthe following items:  Equipment loans - Payable out oft the General Fund Equipment loans - Payable out of the General Fund  General Obligation Bonds, Series 2017 for Road Improvements & Drainage, due in annual installments ranging from $15,0001 to $80,000 due on February 15, through February 15,2 2052, with the interest rate ranging from 2% to 4%. Revenue Bonds and other loans - Payable out of the Utility System Fund through revenues: $480,000 Series 1989: revenue bonds due in annual installments of $15,000 to $25,000 through October 1, 2019; interest at 5.00 percent Loan payable to Frontier Bank for Chevy Pickup for Police Department monthly installments of $820 including principal and interest through Loan payable tol Frontier Bank for Chevy Pickup for Police Department monthly installments of $888 including principal and interest through  1,410,000  185,000  January 20, 2023; interest at 3.45 percent July 20, 2026; interest at 3.45 percent  14,719 46,658 29,855 180,259 4,359 1,068 1,871,918  Loan payable tol Frontier Bank for Park Improvements, monthly installments of $1202.65, with an interest rate of4.1%, monthly intallments beginning December 15, $204,250 Series 2019 revenue bonds due in annual installments of $15,000 to $25,0001 through October 1,2019; interest at 5.00 percent Accrued vacation payable out of the general fund Accrued vacation payable out of the utility system fund  for a term of 60 months.  Total long-term debt  $  28    City ofThrall, Texas Notes to the Financial Statements (Continued)  September. 30, 2021  7 LONG-TERM DEBT (Continued)  The following is a summary ofl long-term debt activity for September 30, 2021.  Beginning Balance  Ending Balance  Due Within One Year  Additions Reductions  Governmental activities Loans and leases payable Loans payable General Obligation Bonds Other liabilities Net Pension Liability Net OPEB Liability Accrued vacation Governmental activities long-term liabilities Business-type activities Bonds and leases payable Revenue bonds Loans Other liabilities: Net Pension Liability Net OPEBI Liability Accrued vacation Business-type activities long-term liabilities  68,322 $ 48,900 $ (25,990) $ 91,232 $ 31,967  1,435,000 12,125 2,115 4,359 Beginning Balance 388,242 388,242 $ 12,125 2,115 1,068 403,550 $  (25,000) (3,823)  1,410,000 8,302 10,741 4,359 Ending Balance 365,259  25,000  8,626  $1,521,921 $ 57,526 $ (54,813) $1,524,634 $ 56,967  Due Within One Year 28,169  Additions Reductions  22,983  22,983 $ 365,259 $ 28,169  (3,822)  8,303 10,740 1,068  8,625  $ 19,161 $ 385,370 $ 28,169  The City was in compliance with all significant limitations and restrictions contained in the debt agreements at year  end.  29    City ofThrall, Texas Notes tot thel Financial Statements (Continued)  September. 30, 2021  7 LONG-TERM DEBT (Continued)  Debt service requirements on outstanding bonds and loans are as follows:  Governmental Activities Loans Principal 56,967 51,415 39,277 35,015 38,558 30,000 160,000 195,000 240,000 295,000 360,000 $1,501,232  Business-Type Activities Bonds and Loans Principal 28,169 28,360 28,556 28,756 28,961 34,170 109,169 55,193 23,925  Year Ended September 30 2022 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052  Interest 56,192 55,807 54,261 53,150 52,279 50,450 234,600 198,900 155,600 102,500 37,400 $1,051,139  Interest 17,783 16,407 15,014 13,611 12,943 21,124 25,646 7,318  $ 365,259 $ 129,846  CAPITAL LEASES PAYABLE  The City is obligated under a lease agreement which has been classified as a capital lease. Property under capital lease consists ofequipment totaling $34,993. The annual amortization: has been included in depreciation expense and at total accumulated depreciation of $34,993 has been recorded against the property under capital lease. The lease is  payable out of the general fund.  30    City ofThrall, Texas Notes to the Financial Statements (Continued) PENSION PLAN Plan Description  September. 30, 2021  The City of Thrall participates as one of 860 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 ofTexas and administered in accordance with the TMRS. Act, Subtitle G,Title 8, Texas Government Code (the TMRS Act) as an agent multuple-employer retirement system for municipal employees in the State ofTexas. 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 ofTexas. TMRS's defined benefit pension plan is a tax-qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues aj publicly available comprehensive annual report (CAFR) that can be  obtained aty www.tmrs.com. B.] Benefits Provided  All eligible employees oft the city are: required to participate in' TMRS.  TMRS provides retirement, disability and death benefits. Benefit provisions are adopted by the governing body of At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payment options. Members may also choose to receive aj portion of their benefit asal Partial Lump Sum Distribution in an amount equal to 12, 24 or 361 monthly payments, which cannot exceed' 75% At the December 31, 2020 valuation and measurement date, the following employees were covered by the benefit  the city, within the options available int thes state statutes governing TMRS.  oft the member's deposits and interest. Employees covered by benefit terms.  terms.  Inactive employees or beneficiaries currently receiving benefits 0 Inactive employees entitled tol but not yeti receiving benefits  8 7 15  Active employees Total  C.Contributions  The contribution rate for the employees in TMRS is 5%, 6% and 7% of employee gross earnings, and the City matching percentages are either 100%, 150% or 200%, both as adopted by the governing body oft the City. Under the state law governing TMRS, the contribution rate for each city is annually determined by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost oft benefits earned by employees during the year, with an additional amount to finance any unfunded Employees for the City ofThrall were required to contribute 5% oftheir annual gross earnings during the fiscal year. The contribution rates for the City of Thrall were 5% and 5%i in calendar years 2019 and 2020 respectively. The city'scontributionst to TMRS fort the year ended! September 30, 2021 were! $18,904, and werei ine excess ofthe required  accrued liability.  contributions.  31    City ofThrall, Texas Notes tot the Financial Statements (Continued) PENSION PLAN (Continued) D.N Net Pension Liability  September. 30, 2021  The city's Net Pension Liability (NPL) was measured as of December 31, 2020, and the Total Pension Liability (TPL) The' Total Pension Liability in the December 31, 2020 actuarial valuation was determined using the following actuarial  used to calculate the Net Pension Liability was determined by an actuarial valuation as oft that date.  Actuarial assumptions: assumptions: Inflation 2.5%] per year Overall payroll growth 3.5-10.5% per year  Investment Rate ofReturn 6.75% net of pension plani investment expense, including inflation  Salaryi increases were based on as service-related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis bys scale) BB on: account fori future mortality improvements. For disabled annuitants, the gender-distinct: RP20001 Disabled Retiree Mortality Tablei is used, with slight Actuarial assumptions used int thel December 31,2020, valuation were based on the results of actuarial experience studies. Thee experience studyi in' TMRS was for thej period January 1,2 2016t through December 31, 2020, first usedi ini thel December 31,2017 valuation. Healthy post-retirement mortality rates and annuity purchase rates were updated based on al Mortality Experience Investigation Study covering 20151 through 2019, and dated December: 31,2020. These assumptions were: first used in the December 31, 2020 valuation, along with a change to the Entry Age Normal (EAN) actuarial cost method. The long-term expected rate of return on pension plan investments is 6.75%. Thej pension plan's policy in regard to the allocation ofinvested: assetsi is established andi may be amended by the' TMRS Board ofTrustees. Plan assets are managed ona a total return basis with an emphasis on both capital appreciation as well as thej production ofincome, in order to satisfy Thel long-term expected rate ofreturn onj pension plani investments was determined usingab building-block methodi in which best estimate: ranges of expected: future real rates ofreturn (expected returns, net of pension plan 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 ofreturn byt thet target asseta allocation percentage and! by addinge expectedi inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the  adjustments.  Assumptions are reviewed annually. No additional changes were made fort the 2020 valuation.  the short-term and long-term funding needs ofTMRS.  following table: Asset class Domestic Equity International Equity Core Fixed Income Non-Core Fixed Income Real Return Real Estate Absolute Return Private Equity Total  Target allocationLong-Term Expected Real Rate of] Return (Arithmetic)  17.5% 17.5% 30.0% 10.0% 5.0% 10.0% 5.0% 5.0% 100.0%  4.80% 6.05% 1.50% 3.50% 1.75% 5.25% 4.25% 8.50%  32    City of' Thrall, Texas Notes to the Financial. Statements (Continued) NOTE9-PENSION PLANS (continued)  September. 30, 2021  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 willl be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods ofp projected benefit payments to determine the" Total Pension Liability.  CityofThrall September30, 2021  Schedule ofChanges in Net Pension Liability and Related Ratios Current Period  A. Total pension liability 1. Service Cost 2. Interest (on the Total Pension Liability) 3. Changes of benefit terms 4.1 Difference between expected and actual experience 5. Changes of assumptions 6.1 Benefit payments, including refunds of employee contributions 7.1 Net change in total pension liability 8. Total pension liability - beginning 9. Total pension liability. ending B. Plan fiduciary net position 1.C Contributions - employer 2. Contributions employee 3.1 Net investment income 5. Administrative Expense 6. Other  $  23,266 12,495 (409) 35,352 173,480 208,832 18,904 12,756 11,413 (73) (3) 42,997 149,230 192,227 16,605 92.05% 255,114 6.51%  $ $ $  4.1 Benefit payments, including refunds of employee contributions  7.1 Net change inj plan fiduciary net position 8. Plan fiduciary net position beginning 9.1 Plan fiduciary net position - ending C.Net pension liability [A.9-B.9] D. Plan fiduciary net position as aj percentage ofthe total pension liability [B.9/A.9] E. Covered-employee payroll F. Net pension liability as aj percentage ofcovered employee payroll [C/E]  $ $ $  $  33    CityofThrall, Texas Notes tot the Financial. Statements  September. 30, 2021  NOTE9-PENSION PLANS (Continued)  Sensitivity of the net pension liability to changes in the discount Tate.  The following presents the net pension] liability of the City, calculated using the discount rate of6 6.75%, as well as what the City's net] pension liability would bei ifit were calculated using: a discount rate thati is 1 percentage point  lower (5.75%) or 1 percentage point higher (7.75%) than the current rate:  1%1 Decrease in  1%1 Increase in $(5,280)  Discount rate (5.75%) Discount Rate (6.75%) Discount Rate (7.75%)  City's net pension liability $43,121 Pension Plan Fiduciary Net Position  $16,605  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  CITYOF THRALL SCHEDULE OF PENSION EXPENSE SEPTEMBER 30, 2021  1. Total Service Cost  $23,266 12,495 (12,756) (10,073) 73 3 (129) (268) (2,228) (985) $ 9,398  2. Interest on the Total Pension Liability 3. Current Period Benefit Changes 4. Employee Contributions (Reduction of Expense) 5. Projected Earnings on Plan Investments (Reduction of Expense) 6. Administrative Expense 7. Other Changes in Fiduciary Net Position 8. Recognition of Current Year Outflow (Inflow) of Resources Liabilities 9. Recognition of Current Year Outflow (Inflow) of] Resources - Assets 10. Amortization of Prior Year Outflows (Inflows) ofl Resources - Liabilities 11. Amortization of Prior Year Outflows (Inflows) of] Resources Assets  12. Total Pension Expense  Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are Actuarial calculations are based on the benefits provided under the terms oft the substantive plani in effect at the time of each valuation and reflect a long-term perspective. Consistent with that perspective, actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities  compared to past expectations and new estimates are made about the future.  and the actuarial value of assets.  34    City ofThrall, Texas Notes tot the Financial. Statements  September 30, 2021  NOTE9-PENSION PLANS (Continued)  CITY OF THRALL SEPTEMBER 30, 2021  SCHEDULE OF OUTFLOWS AND INFLOWS - CURRENT AND FUTURE EXPENSE  Recognition Period (or yrs)  2020 Recognized in current pension expensel  Total (Inflow) Resources  Deferred (Inflow) Outflow inf future expense  amortization or Outflow of  Due to Liabilities: Difference in expected and actual experience [actuarial (gains) or losses] Difference in assumption changes [actuarial (gains) or losses] Due to Assets: Difference in projected and actual earnings on pension plan investments [actuarial (gains) or losses]  3.1700 3.1700  $ (409) $  $ $  (129)  $  (280)  $-$ (129)  (280)  5.0000  $ (1,340)  $  (268) (268)  $ $ $  (1,072) (1,072) (1,352)  Total:  Deferred Outflows and Deferred Inflows of Resources, by year, to be recognized in future pension  expense as follows:  Net deferred outflows (inflows) of resources $ (3,616) (1,529) (2,255) (765) $ (8,165)  2021 2022 2023 2024 2025 Thereafter Total  35    City yofThrall, Texas Notes tot the Financial. Statements  September. 30, 2021  NOTE: 10-SUPPLEMENTAL DEATH BENEFITS PLAN  The City also participates in the cost-sharing multiple-employer defined benefit group term life insurance plan operated by the Texas Municipal Retirement System (TMRS); known as 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 The death benefit for active employees provides al lump-sum payment approximately equal tot 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 on' "other postemployment benefit,"or OPEB. The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; thei intent The City's contributions to the TMRS SDBF for the years ended 2021, 2020, and 2019 were $1275, $1275, and TMRS records indicate the following percentages contributed by the City (as employer contributions) for the  ordinancel before November 1 ofany year tol be effective the following January 1.  is not toj pre-fund retiree term lifei insurance during the employees' entire careers. $1,275 respectively, which equaled thei required contributions each year.  following fiscal years ending:  Plan/ Calendar Year 2017 2018 2019 2020 2021  Annual Required Contribution (Rate) N/A N/A 0.00% 0.00% 0.00%  Percentage of ARC Contributed  Actual Contribution Made (Rate) N/A N/A 0.00% (city toj provide) (city toj provide)  100% 100% 100% (city toj provide) (city toj provide)  Net Other Post Employment Benefits Liability.  Actuarial Assumptions  Actuarial assumptions were developed from the actuarial investigation oft the experience OfTMRS over the four year period from December 31,2015 to December 31, 2019. These assumptions were adopted in 2019 and first All administrative expenses are paid through the Pension' Trust and accounted for under reporting requirements The Mortality Experience Investigation Study covering 2015 through 2019 is used as the basis for the post- retirement: mortality assumption for healthy annuitants and. Annuity Purchase Rate (APRs). Mortality Rates for service employees uses thel RP2000 Combined Mortality' Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on ai fully generational basis with  used in the December 31,2 2019 valuation. under GASB Statement No. 68.  scale BB to account for future mortality improvements subject to the 3% floor.  36    CITY OF THRALL, TEXAS SEPTEMBER, 30, 2021  NOTESTO! BASICI FINANCIAL STATEMENTS  NOTE 10-SUPPLEMENTAL DEATH BENEFITS PLAN  Inflation Overall payroll growth Discount rate  2.50% per year 2.75%  3.50 to 10.5% per year includingi inflation  Changes in thel Net Other Post Employment Benefits Liability  Increase (Decrease) Total OPEBLiability $16,180 1,990 472 0 (482) 3,321 0 5,301 $21,481 8.42%  Balance at 12/31/18 Changes for the year Service Cost Interest on' Total OPEB liability Changes ofb benefit terms Differences between expected and actual experience Changes in assumption or other inputs Benefit payments Net changes Total OPEB Liability - end of year  Total OPEB Liability as al Percentage of Covered Payroll Sensitivity of the' Total OPEB Liability to Changes in the Discount Rate  The following presents thet total OPEB liability ofthe City, calculated using the current discount rate of3.31% as well as what the City's total OPEB liability would be ifit were calculated using a discount rate that is 1 percentage point lower (2.31%) or -1 percentage point higher (4.31%) than the current rate. Because the SDBF is considered an unfunded trust, the relevant discount rate to calculate the total OPEB liability is based on thel Fidelity Index's 20  year Municipal GOAAI Index.  1% Decrease in $27,434  1% Increase in Discount Rate (3.00%) $17,212  Discount Rate (1.00%) Discount Rate (2.00%)  Total OPEB liability  $21,481  37    CITY OF' THRALL, TEXAS SEPTEMBER, 30, 2021  NOTES TO BASIC FIMANCIALSTATEMENIS  NOTE: 10-SUPPLEMENTAL DEATH BENEFITS PLAN  Other Information  Due to the SDBF being considered an unfunded OPEB plan, benefit payments are treated as being equal to the employer's yearly contributions for retirees. No assets are accumulated in a trust that meets the criteria inj paragraph 4 ofGASB Statement No. 75 toj pay related benefits. In order to determine the retiree portion oft the City's Supplemental Death Benefit Plan contributions (that whichi is considered OPEB), the City should perform the following calculation:  Total covered payroll * retiree Portion of SDB Contribution (Rate)  38    CityofThrall, Texas Notes to the Financial Statements 11. RISK MANAGEMENT  September. 30, 2021  The City's risk management program includes coverage for property, general liability, automobile liability, public official's liability and employee dishonesty bonds. The City participates in the Texas Municipal League joint self- insurance fund, which isa aj public entity risk pool. Thej premiums paid to' TMLI result int thet transfer ofrisk tot thej pool. Proprietary fund accounts receivable are concentrated within the geographic service area oft the utility system, which is within the City of Thrall. Those receivables are not concentrated within any individually significant customers. The City requires a deposit from each utility customer prior to establishing service. The net amount of proprietary fund accounts receivable at year end after reducing receivables for the allowance for doubtful accounts and after including estimated amounts fors serviceprovidedi buti not yet billed at year end was $50,640.1 Utility customer deposits  12 CONCENTRATIONS OF CREDIT RISK  held at year end totaled $34,035. 12 SIGNIFICANT BUDGET OVERAGES  The budgetary comparison statement reflects a significant unfavorable variance on the line for municipal court revenues and a positive variance on the line for municipal court expenditures. The City's budget includes the collection of the State portion of fines ini revenues and the payments to the State in expenditures. Fines collected on behalfoft the State should not be included in the City's revenues and the payments to the State for those collections The budgetary comparison statement also reflects a positive variance on the line for other financing resources for debt issued and negative variances on the lines for general government and public safety expenditures. Those variances arose because the issuance of debt for the purchase ofa police vehicle and al backhoe were not included  should notl bei included in the City'sexpenditures.  when the City adopted the annual budget. NOTE13-SUBSEQUENT EVENTS  The City did not have any subsequent events through March 24, 2022, which is the date the financial statements were available to be issued for events requiring recording or disclosure in the financial statement for the fiscal year  ended September 30, 2021.  39    REQUIRED SUPPLEMENTALINFORMATION    City ofThrall, Texas Budgetary Comparison Schedule General Fund  For the Year Ended September. 30, 2021  Actual Amounts Budgetary Basis 308,580 160,201 37,075 49,267 79,942 241 635,306  Variance With Final Budget 2,245 4,297 (2,501) (37,133) (4,585) 77,942 241 40,506  Budgeted Amounts Original 306,335 155,904 39,576 86,400 4,585 2,000 594,800  Final 306,335 155,904 39,576 86,400 4,585 2,000 594,800  REVENUES Sales tax Franchise taxes grant income Municipal court fines Lease income Miscellaneous Investment earnings EXPENDITURES Current: General government Public safety Public Works Streets Municipal lcourt  Property taxes, penalties, and interest  Total revenues  440,726 139,292 580,018 14,782  440,726 139,292 580,018 14,782  469,877 33,173 21,441 32,772 557,263 78,043 (45,159) 48,900 (48,748) (57,464) 87,387 (15,084) 62,959 155,602  (29,151) 106,119 (21,441) (32,772) 22,755 63,261 (45,159) 48,900 (48,748) (57,464) 87,387 (15,084) 48,177  Total expenditures Excess (deficiency) of revenues over expenditures  OTHER FINANCING SOURCES (USES)  Capital Outlay Debt issued Debt service principal paid Debt service interest paid Transfers In Transfers out  Total other financing sources (uses)  Net change in fund balances 14,782  14,782 224,685  Fund balances - beginning Fund balances ending  224,685 $239,467 $239,467 40  218,561 $ 48,177    City of Thrall  Schedule of Changesi in Netl Pension Liability andl Related Ratios Last ten years (will ultimately be displayed)  Total pension liability 1.S Service Cost 2.) Interest (on the Total Pension Liability) 3. Changes ofbenefit terms 4.1 Difference between expected and actual experience 5. Changes of assumptions 6.1 Benefit payments, includingrefunds ofe employee contri 7.1 Net changei in total pension liability 8.Total pension liability beginning 9.Total pension liability ending Plan fiduciary net position 1.Contributions- employer 2. Contributions employee 3.1 Neti investment income 4.1 Benefit payments, includingrefunds of employee contrib 5. Administrative Expense 6.Other 7.1 Net change inj plani fiduciary net position 8. Plan fiduciary net position beginning 9. Plani fiduciary net position- ending Net pension liability [A.9-B.9] Plani fiduciary net position as a percentage ofthe total pension liability [B.9/A.9] Covered-employee payroll Net pension liability as a percentage of covered employee payroll [C/EI  2015 5,128 4,861 3,479  2016 6,462  2017 2018 2019  2020  10,724 13,936 15,633 16,457 19,286 23,266 1,537 (5,580) 3,137 (9,338) (929)  7,501 9,284 10,486 12,495  (409)  (1,073)  (540)  25,729 14,818 25,731 16,403 27,770 35,352 63,029 88,758 103,576 129,307 145,710 173,480 88,758 103,576 129,307 145,710 173,480 208,832  9,508 12,090 14,167 14,640 18,014 18,904  8,099 8,246 19 2,090 (12) (23) (1)  8,882 9,175 10,774 12,756 7,403 (2,504) 16,249 11,413  (540) (38) (3)  (48) (91) (3) (3)  (73) (3)  17,614 22,402 29,871 21,260 44,943 42,997 13,140 30,754 53,156 83,027 104,287 149,230 30,754 53,156 83,027 104,287 149,230 192,227 58,004 50,420 46,280 41,423 24,250 16,605 34.65% 51.32% 64.21% 71.57% 86.02% 92.05% $161,987 $164,927 177,642 183,464 215,481 255,114 35.81% 30.57% 26.05% 22.58% 11.25%  6.51%  41    City of Thrall Schedule ofContributions September3 30, 2021  Last 10 Fiscal Years (will ultimately be displayed)  2015  2016  2017  2018  2019  2020  Actually Determined Contribution Contributions in relation to the actuarially determined contribution  S 17,607 $ 20,336 $ 4 23,049  23,813 28,788 31,660 23,813 28,788 31,640  17,607  20,336  23,049  Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covered employee payroll Notes to Schedule ofContributions Valuation Date determined Notes Valuation Date: Notes  $161,987 $164,927 $177,642  183,464 215,481 255,114 22.58% 11.25% 12.41P4  10.87% 12/31/2020  12.33%  12.97%  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 Amortization Method Remaining Amortization Perioc9 Years Asset Valuation Method Inflation Salary Increases Retirement Age Mortality  Entry Age Normal  Level Percentage of Payroll, Closed  10 Year Smoothed Market 15% Soft Corridor 3.50% to 10.50% Including Inflation  2.5%  Investment Rate of] Return 6.75%  Experience-based table of rates that are specific to the City's plan of benefits. Last updated for the 2015 valuation pursuant to an experience study oft the RP2000 Combined Mortality Table with Blue Collar Adjustment with male rates multiplied by 109% and female rates multiplied by 103% and projected  period 2010-2014  onai fully generational basis with scale BB There were no benefit changes during the year.  OtherInformation: Notes  42    Donald L. Allman, CPA,PC 4749 Williams Drive, Ste. 322 Georgetown, Texas 78633  D  The Accounting Fimm of Donald L. Allman, CPA  CERTIFIED PUBLIC ACCOUNTANT  INDEPENDENT AUDITOR'S. REPORT ONI INTERNAL CONTROLOVER FINANCIAL REPORTING AND ON COMPLIANCE. ANDOTHER MATTERS BASED ON AN AUDIT OF FIMANCIALSTATEMENTS PERFORMED: IN  ACCORDANCE WITH GOPERMMENTAUDIINGA STANDARDS  To the Mayor & City Council City of Thrall," Texas  We have audited, in accordance with the auditing standards generally accepted ini 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, thet financial statements of the governmental activities, thel business-type: activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Thrall, Texas, as of and for the year ended September 30, 2021 and the related notes to thet financial statements, which collectively comprise the City of Thrall, Texas' basic Inp planning and performing our audit oft the financial statements, we considered the City of Thrall, Texas' internal control over financial reporting (internal control) to determine the audit procedures that are appropriate int the circumstances for the purpose of expressing our opinions ont thef financial statements, but not for thep purpose ofe expressing an opinion ont the effectiveness oft the City of Thrall, Texas' internal control. Accordingly, we do not express an opinion on the effectiveness oft the City oft Thrall," Texas' Adeficiency ini internal control exists when the design or operation ofac control does not allowr management or employees, int the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on at timely basis. AI material weakness isa a deficiency, or ac combination of defiçiencies, ini internal control, such that therei isar reasonable possibility thata material misstatement of the entity'sf financial statements willr not be prevented, or detected: and corrected ona a timely basis. A significant deficiencyi is a deficiency, or a combination of deficiencies, ini internal control that is less severe than a material weakness, Our consideration ofi internal control was for thel limited purpose described int thef first paragraph of this section and was not designed toi identify all deficiencies ini internal control that might ber material weaknesses or, significant deficiencies. Givent these limitations, during our audit we didi not identify any deficiencies ini internal controlt that we consider1 to! be material weaknesses. As part ofo obtaining reasonable assurance: about whether the City of Thrall, Texas' financial statements are freet from material misstatement, we performed tests ofi its compliance with certain provisions ofl laws, regulations, contracts, and grant agreements, noncompliance with which could! have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. Ther results of our tests disclosed noi instances of noncompliance or other matters that arer required to be reported Thep purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not top provide an opinion ont the effectiveness oft the entity's internal control or on compliance. This report is an integral part of an audit performed ina accordance with Government. Auditing Standards in considering the entity's internal control  financial statements, and havei issued our report thereon dated March: 24, 2022.  Internal Control over Financial Reporting  internal control.  yeti important enough to merita attention byt those charged with governance. However, material weaknesses may exist that have not beeni identified.  Compliance and Other Matters  under Government. Auditing Standards. Purpose of this Report  and compliance. Accordingly.this communicationi is not suitable for any other purpose  a m DonaldL L. Allman, CPA,PC Georgetown, TX March 24, 2022  43