CITY OF THRALL, TEXAS Audited Financial Statements Independent Auditor's Report And Supplemental Schedules For the Year Ended September,39,2022    CITY OF' THRALL, TEXAS ANNUAL: FINANCIAL REPORT TABLE OF CONTENTS Year Ended September: 30, 2022  FINANCIAL SECTION  PAGE 1-2 3-8  Independent Auditor's] Report onl 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 = Governmental Funds. Reconciliation ofthe Governmental Funds Balance Sheet To the Statement ofNet Position.. Statement of Revenues, Expenditures, and Changes in Fund) Balances- 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 to the Statement of Activities..  Statement of Net Position = Proprietary Funds.. Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds.. Statement of Cash Flows - Proprietary Funds.  Notes to thel 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    Thez Accounting Firm of Donald L Allman, CPA,PC  Donald) LA Allman, CPA, PC 4749 Williams Drive,, Ste. 322 Georgetown, Texas 78633 Email: alimm2omalmincacom  CERTIFIED PUBLIC. ACCOUNTANT  Independent Auditor's Report  To thel Honorable Mayor and City Council  City ofThrall, Texas  We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fundi information of the City of Thrall, Texas, as of and for the year ended September 30, 2022, and the related notes to the financial statements, which collectively comprise the City of Thrall, Texas's basic financial statements as listed in thei table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the govemmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Thrall, Texas, as of September 30, 2022, 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 in the United States of America. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the. Audit of the Financial Statements section of our report. We are required to be independent of the City of Thrall, Texas and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide al basis for our audit opinions. Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation oft financial statements that are free from material misstatement, whether due toi fraud or error. Inp preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Thrall, Texas's ability to continue as a going concern for twelve months beyond thet financial statement date, including any currently Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are freet from material misstatement, whether due tot fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial  Basis for Opinions  Responsibilties of Management for the Financial Statements  known information that may raise substantial doubt shortly thereafter. Auditor's Responsibilities for the Audit of the Financial Statements  statements.  1    Inp performing an audit in accordance with generally accepted auditing standards and Government Auditing Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud ore error, and design and performaudit procedures responsive tot those risks. Such procedures include examining, on at test basis, evidence regarding the amounts and disclosures ini the financial Obtain an understanding ofi internal control relevant to the audit 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 City of Thrall, Texas's internal control. Accordingly, no such opinion is Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Thrall, Texas's ability to continue as a going concern We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing oft the audit, significant audit findings, and certain internal control-related matters Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 3-9 and 37-38 be presented to supplement the basic financial statements. Such information is the responsibility of management and, although nota a part oft thel basic financial statements, is required by the Governmental Accounting Standards Board who considers itt to be. an essential part of financial reporting for placing the! basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required: supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Ina accordance with Government Auditing Standards, we have also issued our report dated April 14, 2023, on our consideration of the City of Thrall, Texas internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City of Thrall, Texas's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Thrall, Texas internal control over financial reporting and compliance.  Standards, we:  statements.  expressed,  financial statements.  for ar reasonable period of time.  that we identified during the audit. Required Supplementary Information  Other Reporting Required by Government. Auditing Standards  Donald L. Allman, CPA, P.C. Kev  Georgetown, TX April 14, 2023  2    City ofThrall, Texas Management' ' Discussion and Analysis  September 30, 2022  Our discussion and analysis of the City's financial performance provides an overview of the City's financial activities fort the fiscal year ended September 30, 2022. Please read iti in conjunction with the  city's financial statements, which follow this section.  Financial Highlights  The City's total net position increased by $358,050 for the year in comparison to the prior year The Proprietary Fund reported a net income of $421,329 before transfers for the fiscal year ended September 30, 2022. The General Fund reported a net loss of $(63,279) before transfers for the The City's Governmental Funds balance reported a net increase of $113,214 for the fiscal year  decrease of $(46,936).  fiscal year ended September 30, 2022. ended September 30, 2022. Using this Annual Report  This annual report presents the following three components ofthe financial statements. 1. Government-wide financial statements provide information for the City as a 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 a management's discussion and analysis and al budgetary The govermment-wide, financial statements are designed to provide readers with a broad overview The Statement ofNet Position presents information on all of 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.  oft the City's finances, in a manner similar to a private-sector business.  City is improving or deteriorating. Goyernment-Wide Financial Statements  The Statement of Activities presents information on how the City's 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 (Contimued)  Seplember 30, 2022  Both the Statement ofNet 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 and its citizens. Business activities include water and sewer services.  Both of the government-wide financial statements distinguish functions ofthe City that are principally supported by taxes and intergovernmental revenues (governmental activities): from functions that are: intended to reçover all or a significant portion oft their costs through user: fees and charges Cusines-ypeacivitie). The government-wide: financial statements begin on page 11.The: following table is a summary ofr net position  as of September 30, 2022:  Goyernment-Wide Net Position  Governmental Activities 2022  Business-type Activities 2022  Total Primary Government 2022  2021  2021  2021  Current and othera assets Capital assets Total assets Deferred outflows ofresources Current liabilities Long-term. liabilities Total liabilities Deferred inflows ofresources Net position: Net investment in capital assets Restricted Unrestricted Total net position  396,857 $298,227 $ 559,346 $ 480,231 $ 956,203 $ 778,458  1,389,469 1,427,940 1,786,326 1,726,167 182 98,914 1,408,049 1,463,309 1,506,963 1,581,638 63,670 62,200 222,135 (68,460) (115,038)  2,298,168 2,100,559 2,857,514 2,580,790 185 95,496 176,891 272,387 63,666 2,126,078 17,867 377,701  3,687,637 3,528,499 4,643,840 4,306,957 367 194,410 1,584,940 1,819,442 1,779,350 2,013,503 127,336 2,188,278 240,002. 309,241  5,840 118,329 55,335 11,588 198,484  5,844 75,732 356,133 431,865 55,332 1,735,300 47,552 316,585  11,684 194,061 110,667 1,746,888 246,036 201,547  $ 215,875 $ 95,034 $ 2,521,646 $2,099,437 $2,737,521 $2,194,471  Capital assets decreased by $(38,471) due to depreciation for governmental activities. Capital assets increased Long-term liabilities of the City reflected scheduled payments on bonds, loans and capital lease debt which reduced the outstanding principal balances ofdebt by $(55,260) in the General Fund and decreased by $(179,242) in the Proprietary Fund. Aj prior period adjustment decreased long-term debt $185,000 in thel Proprietary Fund.  by $197,609 due to construction inj progress from grants for business-type activities.  4    City ofThrall, Texas  Managemen!* 's Discussion and Analysis (Continued)  September 30, 2022  Goyernment-wide Changes in Net Position  Govemmental Activities 2022 729,231 184,120 120,841  Business-type Activities 2022 488,233 421,329 (184,120) 237,209 185,000  Total Primary Goyernment 2022 1,217,464 358,050 358,050 185,000  2021 709,388 (52,922) 87,387 34,465 60,569  2021 654,026 5,986 (87,387) (81,401)  2021 1,363,414 (46,936) (46,936) 2,241,407  Change in net position Total revenues Total expenses Transfers  665,952 $ 656,466 $ 909,562 $ 660,012 $ 1,575,514 $ 1,316,478  Change before transfers (63,279) Change in net position Prior) Period Adjustment Net position - beginning 95,034  2,099,437 2,180,838 2,194,471  Net position-e ending $ 215,875 $ 95,034 $ 2,521,646 $2,099,437 $ 2,737,521 $ 2,194,471 The specific changes ini revenues and expenses are shown in thet tables that follow, along with a discussion ofthe  events giving rise to those changes.  Governmental Activities 2022  Business-type Activities 2022  Total Primary Govemment 2022  2021  2021  2021  Revenues Programrevenues: Charges forservices Operating grants and contributions Interest income General revenues: Property taxes Sales tax Franchise taxes Other generalrevenues Total revenues  $ 67,429 $ 68,695 $ 506,901 $ 538,481 $ 574,330 $ 607,176  6,500 271 325,724 226,235 36,293 3,500  3,540 241 307,562 160,201 37,075 79,152 5  279,807 524  249  795 325,724 226,235 36,293 125,830  490 307,562 160,201 37,075 200,434  122,330  121,282  $ 665,952 $ 656,466 $ 909,562 $ 660,012 $ 1,575,514 $1 1,316,478    City ofThrall, Texas  Management 's Discussion and Analysis (Continued)  September 30, 2022  Governmental Activities 2022 2021 548,728 $ 555,744 $ 40,337 56,941 19,740 19,740 14,431 14,431 86,321 54,854  Business-type Activities 2022  Total Primary Government 2022 548,728 $ 555,744 40,337 19,740 14,431 488,233  2021 $  2021 56,941 19,740 14,431 654,026  Expenses General government Public safety Municipal court Park Public Works Streets Water and wastewater Total expenses  488,233  654,026  $ 709,557 $ 701,710 $ 488,233 $ 654,026 $ 1,197,790 $ 1,355,736  Financial Analysis of the City's) Funds  The general fund had a $120,841 increase overall, due to transferring money from the proprietary fund. The investment in capital assets increased $50,612, restricted funds increased $23,651 and unrestricted fund balance The utility fund reported a change ini net position of $237,209 fort the year, in addition to aj prior period adjustment increasing the net position another $185,000. The investment in capital assets increased $390,778, restricted  increased $46,578, for an overall net increase ini net position of$120,841.  assets decreased $(29,685), and unrestricted fund balance increased $61,116.  6    City ofThrall, Texas  Managemen!: 's Discussion and Analysis (Continued)  September 30, 2022  General Fund Budgetary Highlights  The budgetary comparison statement reflects a significant unfavorable variance on thel line for municipal court revenues and aj positive variance on the lines for property taxi income sales tax income. The City's budget had a negative variance for actual general government expenses compared to budgeted general government expenses. However, overall the City ofThrall had less expenses than budgeted overall including all City departments.  Capital Asset and Debt. Administration  Capital Assets  Thei following capital asset information is presented net ofc depreciation. More detailed information can bei found  on pages 29 and 30 in the notes to the financial statements.  Governmental Activities 2022  Business-type Activities 2022 279,807 1,875,787 296 8,069  Total Primary Goverment 2022 279,807 1,875,787 15,661 71,322 1,307,880  2021  2021 200,000 1,955,349 401 10,600  2021  Land and CNN Construction in progress Distribution and collection systems Buildings andi improvements Equipment Infrastructure  $ 2,971 $ 2,971 $ 134,209 $ 134,209 $ 137,180 $ 137,180  1,955,349 22,731 83,357 1,329,882  15,365 63,253 1,307,880 1,329,882  22,330 72,757  Totals atl historical cost $1,389,469 $1,427,940 $ 2,298,168 $ 2,300,559 $3,687,637 $ 3,728,499  7    City of'Thrall, Texas  Managemen! 'sl Discussion and Analysis (Continued)  Seplember 30, 2022  Debt  More detailed information on the City's debt can be found onj pages 31-33i in thei notest to the: financial statements.  Governmental Activities 2022 57,852  Business-type Activities 2022  Total Primary Government 2022 57,852  2021 91,232  2021  2021 91,232  Revenue bonds Loans payable Capital leases payable Totals  $1,385,000 $1,410,000 $ 172,090 $ 365,259 $ 1,557,090 $ 1,775,259 $1,442,852 $1,501,232 $ 172,090 $ 365,259 $ 1,614,942 $ 1,866,491  Economic Factors and Next Year's Budgets and Rates Council toj 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 oft 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 PAGEI LEFT BLANK INTENTIALLY)  9    City ofThrall, Texas Statement of! Net Position  As of September 30, 2022  Primary Government Activities  Governmental Business-type  Activities $  Total  ASSETS  Cash and cash equivalents (note 2) Receivables (net, where applicable, ofallowances for uncollectibles): Accounts receivables Property taxes, sales taxes & franchise fees Fines receivable Net Pension Asset Restricted cash (note 2) Capital assets (note 5): Land and CCN Construction in progress Other capital assets, net ofdepreciation Total assets Deferred Outflows ofResources LIABILITIES Accounts payable Accrued liabilities Customer deposits Noncurrent liabilities (note 7): TotalOPEB: Liability Accrued vacation & sick leave payable Due within one year Due in more than one year Total liabilities Deferred Inflows ofResources NETPOSITION Net investment in capitalassets Restricted for: Debt service Sales taxstreet repairs Municipal court Police training Park project Construction Unrestricted (deficit)  143,211 $ 490,680 $ 633,891  49,027 1,772 17,867 134,209 2,163,959 2,857,514 185 2,012 51,089 34,035 11,665 1,496 8,360 163,730 272,387 63,666 2,126,078 16,267  49,027 29,738 3,545 240,002 137,180 3,550,457 4,643,840 367 38,097 62,217 34,035 23,332 6,727 60,061 1,554,881 1,779,350 127,336 2,188,278 123,775 105,219 7,595 1,813 1,600 309,241  29,738 1,773 222,135 2,971 1,386,498 1,786,326 182 36,085 11,128 11,667 5,231 51,701 1,391,151 1,506,963 63,670 62,200 107,508 105,219 7,595 1,813 (68,460)  1,600 377,701  Total net position  $  215,875 $ 2,521,646 $ 2,737,521  The accompanying notes are an integral part ofthe financial statements.  10    $A    City ofThrall, Texas Balance Sheet-Govermenta!. Funds  As of September 30, 2022  Debt Fund  Special Funds  Total Funds $143,211 9,312 16,096 4,330 222,135  General Fund $143,211 $ 9,312 16,096 4,330  Service Revenue Governmental  ASSETS Cash and cash equivalents Receivables (net, where applicable, of allowances for uncollectibles): Sales Tax Property taxes Fines & Franchise fees receivable Due from other funds Restricted cash  107,508  114,627  Total assets  $172,949 $107,508 114,627 $395,084  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  36,085 11,128 $4 47,213 16,096 16,096  36,085 11,128 $47,213 16,096 16,096 107,508 105,219 7,595 1,813 109,640 331,775  107,508  105,219 7,595 1,813  Unassigned  109,640 109,640 107,508 $172,949 $107,508  114,627 114,627 $395,084  Total liabilities, deferred inflows of resources, and fund balances  The accompanying notes are an integral part oft thej fnancial statements.  12    City ofThrall, Texas tot the Statement ofNet Position  Reconciliation of the Governmental. Funds Balance Sheet  As of September 30, 2022  Total Fund Balance - Governmental Funds: Deferred Inflows are not included in governmental funds Net Pension Asset is not included in governmental funds Net Opeb liability is not included in governmental: funds Amounts reported for governmental activities in the Vacation and sick leave payable not included in governmental funds Deferred Outflows not included in governmental funds Differences inj property tax revenues and deferred revenues the current period and therefore are not reported in the funds. Long-term liabities are not due and payable in the current period and therefore have not been included in the fund financials statements. Capital assets used in governmental activities are not financial resources and therefore are not reported int the governmental funds. (See Note 6) Net Position of Governmental Activities  331,775 (63,670) 1,773 (11,667) (5,231) 182 16,096 (1,442,852) 1,389,469 $ 215,875  The accompanying notes are an integral part of the financial statements.  13    City ofThrall, Texas Statement of! Revenues, Expenditures and Changes ini Fund Balances Governmental. Funds  For the Year Ended. September 30, 2022  Debt Fund  Special Fund  Total Funds 327,933 226,235 36,293 61,517 3,500 271 655,749  General Fund 327,933 226,235 36,293 61,517 3,500 271 655,749  Service Revenue Governmental  REVENUES Sales tax Franchise taxes Municipal court fines Grant income Miscellaneous Investment earnings Total revenues 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  Property taxes, penalties, and interest  467,428 25,479 44,768 51,877 22,531 612,083 43,666  467,428 25,479 44,768 51,877 22,531 612,083 43,666 (56,192) (58,380) (138,223) 322,343 69,548 113,214 218,561  (56,192) (58,380) 118,389 3,817 3,817 103,691  Debt principal paid Transfers in  (138,223) 184,120 45,897 89,563 20,077 109,640 $107,508  19,834 19,834 94,793 114,627 $ 331,775  Total other financing sources (uses) Net change in fund balances  Fund balances - beginning Fund balances ending  The accompanying notes are an integral part oft the financial. statements  14    City ofThrall, Texas Reconciliation of the Statement of Revenues Expenditures and Changes ini Fund Balances- Governmental. Funds tot the Statement ofActivities  For the Year Ended: September 30, 2022  Net change in fund balances - total governmental funds  $  113,214  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 oft the year. Add noncurrent receivables at1 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  22,531 (61,002) (3,998)  Property tax revenues: Fine revenues:  16,096 (18,305)  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 ofcurrent financial resources and therefore are not reported as expenditures  58,380 (5,689) 486 (5,231) 4,359 120,841  ing governmental funds. Compensated absences:  Subtract noncurrent liability at the end of the year. Add noncurrent liability at the beginning of the year. Change in net position of governmental activities.  $  The accompanying notes are an integral part of thej financial statements.  15    City ofThrall, Texas Statement of? Net Position Proprietary Fund  As of September 30, 2022  Business-type Activities Enterprise Funds 490,680 49,027 $ 539,707 1,772 17,867 134,209 2,163,959 2,317,807 2,857,514 185 2,012 51,089 34,035 8,360 95,496 11,665 1,496 163,730 176,891 272,387 63,666 2,126,078 17,867 377,701 $ 2,521,646  ASSETS Current assets: Cash and cash equivalents Receivables (net, where applicable, of allowances for uncollectibles): Accounts receivable Total current assets Noncurrent assets: Net Pension Asset Restricted cash Capital assets: Land and CCN Other capital assets, net of depreciation Total noncurrent assets Total assets  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  Total current liabilities  Total noncurrent liabilities Total liabilities  Deferred Inflows of Resources NETPOSITION Net investment in capital assets Restricted for debt service Onrestricted (deficit)  Total net position  The accompanying notes are an integral part ofthe fnancial. statements.  16    City ofThrall, Texas Statement of Revenues, Expenses, and Changes inl Net Position Proprietary. Funds  For the Year Ended September. 30, 2022  Business-type Activities Enterprise Funds $ 506,901 122,330 629,231 167,448 140,399 2,700 1,526 8,224 24,067 48,921 4,843 82,198 480,326 148,905 524 (7,907) (7,383) 141,522 279,807 (184,120) 237,209 185,000 2,099,437 2,521,646  OPERATING REVENUES Miscellaneous OPERATING EXPENSES Water purchased & water service costs Salaries and benefits Professional fees Office expense Utilities Repairs and maintenance Miscellaneous Total Pension & OPEBI 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  Change in net position  Prior Period Adjustment Net position - beginning Net position - ending  The accompanying notes are an integral part ofthej financial. statements.  17    City ofThrall, Texas Statement. of Cash Flows Proprietary Fund  For the Year Ended Seplember 30, 2022  Business-type Activities Enterprise Funds  CASH: FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees  $ 508,209 (100,227) (129,659) 278,323  Net cash provided (used) by operating activities  CASH: FLOWS FROMI NONCAPITAL FINANCING ACTIVITIES Transfers from other funds  (184,120) (184,120)  Net cash provided (used) by noncapital financing activities  CASH: FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital assets acquired Grant income received Interest payments on outstanding debt Principal payments on outstanding debt  (279,807) 279,807 (7,907) (8,169) (16,076)  Net cash provided (used) by capital and related financing activities  CASH FLOWS FROMINVESTING Interest and investment revenue received  ACTIVITIES  524 524 78,651 429,896 $ 508,547  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 the fnancial. statements.  18    City ofThrall, Texas Statement ofCash Flows Proprietary. Fund (Continued)  For the Year Ended: Seplember 30, 2022  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: Decrease in Accounts receivable Decrease in Accounts payable Increase in Accrued liabilities Increase in Customer deposits Increase in Accrued vacation Net cash provided (used) by operating activities  $ 148,905  82,198 1,308 (895) 16,685 24,851 4,843 428  Total Pension Expense is a non cash expense  $ 278,323  The accompanying notes are an integral part oft thej financial. statements.  19    City ofThrall, Texas Notes tot the Financial. Statements  September 30, 2022  1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  The City ofThrall, Texas (the City), is a general law city in Williamson County which isi incorporated in the State of Texas. The City operates under a Council form of government and provides such services as: public safety, highways and streets, sanitation, culture-recreation, public improvements, planning and zoning, general administrative, and The accounting policies of 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 FINANCIALSTATEMENTS  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 of 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' business-type activities, with at total column for the primary government as a whole.  accounting.  B. SCOPE OF THE. 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 ofthe reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for 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 a 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 of the City for the year ended September 30, 2015.  C. FUND FINANCIALSTATEMENTS  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 fundi 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    City ofThrall, Texas Notes to the Financial Statements (Continued)  September. 30, 2022  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  C. FUND: FINANCIAL STATEMENTS (Continued) The City has reported the following major governmental funds.  General Fund -1 The General Fund accounts for all revenues and expenditures ofthe 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. MEASUREMENTHOCUS AND: BASIS OF ACCOUNTING  Measurement focus refers to whether aj particular type oft transaction will be recorded in the financial statements. The economic resources measurement: focus recognizes all resources and obligations and the changes in 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 of 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 ofnonexchange transaction. For the government-wide: financial statements prepared on the accrual basis,  property tax revenues are: recognized in the period for which the taxes are levied.  21    City ofThrall, Texas Notes to the Financial. Statements (Continued)  September 30, 2022  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 of the fund financial statements of the governmental funds. Transactions for the purchase of assets, the issuance ofc debt, and the payment ofdebt principal are: reflectedi in 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 expenditures ini the accounting period in which the fund liability is 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 oft the current period. Therefore, revenue: from delinquent property taxes receivable isi not recognized in the Fines receivable but not past due at the end oft the fiscal year may be subsequently reduced when the offender attends ac defensive driving course, provides proofofinsurance, has the offense dismissed by the municipal court, or serves jail time. Current fines receivable thus do not meet the measurability criterion required to be susceptible to accrual. As significant portion of past due fines receivable is not anticipated to be collected soon enough the meet the criterion  balances as capital outlay and debt service principale 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 -1 proprietary funds and the accrual basis of accounting. E. CASH. AND CASH EQUIVALENTS  The: fund: financial statements for 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 tol the Financial: Statements (Continued)  September 30, 2022  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  F. INVESTMENTS  The City had no investments at September 30, 2022. The City is authorized to invest in certificates of deposit at the City's depository bank, obligations oft the United States ofA 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 ber no-load funds which arei regulated by the Securities and Exchange Commission, have ad dollar-weighted average stated maturity ofs 90 days or fewer, and include the investment objective oft the maintenance ofa stable net  asset value of$1 for each share. G. RECEIVABLES  Unbilled service receivables have been accrued in thej proprietary funds to record the estimated amount of revenues earned but not billed as of the end of the fiscal year. The estimate is based on the pro rata number of days in the  billing cycle before and after the fiscal year end.  H. CAPITAL ASSETS  Capital assets are defined by the City as assets with an estimated useful life in excess of two years. All capital assets are valued at historical cost or estimated historical cost ifactual historical cost ifnot available. Donated capital assets Depreciation has been provided over the estimated useful lives using the straight-line method. The estimated useful  are valued at their estimated fair market value on the date donated.  lives are as follows:  Infrastructure Distribution & Collection Buildings and Improvements Machinery and Equipment  20 years 24-50 years 20-40 years 5-20 years  I. ACCUMULATED UNPAID PAID TIME OFF  Paid time offmay be accumulated by employees at thei rate of 801 hours after 1 year ofs service, 1601 hours for 21 through 4 years of service, and 200 hours with 5 or more years of service. Accrued, unused paid time offi is included in an employee' s final pay. Thet total liability fort the governmental fund's accumulated paid time offof$ 6,708 ist reflected int the government-wide: financial statements. None ofit is reported in the fund financial statements because none of  iti is considered tol be a current liability.  23    City ofThrall, Texas Notes to the Financial Statements (Continued)  September. 30, 2022  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  J. LONG-TERM 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 oft the bonds as an adjustment to Ini the fund financial statements of governmental: funds, the face amount of debt 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 ofdecision-making: authority is the City Council, and ai formal resolution oft the City  Council is required to establish or rescind ai fund balance commitment. L. USE OF RESTRICTED RESOURCES AND COMMITED RESOURCES  When an expense is incurred for 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 for 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 to be either eliminated or  disclosed as beingi included in direct expenses.  N. PROGRAM REVENUES AND: INDIRECT EXPENSES  The government-wide: statement ofactivities is presented ina ai format thati identifies the net cost ofthe City'si individual functions. The expenses of each function are reduced by the functions program revenues. Program revenues are revenues which derive directly from the program itselfand include charges for 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, and program specific capital grants and contributions.  expenses.  24    City ofThrall, Texas Notes tot the Financial, Statements (Continued)  September. 30, 2022  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 AND: INVESTMENTS Custodial Credit Risk ofDeposits  Custodial credit risk is the risk that in the event ofa bank failure, the City's deposits may not be returned to it. The City maintains a depository contract which requires its bank to pledge securities to the City in an amount sufficient tos secure thet total amount oft 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 $873,893 at year end and the bank balance was $873,893. Ofthe bank balance, $250,000 was insured by federal depository insurance and the remaining $623,893 was collateralized with securities held by the City's agent (safekeeping bank) int the City's name.  3 RECEIVABLES  Receivables are: recorded net of allowances for uncollectible accounts as follows:  Allowance for Uncollectibles $  Gross Receivables $  Net Receivables $ $ $  General Fund Accounts receivable Property taxes receivable Sales tax receivable Fines & Franchise fees receivable Utility System Fund Utility accounts receivable  16,096 9,312 4,330 49,332  16,096 9,312 4,330 49,027  (305)  25    City ofThrall, Texas Notes to the Financial, Statements (Continued) 4 AD VALOREM PROPERTYTAXES  September. 30, 2022  Property taxes are levied on October 1 on assessed values as of January 11 for all real and personal property located in the City. Taxes are due in January oft the following year and become delinquent on February 1.On January 1 ofeach year, a tax lien attaches toj property to secure the payment of all taxes, penalties, and interest ultimately imposed. The October 1, 2021 levy was based upon 100 percent of the assessed market value of $77,669,153. 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, 2021 levy was $.422267 for a levy of $327,971. Current If 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 of the City may petition for an election to determine whether to limit the tax rate to no more than 8 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 bei reviewed atl least every five years. The City may challenge appraised values  property taxes receivable is $4,938 and delinquent property taxes receivable are $11,158.  established by the Appraisal District through various appeals and, ifnecessary, legal action.  5 CAPITAL ASSETS  Primary Government  Beginning Balance $ 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 $ 2,623 14,858 34,444 9,077 $ 61,002 26  Ending $ 2,971 2,971 229,085 409,814 1,539,529 2,178,428 (213,720) (346,561) (231,649) (791,930) 1,386,498 $1,389,469  Additions Retirement Balance  Governmental activities: Land Construction inj progress Total undepreciated assets Other capital assets: Buildings and improvements Equipment & Vehicles Infrastructure  $  6,331 16,200 22,531 (6,965) (15,835) (38,202) (61,002) (38,471)  Total other capital assets at historical cost Less accumulated depreciation for: Buildings and improvements Equipment & Vehicles Infrastructure Other capital assets, net Governmental activities capital assets, net General government Public safety Public Works Streets Parks  Total accumulated depreciation  $1,427,940 $ (38,471) $  Depreciation expense for governmental activities was charged as follows:  Total governmental functions    CityofThrall, Texas Notes to the Financial, Statements (Continued) 5 CAPITALASSEIS (Continued)  September 30, 2022  Primary Government Additions Retirement  Beginning Balance $ 114,209 $ 20,000 134,209 279,807 3,851,394 4,203 153,951 4,009,548 (1,896,045) (79,562) (3,802) (143,351) (2,043,198) (82,198) 1,966,350 $2,100,559 $197,609 $  Ending Balance $ 114,209 20,000 279,807 414,016 3,851,394 4,203 153,951 4,009,548 (1,975,607) (3,907) (145,882) (2,125,396) 1,884,152 $2,298,168  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 Total accumulated depreciation Other capital assets, net Business-type activities capital assets, net  $  279,807  (105) (2,531) (82,198)  INTERFUND RECEIVABLES AND PAYABLES ANDTRANSFERS  Charges for garbage service are billed and collected with water and sewer charges and are deposited first into the utility fund bank account, and then the garbage portion is transferred to1 the general fund bank account. The September transfer was made in October. The following is as summary ofamounts due from and due to other funds by individual  major fund.  Payments to the City'si retirement plan werei made from the general fund, but withholdings from employees were recorded in both the utility fund and the general fund. The portion oft the payment made from the general fund  that should have been made from the utility funds has been recorded as a transfer.  27    City ofThrall, Texas Notes tot the Financial Statements (Continued) 7 LONG-TERM DEBT  September. 30, 2022  Long-term debt at September 30, 2022, is composed oft the 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 $15,000 to $80,000 due on February 15, through February 15, 2052, with the interest rate ranging from 2% to 4%. Revenue Bonds and other loans Payable out oft the Utility System Fund through revenues: Loan payable to Frontier Bank for Chevy Pickup for Police Department monthly installments of $820 including principal and interest through Loan payable to Frontier Bank for Chevy Pickup for Police Department monthly installments of $888 including principal and interest through  1,385,000  January 20, 2023; interest at 3.45 percent July 20, 2026; interest at 3.45 percent  3,197 38,245 16,410 172,090  Loan payable to Frontier Bank for Park Improvements, monthly installments of $1202.65, with an interest rate of4.1%, monthly intallments beginning December 15,  for a term of 60 months.  $204,250 Series 2019 revenue bonds due in annual installments of $15,000 to $25,000 through October 1,2019; interest at 5.00 percent  Total long-term debt  $  1,614,942  28    City ofThrall, Texas Notes to the Financial Statements (Continued)  September 30, 2022  7 LONG-TERM DEBT (Continued)  Thei following is a summary of long-term debt activity for September 30, 2022.  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  $ 91,232 $ 1,410,000 8,302 10,741 4,359 Beginning Balance 365,259 365,259 $ 8,303 10,740 1,068 $385,370 $  $ (33,380) $ 57,852 $ 26,701  (25,000) (10,075)  1,385,000 (1,773) 11,667 5,231 Ending Balance 172,090  25,000  926 872  $1,524,634 $ 1,798 $(68,455) $1,457,977 $ 51,701  Due Within One Year  Additions Reductions  193,169  8,360  $193,169 $ 172,090 $ 8,360  (10,075)  (1,772) 11,665 1,496  925 428  $183,094 $ 183,479 $ 8,360  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 the Financial Statements (Continued)  September 30, 2022  7 LONG-TERM DEBT (Continued)  Debt service requirements on outstanding bonds and loans are as follows:  Governmental Activities Loans Principal 51,701 37,578 35,015 38,558 30,000 160,000 195,000 240,000 295,000 360,000 $1,442,852  Business-Type Activities Bonds and Loans Principal 8,360 8,556 8,756 8,961 9,170 49,169 55,193 23,925  Year Ended September 30 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052  Interest 55,807 54,261 53,150 52,279 50,450 234,600 198,900 155,600 102,500 37,400  Interest 7,907 7,514 7,111 6,244 5,404 20,021 7,318  $ 994,947 $1 172,090 $ 61,519  8.3 PRIOR PERIOD ADJUSTMENT  Bonds payable in the amount of$185,000 were erroneously left on the financial statements in the prior period despite being paid offin full. The net result oft this prior period adjustment is to decrease bonds payable in the Proprietary  Fund by $185,000 and to increase the Net Assets in the Proprietary Fund by $185,0000.  30    City ofThrall, Texas Notes fot the Financial, Statements (Continued) 9 PENSION PLAN Plan Description  September 30, 2022  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 multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management oft 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) oft the Internal Revenue Code. TMRS issues aj publicly available comprehensive annual report (CAFR) that can be  obtained at www.tmrs.com. B.] Benefits Provided  All eligible employees of 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 as a Partial Lump Sum Distribution in an amount equal to 12,2 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 in the state statutes governing TMRS.  ofthe member's deposits and interest. Employees covered by benefit terms.  terms.  Inactive employees or beneficiaries currently receiving benefits 0 Inactive employees entitled to but not yet 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 of 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 ofbenefits 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% in calendar years 2022 and 2021 respectively. The ity'scontributions: to' TMRS: for the year ended September 30, 2022 were $17,791, and were in excess oft thei required  accrued liability.  contributions.  31    City ofThrall, Texas Notes to the Financial. Statements (Continued) 9 PENSION PLAN (Continued) D.Net Pension Liability  September. 30, 2022  The city's Net Pension Liability (NPL) was measured as of December 31, 2021, 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 ofl Return 6.75%1 net of pension plan investment expense, including inflation  Salary increases were based on a service-related table. Mortality rates for active: members, retirees, and beneficiaries were based on the gender-distinct. RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected ona ai fully generational basis by scalel BB on account for future mortality improvements. For disabled annuitants, the gender-distinct RP20001 Disabled Retiree Mortality Table is used, with slight Actuarial assumptions used in thel December 31, 2021, valuation were based on the results of actuarial experience studies. The experience study in1 TMRS wasi fort the period. January 1,20161 through) December 31,2021, first used int thel December 31,2017 valuation. Healthy post-retirement mortality rates and annuity purchase rates were updated based on al Mortality Experience Investigation Study covering 2015 through 2019, and dated] December31, 2021. These assumptions were first used in the December 31, 2021 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%. The pension plan's policy ini regard to the allocation ofinvested assets is established and may be amended by the TMRS Board ofTrustees. Plan assets are: managed on at total return basis with an emphasis on both capital appreciation as well as the production ofincome, in order to satisfy Thel long-term expected rate ofreturn onj pension plani investments was determined using al building-blocki method inv which best estimate ranges ofe expected future real rates ofreturn (expected returns, net ofpension 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 by thet target asset allocation percentage and by adding expected 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.  thes 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 ofl 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 ofThrall, Texas Notes to the Financial Statements (Continued) NOTE: 9-PENSION PLANS (continued)  September 30, 2022  Discount Rate  The discount rate used to measure the Total Pension Liability was 6.75%. Thej 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 of projected benefit payments to determine the Total Pension Liability.  City ofThrall September30, 2022  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. Difference between expected and actual experience 5. Changes of assumptions 6. Benefit payments, including refunds of employee contributions 7. Net change in total pension liability 8. Total pension liability - beginning 9.Total pension liability ending B. Plan fiduciary net position 1. Contributions employer 2. Contributions employee 3. Net investment income 5. Administrative Expense 6. Other  $  23,801 14,899 (2,626) 36,074 208,832 244,906 17,791 13,297 25,252 (116) 56,224 192,227 248,451 (3,545) 92.05% 255,114 6.51%  $ $ $  4. Benefit payments, including refunds of employee contributions  7. Net change in plan fiduciary net position 8. Plan fiduciary net position beginning 9. 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. Coyered-employee payroll F. Net pension liability as a percentage ofcovered employee payroll [C/E]  $ $ $  $  33    City ofThrall, Texas Notes tot the Financial Statements  September 30, 2022  NOTE9-PENSION PLANS (Continued)  Sensitivity oft the net pension liability to changes in the discount rate.  The: following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension liability would be ifit were calculated using a discount rate that is 1 percentage point  lower (5.75%) or 1 percentage point higher (7.75%) than the current rate:  1% Decrease in  1% Increase in $(27,264)  Discount rate (5.75%) Discount Rate (6.75%) Discount Rate (7.75%)  City's net pension liability $25,245 Pension Plan Fiduciary Net Position  $(3,545)  Detailed information about the pension plan's Fiduciary Net Position is available in a separately-issued TMRS  financial report. That report may be obtained on1 the Internet at www.tmrs.com  CITY OF THRALL SCHEDULE OF PENSION EXPENSE SEPTEMBER 30, 2022  1. Total Service Cost  $23,801 14,899 (13,297) (12,975) 116 (1) (782) (2,456) (2,365) (1,251) 5 5,689  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) of 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 ofthe: substantive plan 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, 2022  NOTE9-1 PENSION PLANS (Continued)  CITY OFTHRALL SEPTEMBER 30, 2022  SCHEDULE OF OUTFLOWS AND INFLOWS - CURRENT AND FUTURE EXPENSE  Recognition Period (or yrs)  2021 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]  3.3600 3.3600  $ (2,626) $  $ $ $  (782)  $  (1,844)  - $- $ (782)  (1,844)  5.0000  $ (12,277)  $  (2,456) (2,456)  $ $ $  (9,821)  (9,821) (11,665)  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 $ (4,767) (5,493) (3,504) (2,453) $(16,217)  2022 2023 2024 2025 2026 Thereatter Total  35    City ofThrall, Texas Notes tot the Financial: Statements  September 30, 2022  NOTE: 10 -SUPPLEMENTALDEATH 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, toj 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 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 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; the intent The City's contributions to the TMRS SDBF for the years ended 2022, 2021, and 2019 were $1275, $1275, and TMRS: records indicate the following percentages contributed by the City (as employer contributions) for the  ordinance before November 1 ofany year to be effective the following January 1.  isi not to pre-fund retiree term life insurance during the employees' entire careers, $1,275 respectively, which equaled the 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 to provide) (city to provide)  100% 100% 100% (city to provide) (city to provide)  Net Other Post Employment Benefits Liability.  Actuarial Assumptions  Actuarial assumptions were developed from the actuarial investigation of the experience OfTMRS over the four year period from December: 31,20151 to December 31,2019. These assumptions were adopted in 2019 and: first All administrative expenses are paid through thel Pension Trust and accounted for under reporting requirements Thel 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 the 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 a fully generational basis with  used in thel December 31, ,2019 valuation. under GASB Statement No. 68.  scale BB to account for future mortality improvements subject to the 3%1 floor.  36    CITY OF THRALL,TEXAS SEPTEMBER, 30, 2022  NOTES TO: BASIC FINANCIALSTATEMENTS  NOTE. 10-SUPPLEMENTALDEATH BENEFITS PLAN  Inflation Overall payroll growth Discount rate  2.50% per year 2.75%  3.501 to 10.5% per year including inflation  Changes in thel Net Other Post Employment Benefits Liability  Increase (Decrease) TotalOPEBLiability $21,481 2,048 450 0 (1,473) 826 0 1,851 $23,332 8.77%  Balance at 12/31/20 Changes for the year Service Cost Interest on Total OPEB liability Changes of 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 ofCovered Payroll  Sensitivity of the Total OPEB Liability to Changes in thel Discount Rate  The following presents thet total OPEB liability oft the 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 I 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 the Fidelity Index's2 20  year Municipal GO. AA Index.  1% Decrease in $29,679  1% Increase in Discount Rate (3.00%) $18,793  Discount Rate (1.00%) Discount Rate (2.00%)  Total OPEB liability  $23,332  37    CITY OFTHRALL, TEXAS SEPTEMBER,30, 2022  NOTES TOBASIC: FINANCIALSTATEMENTS  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 at trust that meets the criteria inj paragraph 4 ofGASB Statement No. 751 toj pay related benefits. In order to determine the retiree portion oft the City's Supplemental Death Benefit Plan contributions (that which is considered OPEB), the City should perform the following calculation:  Total covered payroll * retiree Portion of SDB Contribution (Rate)  38    City ofThrall, Texas Notes tot the Financial, Statements 11. RISK MANAGEMENT  September 30, 2022  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 is aj public entity risk pool. Thej premiums paid to' TML: result ini the transfer oft risk to the pool. Proprietary: fund accounts receivable are concentrated within the geographic service area ofthe 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 for service provided but not yet! billed at year end was $49,027.Utility customer deposits  12 CONCENTRATIONS OF CREDIT: RISK  held at year end totaled $34,035. NOTE 13-S SUBSEQUENT EVENTS  The City did not have any subsequent events through. April 14, 2023, which is the date thei financial statements were available to bei issued for events requiring recording or disclosure in the financial statement for the fiscal year ended  September 30, 2022..  39    REQUIRED SUPPLEMENTALINFORMATION    CityofThrall, Texas Budgetary Comparison Schedule General. Fund  For the Year Ended September 30, 2022  Actual Amounts Budgetary Basis 327,933 226,235 36,293 61,517 3,500 271 655,749  Variance With Final Budget 20,933 58,331 (3,283) (24,883) (4,585) 1,500 271 48,284  Budgeted Amounts Original 307,000 167,904 39,576 86,400 4,585 2,000 607,465  Final 307,000 167,904 39,576 86,400 4,585 2,000 607,465  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 court  Property taxes, penalties, and interest  Total revenues  447,626 149,832 597,458 10,007  447,626 149,832 597,458 10,007  467,428 25,479 51,877 44,768 589,552 66,197 (22,531) (58,380) (56,192) 184,120 47,017 113,214 218,561  (19,802) 124,353 (51,877) (44,768) 7,906 56,190 (22,531) (58,380) (56,192) 184,120 47,017 103,207  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 10,007  10,007 218,561  Fund balances beginning Fund balances ending  218,561  $228,568 $228,568 40  331,775 $ 103,207    CityofThrall  Schedule of Changes in Net) Pension Liability and Related Ratios Last ten years (will ultimately be displayed)  Total pension liability 1. Service Cost 2.1 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, including refunds ofe employee contri 7.Net change in total pension liability 8.1 Total pension liability beginning 9.Total pension liability ending Plan fiduciary net position 1.Contributions- employer 2. Contributions employee 3.1 Net investment income 4.1 Benefit payments, including refunds of employee contrib 5. Administrative. Expense 6. Other 7.Net change inj plan fiduciary net position 8.) Plan fiduciary net position beginning 9.1 Plan fiduciary net position ending Net pension liability [A.9-B.9] Plan fiduciary net position as aj percentage of the total pension liability [B.9/A.9] Coyered-employee payroll Net pension liability as a percentage of covered employee payroll IC/E)  2015 5,128 4,861 3,479  2016  2017 2018 2019 2020  2021  10,724 13,936 15,633 16,457 19,286 23,266 23,8( 1,537 (5,580) 3,137 (9,338) (929) (409) (2,6: 25,729 14,818 25,731 16,403 27,770 35,352 36,0, 63,029 88,758 103,576 129,307 145,710 173,480 208,8: 88,758 103,576 129,307 145,710 173,480 208,832 244,9(  6,462 7,501 9,284 10,486 12,495 14,85  (1,073)  (540)  9,508 12,090 14,167 14,640 18,014 18,904 17,79  8,099 19 (12)  8,246 8,882 9,175 10,774 12,756 13,25 2,090 7,403 (2,504) 16,249 11,413 25,2:  (540) (38) (3)  (23) (I)  (48) (3)  (91) (3)  (73) (3)  (11  17,614 22,402 29,871 21,260 44,943 42,997 56,22 13,140 30,754 53,156 83,027 104,287 149,230 192,22 30,754 53,156 83,027 104,287 149,230 192,227 248,4: 58,004 50,420 46,280 41,423 24,250 16,605 (3,54 34.65% 51.32% 64.21% 71.57% 86,02% 92.05% 101.4: $161,987 $164,927 177,642 183,464 215,481 255,114 265,93 35.81% 30.57% 26.05% 22.58% 11.25% 6.51% -1.33  41    City of Thrall Schedule ofContributions September: 30, 2022  Last 10 Fiscal Years (will ultimately be displayed)  2015  2016  2017  2018  2019  2020  2021  Actually Determined Contribution Contributions in relation to the actuariall determined contribution  $1 17,607 $ 20,336 $ 23,049 23,813 28,788 31,660 31,088 17,607 20,336 23,049 23,813 28,788 31,660 31,088  Contribution deficiency (excess) Covered employee payroll Contributions as a percentage of covere employee payroll Notes to Schedule ofContributions Valuation Date determined Notes Valuation Date: Notes  $161,987 $164,927 $177,642 183,464 215,481 255,114 265,933 10.87% 12.33% 12.97% 22.58% 11.25% 12.41% 11.699  12/31/2021  Actuarially determined contribution rates are calculated as ofDecember 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  Levell Percentage ofP Payroll, Closed  10 Year Smoothed Market 15% Soft Corridor 3.50% to 10.50% Including Inflation  2.5%  Investment Rate ofReturn 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  onaf fully generational basis with scale BB There were no benefit changes during the year.  Other/nformation: Notes  42    Donald L. Aliman, CPA, PC 4749 Williams Drive, Ste. 322 Georgetown, Texas 78633  The Accounting Fim of Donald L. Allman, GCPA  CERTIFIED PUBLIC ACCOUNTANI  INDEPENDENT AUDITOR'SI REPORTO ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE. AND OTHER MATTERS! BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED: IN  ACCORDANCE WITH GOPERMMENTAUDTTINGSTANDARDS  To thel Mayor & City Council City of Thrall, Texas  We have audited, in accordance with the auditing standards generally accepted in the United. States of America and the standards applicable to financial audits contained in Government Auditing. Standards issued by the Comptroller General of the United States, the financial statements oft the governmental activities, the 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, 2022 and the related notes to the financial statements, which collectively comprise the City of Thrall, Texas' basic Inp planning and performing our audit oft thei 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 thet financial statements, but noti fort the purpose of expressing an opinion ont the effectiveness of the City of Thrall, Texas' internal control. Accordingly, we do not express an opinion ont the effectiveness of the City of Thrall, Texas' Adeficiencyi in internal control exists when the design or operation of a 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. A material weakness isa deficiency, or a combination of deficiencies, ini internal control, sucht that therei is a reasonable possibility thata a material misstatement oft the entity's financial statements will not be prevented, or detected and corrected on: a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that isl less severe than ar material weakness, Our consideration ofi internal control was fori thel limited purpose described int thet first paragraph of this section and was not designed toi identify all deficiencies ini internal control that might be material weaknesses or, significant deficiencies. Givent these limitations, during our audit we did not identify any deficiencies ini internal control that we consider tol be material weaknesses. As part of obtaining reasonable assurance. about whether the City of Thrall, Texas' financial statements are freef from material misstatement, we performedt tests ofi its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect ont 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 and opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required tol be reported The purpose oft thist report is solely to describe the scope of our testing of internal control and compliance andi the results oft that testing, andr nott to provide an opinion ont the effectiveness oft the entity'si internal control or on compliance. This reporti is an integral part of an audit performed in accordance with Government. Auditing Standards inc considering the entity's internal control  financial statements, and! havei issued our report thereon dated April 14, 2023.  Internal Control over Financial Reporting  internal control.  yeti important enough to merit attention byt those charged with governance. However, material weaknesses may existt that haver not been identified.  Compliance and Other Matters  under Government Auditing. Standards. Purpose of this Report  and compliance. Accordingly, this communication is not suitable for any other purpose  Donpl L. Allman, CPA,PC DK C April 14,2023  43