CITY OF THRALL, TEXAS Audited Financial Statements Independent Auditor's Report And Supplemental Schedules For the Year Ended September, 30, 2020    CITY OF THRALL, TEXAS ANNUAL FINANCIAL REPORT TABLE OF CONTENTS Year Ended September 30, 2020  FINANCIAL SECTION  PAGE 1-2 3-8  Independent Auditor's Report on Financial Management's Discussion and Basic Financial Statements:  Statements.. Analysis..  Government-wide Financial Statements:  Statement ofl Net Position.. Statement of Activities.. Fund Financial Statements  10 11  Balance Sheet - Governmental  12  Funds..  Reconciliation of the Governmental Funds Balance Sheet  To the Statement of] Net Position..  13  Statement ofRevenues, Expenditures, and Changes in Fund Balances- - Governmental  14  Funds..  Reconciliation of the Statement ofl Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of  15 16  Activities.. Funds.  Statement of] Net Position - Proprietary  Statement ofRevenues, Expenses and Changes in Fund Net Position - Proprietary Statement of Cash Flows - Proprietary  17 18-19  Funds. Funds.    Notes to the Financial Statements.  20-39  Required Supplementary Information: Budgetary Comparison Statement - General  40 41 42  Fund.. Ratios.. Schedule of Contributions.  Schedule of changes in Net Position Liability and Related  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    Tho Acoounting m Donaldo L Allman, CPA,PC  DonaldL L. Allman, CPA, PC 4749 Williams Drive, Ste. 322 Gcorgetown, Texas 78633 Email: Almamadoalmancpicon  CERTIFIED PUBLIC. ACCOUNTANT  Independent Auditor's Report  To thel Honorable Mayor and Çity Council Report on the Financial Statements  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 fund information of the City of Thrall, Texas as of and for the year ended September 30, 2020, and the related notes to the financial statements, which collectively comprise the City of Thrall, Texas' basic financial statements as listed in 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 these 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 the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation oft the financial statements in order to design audit procedures that are appropriate in the circumstançes, but not for the purpose of expressing an opinion on the effectiveness oft the entity'sinternal 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 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for  statements. out audit opinions.  1  MEMBER1 TEXAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS &A AMERICANI INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 4749Williams Drive, Ste. 322, GEORGETOWN, TEXAS 78633 512-422-3700F FAX: 512-240-5460 WEBSITE www.denalmnanspsom    Opinions  In our opinion, the financial statements, referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major 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 in 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 tos supplement the basic finançial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generallyaccepted in the United States of America, which consisted of inquiries ofr 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 also issued our report dated March 22, 2021 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 ist to describe the scope of our testing ofi internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting 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.  Respectfully submitted,  H Donald L. Allman, CPA, PC Georgetown, TX March 22, 2021  2    City ofThrall, Texas Management: 's Discussion and. Analysis  September 30, 2020  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, 2020. Please read it in conjunction with the  city's financial statements, which follow this section.  Financial Highlights increase of $426,123.  The City's total net position decreased by $(151,069) for the year in comparison to the prior year The Proprietary Fund reported a net income of $36,518 before transfers for the fiscal year ended September 30, 2020. The General Fund reported a net loss of$(187,587) before transfers for the The City's Governmental Funds balance reported a net decrease of $(69,083) for the fiscal year  fiscal year ended September 30, 2020. ended September 30, 2020. Using this Annual Report  This annual report presents the following three components oft the 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's 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 ai management's discussion and analysis and a budgetary The govermment-wide, financial statements are designed to provide readers with a broad overview The Statement of Net Position presents information on all of the assets and liabilities of 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 is improving or deteriorating. Government-Wide Financial Statements  The Statement ofActivities 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 (Continued)  September. 30, 2020  Both the Statement of 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 and its citizens. Business activities include water and sewer services.  Both of the government-wide finançial statements distinguish functions of the City that are principally supported by taxes and intergovemmental revénues (governmental activities) from functions that are intended to recover all or a 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, 2020:  Goyernment-Wide Net Position  Governmental Activities 2020  Business-type Activities 2020  Total Primary Government 2020 3,832,367 4,404,428 4,595,294 9,219 219,608 1,848,313 2,067,921 2,135,046 104,319 2,258,902 2,327,971 231,474 (248,969) (143,675)  2019  2019  2019 3,980,883 6,614 199,485 1,935,561 74,386 208,180  Current and other assets Capitalassets Totalassets Deferred outflows ofresources Current liabilities Long-term liabilities Total liabilities Deferred inflows ofresources Net position: Net investment in capitalassets Restricted Unrestricted Total net position  261,106 $311,674 $ 310,955 $ 302,737 $ 572,061 $ 614,411  1,450,758 1,518,224 1,711,864 1,829,898 4,608 134,929 1,468,814 1,525,321 1,603,743 1,645,875 52,160 265,535 276,354 181,606 (386,572) (298,830)  2,381,609 2,462,659 2,692,564 2,765,396 4,611 84,679 379,499 464,178 52,159 1,993,367 2,051,617 49,868 137,603  3,306 120,554 37,193 172,612  3,308 78,931 410,240 489,171 37,193 35,568 155,155  $ 60,569 $150,136 $ 2,180,838 $2,242,340 $ 2,241,407 $2,392,476  Capital assets decreased by $(67,466) 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 $(56,507) in the General Fund and decreased by $(30,741)  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, 2020  Goyernment-wide Changes in Net Position  Govemmental Activities 2020 2019 751,080 623,707 98,020 (193,000) (89,567) 19,409 130,727  Business-type Activities 2020 494,318 36,518 (98,020) (61,502) 2,242,340  Total Primary Govemment 2020  2019  2019 1,272,944 426,123 426,123 1,966,353  Change in net position Totalrevenues Totalexpenses Transfers  563,493 $ 836,116 $ 530,836 $ 862,951 $ 1,094,329 $ 1,699,067  649,237 1,245,398 213,714 193,000 406,714 1,835,626 2,392,476  Change before transfers (187,587) 212,409  (151,069) (151,069)  Change in net position Prior Period Adjustment Net position beginning 150,136 Net position - ending  60,569 $ 150,136 $ 2,180,838 $2,242,340 $2,241,407 $ 2,392,476  The specific changes in revenues and expenses are shown in the tables that follow, along with a discussion of the  events giving rise to those changes.  Governmental Activities 2020 2019  Business-type Activities 2020  Total Primary Govemment 2020  2019  2019  Revenues Programrevenues: Charges for services Operating grants and contributions Interest income General revenues: Property taxes Sales tax Franchise taxes Other general revenues Total revenues  $ 47,596 $ 41,823 $ 530,604 $ 602,984 $ 578,200 $ 644,807  7,024 295 275,869 185,044 37,358 10,307  239,063 6,248 366 261,816 171,244 39,794 75,762 5  258,596 277  6,248 643 261,816 171,244 39,794 76,856  232  527 275,869 185,044 37,358 10,307  1,094  $5 563,493 $ 836,116 $ 530,836 $ 862,951 $1 1,094,329 $ 1,699,067    City of Thrall, Texas  Management! 's Discussion and. Analysis (Continued)  September 30, 2020  Govemmental Activities 2020 2019 564,317 $ 506,649 $ 71,267 56,095 19,740 15,024 14,431 12,526 81,325 33,413  Business-type Activities 2020  Total Primary Government 2020 564,317 $ 506,649 71,267 19,740 14,431 494,318  2019  2019 56,095 15,024 12,526 649,237  Expenses General government Public safety Municipal court Park Public Works Streets Waterand wastewater Totalexpenses  494,318  649,237  751,080 $ 623,707 $ 494,318 $ 649,237 $1,245,398 $ 1,272,944  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 $(10,819), restricted funds increased $8,994, and unrestricted fund balance The utility fund reported a change in net position of $(61,502) for the year, compared to $406,714 in the previous year. The investment in capital assets decreased $(58,250), restricted assets increased $14,300, and unrestricted  decreased $(87,742), for an overall net decrease in net position of$(89,567).  fund balance decreased $(17,552).  6    City ofThrall, Texas  Management! 's Discussion and Analysis (Continued) General Fund Budgetary Highlights  September. 30, 2020  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] presented net of depreciation. More detailed information can be found  on pages 29 and 30 in the notes to the financial statements.  Govemmental Activities 2020 2019  Business-type Activities 2020 200,000 1,833,763 506 13,131  Total Primary Goverment 2020 200,000 1,833,763 65,498 64,659 1,331,267  2019 200,000 1,912,177 611 15,662  2019  Land and CNN Construction inj progress Distribution and collection systems Buildings and improvements Equipment Infrastructure  2,971 $ 2,971 $ 134,209 $ 134,209 $ 137,180 $ 137,180  1,912,177 108,363 90,512 1,332,651  64,992 51,528 1,331,267 1,332,651  107,752 74,850  Totals at historical cost $1,450,758 $1,518,224 $ 2,181,609 $2,262,659 $ 3,632,367 $ 3,780,883  7    City ofThrall, Texas  Management 's Discussion and Analysis (Continued)  September 30, 2020  Debt  More detailed information on the Çity's debt can be found on pages 31-33 in the notes to the financial statements.  Govermental Activities 2020 2019 68,322 99,969  Business-type Activities 2020  Total Primary Govemment 2020 68,322  2019  2019 99,969  Revenue bonds Loans payable Capital leases payable Totals  $1,435,000 $1,460,000 $ 388,242 $ 411,042 $ 1,823,242 $ 1,871,042 $1,503,322 $1,559,969 $ 388,242 $ 411,042 $1,891,564 $ 1,971,011  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 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 PAGE LEFT BLANK INTENTIALLY)  9    City ofThrall, Texas Statement of Net Position  Asof September 30, 2020  Primary Govemment Activities  Governmental Business-type  Activities  Total 310,197 50,335 29,923 181,606 137,180 200,000 3,495,187 4,404,428 9,219 12,888 100,954 34,035 4,230 24,250 71,731 1,819,833 2,067,921 104,319 2,258,902 148,229 65,346 5,165 2,955 385 9,394 (248,969)  ASSETS  Cash and cash equivalents (note 2) Receivables (net, where applicable, ofallowances for uncollectibles): Accounts receivables Property taxes, sales taxes & franchise fees Fines receivable Internal balances Restricted cash (note 2) Capitalassets (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): Total OPEB Liability Net Pension Liability Due within one, year Due in more than one year Total liabilities Deferred Inflows ofResources NET POSITION Net investment in capitalassets Restricted for: Debt service Sales taxstreet repairs Municipal court Police training Park project Construction Unrestricted (deficit)  49,577 $ 260,620  50,335  29,923 181,606 2,971 1,447,787 1,711,864 4,608 10,876 75,305 2,115 12,125 48,748 1,454,574 1,603,743 52,160 265,535 106,212 65,346 5,165 2,955 385 1,543 (386,572)  134,209 200,000 2,047,400 2,692,564 4,611 2,012 25,649 34,035 2,115 12,125 22,983 365,259 464,178 52,159 1,993,367 42,017  7,851 137,603  Total net position  S  60,569 $ 2,180,838 $ 2,241,407  The accompanying notes are an integral part ofthe financial statements.  10        City ofThrall, Texas Balance Sheet-Govermental. Funds  As of September 30, 2020  Debt Fund  Special Funds  Total Funds 4 49,577 10,600 19,323 181,606  General Fund $4 49,577 $ 10,600 19,323  Service Revenue Governmental  ASSETS 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  106,212  75,394 75,394 $261,106  Total assets  $79,500 $106,212  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  10,876 75,305 $86,181 19,323 19,323  10,876 75,305 $ 86,181 19,323 19,323 106,212 65,346 5,165 2,955 385 1,543 (26,004) 155,602  106,212  65,346 5,165 2,955 385 1,543 75,394 75,394 $261,106  Unassigned  (26,004) (26,004) 106,212 $79,500 $106,212  Total liabilities, deferred inflows of resources, and fund balances  The accompanying notes are an integral part of the financial statements.  12    City ofThrall, Texas to the Statement ofl Net Position  Reconciliation of the Governmental Funds Balance Sheet  As of September. 30, 2020  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 not 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 inj 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 in 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  $ 155,602 (52,160) (12,125) (2,115) 4,608 19,323 (1,503,322) 1,450,758 $ 60,569  The accompanying notes are an integral part of the financial statements.  13    City ofThrall, Texas Statement of Revenues, Expenditures and Changes in Fund Balances Governmental. Funds  Fort the Year Ended September 30, 2020  Reyised and Restated for transfer from general fund to debt service  Debt Fund  Special Fund  Total Funds 286,469 185,044 37,358 25,583 10,307 295 545,056  General Fund 286,469 185,044 37,358 25,583 10,307 295 545,056  Service Revenue Governmental  REVENUES Sales tax Franchise taxes Municipal court fines Grant income Miscellaneous Inyestment 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  469,604 53,551 25,094 47,912 596,161 (51,105)  469,604 53,551 25,094 47,912 596,161 (51,105) (59,351) (56,647) (124,992) 223,012 (17,978) (69,083) 224,685  (59,351) (56,647) 121,497 5,499 5,499 100,713  Debt principal paid Transfers in  (124,992) 98,020 (26,972) (78,077) 52,073 (26,004) $106,212  3,495 3,495 71,899 75,394 $ 155,602  Total other financing sources (uses) Net change in fund balances  Fund balances beginning Fund balances ending  The.accompanying notes are an integral part of the financial statements  14    City ofThrall, Texas Reconciliation of the Statement ofl Revenues Expenditures and Changes in Fund Balancès Governmental. Funds to the. Statement of Activities  For the Year Ended September. 30, 2020  Net change in fund balances total governmental funds  $  (69,083)  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 princip ipal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of  (67,466)  Property tax revenues: Fine revenues:  19,323 (29,923)  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  56,647 (5,906) 6,841  in 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.  $  (89,567)  The a accompanying notes are an integral part of the financial statements.  15    City of Thrall, Texas Statement of Net Position Proprietary Fund  As of September 30, 2020  Business-type Activities Enterprise Funds $ 260,620  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  50,335 310,955  134,209 2,247,400 2,381,609 2,692,564 4,611 2,012 24,581 34,035 22,983 83,611 12,125 2,115 1,068 365,259 380,567 464,178 52,159 1,993,367 49,868 137,603 $ 2,180,838  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 OPEB Liability Accrued vacation Long-term debt Deferred Inflows of Resources NET POSITION Net investment in capital assets Restricted for debt service Unrestricted (deficit)  Total current liabilities  Total noncurrent liabilities Total liabilities  Total net position  Theaccompanying notes are an integral part of the financial statements.  16    City ofThrall, Texas Statement of Revenues, Expenses, and Changes inl Net Position Proprietary Funds  For the Year Ended: September 30, 2020  Business-type Activities Enterprise Funds $ 530,604 530,604 137,230 107,358 5,784 10,782 52,873 73,193 5,905 81,050 474,175 56,429 232 (20,143) (19,911) 36,518  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  (98,020) (61,502) 2,242,340 2,180,838  Change in net position  The accompanying notes are an integral part of the financial statements.  17    City ofThrall, Texas Statement of Cash Flows Proprietary Fund  For the Year Ended September 30, 2020  Business-type Activities Enterprise Funds  CASH FLOWS FROMOPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees  530,604 (274,297) (107,358) 148,949 (98,020) (98,020)  Net cash provided (used) by operating activities  CASH FLOWS FROM NONÇAPITAL 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 FROMINVESTING Interest and investment revenue received  (20,143) (22,800) (42,943)  Net cash provided (used) by capital and related financing activities  ACTIVITIES  232 232 8,218 252,402 $ 260,620  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 of thej financial statements.  18    CityofThrall, Texas Statement of Cash Flows Proprietary Fund (Continued)  For the Year Ended September 30, 2020  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 (Decrease) in Accounts payable Increase in Accrued liabilities Decrease in Net Pension Liability Decrease in Customer deposits Increase in Accrued vacation Net cash provided (used) by operating activities  $  56,429  81,050 (4,360) 9,925 5,905 148,949  Total Pension Expense is a non cash expense  The accompanying notes are an integral part of the financial statements.  19    CityofThrall, Texas Notes to the Financial Statements  September 30, 2020  1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  The City ofThrall, Texas (the City), is a general law city in Williamson County which is incorporated in the State of Texas. The City operates undera 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 ofthe 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 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 be included in the accompanying financial statements. The definition of the reporting entity is based primarily on the notion of financial accountability. A primary government is financially accountable for legally separate organizations ifits officials appoint a voting majority of an organization' 's governing body and either it 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 of the City for the year ended September 30, 2015.  C. FUND 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 andj proprietary fund financial statements place an emphasis on 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 to the Financial Statements (Continued)  September 30, 2020  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  C. FUND 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. Iti receives a greater variety and number of 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 toj 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 AND BASIS OF ACCOUNTING  Méasurement focus refers to whether aj particular type oft transaction will be recorded int 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. Goyernment-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 tot the class ofr nonexchange 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    CityofThrall, Texas Notes to the Financial. Statements (Continued)  September. 30, 2020  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. MEASUREMENT FOCUS ANDI 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 ofa accounting. 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, thei issuance of debt, and thej payment of debt 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 int 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 oft 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 is 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 proof of insurance, 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. A 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 of accounting. E. CASH ANDO CASH EQUIVALENTS  The 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: récorded as investments and are not treated as cash or cash equivalents.  22    CityofThrall, Texas Notes to the Financial Statements (Continued)  September 30, 2020  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)  F. INVESTMENTS  The City had no investments at September 30, 2018. The City is authorized to invest in certificates of deposit at the City's depository bank, obligations ofthe United States of America, and investment pools and no-load money market mutual funds which meet the conditions of the State of Texas Public Funds Investment Act. Money market mutual funds must be no-load: funds which arei regulated by the Securities and Exchange Commission, have a dollar-weighted avérage stated maturity of 90 days or fewer, and include the investment objective oft the maintenance of a stable net  asset value ofs1 for each share. G. - 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 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 arevalued 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  arevalued 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 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 off is included in an employee'sf final pay. The total liability for the governmental fund's accumulated paid time offof$ 6,708 is reflected in 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    CityofThrall, Texas Notes to the Financial Statements (Continued)  September 30, 2020  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 of the bonds as an adjustment to Int 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, and 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 a fund balance commitment. L. USE OF RESTRICTED RESOURCES ANDCOMMITED 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 forpurposes 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 being included in direct expenses. N. PROGRAM REVENUES AND INDIRECT EXPENSES  The government-wide: statement ofactivities is presentedi lina a format that 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 itself and 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    Cityo ofThrall, Texas Notès to the Financial Statements (Continued)  September 30, 2020  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 0. OPERATING ANDNONOPERATING 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 çollectible, 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 of Deposits  Custodial credit risk is the risk that in the event ofal 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 to secure the total amount of the City's funds on deposit, less any portion oft the deposit balance which is secured by FDIC coverage. The carrying amount of the City's deposits was $532,889 at year end and the bank balance was $532,889. Of the bank balance, $250,000 was insured by federal depository insurance and the remaining $282,889 was collateralized with securities held by the City's agent (safekeeping bank) in the City's name.  3 RECEIVABLES  Reçeivables 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  21,819 6,270 4,330 50,640  (2,496) $ 19,323  6,270 4,330 50,335  (305)  25    CityofThrall, Texas Notes to the Financial Statements (Continued) 4 AD VALOREM PROPERTYTAXES  September 30, 2020  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 ofe each year, a tax lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed. The October 1, 2019 levy was based upon 100 percent of the assessed market value of $43,800,943. The maximum tax rate permitted by the Constitution of the State ofTexas is $2.50 per $100.00 of assessed valuation. The tax rate for the October 1, 2019 levy was $.597740 for a levy of $275,869. 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 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 of 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, ifi necessary, legal action.  property taxes receivable is $10,784 and delinquent property taxes receivable are $11,034.  5 CAPITAL ASSETS  Primary Government  Beginning Balance $ 2,971 $ 2,971 229,085 358,324 1,523,329 2,110,738 (121,333) (283,474) (190,678) (595,485) 1,515,253 $ 7,260 17,716 33,413 9,077 $ 67,466 26  Ending $ 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 $1,450,758  Additions Retirement Balance  Governmental activities: Land Construction inj progress Total undepreciated assets Other capital lassets: Buildings and improvements Equipment & Vehicles Infrastructure  $  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  (42,760) (23,322) (1,384) (67,466) (67,466)  $1,518,224 $ (67,466) $  Depreciation expense for governmental activities was charged as follows:  Total governmental functions    CityofThrall, Texas Notes to the Financial, Statements (Continued) 5 - CAPITAL ASSETS (Continued)  September. 30, 2020  Primary Government Additions Retirement  Beginning Balance 114,209 $ 20,000 200,000 334,209 3,651,394 4,203 153,951 3,809,548 (1,739,217) (78,414) (3,592) (138,289) (1,881,098) (81,050) 1,928,450 (81,050) $2,262,659 $(81,050) $  Ending Balance 114,209 20,000 200,000 334,209 3,651,394 4,203 153,951 3,809,548 (1,817,631) (3,697) (140,820) (1,962,148) 1,847,400 $ 2,181,609  Business-type activities: Land Cert of convenience and necessity (CCN) Construction in 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  $  (105) (2,531)  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 portioni is transferred to the general fund bank account. The September transfer was made in October. The following is a summary of amounts due from and due to other funds by individual  major fund.  Payments to the City'sretirement, plan were made from the general fund, but withholdings from employees were recorded in both the utility fund and the general fund. The 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    City ofThrall, Texas Notes to the Financial Statements (Continued) 7 LONG-TERM DEBT  September 30, 2020  Long-term debt at September 30, 2020, is composed oft the following items:  Equipment loans - Payable out of the General Fund Equipment loans - Payable out of the General Fund  Loan payable to Frontier Bank secured by Tahoe; monthly installments of'$615 including principal and interest through March 20, 2020;  interest at 5.95 percent.  $  Loan payable to Frontier Bank sécured by backhoe; monthly installments of'$615 including principal and interest through June 16, 2019;  interest at 6.95 percent.  Loan payable to Frontier Bank sécured by truck; monthly installments of/$449 including principal and interest through May 20, 2021; 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 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  interest at 5.75 percent.  3,778 1,435,000  200,000  January 20, 2023; interest at 3.45 percent  21,954 42,754 188,242 4,359 1,068 1,897,155  Loan payable to Frontier Bank for Park Improvements, monthly installments of $1202.65, with an interest rate of 4.1%, monthly intallments beginning December 15, $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 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, 2020  7 LONG-TERM DEBT (Continued)  The following is as summary of long-term debt activity for September 30, 2020.  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 OPEB Liability Accrued vacation Business-type activities long-term liabilities  99,969 $ 1,460,000 20,712 1,288 4,359 $1,586,328 $ Beginning Balance 411,042 - 411,042 $ 20,711 1,287 1,068 - 434,108 $  $ (31,647) $ 68,322 $ 23,748  (25,000) (8,587)  1,435,000 12,125 2,115 4,359 Ending Balance 388,242  25,000  827  827 $(65,234) $1,521,921 $ 48,748  Due Within One Year 22,983  Additions Reductions  22,800  22,800 $ 388,242 $ 22,983  (8,586)  12,125 2,115 1,068  828  - 14,214 $ 403,550 $ 22,983  The City was in compliance with all significant limitations and restrictions contained in the debt agreements at year  end.  29    City ofThrall, Texas Notes to the Financial Statements (Continued)  September 30, 2020  7 LONG-TERM DEBT (Continued)  Debt service requirements on outstanding bonds and loans are as follows:  Governmental Activities Loans Principal 48,748 47,921 42,057 29,596 25,000 60,000 160,000 195,000 240,000 295,000 360,000 $1,503,322  Business-Type Activities Bonds and Loans Principal 22,983 28,169 28,360 28,556 75,000 26,887 99,169 55,193 23,925  Year Ended September 30 2021 2022 2023 2024 2025 2026-2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052  Interest 57,464 55,770 54,197 52,963 52,175 101,800 234,600 198,900 155,600 102,500 37,400 $1,103,369  Interest 19,034 17,783 16,407 15,014 13,611 34,100 25,646 7,318  d$ 388,242 $ 148,913  8 CAPITAL LEASES PAYABLE  The City is obligated under a lease agreement which has been classified as a capital lease. Property under capital lease consists of equipment totaling $34,993. The annual amortization has been included in depreciation expense and a total accumulated depreciation of/$34,993 has been recorded against the property under capital lease. The lease is  payable out oft the general fund.  30    City ofThrall, Texas Notes to the Financial Statements (Continued) PENSION PLAN Plan Description  September 30, 2020  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 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) oft the Internal Revenue Code. TMRS issues a publicly available comprehensive annual report (CAFR) that can be  obtained at www.tmrs.com. B.J Benefits Provided  Alleligible employees of the city are required toj 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 intérest 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 12,24 or 361 monthly payments, which cannot exceed 75% At the December 31, 2019 valuation and measurement date, the following employees were covered by the benefit  the/city, within the options available in the state statutes governing TMRS.  of the member's deposits and interest. Employees covered by benefit terms.  terms.  Inactive employees or beneticiaries currently receiving benefits 0 Inactive employees entitled to but not yet receiving benefits  7 6 13  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 ofthe 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 of 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% of their annual gross earnings during the fiscal year. The contribution rates for the City of Thrall were 5% and 5% in calendar years 2019 and 2018 respectively. The city'scontributions to' TMRS: for the year ended September 30, 2020 were $18,014, and were in excess ofther required  accrued liability.  contributions.  31    CityofThrall, Texas Notes to the Financial, Statements (Continued) 9 PENSION PLAN (Continued), D.Net] Pension Liability  September 30, 2020  The city's Net Pension Liability (NPL) was measured as of December 31, 2019, and the Total Pension Liability (TPL) The Total Pension Liability in the December 31, 2019 actuarial valuation was determined using the following actuarial  used to calculate thel Net Pension Liability was determined by an actuarial valuation as oft that date.  Actuarial assumptions: assumptions: Inflation 2.5% per year  Ovérall payroll growth 3.5-10.5% per year  Investment Rate of Return 6.75% net of pension plan investment expense, including inflation  Salary increases werel based on a service-related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender-distinct RP2000 Combined Healthy Mortality Table, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB on account for future mortality improvements. For disabled annuitants, the gender-distinct RP2000 Disabled Retiree Mortality Table is used, with slight Actuarial assumptions used in thel December 31, 2019, valuation were based on the results of actuarial experience studies. The experience study in' TMRS was for the period. January 1,2010 through December 31,2015, first used in the December 31,2016 valuation. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 20101 through 2014, and dated December 31, 2017. These assumptions were first used in the December 31, 2016 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 in regard to the allocation of invested assets is established and may be amended by the TMRS Board ofTrustees. Plan assets are managed on 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 on pension plani investments was determined using al 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 by the target asset allocation percentage and by adding 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 for the 2017 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 llocationLong-lerm 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 ofThrall, Texas Notes to the Financial, Statements (Continued) NOTE9-PENSION PLANS (çontinued)  September. 30, 2020  Disçount Rate  The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability.  City ofThrall September: 30, 2020  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. Net investment income 5. Administrative Expense 6. Other  $  19,286 10,486 (929) (1,073) 27,770 145,710 173,480 18,014 10,774 16,249 (91) (3) 44,943 104,287 149,230 24,250 86.02% 215,481 11.25%  $ $  4. Benefit payments, including refunds of employee contributions  7. Net change in plan fiduciary net position 8.1 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 a 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]  da $  $  33    City ofThrall, Texas Notes to the Financial Statements  September. 30, 2020  NOTE 9 - PENSION PLANS (Continued)  Sensitivity of the net pension liability to changes in the discount rate.  The following presents the net pension liability oft the City, calculated using the discount rate of6.75%, 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 $5,509  Discount rate (5.75%) Discount Rate (6.75%) Discount Rate (7.75%)  City's net pension liability $47,031 Pension Plan Fiduciary Net Position  $24,250  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, 2020  1. Total Service Cost  $19,286 10,486 (10,774) (7,039) 91 3 (638) (1,842) (1,590) 1,036 9,019  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) ofResources Assets  12. Total Pension Expense  Actuarial valuations involve estimates oft 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 of the 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 ofassets.  34    City ofThrall, Texas Notes to the Financial Statements  September 30, 2020  NOTE9-PENSION PLANS (Continued)  CITY OF THRALL SEPTEMBER 30, 2020  SCHEDULE OF OUTFLOWS AND INFLOWS - CURRENT AND FUTURE EXPENSE  Recognition Period (or yrs)  2019 Recognized in current pension expense  Total (Inflow) Resources  Deferred (Inflow) Outflow in 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]  3.1400 3.1400  $ (929) $ (1,073)  $ $  (296) (342) (638)  $ $  (633) (731) (1,364)  5.0000  $ (9,210)  $  (1,842) (1,842)  $  (7,368). (7,368) (8,732)  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 e$ (3,213) (3,219) (1,132) (1,965) (500) $(10,029)  2020 2021 2022 2023 2024 Thereafter Total  35    City ofThrall, Texas Notes to the Financial Statements  September 30, 2019  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 employées provides a lump-sum payment approximately equal to the employee'sa 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 2019, 2018, and 2017 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.  is 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 2015 2016 2017 2018 2019  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 toj 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, 2010 to December 31,2014. These assumptions were adopted in 2015 and first All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements The Mortality Experience Investigation Study covering 2009 through 2011 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, 2015 valuation. under GASB Statement No. 68.  scale BB to account for future mortality improvements subject to the 3% floor.  36    CITYOF THRALL, TEXAS SEPTEMBER, 30, 2020  NOTESTO BASIC "MANCALSTATENENS  NOTE 10-SUPPLEMENTAL DEATH 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 the Net Other Post Employment Benefits Liability  Increase (Decrease) Total OPEBLiability $11,950 1,314 468 0 (817) 3,265 0 4,230 $16,180 7.51%  Balance at 12/31/18 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 a Percentage of Covered Payroll Sensitivity oft the Total OPEB Liability to Changes in thel Discount Rate  The following presents the total OPEB liability of the City, calculated using the current discount rate of3.31% as well as what the City'st 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 the Fidelity Index's20  year Municipal GOAA Index.  1% Decrease in $20,454  1% Increase in Discount Rate (3.75%) $13,089  Discount Rate (1.75%) Discount Rate (2.75%)  Total OPEB liability  $16,180  CITY OF THRALL SCHEDULE OF OPEB EXPENSE SEPTEMBER 30, 2020  1. Total Service Cost 2. Interest on the Total OPEB Liability 3. Changes in Benefitterms 4. Employer administrative costs  1,314 468  5. Recognition of deferred outflows/inflows of resources 6. Difference between expected and actual experience 7. Changes in assumptions or otherinputs  140 869 2,791  Total OPEB Expense  37    CITY OF THRALL, TEXAS SEPTEMBER, 30, 2020  NOTES TO BASIC MIMANCIALSTATENENES  NOTE 10-SUPPLEMENTAL: DEATH BENEFITS PLAN  2019 Recognized in current pension expense  Deferred (Inflow) Outflow in future expense  Due to Liabilities: Difference in expected and actual experie [actuarial (gains) orlosses) Difference in assu [actuarial (gains)orlosses) Due to Assets: Difference in projected and actual earnings onpension plan investments [actuarial (gains)orlosses)  3.5900 3.5900  (817) 3,265  (228) 909 681  (589) 2,356 1,767  Total:  1,767  Deferred Outflows and Deferred Inflows of Resources, by year, to be recognized in future pension  expense as follows:  Net deferred outflows (inflows) of resources 1,009 1,009 577 10 2,605  2020 2021 2022 2023 2024 thereafter Other Information  Due tothe 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 to pay related benefits. In order to determine the retiree portion of 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 to the Financial Statements 11. RISK MANAGEMENT  September 30, 2020  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. The premiums paid to TML result in the transfer ofr risk to the pool. Proprietary fund accounts receivable are concentrated within the geographic service area oft the utility system, which isv 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 $50,640. Utility customer deposits  12 CONCENTRATIONS OF CREDIT RISK  held at year end totaled $34,035. 12 SIGNIFICANT BUDGETOVERAGES  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 in revenues and the payments to the State in expenditures. Fines collected on behalfof 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 of a police vehicle and a backhoe were not included  should not be included ini the City'sexpenditures.  when the City adopted the annual budget. NOTE13-SUBSEQUENT EVENTS  The City did not have any subsequent events through March 22, 2021, which is the date the financial statements were available to bei issued for events requiring recording or disclosure in the financial statement for the fiscal year  ended September 30, 2020.  39    REQUIRED SUPPLEMENTAL INFORMATION    City ofThrall, Texas Budgetary Comparison Schedule General Fund  For the Year Ended. September 30, 2020  Actual Amounts Budgetary Basis 286,469 185,044 37,358 25,583 10,307 295 545,056  Variance With Final Budget 16,229 36,148 (2,218) (60,817) (4,585) 8,307 295 (6,641)  Budgeted Amounts Original 270,240 148,896 39,576 86,400 4,585 2,000 551,697  Final 270,240 148,896 39,576 86,400 4,585 2,000 551,697  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  416,266 127,712 543,978 7,719  417,568 127,712 545,280 6,417  469,604 53,551 47,912 25,094 596,161 (51,105)  (52,036) 74,161 (47,912) (25,094) (50,881) (57,522)  Total expenditures Excess (deficiency) ofr revenues over expenditures  OTHER FINANCING SOURCES (USES)  Capital Outlay Debt issued Debt service principal paid Debt service interest paid Transfers In Transfers out  (56,647) (59,351) 98,020 (17,978) (69,083) 224,685  (56,647) (59,351) 98,020 (17,978) (75,500)  Total other financing sources (uses) Net change in fund balances  7,719 224,685  6,417 224,685  Fund balances beginning Fund balances - ending  $232,404 $231,102 40  155,602 $ (75,500)    Schedule of Changes in Net Pension Liability and) Related Ratios Last ten years (will ultimately be displayed)  Total pension liability 1.Service Cost 2. Interest (ont the Total) Pension Liability) 3.0 (hanges of benefit terms 4.1 Difference between expected and actual experience 5.Çhanges of assumptions 6.1 Benefit payments, including refunds of employee contri 7.1 Net change in total pension liability 8. Total pension liability beginning 9. Total pension liability ending Plan fiduciary net position 1.Contributions employer 2. Çontributions employee 3.1 Net investment income 4. Benefit payments, including refunds of employee contrib 5. Administrative Expense 6. Other 7. Net change inj plan fiduciary net position 8.1 Plan fiduciary net position beginning 9. Plan fiduciary net position ending Net pension liability [A.9-B.9] Plan fiduciary net position as a percentage of the total pension liability [B.9/A.9] Covered-employee payroll Net pension liability as a percentage of çoveredemployee payroll [C/EI  2014 3,871 51,433  2015 5,128 4,861 3,479  2016  2017 2018  2019 19,286 10,486 (929) (1,073)  7,725 10,724 13,936 15,633 16,457  6,462 7,501 9,284  1,537 (5,580) 3,137 (9,338)  (540)  $ 63,029 25,729 14,818 25,731 16,403 27,770 $63,029 88,758 103,576 129,307 145,710 173,480  63,029 88,758 103,576 129,307 145,710  7,305 5,835  9,508 12,090 14,167 14,640  18,014 10,774 (91) (3)  8,099 19 (12)  8,246 8,882 9,175 2,090 7,403 (2,504) 16,249  (540) (23) (38) (48) (1) (3) (3)  - 13,140 17,614 22,402 29,871 21,260 44,943 $13,140 30,754 53,156 83,027 104,287 149,230 $ 49,889 58,004 50,420 46,280 41,423  13,140 30,754 53,156 83,027 104,287  24,250  20.85% 34.65% 51.32% 64.21% 71.57% 86.02% $116,695 $161,987 $164,927 177,642 183,464 215,481 42.75% 35.81% 30.57% 26.05% 22.58% 11.25%  41    City of Thrall Schedule ofContributions September 30, 2020  Last 10 Fiscal Years (will ultimately be displayed)  2014  2015  2016  2017  2018  2019  Actually Determined Contribution Contributions in relation to the actuarially determined contribution  1 13,140 $ 17,607 $ 20,336  2 23,049 23,813 28,788  13,140  17,607  20,336  23,049 23,813 28,788  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  $116,695 $161,987 $164,927 $177,642 183,464 215,481  11.26% 12/31/2019  10.87%  12.33%  12.97% 22.58% 11.25%  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 Perioc 9 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 of 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  ona 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  The Mecomniing Fim Donaldl Allman, CPA  PL,  CERTIFIED PUBLIC ACCOUNTANT  INDEPENDENT AUDITOR 'S REPORT ONI INTERNAL CONTROL OVER FINANCIAL REPORTING ANDON COMPLIANCE AND OTHER MATTERS BASEDO ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN  ACCORDANCE WITH GOVERMMENTA AUDITING: STANDARDS  To thel Mayor & City Council Cityjof Thrall, Texas  Wehave audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City of Thrall, Texas, as of and for the year ended September 30, 2020 and the related notes to the financial statements, which collectively comprise the City of Thrall, Texas' basic In planning and performing our audit of 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 on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Cityjof Thrall, Texas' internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Thrall, Texas' A deficiency in internal control exists when the design or operation ofa control does not allow management or employees, int the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material wedkness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility thata a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a1 timely basis. A significant deficiency isa deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, Ouriconsideration ofi internal control was for thel limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies ini internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider tol be material weaknesses. As part of obtaining reasonable assurance about whether the City of Thrall, Texas' financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, proyiding an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported The purpose of this report is solely to describe thes scope of our testing ofi internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness oft the entity's internal control or on compliance. This report isan intègral part of an audit performedi in accordance with Government Auditing Standards in considering the entity's internal control  financial statements, and have issued our report thereon dated March 22, 2021.  Internal Control over Financial Reporting  internal control.  yet important enough to merit attention by those charged with governance. However, material weaknesses may exist that have not been identified.  Compliance and Other Matters  under Government Auditing Standards. Purpose of this Report  and compljance. Accordingly, this communication is not suitable for any other purpose  Donald L. Allman, CPA, PC Georgetown, TX March 22, 2021  43