HomeMy WebLinkAboutResolution - 2019-R0039 - CAFR - 02/25/2019Resolution No. 2019-R0039
Item No. 8.17
February 25, 2019
RESOLUTIO
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the City Council of the City of Lubbock hereby accepts the City of Lubbock
Comprehensive Annual Financial Report for the Fiscal year that ended September 30, 2018.
Passed by the City Council on Eebnja y 2 , 2019
DANIEL M. POPE, MAYOR
ATTEST:
A----
Re*a Garza, City Secr tart'
APPROVED AS TO CONTENT:
D. lu Kost ich, Chief Finan al Officer
APPROVED AS TO FORM:
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Amy . Sims, Dep ty tty Attorney
vw:ccdocs/RES.Comp Fin rpt-18
February 5, 2019
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COMPREHENSIVE
ANNUAL FINANCIAL
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For the Fiscal Year Ended September 30, 2018
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Comprehensive Annual Financial Report
List of Elected and Appointed Officials
For the Fiscal Year Ended September 30, 2018
City Council
Daniel M. Pope
Mayor
Jeff Griffith
Mayor Pro Tem —
District 3
Juan A. Chadis
Council Member - District 1
Shelia Patterson Harris
Council Member -
District 2
Steve Massengale
Council Member - District 4
Randy Christian
Council Member —
District 5
Latrelle Joy
Council Member —
District 6
Appointed Officials
W. Jarrett Atkinson City Manager
Chad Weaver City Attorney
Rebecca Garza City Secretary
Finance Staff
D. Blu Kostelich
Chief Financial Officer
Linda Cuellar, CPA
Director of Accounting
Cheryl Brock
Director, Financial Planning and Analysis
Brack Bullock
Accounting Manager
Veronica Valderaz
Accounting Manager
Deborah Hansard
Senior Accountant
Amber Aguilar
Senior Accountant
Amber Painter, CPA
Senior Accountant
Meg Beverly
Senior Accountant
Andy Burcham
Assistant Director, LP&L
E. Chad Sales
Financial Planning & Analysis Manager, LP&L
Ranu Manik, CPA
Director of Finance, LP&L
1
City of Lubbock, Texas
Comprehensive Annual Financial Report
Year Ended September 30, 2018
TABLE OF CONTENTS
Page
List of Elected and Appointed Officials .................................................................. i
Tableof Contents.................................................................................................... ii
INTRODUCTORY SECTION
Letterof Transmittal............................................................................................... I
Certificate of Achievement in Financial Reporting...............................................16
OrganizationalChart.............................................................................................17
FINANCIAL SECTION
Independent Auditor's Report ................................................................................19
Management's Discussion and Analysis..............................................................23
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Position...............................................................................41
Statement of Activities....................................................................................42
Fund Financial Statements:
Governmental Fund Financial Statements
Balance Sheet — Governmental Funds.............................................................44
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position...................................................................45
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds..........................................................46
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances of Governmental Funds to the
Statement of Activities..................................................................................47
Proprietary Fund Financial Statements
Statement of Net Position — Proprietary Funds................................................48
Reconciliation of the Statement of Net Position - Proprietary Funds to
the Statement of Net Position.......................................................................53
Statement of Revenues, Expenses and Changes in Fund Net Position -
ProprietaryFunds..........................................................................................54
Reconciliation of the Statement of Revenues, Expenses and Changes
in Fund Net Position - Proprietary Funds to the Statement
ofActivities...................................................................................................57
Statement of Cash Flows - Proprietary Funds.................................................58
Notes to Basic Financial Statements......................................................................60
Required Supplementary Information:
Schedule of Changes in Net Pension Liability and Related Ratios — TMRS ......... III
Schedule of Contributions — TMRS........................................................................112
Schedule of Changes in Net Pension Liability and Related Ratios — Lubbock Fire
PensionFund........................................................................................................113
Schedule of Contributions — Lubbock Fire Pension Fund......................................114
Schedule of Changes in Total OPEB Liability and Related Ratios ........................115
General Fund Mandatory Budgetary Comparison Schedule..................................116
ii
Combining Fund Statements and Schedules:
Nonmaior Governmental Funds
Combining Balance Sheet — Nonmajor Governmental Funds.......................122
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances — Nonmajor Governmental Funds...............................................128
Budgetary Comparison Schedule — Special Revenue Funds and
DebtService Fund.......................................................................................134
Nonmaior Enterprise Funds
Combining Statement of Net Position — Nonmajor Enterprise Funds ........... 138
Combining Statement of Revenues, Expenses and Changes in Fund Net
Position — Nonmajor Enterprise Funds..........................................................142
Combining Statement of Cash Flows — Nonmajor Enterprise Funds ............144
Internal Service Funds
Combining Statement of Net Position — Internal Service Funds ...................148
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position — Internal Service Funds ............................152
Combining Statement of Cash Flows — Internal Service Funds ....................154
Nonmaior Component Units
Combining Statement of Net Position — Nonmajor Component Units ..........
158
Combining Statement of Activities — Nonmajor Component Units ..............160
Discretely Presented Component Units
Statement of Net Position — Urban Renewal Agency....................................162
Statement of Revenues, Expenses and Changes in Fund
Net Position — Urban Renewal Agency.....................................................163
Statement of Cash Flows — Urban Renewal Agency.....................................164
Statement of Net Position — Vintage Township Public Facilities Corp .........
165
Statement of Revenues, Expenses and Changes in Fund
Net Position — Vintage Township Public Facilities Corp ..........................166
Statement of Cash Flows — Vintage Township Public Facilities Corp ..........167
STATISTICAL SECTION (unaudited)
Table A: Net Position by Component............................................................170
Table B: Changes in Net Position..................................................................171
Table C: Fund Balance of Governmental Funds ........................................... 173
Table D: Changes in Fund Balances of Governmental Funds .......................174
Table E: Tax Revenues by Source.................................................................175
Table F: Assessed and Estimated Actual Value of Taxable Property ...........176
Table G: Principal Taxpayers........................................................................177
Table H: Property Tax Levies and Collections..............................................178
Table I: Property Tax Rates — Direct and Overlapping Governments ..........
179
Table J: Ratio of Outstanding Debt by Type................................................180
Table K: Ratio of Net General Bonded Debt to Assessed Value and
Net Bonded Debt per Capita....................................................................181
Table L: Computation of Legal Debt Margin................................................182
Table M: Revenue Bond Coverage — LP&L and Water Bonds.....................183
Table N: Ratio of Annual Debt Service Expenditures for General
Obligation Bonded Debt to Total General Governmental
Expenditures............................................................................................184
Table O: Computation of Direct and Overlapping Bonded Debt —
General Obligation Bonds in Governmental Activities ..........................185
iii
Table P: Demographic Statistics....................................................................186
Table Q: Principal Employers........................................................................187
Table R: Full-time Equivalents City Government Employees by Function.. 18 8
Table S: Operating Indicators by Function/Program.....................................189
Table T: Capital Assets Statistics by Function/Program...............................190
COMPLIANCE REPORTS
Schedule of Expenditures of Federal Awards.....................................................191
Schedule of Expenditures of State Awards.........................................................195
Independent Auditor's Report on Internal Control over Financial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed in Accordance with Government Auditing
Standards........................................................................................................197
Independent Auditor's Report on Compliance for Each Major Program and
on Internal Control over Compliance in Accordance with Uniform
Guidance and the State of Texas Uniform Grant Management Standards ....199
Schedule of Findings and Questioned Costs.......................................................201
1v
10.
city of
Lub ock
TEXAS
P.O. Box • 1625 13th Street • Lubbock, Texas 79457
(806) 775-0000 • Fax (806) 775-0001
bruary 6=11 I
ERnorable Mayor, City Council, and Citizens of Lubbock, Texas:
are pleased to submit the Comprehensive Annual Financial Report (CAFR) of the City of Lubbock,
MM for the fiscal year ended September 30.201 1. The purpose of the CAFR is to provide accurate
and meaningful information concerning the City's financial condition and performance. In addition,
independent auditors have verified that the City has fairly presented its financial position, in all material
respects, in accordance with accounting principles generally accepted in the United States of America.
Re CAFR satisfies Section 103.001 of the Texas Local Government Code requiring annual audits of all
g
municipalities. Responsibility for both the accuracy of the data and the completeness and fairness of the
presentation, including all disclosures, rests with the City. We believe the data is accurate in all material
respects and is presented in a manner that fairly sets forth the financial position and results of the City. We
also believe all disclosures necessary to enable the reader to gain an understanding of the City's financial
affairs m included. To provide a reasonable basis for making these representations, City management has
an established comprehensive internal control framework that is designed: 1) to protect the City's assets
from loss, theft, or misuse; and 2) to compile sufficient, reliable information for the preparation of the City's
financial statements, in conformity with Generally Accepted Accounting Principles (GAAP). Because the
cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal
controls Is designed to provide reasonable, rather than absolute, assurance that the financial statements are
free from material misstatement.
Me City's financial statements � audited b Weaver and Tides ■ licensed certified public
y v
accountants' firm. The goal of the independent audit is to provide reasonable assurance that the financial
statements are free of material misstatement. The independent audit involves:
• examining evidence on a test basis that supports the amounts and disclosures in the financial
statements,
• assessing the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation.
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
TIRependent accountants concluded that the City's financial statements are in conformity with GAAP,
are fairly presented, and there is a reasonable basis for providing an unMEed opinion. The independent
nlditor's report is presented as the first component of the financial section of this report.
Me independent accountants' audit of the City's financial statements is art of a broader, federally
p Y p Y
mandated "Single Audit," which is designed to meet the special needs of federal granting agencies. These
reports are available in the City's CAFR. The standards governing Single Audit engagements require the
independent auditor to report on several facets of the City's financial processes and controls:
lair presentation of the financial statements,
Internal controls over financial reporting and the administration of federal awards, and
■ompliance with legal and grant requirements.
GAA ires management to provide a narrative introduction, overview, and analysis to accompany the
basic financial statements in the form of a Management Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A. The City's MD&A is found immediately following the
report of the independent auditors.
CITY OVERVIEW
Description of the Cit
The City is a political subdivision and municipal corporation of the State, duly organized and existing under
the laws of the State, including the City's Home Rule Charter. The City was incorporated in 1909 and first
adopted its Home Rule Charter in 1917. The City operates under a Council/Manager form of government
with a City Council comprised of the Mayor and six Council members. The Mayor is elected at -large for
a two-year term ending in an even -numbered year. Each of the six members of the City Council is elected
from a single -member district for a four-year term of office. City Council elections are held every two
years, with elections for Council members in Districts 1, 3, and 5 being staggered with elections for Council
members in Districts 2, 4, and 6. The City Manager is the chief administrative officer of the City.
The City is empowered to levy a property tax on both real and personal properties located within its
boundaries. It is also empowered by state statute to extend its corporate limits by annexation, which occurs
periodically as the City Council deems appropriate. The 2010 Census population for the City was 229,573;
the estimated 2018 population is 261,946. The City covers approximately 136 square miles.' The
organizational chart of the City is shown following the transmittal letter.
In accordance with generally accepted accounting principles and Codification of Governmental Accounting
Standards, Section 2100, Defining the Financial Reporting Entity, " these financial statements present the
C'It' the primary government) and its component units. The component units discussed below are included
in the City's financial reporting entity because of the significance of their operational or financial
relationship with the City. The criteria established by the GASB for determining the reporting entity
includes financial accountability and whether the financial statements would be misleading if data were not
included. West Texas Municipal Power Agency (WTMPA) and the Lubbock Metropolitan Planning
Organization are blended component units. Discretely presented component units include Urban Renewal
1 City of Lubbock GIs Department.
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
Agency (URA), Civic Lubbock, Inc., Market Lubbock Economic Development Corporation, dba Market
Lubbock, Inc., Lubbock Economic Development Alliance, and the Vintage Township Public Facilities
Corporation. Additional information on the component units is found in the footnotes.
City Services
The City provides a full range of services including public safety (police and fire services), electric, water,
wastewater, storm water, solid waste, public transportation (airport and transit), health and social services,
cultural and recreation, highways and streets, planning and zoning, and general administrative services.
Public Safety: The Police Department serves and protects the public by conducting criminal investigations
and enforcing laws governing public safety and order. During FY 2018 a public safety improvement project
was approved. This will include the building of three police substations, a new police headquarters
building, and a new property room. These projects will take approximately 3 years to complete. As part of
an effort to reach the goal of two officers for every 1,000 residents, the Police Department hired 23 new
police recruits in FY 2018. As of September 30, 2018, the Police Department was staffed with 420 sworn
officers plus an additional 9 Police Academy Recruits. In FY 2018, the Police Department had 310,005
responses to primary and backup dispatched calls for service with an average response time to Priority 1
calls of 6.54 minutes.
Lubbock Fire Rescue is dedicated to providing unparalleled emergency response and life safety services
for the City. As of September 30, 2018, the Fire Department operated 19 fire stations and was staffed with
404 sworn firefighters. The construction of a new Emergency Operations Center began in December
2016, and was completed in the second quarter of FY 2017. Improvements continue for fire stations
citywide as a result of funding for fire station renovations appropriated in the FY 2018 budget. We will
continue to improve and renovate our facilities with $300,000 being allocated for FY 2019. In FY 2018,
the Fire Department responded to 18,985 calls, an average of 52 calls per day.
Electric Utility: The City's municipally owned electric utility system, known as Lubbock Power and Light
(LP&L), was established in 1916, and is at present the largest municipal system in the West Texas region
and the third largest municipal system in the State of Texas. Electric service in the City is provided by
LP&L, South Plains Electric Cooperative, and Southwestern Public Service (SPS). LP&L owns and
maintains 106,555 meters as of September 30, 2018, 37 substations, 4,312 total miles of primary and
secondary distribution lines, and approximately 105 miles of transmission lines. The average daily electric
consumption is roughly 7,175 MWh.
On November 2, 2004, Lubbock voters elected to amend the City Charter to provide for an Electric Utility
Board (EUB), which governs, manages, and operates LP&L today. The City Council retains authority for
appointment of board members, approval of the operating and capital budget, approval of rates for electric
service, eminent domain, and approval of debt financing.
A Transaction Agreement for Total Requirements Power Service (SPS Power Agreement) between the
West Texas Municipal Power Agency (WTMPA) and SPS provides that SPS serve the entire capacity and
energy requirements of WTMPA members (of which LP&L is a member). The term of the agreement is
through the hour ending at midnight on May 31, 2019, unless cancelled earlier. After the termination of
the SPS Power Agreement, capacity and energy supply will be provided by a 170MW partial requirements
contract with SPS, effective June 1, 2019 through May 31, 2044; a 400MW Capacity and Energy
Scheduling Contract with SPS, effective June 1, 2019 through May 31, 2021; a 100.8MW power purchase
agreement between WTMPA and Elk City II Wind, LLC, effective June 1, 2019 through May 31, 2032;
and 112 MW of dependable natural gas fired generation, with approximately 112MW anticipated to be
available in 2019 to meet LP&L's load requirements.
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
On September 24, 2015 LP&L announced it's intent to join the Electric Reliability Council of Texas
(ERCOT). Shortly after the announcement, LP&L initiated the process to formally join the Texas intrastate
electric grid, and in February 2016 the PUC established Project No. 45633, Project to Identify Issues to
Lubbock Power & Light's Proposal to Become Part of the Electric Reliability Council of Texas (the
"Project"). In March 2016, LP&L submitted a transmission integration study into the Project at the request
of the PUC, and ERCOT submitted its transmission integration study into the Project in June 2016. LP&L's
transmission integration study was conducted by expert engineering consultants who worked in close
coordination with LP&L staff. At the June 2016 PUC Open Meeting, the PUC identified the need for joint
cost -benefit studies by SPP and ERCOT followed by a public interest determination docket and a Certificate
of Convenience and Necessity ("CCN") case. In addition to the cost -benefit studies conducted by SPP and
ERCOT, LP&L performed its own cost -benefit analysis, looking closely at every technical component of
the future transition. On June 30, 2017 and July 7, 2017 ERCOT and SPP respectively filed their studies
with the PUC and on September 1, 2017 LP&L filed its study and submitted its formal application to join
ERCOT.
The filing of Lubbock's application with the Public Utility Council followed two years of extensive studies
and research conducted by multiple stakeholders, including LP&L, to determine how Lubbock's entry to
the ERCOT would affect ERCOT, SPP and Lubbock ratepayers. On September 1, 2017, LP&L filed its
application in PUC Docket No. 47576, Application of the City of Lubbock through Lubbock Power and
Light for Authority to Connect a Portion of Its System with the Electric Reliability Council of Texas
("Application"). Through the Application LP&L was seeking Commission authority to disconnect Affected
Load from SPP and to connect to ERCOT, along with related findings that would facilitate LP&L's
integration into the ERCOT system, consistent with the public interest.
From October 2017 to January 2018, LP&L worked closely with ERCOT and PUC staff in preparation of
a public interest hearing which took place in January 2018. In March 2018, the PUC approved the
integration of the Affected Load to the ERCOT system through an Order in PUC Docket No. 47576 ("PUC
Order"). With approval by the PUC, LP&L then moved into the next phase of the ERCOT integration
project which is comprised of the construction of transmission assets to connect the LP&L system to the
ERCOT power grid.
The additional infrastructure necessary for the ERCOT integration will be studied and decided upon as part
of the CCN case to take place through the PUC. A CCN case is expected to be initiated in the last quarter
of 2018. LP&L currently estimates the cost of additional infrastructure necessary for LP&L to integrate
into ERCOT at approximately $400 million, of which approximately one-half is expected to be owned by
LP&L.
Capital projects currently included in LP&L's existing long-term capital improvement plan are largely
related to reliability and will cover a portion of system improvements necessary prior to a final transition.
Additional areas of construction needed, such as new transmission lines and substations, will be studied
and decided upon as part of the CCN case to take place through the PUC. The load proposed to interconnect
with ERCOT excludes all load related to the partial requirements agreement with SPS, and the load related
to the WTMPA Elk City wind agreement. The SPS and Elk City loads will continue to be served in SPP.
LP&L intends to honor the terms of the partial requirements contract by receiving power and energy from
SPS on the distribution system connected to SPS's transmission system. This portion of LP&L load will
remain in SPP during the term of the agreement and is not included in the load that will be interconnected
to ERCOT.
West Texas Municipal Power Agency: In 1983, the cities of Lubbock, Brownfield, Floydada, and Tulia
(Cities), created the West Texas Municipal Power Agency (WTMPA) as a joint power agency. WTMPA
is a municipal power agency that was created to enhance the negotiating strength of the Cities in obtaining
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
favorable electric power contracts and in coordinating joint planning for additional generation. WTMPA
is governed by an eight -member Board of Directors. The board consists of two directors from each of the
Cities; however, an affirmative vote of the "majority in interest" is required to approve the operating budget,
approve capital projects, approve debt issuance, and approve any amendments to WTMPA rules and
regulations. One member is elected as the president who presides over monthly meetings. Directors serve
without compensation. WTMPA has no employees and instead contracts for services to meet its general
operating needs. WTMPA may engage in the business of generation, transmission, sale, and exchange of
electric energy to the Cities. WTMPA may also participate in power exchange of electric energy to the
Cities. WTMPA may also participate in power pooling and power exchange agreements with other entities.
The City maintains the "majority in interest" vote based on kilowatt purchases and consequently has
majority voting control. As the City purchases approximately 95.6 percent of the electricity brokered,
WTMPA provides services almost exclusively to the City and is therefore presented as a blended enterprise
fund. Separate audited financial statements may be obtained through the City.
Water Utility: The City's most current Strategic Water Supply Plan was finalized in August 2018. The Plan
includes an emphasis on water conservation strategies and includes strategies for supplying Lubbock for
the next 100-years. The City also works closely with the Region O Water Planning Group in contributing
to the preparation of a portion of the State Water Plan, which includes the City's water supply needs and
alternatives.
The City used a total of 12.85 billion gallons of water in FY 2018. The City's 5-year average per capita
consumption for FY 2018 was 148 gallons per capita per day (gpcd). The peak capacity of the City's water
supply and treatment was 80 million gallons per day, with an average utilization of 35.1 million gallons per
day.
The City currently receives its water from four different sources: Roberts County Well Field, Lake
Meredith, Bailey County Well Field, and Lake Alan Henry. The Roberts County Well Field and Lake
Meredith are owned by the Canadian River Municipal Water Authority (CRMWA). Lubbock is one of
CRMWA's eleven member cities. The Bailey County Well Field and Lake Alan Henry are owned by the
City.
The City obtained 8.23 billion gallons of its annual water supply from CRMWA in FY 2018. At the
beginning of FY 2012, Lake Meredith reached its lowest historical level and was no longer usable. Lake
Meredith water levels began rising again about five years ago. It is now at 38.2% of its capacity. Since
June of 2015, CRMWA has been using water from Lake Meredith. Currently, CRMWA is blending
groundwater from the Ogallala Aquifer in Roberts County with some surface water from Lake Meredith to
help meet the needs of member cities. CRMWA owns 407,566 acres of ground water rights with an
estimated 22 million acre-feet of water within those rights. CRMWA can deliver up to 65,000 acre-feet of
water to its member cities each year from the Roberts County Well Field. They supply additional water
from Lake Meredith throughout the year to increase peak capacity by 25 million gallons per day. The
aqueduct supplying water to the southern cities cannot be filled with the existing well field infrastructure
and water supplied from Lake Meredith. Therefore, CRMWA is currently securing easements for a new
pipeline route so a second transmission line (CRMWA 11) can be constructed from the well field to the
aqueduct. This will allow for the full utilization of the aqueduct to the southern cities. The project is
estimated to be completed sometime after 2030 when all of the member cities have a need for the additional
water.
The Bailey County Well Field contains 175 active water wells with 83,305 acres of water rights, providing
2.45 billion gallons of the City's annual water supply in FY 2018. In October 2011, the City completed the
construction of eight additional wells to maintain the well field production rates. The City will add
additional wells to the Bailey County Well Field as needed to restore some of the well field production
capacity.
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
The City finished construction on Lake Alan Henry in 1993. In 2012, Phase I of the Lake Alan Henry
infrastructure project was completed. This project consisted of constructing: two new pump stations, a 51-
mile raw water pipeline from the Lake to the City, a new South Water Treatment Plant with membrane
technology, and 19 miles of treated water transmission lines. Phase I is capable of providing 11 million
gallons of water per day to the City. Lake Alan Henry supplied 2.17 billion gallons of the City's annual
water supply in FY 2018. The lake is currently at greater than 88% of its capacity. The South Water
Treatment Plant includes a 225 million gallon terminal storage reservoir and a high service pump station to
transfer the treated water into the City's distribution system.
The City provides water service to over 88,524 meters through 1,752 miles of distribution lines as of
January 1, 2018. The City also provides treated wholesale water to Shallowater, Ransom Canyon, Buffalo
Springs Lake, Reese Redevelopment Authority, TDCJ's Montford Unit, and Lubbock Cooper ISD.
Wastewater Utility: Wastewater collection and treatment is provided within the city limits to residential,
commercial, and industrial customers. As of December 31, 2017, the collection system consisted of
approximately 1,181 miles of sanitary sewer lines and 34 lift stations. The Southeast Water Reclamation
Plant (SEWRP) has a permitted capacity of 31.5 million gallons per day and an average utilization of
approximately 19 million gallons per day. The peak utilization of the SEWRP is 25 million gallons per
day. The treated wastewater is disposed of or reused in various ways. In 2017, approximately 51 percent of
the SEWRP wastewater was used to irrigate crops at the Lubbock Land Application Site and at the Hancock
Land Application Site. In addition, Xcel Energy used approximately seven percent of the treated wastewater
and 42 percent was discharged into the North Fork of the Double Mountain Fork (North Fork) of the Brazos
River. Currently, dewatered solids generated during the wastewater treatment process are hauled and
disposed of at the City's regional solid waste landfill in Abernathy, Texas. In April 2018, the new
Northwest Water Reclamation Plant (NWWRP) became operational. This new plant was constructed to
handle the growing sewer demand in the northwest part of Lubbock. The NWWRP had an average
utilization of 1 million gallons per day. The permitted capacity of the NWWRP is 3 million gallons per day.
Effluent from this plant is discharged into the North Fork of the Brazos River. All solids from the NWWRP
are sent to the SEWRP for processing.
As part of the City's Strategic Water Supply Plan, projects are underway to improve the quality of the
treated wastewater so it can be reused in beneficial ways. The City has completed Phase I, Phase 11, and the
Digester Upgrade of Phase III of a four -phase project to upgrade the Southeast Water Reclamation Plant.
Phase I included upgrades and improvements to the influent lift station. Phase II included upgrades to Plant
3 for filtration and ultraviolet disinfection, and Plant 4 for biological nutrient removal, filtration, and
ultraviolet disinfection. Phase III included design and construction improvements to anaerobic digesters
and the solids handling facility. The upgrades included new covers, new mixing system, new heating
system, and gas piping to Digester 8 and 9. Upgrades to the solids handling facility included new sludge
thickening and dewatering equipment, sludge holding tank upgrades, odor control for the solids handling
facility, and new sludge loading facilities. Phase IV will include upgrades to Plant 3 for biological removal.
Design for rehabilitation of Plant 3 clarifiers and improved aeration capabilities has begun and these efforts
will improve the quality of the City's effluent discharge and prepare it for future reuse opportunities. The
high quality effluent can be discharged into the North Fork.
The 2008 Wastewater Master Plan recommended several improvements to the collection system in order
to meet population growth as well as aging infrastructure replacement needs. The South Lubbock Sanitary
Sewer System Expansion Phase I and II are complete and Phase III is under design. This project consists
of engineering design and construction of large diameter sanitary sewer interceptors for the expansion of
the existing sanitary sewer system. In addition, the Canyon Lakes Interceptor Rehabilitation project is under
construction and will replace deteriorated lines and manholes to improve aging infrastructure. The new
Northwest Water Reclamation Plant relieves the surcharge of sewer mains serving north Lubbock. An
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
update to the Wastewater Master Plan has begun. This plan will evaluate the existing collection system
and provide a new master plan for meeting the City's expected development and growth.
Storm Water Utility: The City's storm water run-off is primarily conveyed through the City's street system
that discharges into 146 playa lakes. The subsurface drainage, via storm sewer pipes with curb inlets and
intake structures, conveys water to two small intermittent streams (Blackwater Draw and Yellowhouse
Draw) which both converge at the upper reaches of the North Fork of the Double Mountain Fork of the
Brazos River.
The City's municipal separate storm sewer system (MS4) is made up of approximately 1,235 miles of paved
and unpaved streets, 624 linear miles of paved and unpaved alleys, 1,240 storm sewer inlets, 96 miles of
subsurface storm sewer pipe, six detention basins, 146 playa lakes, and one pump station. Maintenance of
all of the storm sewers, including street cleaning, is funded through storm water fees.
During FY 2018, the focus was on three major projects: Storm Water Master Plan, Storm Water
Management Plan (SWMP), and Complete Phase 2 Construction of the Northwest Lubbock Drainage
Project. The Storm Water Master Plan is a multi -year year project that is providing a comprehensive,
holistic approach to storm water management. This project is updating the Drainage Criteria Manual (1997)
and the Master Drainage Plan (2010), which are the primary documents that regulate development, guide
drainage design and identify improvement projects. The Storm Water Management Program is
implementing changes to achieve compliance with the City's MS4 Permit Renewal issued by Texas
Commission on Environmental Quality (TCEQ) in August of 2015. When completed with all phases, the
Northwest Lubbock Drainage Project will connect six playa lakes to a new drainage system to help reduce
the risk of flooding in the northwest region of Lubbock.
Solid Waste Utility: The City provides garbage collection and disposal services to 74,725 residential
customers and 2,732 commercial customers. One of the City's two landfill sites is designated as the Caliche
Canyon Landfill and includes a citizen transfer station. The second site is the West Texas Regional Disposal
Facility located in Abernathy, Texas, which opened in 1999, one of the largest permitted areas for a landfill
in the State of Texas. With 1,260 acres, the expected useful life of this landfill is 124 years.
Public Transportation: A key component of Lubbock's transportation system is the Lubbock Preston Smith
International Airport, located seven miles north of the City's central business district on 3,000 acres of land
adjacent to Interstate 27. The Airport is operated as a department of the City, with the guidance of an
advisory board, and includes a 220,000 square foot passenger terminal building. The Airport has two
commercial service runways, 11,500 and 8,000 feet in length. Air traffic control services include a 24-hour
Federal Aviation Administration control tower and a full range of instrument approaches. The Airport is
served by three major passenger airlines and two major cargo airlines. It facilitates over 40 commercial
flights per day. A project to rehabilitate the 11,500 foot runway was completed during FY 2016-17. The
next major initiative is a multi -year project to renovate the terminal building.
Citibus provides public transportation for the City of Lubbock and is managed by RATP Dev North
America. Transit services provided by Citibus include Fixed Route, CitiAccess (paratransit), Nite Ride
(evening demand response service) in addition to other special services. There are nine fixed routes that
traverse the City. CitiAccess is a curb -to -curb service for passengers in the community who are unable to
utilize the regular fixed route service. The Citibus evening service is designed to meet the needs of the
citizens of Lubbock who need transportation services outside of Citibus' fixed route and CitiAccess regular
hours. A majority of evening service passengers work at night and utilize the service for afterhours
transportation to and from their jobs. In addition to the above transportation services, Citibus provides route
service to Texas Tech University and surrounding apartment complexes with 35 buses. Citibus is also the
contracted agent for passenger sales and freight shipping/receiving for Greyhound Lines, Inc., which
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
operates from the Citibus Downtown Transfer Plaza.
Health and Social Services: The City has a housing and community development program implemented
and administered through funding from the federal Community Development Block Grant (CDBG),
HOME Investment Partnership, and Emergency Shelter Grant (ESG). With these programs, the City
completed work on 93 houses in FY 2018 with CDBG and HOME funds and assisted 1,983 individuals
through the ESG Program with emergency shelter and essential homeless prevention services.
The City also received funding from the Texas Department of Housing and Community Affairs. These
funds allow the City to offer additional programs to its citizens. Through these programs in FY 2018, 291
households received assistance in repairing the heating and/or cooling systems in their homes, 1,090
households received utility assistance and 17 individuals graduated from the Self -Sufficiency Program.
Cultural and Recreation Activities: The City provides cultural and recreation services through 4 libraries
and 81 parks with 56 playgrounds. Other recreational facilities include 4 swimming pools, 60 tennis
courts, 50 baseball and softball fields, 41 soccer fields, 3 disc golf courses, a cultural arts center, 5
community centers, and 4 adult activity centers. To further enhance quality of life and to provide support
to tourism, the City operates the Memorial Civic Center, the Buddy Holly Center, the Wells Fargo
Amphitheatre, and the Silent Wings Museum.
The City is financially accountable for a legally separate civic services corporation (Civic Lubbock, Inc.),
which is reported separately within the City's financial statements as a discretely presented component unit.
Additional information on this legally separate entity is found in the notes to the financial statements.
Highways and Streets: The City is responsible for the construction and maintenance of 1,178 miles of
paved streets, 57.4 miles of unpaved streets, and 624 miles of paved and unpaved alleys.
hi 2004, the City Council established the Gateway Streets Program. The program, funded with 40 percent
franchise fees, opens areas of the City for development through thoroughfare construction. The Gateway
Streets Program consists of the Northwest Passage, City thoroughfare streets and Texas Department of
Transportation (TxDOT) improvements in northwest Lubbock, as well as other thoroughfare improvements
located in southwest Lubbock.
The City thoroughfare streets that have recently been completed include 98th Street between Milwaukee
Avenue and Upland Ave, Erskine Avenue from Indiana Avenue to Quaker Ave.
Other street improvement projects under design or construction include the following:
• The unimproved roadways project which currently has Ave N, Ave O, Ave P, Wabash, Guava and
65t' Street Under Construction. Beech Ave, East 16" St, East 17t' St, Ute Ave, Salem Ave and
124' are currently under design
• The Upland Ave thoroughfare project has begun and is currently in the design phase from 66th St.
to I I4th St.
• The design of phases 3 and 4 of 34th Street from Slide Avenue to Quaker Avenue and Avenue Q to
Interstate 27 is completed and awaiting funding.
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
Annual Budget Process
The annual operating budget serves as the foundation of the City's financial planning and control. All City
departments submit requests for appropriation to the City Manager each year. The City Manager uses these
requests as the starting point for developing the proposed Operating Budget and Capital Program. The City
Manager then presents the proposed Operating Budget and Capital Program to the City Council for review,
as required by City Charter. The City Council is required to hold a public hearing on the proposed Operating
Budget and Capital Program and to adopt it no later than September 30, the close of the City's fiscal year.
For FY 2019, the adopted Operating Budget and Capital Program appropriates funding at the fund level for
all funds and at the project level in the Capital Program.
The General Fund Operating Budget is adopted on a basis other than GAAP, with the main difference being
that related capital outlays are not budgeted. Budgetary control is maintained at the fund level. The City
Manager may make administrative transfers and increases or decreases between accounts below the fund
level without City Council approval. However, any transfer of funds between Funds, the legal level of
control, or higher level shall be presented to City Council for approval by ordinance before such funds can
be transferred between Funds or expended. All annual operating appropriations lapse at the end of the fiscal
year. Capital Project and grant appropriations do not lapse at fiscal year end, but remain in effect until the
project or grant is completed and closed.
ECONOMIC CONDITION AND OUTLOOK
The information presented in the financial statements is best understood when it is considered within the
context of the City's economy. The following information is provided to highlight a broad range of
economic forces that support the City's operations.
Local Economy
The City of Lubbock has a stable economy with historically consistent and steady growth. Over the past
forty years, Lubbock's agriculturally -based economy has diversified. This diversification minimizes the
effects of business cycles experienced by individual sectors. The City has strong manufacturing, wholesale
and retail trade, healthcare, education, and government sectors. Manufacturing includes a diverse group of
employers who support approximately 4,800 workers. Our central location and access to transportation
contributes to Lubbock's development as a regional warehousing and distribution center. Also due to it's
location, Lubbock serves as the major retail trade center for a 26-county retail trade area of more than half
a million people.
The current expansion in the Lubbock economy reached the seven-year mark in August 2018 according to
the Lubbock Economic Index, which represents the general condition of the Lubbock economy Lubbock
has been in a cycle of expansion for 84 months through August 2018. The Lubbock Economic Index has
grown by 29 percent over that time, averaging 4.3 percent growth per year.
The Lubbock Economic Index increased to 152.5 in August 2018, up by 1.2 percent from the August 2017
index. Construction activity has expanded significantly in recent years and after setting records in 2017,
construction has slowed in 2018. Building permits are down by 45 percent compared to the first eight
months of 2017, largely due to very large and unique commercial projects permitted in the prior year.
Residential building permits through August 2018 declined 8.3 percent compared to the same time period
the prior year.2
2 Ingham Economic Reporting, July -August 2018, Lubbock Economic Index and Consumer Price Index, Amarillo, Texas: Karr Ingham
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
160.0
155.0
150.0
145.0
140.0
135.0
130.0
125.0
120.0
115.0
Jan-09
Lubbock Economic Index
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18
The Southern High Plains District, comprised of 16 counties surrounding Lubbock, is one of the most
productive agricultural areas in the United States. In 2018, 23.4 percent of the nation's upland cotton crop
and 42.6 percent of the state's upland cotton crop were planted by farmers in the Southern High Plains
District. The Southern High Plains production was 2.18 million bales, down 32.3 percent from the 3.22
million bales in 2017.3
Lubbock is home to three universities and one community college: Texas Tech University, Lubbock
Christian University, Wayland Baptist University — Lubbock Center, and South Plains College. Fall 2018
enrollment for all higher education institutions in Lubbock was 55,095, an increase of 2.4 percent from the
Fall 2017 enrollment of 53,803. The increase was due to enrollment increases at Texas Tech, and Texas
Tech Health Science Center, and Lubbock Christian University, offset slight by a decrease experienced at
Wayland Baptist University and South Plains College. Texas Tech has set a goal to reach enrollment of
40,000 students by 2020. The availability of graduates in the City is an added advantage to local industries
as the universities and colleges continue to produce a ready source of qualified labor.
5!
5!
5;
4!
44
4:
41
Higher Education Fall Enrollments 2008 - 2018
,000
53,803 55,095
53,056
,000
51,608 52,168
,000
,000
45,912 49,290 49,375
48,954
,000
,000
.000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
3 United States Department of Agriculture, National Agriculture Statistics Service, retrieved from htip://www.nass.usda.gov/Ouick Stats/.
(Figures are preliminary and will be updated as information becomes available.)
10
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
The health care and social assistance sector is also a vital component of the Lubbock economy, with 24,624
employees and payroll exceeding $1 billion.4 Lubbock is home to several medical facilities including:
University Medical Center, Covenant Medical Center, The Lubbock Heart Hospital, and Grace Medical
Center. The Texas Tech University Health Sciences Center also provides health care, as well as training
and research opportunities for health care professionals.
Sales Tax Collections: Sales tax collections in FY 2018 totaled $73,571,504, 4.5 percent higher than
collections through the same period in FY 2017.
so
75
70
65
60
55
50
45
40
Annual Sales Tax Collections
73.6
68.0
68.0
70.4
62.3
64.7
57.3
53.7
50.7
51.0
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Building Permit Valuations: Construction activity has expanded significantly in recent years and after
setting records in 2017, construction slowed in 2018. However, building permits are up by 109.6 percent
compared to 2017, largely due to a major hail event that significantly increased the number of roofing
permits issued. The yearly comparison is below:
Building Permit Valuations
857.7
850
776.0
750
\626.7
650
659.4
550
475.9
450
508.3
361.2 376.2 440.3
350
282.9
250
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
"U.S. Census Bureau, 2015 County Business Patterns, retrievedfrom http://censtats.census.govlcgi-binlcbpnaicicbpsectpl (2 year delay in
publication).
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
New residential permit totals issued through December 2018 were valued at 302.5 million, 23.5 percent
below the same time period in 2017.5 The preliminary average home sales price through October 2018 was
$196,081, an increase of 10.5 percent over FY 2017.E
Employment: The total non-agricultural employment estimate for September 2018 was 151,600, an
increase of 2.6 percent over the revised September 2017 estimate of 147,800. The unemployment rate for
the Lubbock Metropolitan Statistical Area (MSA) in September 2018 was 3.0 percent. Historically,
Lubbock has had a low rate of unemployment that is well below the national and state unemployment rates.'
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
Unemployment Rate
2009 2010 2011 2012 2013 2014 2015 2016 2017 Sept. 2018
bus ♦Texas ♦Lubbock
ECONOMIC DEVELOPMENT
hi 1995, the City Council created Market Lubbock, Inc. (MLI), a non-profit corporation to oversee
economic development for the City. MLI is funded with .02315 cents of the property tax allocation. In
October 2004, the Lubbock Economic Development Alliance (LEDA), an economic development sales tax
corporation, assumed responsibility for economic development. LEDA program strategies include business
retention, business recruitment, workforce development, foreign trade zone, and the bioscience initiative.
LEDA is funded by a 1/8 cent economic development sales tax. Total allocated tax revenues for MLI and
LEDA for FY 2018 were $9.2 million.
The City's Finance Department is responsible for tracking and maintaining economic and demographic
information for the City, assisting with city -related business issues, the enterprise zone and tax abatement
programs, three Tax Increment Financing Reinvestment Zones, and all Public Improvement Districts.
s City of Lubbock Building Inspection Department, October 2017 and October 2018 Building Inspection Statistical Report.
6 Texas A&M University Real Estate Center, Lubbock MLS Housing Activity Report (October 2018), retrieved from
b-q://recenter.tamu.edu/data/datahs.html (Figures are preliminary and will be updated as information becomes available.)
' Texas Workforce Commission, MSA Employment and Unemployment Data, September 2018. (Current year numbers are the average through
September 2018 and are updated as data becomes available.)
12
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
Lubbock Business Park: The Lubbock Business Park (Park) is a 586-acre tract of land located off of
Interstate 27, approximately one mile south of Lubbock Preston Smith International Airport. The Park is
being developed by LEDA as a recruitment tool to assist in the recruitment of new businesses to the area.
The Park has shovel ready lots available for businesses who would like to relocate to Lubbock or expand
an existing business.
The City of Lubbock, Lubbock County, Lubbock Hospital District, and High Plains Underground Water
District are participating in this public/private project with the creation of a Tax Increment Financing
Reinvestment Zone that will assist in funding the public infrastructure necessary to develop the Park.
According to the latest Project and Finance Plan for the Lubbock Business Park Tax Increment Financing
Reinvestment Zone (LBP Zone), there are planned expenditures of approximately $45.2 million for public
infrastructure improvements, which will result in an increase in taxable value of approximately $208.2
million over the LBP Zone's 30-year life. The 2018 appraised value of the LBP Zone is $82.4 million with
a net taxable value of $56.8 million, which is a $56.4 million increase over the 2009 base year value.
Overton Park: Overton Park, a former blighted area called North Overton, is a 300-acre revitalization
project adjacent to the downtown area of Lubbock. Projects that have been constructed in Overton Park
since the beginning of the redevelopment include: eleven student -oriented apartment complexes; The
Centre, an apartment complex built over upscale retail; City Bank; Super Wal-Mart; The Overton Hotel
and Conference Center; Racer Car Wash; condominiums; and many small specialty restaurants and retail
establishments.
The City of Lubbock, Lubbock County, Lubbock Hospital District, and High Plains Underground Water
District are participating in this public/private project with the creation of a Tax Increment Financing
Reinvestment Zone that has funded the replacement of the 80-year old infrastructure. According to the
Project and Finance Plan for the North Overton Tax Increment Financing Reinvestment Zone (Overton
Zone), there were planned expenditures of $62.3 million (Phase 1 and 2, not including interest on debt), for
the replacement and upgrade of public improvements including roads, water, sewer, relocation underground
of the electric infrastructure, lighting, and landscaping in the parkway. Based on current estimates, these
improvements will result in an increase of taxable value of approximately $520 million over the Overton
Zone's 30-year life. The 2018 appraised value of the Overton Zone is $507.6 million, which is a $480.7
million increase over the 2002 base year value.
North and East Lubbock Neighborhood and Infrastructure Fund: Lubbock City Council passed a
resolution on May 9, 2013, to create the North and East Lubbock Neighborhood and Infrastructure Fund
(NELNI) to provide a source of funding for downtown redevelopment, neighborhood and infrastructure
projects, and other community development projects. The revenue for the fund is 90 percent of the oil and
gas revenues that historically went to the General Fund.
The Lubbock community, at -large, has experienced growth. However, the north and east Lubbock
communities have experienced population destabilization, economic instability, and housing deterioration.
The past several years have brought a slight increase of single-family residential development and
affordable rental units in this area by nonprofit organizations and private developers in addition to
rehabilitation of existing homes to provide a safe and sanitary living environment. The funding in the North
and East Lubbock Neighborhood and Infrastructure Fund in FY 2018 was used for rehabilitation of owner
occupied homes in North and East Lubbock. In FY 2018, twenty-two owner occupied homes had minor
rehabilitations with the funding available.
13
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
Downtown Redevelopment: The City of Lubbock Central Business District (CBD) has developed over the
years with traditional office, retail, and governmental agency uses. As with many cities in the last ten to
twenty years, retail has moved to shopping areas and other areas outside the CBD, and office development
has stagnated. In an effort to reverse the trend, the City of Lubbock, with participation from Lubbock
County, Lubbock Hospital District, and High Plains Underground Water District, created a Tax Increment
Financing Reinvestment Zone to assist in the redevelopment of downtown in December 2001, with a
termination date of December 31, 2020. On September 24, 2009, the City Council approved an extension
of the termination date to December 31, 2040 in order to provide additional funding to implement the
project and finance plan. According to the latest Project and Finance Plan for the Central Business District
Tax Increment Financing Reinvestment Zone (CBD Zone), planned expenditures amount to $40.8 million
for public infrastructure improvements, which will result in an increase in taxable value of approximately
$255.7 million over the CBD Zone's 40-year life. The 2018 appraised value of the CBD Zone is $214
million, a $108.1 million increase over the 2001 base year value.
FINANCIAL INFORMATION
Long-term financial planning
The City uses ten-year rate models for long-range planning in all major enterprise funds as a basis for
budget discussion and policy decision -making. These models are based on current projects and policies
and are continually monitored and updated throughout the year. The rates in the models are calculated to
provide financially sound net position reserves, as established by City Council Policy.
The City Council has approved goals for the General Fund unrestricted fund balance, which is set at a
minimum of an amount equal to 20 percent of operating revenues to meet unanticipated contingencies and
fluctuations in revenue. Enterprise funds also have appropriable net position reserve policies, ranging from
10 to 25 percent of operating revenue. LP&L must maintain three months gross retail electric revenue, as
determined by taking the average monthly gross retail electric revenue from the previous fiscal year. Water
and Wastewater funds maintain appropriable net position in an amount equal to 25 percent of operating
revenues. The Airport and Storm Water funds maintain appropriable net position of 15 percent of operating
revenues. Appropriable net position has a slightly different definition than GAAP unrestricted net position.
Excesses and deficits are addressed in the subsequent year budget process.
Utility funds make payments in lieu of property taxes and franchise fees to the General Fund. The amount
LP&L pays in lieu of property tax is based on one percent of gross revenues. The payment in lieu of
property taxes for other utility funds is calculated by applying the property tax rate to the fixed assets of
the fund.
14
Honorable Mayor, City Council,
And Citizens of the City of Lubbock, Texas
February 6, 2019
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City for its comprehensive annual financial report for the fiscal
year ended September 30, 2017. In order to be awarded a Certificate of Achievement, a governmental unit
must publish an easily readable and efficiently organized comprehensive annual financial report in which
contents conform to program standards. Such reports must satisfy both GAAP and applicable legal
requirements. The City of Lubbock has received this award for fourteen consecutive years.
A Certificate of Achievement is valid for a period of one year only. We believe our current report continues
to conform to the Certificate of Achievement Program requirements, and we are submitting it to the GFOA
to determine its eligibility for another certificate.
The preparation of this report would not be possible without the efficient and dedicated services of the
entire staff of the Finance Department. We would particularly like to thank the Accounting Managers,
Senior Accountants, Executive Director of Budget, and Senior Financial Analysts for their countless hours
of work on this financial report. We express our appreciation to all members of City departments who
assisted with and contributed to the preparation of this report. Credit is also given to the City Council and
the Audit Committee for their interest and support in planning and conducting the operations of the City in
a responsible manner.
Respectfully submitted,
W. J /ettnson
I y
Manager
�' —d' C-�
Linda Cuellar, CPA
Director of Accounting
D. Blu Ko�telich
Chief Financial Officer
15
16
Police
Fire
Greg Stevens
Lance Phelps
Administration
Administratioi
Jon Caspell
FRobKeinast
MM
Patrol
ression
tGaetielson
Jerry Brewer
Emency
Management
Jay Parchman
Organizational Chart
Citizens
Municipal ' City Council
Court
EUBAP&L City Secretary City Manager City Attorney
Rebecca Garza Jarrett Atkinson Chad Weaver
Emn
ENI
Vital Statistics Council Staff
Eva Smith Bob Goodwin
ACM
Jesica McEachern
Business
Development
Justin Pruitt
Public Works
Engineering
Wood Franklin
Mike Keenum
Traffic
Development
Operations
Services
Sharmon Owens
Engineering
Public Works
Capital Project
Operations
Mike Gilliland
and Design
John TT rpin
Landfill
Right of Way
Operations
Dave Booher
Collections
Inspections
Penny Morin
Claude Kneisley
Utilities
Stormwater
Compliance
Aubrey Spear
Trenia Harris
Water Reservoir' Water I Utility ' Wastewater
Environmental Operations Maintenance Operations
Malcolm Laing Mike Lowe Brian Bearden Mary Gonzales
Development
Services
Steve O'Neal
Building
Inspection
Robbie Wallace
Planning ant
Zonin
AJ Fawv
Health
Stuart Walker
ACM
Scott Snider
Museums
Brooke Witcher
Libraries
FIternal Audit
Jennifer Harvell
Admin
Support
Civic Center
Lisa Thomason
Parks & Recreation
Cemetery
' Bridget Faulkenberry
ACM
Mark Yearwood
Facilities
Management
Wes Everett
Information
Technology
David McGaughey
Fleet
Billy Taylor
Geographic
Information
Systems
Sally Abbe
Communications
Clifford Crow
Human
Resources
Leisa Hutcheson
Risk
Management
Lainey Morrison
Benefits
Terri Smith
Chief Financial
Officer
Blu Kostelich
Accounting
Linda Cuellar
Finance
Budget
Cheryl Brock
Purchasing
Marta Alvarez
Print Shop
Misty Mikes
Warehouse
Paul Murillo
DCM
Bill Howerton
Airport
Kelly Campbell
Citibus
Chris Mandrell
Community
Development
1 Karen Murfee
Animal
Services
Health
Katherine Wells
Lum)o6r� k
weaver Austin I Conroe I Dallas I Fort Worth I Houston
Los Angeles I Midland I New York City I San Antonio
Independent Auditor's Report
The Honorable Mayor and Members of the City Council
The City of Lubbock, Texas
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, the aggregate discretely presented component units, each major fund, and the
aggregate remaining fund information of the City of Lubbock, Texas (the City), as of and for the year
ended September 30, 2018, and the related notes to the financial statements, which collectively comprise
the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We did not audit
the financial statements of Civic Lubbock, Inc., Market Lubbock Economic Development Corporation
d/b/a Market Lubbock, Inc. or Lubbock Economic Development Alliance, which represent 92 percent,
95 percent and 97 percent, respectively, of the assets, net position and revenues of the aggregate
discretely presented component units. Those statements were audited by other auditors, whose reports
have been furnished to us, and our opinion, insofar as it relates to the amounts included for such entities,
is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing
standards generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement. The financial statements of Civic
Lubbock, Inc., a component unit included in the financial statements of the aggregate discretely
presented component units, and West Texas Municipal Power Agency, a blended component unit
reported as a major fund included in the basic financial statements of the business -type activities, were
not audited in accordance with Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main:972.490.1970 1 Fax:972.702.8321
CPAs AND ADVISORS I WEAVER.COM
19
The Honorable Mayor and Members of the City Council
The City of Lubbock, Texas
Opinions
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental
activities, the business -type activities, the aggregate discretely presented component units, each major
fund, and the aggregate remaining fund information of the City as of September 30, 2018 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.
Emphasis of Matters
As discussed in Notes 1-1 and I-J. to the basic financial statements, the City implemented Governmental
Accounting Standards Board Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other than Pensions. Beginning net position has been restated to reflect the change in
accounting principle resulting from this statement. The City also implemented Governmental Accounting
Standards Board Statement No. 85, Omnibus 2017 which required Lubbock Power and Light (LP&L), a
major enterprise fund of the City, to reclassify goodwill from a previous acquisition to a deferred outflow
of resources. Our opinions are not modified with respect to these matters.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison, pension and other post -employment
benefits information, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting
for placing the basic financial statements in an appropriate operational, economic, or historical context.
We have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The accompanying combining and individual fund
statements and schedules, introductory and statistical sections, schedule of expenditures of federal
awards and schedule of expenditures of state awards required by Title 2 U.S. Code of Federal Regulations,
Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards and State of Texas Uniform Grant Management Standards, issued by the Governor's Office of
Budget and Planning, as listed in the table of contents, are presented for purposes of additional analysis
and are not a required part of the basic financial statements.
The combining and individual fund statements and schedules of expenditures of federal and state awards
are the responsibility of management and were derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and certain
additional procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
20
The Honorable Mayor and Members of the City Council
The City of Lubbock, Texas
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the accompanying combining and
individual fund statements, schedule of expenditures of federal awards and schedule of expenditures of
state awards are fairly stated in all material respects in relation to the basic financial statements as a
whole.
The introductory section and statistical sections have not been subjected to the auditing procedures
applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or
provide any assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated February xx,
2019 on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements, and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the City'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's internal control over financial reporting and compliance.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 6, 2019
21
!4 r4o 1
city 0-f
Lum)o6r� k
22
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The Management's Discussion and Analysis (MD&A) provides a narrative overview and analysis of the
financial activities of the City of Lubbock for the fiscal year ended September 30, 2018.
Readers of the financial statements are encouraged to consider the information included in the transmittal
letter and in the other sections of the Comprehensive Annual Financial Report (CAFR) e.g., combining
statements and the statistical section in conjunction with the MD&A.
Financial Highlights
The following financial highlights summarize the City's financial position and operations as presented in
more detail in the Basic Financial Statements (BFS).
• The City's total government -wide assets and deferred outflows exceeded its liabilities and deferred
inflows at September 30, 2018 by $933.9 million (net position).
• The City's total net position increased by $84.1 million as a result of operations during the fiscal
year. However, due to the implementation of Governmental Accounting Standards Board (GASB)
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions (OPEB), such as retiree health insurance, there was a prior period adjustment of ($46.9)
million resulting in a net increase in total net position of $37.2 million.
• The ending unassigned fund balance for the General Fund was $48.0 million, or 27.7 percent of
total General Fund revenues, an increase of $10.4 million from the prior year.
• The City's governmental funds reported combined ending fund balances of $164.7 million, of
which $48.0 million is available for spending at the City's discretion.
• The City's enterprise funds reported combined ending net position of $912.9 million, of which
$116.5 million is available for spending at the City's discretion.
• During FY 2018, the City issued $236.6 million in bonded debt. Part of this was used to refund
debt, which decreased debt service requirements by $4.9 million.
Overview of the Financial Statements
Basic Financial Statements: The MD&A is intended to serve as an introduction to the City's BFS. The
BFS are comprised of three components: 1) Government -Wide Financial Statements (GWFS), 2) Fund
Financial Statements (FFS), and 3) Notes to Basic Financial Statements (Notes). The CAFR contains other
supplementary information in addition to the BFS.
Government -Wide Financial Statements: The GWFS, shown on pages 41-43 of the CAFR, contain the
Statement of Net Position and the Statement of Activities, described below:
The Statement of Net Position presents information on the City's assets, liabilities (including capital assets
and short- and long-term liabilities), and deferred inflows/outflows of resources with the difference reported
as net position using the accrual basis of accounting. Over time, increases or decreases in net position serve
as a useful indicator of whether the financial position of the City is improving or deteriorating.
23
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The Statement of Activities presents a comparison between direct expenses and program revenues for each
of the City's functions or programs. Direct expenses are specifically associated with an activity and are
therefore clearly identifiable with that activity. Program revenues include charges paid by the recipient of
the goods or services offered by the program. Program revenues also include grants and contributions
restricted to meeting the operational or capital requirements of a particular activity. Revenues not directly
related to a specific activity are presented as general revenues. The comparison of direct expenses with
revenues from activities identifies the extent to which each activity is self-financing, or alternatively, draws
from any City generated general revenues.
Governmental activities (activities principally supported by taxes and intergovernmental revenues) of the
City include administrative services as well as general government, community services, cultural and
recreation, economic and business development, fire, health, police, other public safety, and streets and
traffic. Business -type activities (activities intended to recover all of their costs through user fees and
charges) of the City include electric, water, wastewater, storm water, transit, airport, civic centers, cemetery,
and Lake Alan Henry Recreation. Electric includes Lubbock Power and Light (LP&L) and West Texas
Municipal Power Agency (WTMPA). All changes in net position are reported as soon as the underlying
event occurs (accrual basis), regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will result in cash flows in future fiscal periods, such as
uncollected taxes and earned, but unused vacation leave.
Component Units: The GWFS include the City (the "primary government"), and seven legally separate
entities (the "component units") for which the City is financially accountable. The discretely presented
component units consist of. Urban Renewal Agency (URA), Market Lubbock Economic Development
Corporation, d/b/a Market Lubbock, Inc., Lubbock Economic Development Alliance, Civic Lubbock, Inc.,
and Vintage Township Public Facilities Corporation. West Texas Municipal Agency (WTMPA) and the
Lubbock Metropolitan Planning Organization are blended component units. The component units provide
community services, economic development services, arts and cultural activities, and public improvement
financing for the City. Financial information for the discretely presented component units is reported
separately in the GWFS to differentiate them from the City's financial information.
Fund Financial Statements: A fund is defined as a fiscal and accounting entity with a self -balancing set
of accounts recording cash and other financial resources, together with all related liabilities and residual
equities or balances, and changes therein, which are segregated for the purpose of carrying on specific
activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.
The principal role of funds in the financial reporting model is to demonstrate fiscal accountability. The
City, as with other state and local governments, uses fund accounting to ensure and demonstrate compliance
with finance -related legal requirements.
The focus of the FFS is on major funds. Major funds are those that meet minimum criteria (a percentage
of assets, liabilities, revenue, or expenditures/expenses of fund category and of the governmental and
enterprise funds combined), or those that the City chooses to report as major funds given their qualitative
significance. Non -major funds are aggregated and shown in a single column in the appropriate financial
statements. Combining schedules of nonmajor funds are included in the CAFR following the Required
Supplementary Information (RSI) and Other Supplementary Information (OSI). All funds of the City can
be divided into two categories: governmental funds and proprietary funds.
Governmental FFS: Governmental funds are used to account for essentially the same functions reported
as governmental activities in the GWFS. However, unlike the GWFS, governmental FFS focus on near-
24
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
term inflows and outflows of spendable resources, as well as on balances of spendable resources available
at the end of the City's fiscal year. Such information is useful in evaluating the City's near -term financing
requirements.
Because the focus of governmental funds is narrower than that of the GWFS (modified accrual versus
accrual basis of accounting, and current financial resources versus economic resources), it is useful to
compare the information presented for governmental funds with similar information presented for
governmental activities in the GWFS. By doing so, the reader may better understand the long-term impact
of near -term financing decisions. Reconciliations are provided for both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances to
facilitate the comparison between governmental funds and governmental activities.
The City maintains 30 individual governmental funds. Information is presented separately in the
governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and
changes in fund balances for the General Fund and Governmental Capital Projects Fund, which are
considered to be major funds. The governmental FFS can be found on pages 44-47 of the CAFR. Data for
the other 28 governmental funds are combined into a single, aggregated presentation.
The City adopts a budget annually for the General Fund and most other funds. In the RSI section, a
budgetary comparison statement for the General Fund has been provided to demonstrate compliance with
the budget.
Proprietary FFS: The City maintains two different types of proprietary funds. Enterprise funds are used
to report the same functions presented as business -type activities in the GWFS. Enterprise FFS provide the
same type of information as the GWFS, only in more detail. The City uses enterprise funds to account for
LP&L, water/wastewater, WTMPA, storm water, transit, airport, civic centers, cemetery, and Lake Alan
Henry Recreation activities, of which the first four activities are considered to be major funds by the City
and are presented separately. The latter five activities are considered non -major funds and are combined
into a single aggregated presentation.
Internal service funds are an accounting device used to accumulate and allocate costs internally among the
City's various functions. The City uses internal service funds to account for vehicle service operations and
fueling, central warehouse and printing services, information technology services, risk management, health
benefits, and investment pool funds. The services provided by the internal service funds benefit both
governmental and business -type activities, and accordingly, they have been included within governmental
activities and business -type activities, as appropriate, in the GWFS. All internal service funds are combined
into a single aggregated presentation in the proprietary FFS. Reconciliations are provided for the
proprietary fund statement of net position and the proprietary fund statement of revenues, expenses, and
changes in fund net position for comparison between enterprise funds and business -type activities. The
proprietary FFS can be found on pages 48-59 of the CAFR.
Notes to Basic Financial Statements: The notes provide additional information that is essential to a full
understanding of the data provided in the GWFS and FFS. The notes can be found on pages 60-110 of the
CAFR.
Other Information: In addition to the basic financial statements and accompanying notes, this report also
presents certain RSI including the Schedule of Changes in Net Pension Liability and Related Ratios, the
Schedule of Contributions for the City's pension plans, and the Schedule of Changes in Total OPEB
25
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
Liability and Related Ratios. The General Fund budgetary comparison demonstrating the legal level of
budgetary control can also be found as part of the RSI. The RSI can be found on pages 111-118 of the
CAFR.
Combining Fund Statements and Schedules are included after RSI. This includes Nonmajor Funds and
Nonmajor Discretely Presented Component Units. Certain special revenue funds and the debt service fund
budgetary comparison schedule are presented in this section, demonstrating compliance at the legal level
of budgetary control.
Government -Wide Financial Analysis
As noted earlier, net position serves as a useful indicator of the City's financial position. Assets and
deferred outflows exceeded liabilities and deferred inflows by $933.9 million (net position) at the close of
the fiscal year, compared to assets and deferred outflows exceeding liabilities and deferred inflows by
$896.6 million (net position) at the end of the prior fiscal year. As a result of operations, total net position
increased by $84.1 million during the period. However, due to the adoption of GASB Statement No. 75,
there was a restatement of previously reported net position of ($46.9) million resulting in a total decrease
in net position below of $37.2 million.
City of Lubbock Net Position
September 30
(in thousands)
Governmental Business -type
Activities Activities Total
2018 2017 2018 2017 2018 2017
Current and other assets
$ 209,172
$ 192,931
$ 470,136
$ 413,792
$ 679,308
$ 606,723
Capital assets
468,328
422,376
1,521,974
1,510,554
1,990,302
1,932,930
Total assets
677,500
615,307
1,992,110
1,924,346
2,669,610
2,539,653
Total deferred outflows
of resources
39,354
63,780
20,427
26,016
59,781
89,796
Current liabilities
23,488
22,779
61,701
60,887
85,189
83,666
Noncurrent liabilities
664,865
626,646
1,026,589
1,017,846
1,691,454
1,644,492
Total liabilities
688,353
649,425
1,088,290
1,078,733
1,776,643
1,728,158
Total deferred inflows
of resources
12,933
3,364
5,940
1,297
18,873
4,661
Net position:
Net investment in capital
assets
152,999
126,550
764,280
730,908
917,279
857,458
Restricted
22,596
20,189
50,683
39,890
73,279
60,079
Unrestricted
(160,027)
(120,441)
103,343
99,534
(56,684)
(20,907)
Total net position
$ 15,568
$ 26,298 $
918,306 $
870,332 $
933,874 $
896,630
Approximately 98.2 percent of the City's net position reflects its investment in capital assets, e.g., land,
buildings, infrastructure, machinery and equipment, less accumulated depreciation and any related
outstanding debt used to acquire those assets. The City uses capital assets to provide services to citizens;
26
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
consequently, those assets are not available for future spending. Although the City's investment in capital
assets is reported net of related debt, the resources needed to repay this debt must be provided from other
sources since the capital assets cannot be used to liquidate the liabilities.
The City has restricted net position totaling $73.3 million, which represent resources subject to external
restrictions on how they may be used. Such resources include bond funds restricted to be spent for specified
capital projects, debt service reserves restricted by bond covenants, passenger facility charges restricted for
airport improvements, and special revenue funds restricted for specific purposes.
The unrestricted net position is the amount that may be used to meet the government's ongoing obligation
to citizens and creditors. The adoption of GASB Statement No. 68 in FY 2015 and No. 75 in FY 2018
resulted in the City's reporting of net pension liabilities, total OPEB liability, deferred inflows of resources,
deferred outflows of resources and recognition of pension/OPEB expense. Both statements had a
significant negative effect on the Cities' net position and consequently unrestricted net position as of
September 30, 2018.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net
position for business type activities. The government -wide unrestricted net position decreased by $35.8
million from FY 2017 due to the ($46.9) million impact related to the implementation of GASB Statement
No. 75.
27
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
City of Lubbock Changes in Net Position
For the Years Ended September 30
(in thousands)
Business -
Governmental
type
Activities
Activities
Totals
Revenues:
2018
2017
2018
2017
2018
2017
Program Revenues:
Charges for services
$ 33,491 $
10,906 $
426,977 $
438,165
$ 460,468 $
449,071
Operating grants and contributions
6,447
7,241
8,297
7,902
14,744
15,143
Capital grants and contributions
15,152
10,832
16,466
15,326
31,618
26,158
General Revenues:
Property taxes
89,644
86,302
-
-
89,644
86,302
Sales taxes
73,572
70,418
-
-
73,572
70,418
Other taxes
9,018
8,629
-
-
9,018
8,629
Franchise fees
9,332
9,073
-
-
9,332
9,073
Investment earnings
2,675
1,371
8,241
2,841
10,916
4,212
Other
4,255
3,362
1,303
1,917
5,558
5,279
Total revenues
243,586
208,134
461,284
466,151
704,870
674,285
Expenses:
Administrative services/general govt.
14,855
14,598
-
-
14,855
14,598
Community services
5,065
6,220
-
-
5,065
6,220
Cultural and recreation
18,894
20,146
-
-
18,894
20,146
Economic and business development
18,939
17,207
-
-
18,939
17,207
Fire
61,090
61,435
-
-
61,090
61,435
Health
5,790
5,905
-
-
5,790
5,905
Police
67,835
69,597
-
-
67,835
69,597
Other public safety
8,014
7,991
-
-
8,014
7,991
Streets and traffic
30,656
28,674
-
-
30,656
28,674
Solid Waste
16,820
-
-
-
16,820
-
Interest on long-term debt
11,858
12,349
-
-
11,858
12,349
Electric
-
-
217,958
224,783
217,958
224,783
Water/Wastewater
-
-
94,691
84,789
94,691
84,789
Solid Waste
-
-
-
19,277
-
19,277
Storm Water
-
-
11,658
11,901
11,658
11,901
Transit
-
-
13,614
13,293
13,614
13,293
Airport
-
-
17,865
16,720
17,865
16,720
Civic Centers
-
-
4,147
4,344
4,147
4,344
Cemetery
-
-
606
760
606
760
Lake Alan Henry
-
-
391
383
391
383
Total expenses
259,816
244,122
360,930
376,250
620,746
620,372
Change in net position before
transfers
(16,230)
(35,988)
100,354
89,901
84,124
53,913
Transfers
40,130
34,989
(40,130)
(34,989)
-
-
Change in net position
23,900
(999)
60,224
54,912
84,124
53,913
Net position - beginning as restated*
(8,332)
27,297
858,082
815,420
849,750
842,717
Net position - end of year
$ 15,568 $
26,298 $
918,306 $
870,332
$ 933,874 $
896,630
*The restatement of the beginning net position in FY 2018 is the result of the City implementing GASB Statement No. 75. FY 2017 was not
restated.
Changes in Net Position: Details of the above summarized information can be found on pages 42-43 of
the CAFR.
28
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
Governmental activities: The City's governmental activities experienced an increase in net position of
$22.3 million, compared to a decrease of $1.0 million during the prior fiscal year. Key elements of the
operational increase compared to prior year include:
Revenues increased $35.5 million, from $208.1 million in FY 2017 to $243.6 million in FY 2018.
o The City experienced a $26.1 million increase in total program revenues from FY 2017 to FY 2018.
Charges for services increased $22.6 million from FY 2017 to FY 2018 and operating grants and
contributions decreased $0.8 million Capital grants and contributions increased $4.3 million from
FY 2017 to FY 2018. Solid Waste was moved to the General Fund in FY 2018 causing a $22.7
million increase in charges for services. Plumbing and electrical revenue dropped by $0.1 million
in FY 2018 lowering the charges for services. Community Development grant revenue decreased
by $0.8 million. Developers contributed $13.6 million in donated streets in FY2018, a $3.9 million
increase from FY 2017.
o Property tax revenue increased from $86.3 million in FY 2017 to $89.6 million in FY 2018. The
property tax rate stayed flat from $0.53802 per $100 of assessed value in 2017 to $0.53802 per 100
of assessed value in 2018. Taxable assessed values increased from $15.9 billion in 2017 to $16.8
billion in 2018, as real property valuations continued to climb.
o Sales tax revenue increased from $70.4 million in FY 2017 to $73.6 million in FY 2018. Since FY
2008, Lubbock had experienced a steady increase in sales tax revenue averaging a 4.25 percent
increase annually in that time frame. In FY 2018, Lubbock experienced a 4.5 percent increase in
sales tax.
o Franchise fees increased from $9.1 million in FY 2017 to $9.3 million in FY 2018. The slight
increase is due to collections on past due amounts.
Total expenses increased $15.7 million, from $244.1 million to $259.8 million in FY 2018.
o Employee compensation decreased overall due to all employees paying a portion of their health
and dental benefits in FY 2018. The Texas Municipal Retirement System (TMRS) contribution
rate increased slightly from 17.95 percent in FY 2017 to 18.05 percent in FY 2018 and the Lubbock
Fire Pension Fund rate increased from 21.72 percent in FY 2017 to 21.81 percent in FY 2018.
o Solid Waste was moved under Governmental Activities in FY 2018 from Business -Type Activities.
The move caused a $16.8 million increase in expenses.
o Fire Department expenses decreased $0.3 million to $61.1 million in FY 2018. The GASB 68
pension expense of the fire department decreased by $1.1 million in FY 2018. The salary and
benefit cost increased by $0.9 while the maintenance and other charges decreased slightly.
o Police services decreased $1.8 million to $67.8 million in FY 2018. The GASB 68 pension expense
of the police department decreased by $2.6 million in FY 2018. Police salary and benefit expenses
increased by $1.1 million due to overtime expenses. Maintenance operating expenses increased
slightly by $0.7 million in FY 2018.
o Cultural and recreation decreased by $1.2 million to $18.9 million in FY 2018. Cultural and
recreation salary and benefit and maintenance expenses decreased by $0.5 million in FY 2018.
Mowing services and chemical supplies expenses decreased due to drought and wind conditions in
FY 2018. Electric utilities expense decreased due to relocation of Parks Maintenance Department.
• Transfers from business -type activities during FY 2018 increased governmental activities' net position
by $40.1 million. During the prior fiscal year, the transfers increased governmental activities' net
position by $35.0 million. Transfers from Lubbock Power and Light to the general fund increased by
$3.7 million in FY 2018. Transfers from storm water to the general fund increased by $0.4 million in
FY 2018.
29
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
o Net transfers from business -type activities included payments in lieu of taxes, franchise fees, and
indirect costs of operations for centralized services such as payroll and purchasing to governmental
activities.
The following graph depicts the expenses and program revenues generated through the City's various
governmental activities.
Expenses and Program Revenues - Governmental Activities
60.0
sue.
d
o
p
50.0
C7
x
a0.0
c
30.0J
�
d
�
20.0
U
❑ Expense
❑ Program revenue
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The following graph reflects the source of revenues and the percentage each source represents of the
total.
Charg
Grants
Contribu
8.9O
Investment Earnings
1.1 %
Franchise F
3.8%
Other
M
Revenues by Source - Governmental Activities
30.2%
N inrrllanPnnc
Property Taxes
36.8%
Business -type activities: Revenues from the City's business -type activities totaled $461.3 million,
compared to $466.2 million in FY 2017, a decrease of $4.9 million. Key elements of the revenue decrease
from operations include:
Charges for services for business -type activities totaled $427.0 million in FY 2018, a decrease of $11.2
million from the prior year.
o Electric operations, which include Lubbock Power & Light and West Texas Municipal Power
Authority, totaled $246.9 million in FY 2018, a decrease of $5.2 million. The operating revenue
decrease was driven by a $4.7 million decrease in general consumers' metered revenue. These
revenues were down due to lower PPRF rates related to reduced purchased power costs. A decrease
in fees and charges totaling $0.9 million was due to less revenue from reconnect fees, payment
arrangement setups and lower work orders related to new construction.
o Water/Wastewater operations totaled $134.3 million in FY 2018, an increase of $11.5 million.
Average daily water usage was 34.6 million gallons for FY 2018, up from 32.4 million gallons in
FY 2017. Water charges for services increased from $81.1 million in FY 2017 to $86.5 million in
FY 2018. Wastewater charges for services increased from $42.3 million in FY 2017 to $47.8
million in FY 2018 due to volume rates increasing from $3.17 to $3.71 in FY 2018.
o Storm Water Fund operations totaled $26.4 million, an increase of $0.9 million. The slight increase
was due to new construction in FY 2018.
0 Operating grants, capital grants and contributions produced $24.8 million in revenue for business -type
activities during FY 2018, an increase of $1.6 million from the prior year. The increase is related to
31
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
Water/Wastewater capital grants and contributions, which increased from $6.0 million in FY 2017 to
$12.6 million in FY 2018. Airport had two large runway projects wrap up, so capital grants and
contributions decreased from $5.8 million in FY 2017 to $0.4 in FY 2018.
Expenses for business -type activities were $360.9 million in FY 2018, a decrease of $15.4 million.
Electric operating expenses were $218.0 million, a decrease of $6.8 million from the prior year. The
primary operating expenses contributing to the decrease included a $7.4 million decrease in the
purchase of fuel and power. Other services and charges increased by $1.2 million which was largely a
result of one-time system costs associated with the installation of the new billing and payment solution
as well as one-time trailing charges related to the old billing and payment solution, totaling just under
$1.0 million. Depreciation and amortization expense increased $0.3 million in FY 2018 as a result of
increased depreciable capital assets relative to FY 2017. Interest and debt -related expense increased
from FY 2017 in an amount totaling $1.5 million due to higher bond interest payments and bond
issuance costs associated with the 2018 issuance.
Expenses in the Water/Wastewater Fund were $94.7 million in FY 2018, up $9.9 million from FY 2017.
Water expenses remained steady as other services and charges decreased by $1.0 million in FY 2018
while interest expense went up $0.4 million. Wastewater supplies and other services and charges
increased by $0.4 million and $1.3 million in FY 2018. A large decrease in capital interest was due to
Wastewater assets being in use or ready for their intended use in FY 2018. As a result, interest expense
increased from $14.1 million in FY 2017 to $22.3 million in FY 2018. Personnel services also
decreased $0.2 million in FY 2018.
• Expenses in the Storm Water Fund were $11.7 million in FY 2018, a decrease of $0.2 million from the
prior year. Personnel cost decreased by $0.4 million in FY 2018 to $1.9 million. The decrease was
because of vacancy savings in positions along with benefits savings due to employees paying a portion
of their benefits in FY 2018. Billing office expense increased $0.1 million in FY 2018 from FY 2017.
Expenses for transit, airport, civic centers, cemetery, and Lake Alan Henry were $36.6 million, a $1.1
million increase from FY 2017. Transit Fund expenses increased by $0.3 million in FY 2018 to $13.6
million. Transit other services and charges increased by $0.2 million in FY 2018 and depreciation
expense increased by $0.1 million as well. Airport expenses increased by $1.1 million in FY 2018 to
$17.9 million. Airport depreciation increased by $1.5 million in FY 2018 while personnel services
and other services and charges decreased slightly. Civic centers expenses decreased by $0.2 million
in FY 2018 and Cemetery expenses decreased from $0.8 million in FY 2017 to $0.6 million in FY
2018. Personnel services decreased by $0.1 million due to vacancies and employees paying a portion
of their benefits for the first time in FY 2018.
32
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The following graph reflects the revenue sources generated by the business -type activities. As noted earlier,
the activities include LP&L and WTMPA (Electric), water, wastewater, storm water, transit, airport, civic
centers, cemetery, and Lake Alan Henry.
Revenues by Source — Business -type Activities
Grants and
Contributions Miernllannnne
Investme
1
92.6%
Financial Analysis of the City's Funds
!rvices
Governmental funds: The focus of the City's governmental funds is to provide information on near -term
inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City's
financing requirements. The General Fund is the chief operating fund of the City.
The GASB has defined five types of fund balances, which, are more fully described in the notes to the
financials. The City uses four of the five types of fund balances defined: nonspendable, restricted,
committed, and unassigned. At the end of the year, the City's governmental funds reported combined
ending fund balances of $164.7 million, compared to $152.1 million at the end of the prior fiscal year.
The unassigned fund balance serves as a useful measure of the City's resources available for spending at
the end of the fiscal year. In FY 2018, the General Fund had $48.0 million unassigned fund balance
compared to $37.5 million unassigned fund balance in FY 2017. This is 29.1 percent of the ending
governmental fund balance, compared to 24.7 percent of the ending governmental fund balance, at the end
of the prior fiscal year. As a measure of the General Fund's liquidity, it is useful to compare both the
unassigned fund balance and total fund balance to total fund revenues. Unassigned fund balance
represented 27.7 percent of total General Fund revenues compared to 27.1 percent of total General Fund
33
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
revenue in the prior year. Total fund balance represented 30.7 percent of total General Fund revenues
compared to 28.6 percent of total General Fund revenue in the prior year.
The Governmental Capital Project Fund had a decrease in fund balance of $8.4 million in FY 2018. Large
outlay expenditures in projects that were financed with previous year debt caused the drop in fund balance
to $64.1 million. Long term debt of $9.0 million was issued in FY 2018 to fund projects going forward.
Proprietary funds: The City's proprietary fund statements provide essentially the same type of information
found in the GWFS, but in more detail. Unrestricted net position of the major proprietary funds at the end
of September 30, 2018 and 2017 are as follows with amounts presented in thousands:
2018
2017
LP&L $ 46,792
$ 48,257
Water/Wastewater Fund 35,212
33,569
WTMPA 1,054
(281)
Storm Water 5,294
5,077
$ 88,352
$ 86,622
The LP&L Fund unrestricted net position increased by $1.5 million, compared to an increase of $0.5 million
in the prior year. Due to the adoption of GASB Statement No. 75, the FY 2017 net position was restated
because of a change in accounting principle that required LP&L to eliminate the Net OPEB Obligation of
$9.4 million and then make a prior period adjustment to record the OPEB Liability of $16.9 million. Both
of these adjustments were netted against net position, causing a total prior period adjustment of $7.5 million.
FY 2018 net position before contributions and transfers of $31.7 million was $3.9 million higher than in
FY 2017. This was due to a $6.6 million decrease in operating expenses and a $4.7 million decrease in
operating revenues. The main operating expenses contributing to the $6.6 million decrease included the
$7.4 million decrease in the purchase of fuel and power, and a $1.2 million increase in other services and
charges cost. The $4.7 million operating revenue decrease was driven by the decrease in general
consumers' metered revenues and slight decrease in other revenues related to lower meter reconnect fees,
payment arrangements, and lower outside work orders due to new construction.
The Water/Wastewater Fund unrestricted net position increased by $1.6 million compared to a decrease of
$1.0 million in the prior year. The adoption of GASB Statement No. 75 caused a prior period adjustment
of $5.5 million that decreased unrestricted net position. Revenues increased by $11.5 million in FY 2018
due to an increase in average daily water consumption from 32.4 million gallons in FY 2017 to 34.6 million
gallons in FY 2018. Wastewater volume rates increased from $3.17 in FY 2017 to $3.71 in FY 2018. A
large decrease in capital interest was due to Wastewater assets being in use or ready for their intended use
in FY 2018. As a result, interest expense increased from $14.1 million in FY 2017 to $22.3 million in FY
2018. Other services and charges expense decreased in Water by $1.0 million in FY 2018 while
Wastewater other services and charges increased by $1.3 million due to the NW Water Reclamation Plant
being mostly complete in FY 2018.
The WTMPA Fund unrestricted net position increased by $1.3 million compared to an increase of $1.2
million during the prior fiscal year. Operating revenue decreased by $7.5 million in FY 2018 to $159.6
million. Operating expenses decreased by $7.4 million in FY 2018 to $160.0 million. The decrease in
revenue and expense was related to the decrease in fuel and power cost.
34
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The Storm Water Fund unrestricted net position increased by $0.2 million compared to a $0.8 million
increase in the prior fiscal year. Revenues increased by $0.9 million in comparison to FY 2017. Personnel
cost decreased by $0.3 million in FY 2018 to $1.9 million. The decrease was because of vacancy savings
in positions along with benefits savings due to employees paying a portion of their benefits in FY 2018.
This was offset by the adoption of GASB Statement No. 75, which required a prior period adjustment of
$0.9 million decreasing net position.
General Fund Budgetary Highlights
The Adopted Operating Budget for the General Fund, including transfers, totaled $205.7 million.
The final adopted budget revenue for FY 2018, including transfers in, totaled $206.1 million. The only
budget change request (BCR) made was to increase General Fund cash by $405,191 due to the Storm Water
Utility Fee Restructure project being closed. The cash was not needed to complete the project. Actual
revenue was $217.5 million. Revenue and transfers -in in the General Fund were more than budget by $11.4
million. The Solid Waste Fund was moved to the General Fund which caused a $10.0 million transfer. The
City's sales tax revenue was $2.1 million over budget. Interest earnings were $0.4 million over budget
and franchise fees were over budget by $0.5 million. These were offset by the transfer from LP&L being
$1.7 million less than budget.
The original operating expenditure budget for the General Fund, including transfers out, totaled $212.9
million. An amendment was passed to carry forward balances not used in FY 17 in the amount of $0.1
million for equipment in Solid Waste and a feasibility study that begun in FY 17 but was not complete.
The final General Fund expenditure budget totaled $213.0 million.
The City ended the fiscal year with expenditures and transfers out totaling $211.8 million, $1.1 million less
than budgeted. Expenditures were lower across the board due to compensation and benefits being less than
anticipated due to attrition, mostly from retirements and continued difficulty filling positions. Also,
employees are paying for a portion of their health benefits which caused expenses to decrease overall. Fuel
prices and electric utility costs were lower than anticipated which affected all areas. City Secretary was
under budget by $0.5 million due to no run-off elections needed in FY 18. Parks was under budget by $1.2
million due to lower compensation and benefits as stated above, lower pesticide expense, and also due to
lower mowing contract expenses because of drought conditions.
The City budgets on a basis other than Generally Accepted Accounting Principles (GAAP), with the main
difference being that debt proceeds and related capital outlay are not budgeted.
Capital Assets and Debt Administration
Capital assets: The City's investment in capital assets, net of accumulated depreciation, for its
governmental and business -type activities at September 30, 2018 totaled $1.99 billion, a $57.3 million
increase over the prior fiscal year's balance of $1.93 billion. The investment in capital assets includes land,
buildings and improvements, equipment, construction in progress, and infrastructure.
35
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
City of Lubbock Capital Assets
(Net of Accumulated Depreciation)
September 30
(in thousands)
Business -
Governmental
type
Activities
Activities
Totals
2018
2017
2018
2017
2018
2017
Land
$ 28,839
$ 25,332
$ 61,329 $
57,679
$ 90,168 $
83,011
Electric non -depreciable
-
-
17,069
16,807
17,069
16,807
Buildings
38,956
35,148
140,715
99,598
179,671
134,746
Improvements other
than buildings
304,392
286,287
968,388
856,358
1,272,780
1,142,645
Machinery and equipment
58,496
45,302
93,079
75,932
151,575
121,234
Electric depreciable
-
-
191,315
196,458
191,315
196,458
Construction in progress
37,645
30,308
50,079
207,722
87,724
238,030
Total
$ 468,328
$ 422,377
$ 1,521,974 $ 1,510,554
$ 1,990,302 $
1,932,931
Major capital asset projects and purchases during the fiscal year included the following:
• New Emergency Operation Center located at Lubbock Fire Complex, totaling $1.8 million
• LP&L upgrades to Chalker Substation capacity, totaling $7.7 million
• Construction of storm water infrastructure from Maxey Park to Canyon Lakes, totaling $17.0 million
• Construction work on a new Northwest Water Reclamation Plant, totaling $10.1 million
• Water Pump Station #10 located at 82"a/Memphis constructed improvements totaling $7.6 million
• Citizens Tower that will serve as the new city hall, totaling $16.9 million
At the end of the fiscal year, the City had construction commitments of $302.4 million. LP&L has $34.8
million remaining commitments for a new customer information system. The new system will integrate
technologies and innovative services such as advanced meters, communication networks, and data
management systems. The municipal facilities replacements project has $37.7 million in commitments.
The Citizens Tower and new police station fall under this municipal facilities replacement project. The
airport has $26.2 million in commitments for a remodel of the terminal.
Additional information about the City's capital assets can be found on pages 78-82 of the CAFR.
36
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
Long-term debt: A summary of the City's total outstanding debt follows:
Governmental Business -type
Activities Activities Totals
2018 2017 2018 2017 2018 2017
General obligation bonds $ 344,584 $ 328,974 $ 656,626 $ 718,321 $ 1,001,210 $ 1,047,295
Revenue and contract bonds - - 210,542 132,469 210,542 132,469
Capital Lease Obligation 11,351 15,615 2,653 14,321 14,004 29,936
Total $ 355,935 $ 344,589 $ 869,821 $ 865,111 $ 1,225,756 $ 1,209,700
There is no direct debt limitation in the City Charter or under state law. The City operates under a Home
Rule Charter that limits the maximum tax rate for all city purposes to $2.50 per $100 of assessed valuation.
The Attorney General of the State of Texas permits an allocation of $1.50 of the $2.50 maximum tax rate
for general obligation bonds debt service. The FY 2018 interest and sinking fund tax rate per $100 of
assessed valuation was $0.12662, which is significantly below the maximum allowable tax rate.
As of September 30, 2018, the City's total outstanding debt has increased by $16.1 million, or 1.3 percent
from the prior fiscal year. The increase in outstanding debt is attributed to the issuance of $236.6 million
in debt, offset by the payment of scheduled principal payments totaling $101.6 million and refunded debt
of $118.9 million.
During the fiscal year, the City issued the following bonds and certificates:
$18.5 million Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series
2018A (Certificates), with interest rates ranging from 3.00 percent to 5.00 percent. The
Certificates were issued at a premium of $2,105,259 and incurred issuance cost of $210,259.
The $20,640,259 proceeds from the sale of the Certificates will be used for the purpose of
paying contractual obligations to be incurred for various public improvements and
renovations including: (i) purchase of computing assets for the Secondary Data Center; (ii)
renovations, improvements and extensions to City streets, including sidewalks, street lighting,
traffic signals/controllers and traffic signal communication systems, signage, landscaping,
utility improvements, extensions, relocations and acquisition of land, rights -of -way and
equipment in connection therewith; and (iii) payment of professional services of attorneys,
financial advisors, engineers and other professionals in connection with the Project and the
issuance of the Certificates.. The proceeds of the debt are recorded in the various Capital Projects
Funds.
$14.7 million Tax and Waterworks System Surplus Revenue Certificates of Obligation, Series
2018B (Certificates), with interest rates ranging from 2.30 percent to 4.06 percent. The
Certificates were issued at par and incurred issuance cost of $175,000. The $14,675,000
proceeds from the sale of the Certificates will be used for the purpose of paying contractual
obligations to be incurred for various public improvements and renovations including: (i)
construction, renovations and improvements to the Lubbock Preston Smith International
Airport facilities, including terminal building remodeling and construction of a consolidated
rental car parking facility; and (ii) payment of professional services of attorneys, financial
37
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
advisors, engineers and other professionals in connection with the Project and the issuance of
the Certificates. The proceeds of the debt are recorded in the various Capital Projects Funds.
$93.93 million Electric Light and Power System Revenue System Bonds, Series 2018 (Bonds), with
interest rates from 4.00 percent to 5.00 percent. The Bonds were issued at a premium of
$12,858,194 and incurred issuance costs of $942,947. $106,783,194 of the proceeds of the
sale of the Bonds will be used for the purpose of paying contractual obligations to be incurred
for the purposes of. (i) paying the costs of acquiring, purchasing, constructing, improving,
renovating, enlarging, and/or equipping property, buildings, structures, facilities, and/or
related infrastructure for the System, (ii) funding capitalized interest, (iii) funding the reserve
fund requirement for the Bonds, and (iv) paying the costs of issuing the Bonds.
• $13.3 million Tax Note, Series 2018 - The proceeds were used for the purpose of providing funds to
pay contractual obligations incurred or to be incurred (i) for the purchase of the Property, consisting
of. materials, supplies, equipment and machinery for the City's Citibus, Fire, Public Works Streets
and Solid Waste Management departments; and (ii) to pay the costs of issuance related thereto.
• $96.2 million General Obligation Refunding, Series 2018 - The proceeds were used to refund a
portion of the City's outstanding indebtedness for the purpose of achieving debt service
savings. The bonds refunded $104.7 million in outstanding debt, which resulted in a decrease
of $4.9 million in total debt service requirements.
In March 2018, Fitch Ratings, Inc. and Standard and Poor's each reaffirmed the City's bond rating of AA+
and characterized the City's rating outlook as stable.
Additional information about the City's long-term debt can be found on pages 96-102 of the CAFR.
Economic Factors and the Next Fiscal Year's Budget and Rates
• In September 2018, the average unemployment rate for the Lubbock area was 3.0 percent, up from 2.9
percent in September of the previous year. The rate compares favorably to the State's unemployment
rate of 3.7 percent and the national rate of 3.6 percent for September 2018.
• Taxable retail sales tax was $73.6 million in FY 2018 compared to $70.4 million in FY 2017.
• The total number of new residential permits through September 2018 decreased 22.6 percent from 2017
levels, and valuation amounts were $227.4 million which is 45.5 percent lower than the same time
period in 2017.
• Hotel occupancy tax receipts increased to $7.4 million in FY 2018 compared to $7.0 million in FY
2017.
The following factors were considered in preparing the City's budget for FY 2019.
• The City has adopted an increased tax rate of 54.802 cents per $100 valuation for FY 2019. This
is a 1.0 cent increase from FY 18. The tax rate for debt service increased from 12.662 cents to
38
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
13.662 cents per $100 valuation. The Maintenance and Operations rate remains the same at 38.825
cents per $100 valuation. The property tax rate per $100 valuation is broken down as follows:
General Fund 38.825 cents; Debt Service Fund 13.662 cents; and Economic Development Fund
2.315 cents. Property tax revenues are expected to increase by $5.5 million for FY 2019 of which
$2.0 million is new property on the roll.
• Sales tax revenues in FY 2019 are expected to increase 3.0 percent compared to the FY 2018 re -
forecasted amount.
Payments in lieu of franchise fees are expected to increase 1.8 percent. One hundred percent of
franchise fees are recorded in the General Fund as was implemented with the FY 2018 Adopted
Budget. A transfer to the appropriate fund such as Gateway is included as part of the expenditures.
Franchise fee payments are based on 5.0 percent of metered revenues for LP&L and 5.0 percent of
gross revenues for all other municipal utilities. Payments in lieu of property taxes increased $0.6
million, due to an increase of 1.0 cent to the property tax rate.
• Fees for services are expected to increase by $0.9 million in FY 2019. This is due to Solid Waste
increasing tipping fees by three dollars and the residential rate by 75 cents. Other significant
changes to fees for services include increases and additions to fire inspection fees as well as increase
to swimming pool admission, instruction, and rental rates.
• Compensation costs are expected to increase 5.8 percent in FY 2019. Increases in Police and Fire
compensation total $3.5 million. Positions in the General Fund increased by 50, with the addition
of 29 coming during the Engineering reorganization and two Marshal positions coming from a
Special Revenue fund in Municipal Court. Nineteen additional positions were added to critical
areas in the General Fund to address the needs of the City.
• Health insurance is projected to increase $0.4 million or 2.7 percent as a result of the increase in
staff. The health insurance plan costs remained the same.
• Charges for computer and other equipment increased 69.2 percent or $0.2 million due to funding
new mobile and web applications to replace current 311 online services for 311 Call Center, new
tablets and software for Animal Services, new dumpsters in residential collection, and new radio
lapel mics in fire suppression.
• Motor vehicle maintenance cost is expected to increase 8.3 percent, or $0.4 million in FY 2019.
The increase is due to expired warranties on several pieces of heavy equipment.
• The transfer to the capital program totals $10.3 million this year. Fifteen capital projects are cash
funded in FY 19. Seven projects are related to the ongoing maintenance on City facilities. A project
has been approved for comprehensive plan implementation and one for city council initiatives.
Parks has three projects for improvements to parks. The Adopted Budget also includes funding the
street maintenance project solely with cash. The other projects for public works are for backup
power at signalized intersections and ADA ramps and sidewalks.
39
City of Lubbock, Texas
Management's Discussion and Analysis
For the Year Ended September 30, 2018
The monthly Wastewater Fund base rate will increase 3.1 percent from $16.00 to $16.50 in FY
2019. There is no rate increase proposed for Water. Revenue is expected to increase $1.0 million
or .8 percent from FY 18.
Requests for Information
The financial report is designed to provide a general overview of the City of Lubbock's finances. Questions
concerning any of the information provided in the report or requests for additional financial information
should be addressed to the Director of Accounting, City of Lubbock, P.O. Box 2000, Lubbock, Texas,
79457.
40
City of Lubbock, Texas
Statement of Net Position
September 30, 2018
Primary Government
Governmental
Business -type
Component
Activities
Activities
Total
Units
ASSETS
Cash and cash equivalents
$ 4,052,028
$ 7,763,566
$ 11,815,594
$ 16,682,270
Investments
93,166,739
167,323,738
260,490,477
12,135,473
Receivables (net of allowance for uncollectibles)
18,914,188
53,256,875
72,171,063
2,301,141
Internal balances
2,139,945
(2,139,945)
-
-
Due from other governments
2,020,342
1,045,160
3,065,502
300,127
Due from others
2,520,954
217,822
2,738,776
-
Inventories
270,959
3,434,739
3,705,698
308,066
Prepaid expenses
471,930
1,649,798
2,121,728
18,652
Restricted assets:
Cash and cash equivalents
-
-
-
2,262,276
Investments
85,214,444
237,584,043
322,798,487
-
Leases receivable
400,075
-
400,075
-
Investment in property
-
-
187,028
Mortgage receivables
3,394,507
Land Inventory
-
-
-
3,245,662
Capital assets (net of accumulated depreciation):
Non -depreciable
66,484,143
128,475,882
194,960,025
3,691,286
Depreciable
401,843,772
1,393,498,155
1,795,341,927
119,165
Total assets
677,499,519
1,992,109,833
2,669,609,352
44,645,653
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions
27,625,613
4,487,368
32,112,981
-
Deferred outflow from goodwill
-
531,114
531,114
Deferred outflow from OPEB
6,332,073
2,707,665
9,039,738
Deferred charge on refunding
5,396,625
12,700,551
18,097,176
Total deferred outflows of resources
39,354,311
20,426,698
59,781,009
-
LIABILITIES
Accounts payable
11,267,781
45,981,776
57,249,557
2,177,534
Accrued liabilities
5,855,408
5,006,792
10,862,200
127,087
Accrued interest payable
1,913,893
5,736,620
7,650,513
75,852
Customer deposits
-
4,972,897
4,972,897
-
Unearned revenue
4,450,565
3,220
4,453,785
380,862
Noncurrent liabilities due within one year:
Compensated absences
10,561,944
4,512,335
15,074,279
-
Accrued insurance claims
1,879,494
1,434,338
3,313,832
-
Leases payable
1,947,242
510,845
2,458,087
4,718,829
Bonds and notes payable
36,032,684
69,629,308
105,661,992
24,000
Noncurrent liabilities due in more than one year:
Compensated absences
18,739,899
1,179,108
19,919,007
-
Post -employment benefits
98,670,904
42,192,811
140,863,715
Net pension liability
141,578,652
29,223,691
170,802,343
Accrued insurance claims
206,370
2,363,605
2,569,975
Landfill closure and postclosure care
5,879,342
-
5,879,342
Rebatable Arbitrage
-
50,917
50,917
-
Leases payable
9,404,010
2,142,222
11,546,232
6,078,000
Bonds and notes payable
339,964,394
873,349,535
1,213,313,929
2,033,000
Total liabilities
688,352,582
1,088,290,020
1,776,642,602
15,615,164
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
12,932,827
5,940,015
18,872,842
-
Total deferred inflows of resources
12,932,827
5,940,015
18,872,842
NET POSITION
Net investment in capital assets
152,969,002
764,280,101
917,249,103
3,810,451
Restricted for:
Passenger facility charges
-
4,994,123
4,994,123
-
Debt service
10,427,738
45,689,128
56,116,866
-
Special revenue
12,168,893
-
12,168,893
3,581,535
Primary government agreement
-
-
-
100,000
Unrestricted
(159,997,212)
103,343,144
(56,654,068)
21,538,503
Total net position
$ 15,568,421
$ 918,306,496
$ 933,874,917
$ 29,030,489
See accompanying Notes to Basic Financial Statements
41
City of Lubbock, Texas
Statement of Activities
For the Year Ended September 30, 2018
Primary government:
Governmental activities:
Administrative services and general government
Community services
Cultural and recreation
Economic and business development
Fire
Health
Police
Other public safety
Streets and traffic
Solid Waste
Interest on long-term debt
Total governmental activities
Business -type activities:
Electric
Water/Wastewater
Storm Water
Transit
Airport
Civic Centers
Cemetery
Lake Alan Henry
Total business -type activities
Total primary government
Component units:
Urban Renewal Agency (URA)
Civic Lubbock, Inc.
Market Lubbock, Inc.
Lubbock Economic Development Alliance
Vintage Township Public Facilities Corporation
Total component units
Program Revenues
Operating
Charges for
Grants and
Expenses
Services
Contributions
$ 14,854,781
25,584
$ -
5,064,842
-
4,184,428
18,894,418
1,344,698
226,619
18,938,568
1,392,673
-
61,089,454
30,975
-
5,790,308
611,915
1,003,042
67,835,367
103,273
121,451
8,014,293
7,111,784
911,553
30,656,165
213,308
-
16,820,311
22,656,887
-
11,857,748
-
-
259,816,255
33,491,097
6,447,093
217,957,566
246,862,911
7,011
94,690,532
134,393,703
1,166,442
11,658,461
26,401,167
14,051
13,613,841
5,872,405
4,073,540
17,864,799
11,640,261
3,036,300
4,147,240
819,382
-
606,304
370,857
-
390,539
615,979
-
360,929,282
426,976,665
8,297,344
$ 620,745,537
$ 460,467,762
$ 14,744,437
$ 463,357
$ 211,958
$ -
2,763,361
2,434,027
378,698
12,119,377
93,891
236,204
7,259,784
-
93,325
151,704
-
-
$ 22,757,583
$ 2,739,876
$ 708,227
General revenues:
Property taxes
Sales taxes
Occupancy taxes
Other taxes
Franchise taxes
Investment earnings
Miscellaneous
Transfers, net
Total general revenues
and transfers
Change in net position
Net position - beginning restated
Net position - ending
See accompanying Notes to Basic Financial Statements
42
%,appal
Grants and
Net (Expenses) Revenues and
Changes in Net Position
Primary Government
Governmental Business -type
Activities Activities
Total Component Units
$
-
$ (14,829,197)
$ -
$ (14,829,197)
$ -
-
(880,414)
-
(880,414)
-
60,804
(17,262,297)
-
(17,262,297)
-
1,787,304
(15,758,591)
-
(15,758,591)
-
-
(61,058,479)
-
(61,058,479)
-
-
(4,175,351)
-
(4,175,351)
-
264,663
(67,345,980)
-
(67,345,980)
-
-
9,044
-
9,044
-
13,039,406
(17,403,451)
-
(17,403,451)
-
-
5,836,576
-
5,836,576
-
-
(11,857,748)
-
(11,857,748)
-
15,152,177
(204,725,888)
-
(204,725,888)
-
690,748
-
29,603,104
29,603,104
-
12,595,493
-
53,465,106
53,465,106
-
2,792,695
-
17,549,452
17,549,452
-
-
-
(3,667,896)
(3,667,896)
-
386,826
-
(2,801,412)
(2,801,412)
-
-
-
(3,327,858)
(3,327,858)
-
-
-
(235,447)
(235,447)
-
-
-
225,440
225,440
-
16,465,762
-
90,810,489
90,810,489
-
$
31,617,939
(204,725,888)
90,810,489
(113,915,399)
-
$
-
-
-
-
(251,399)
-
-
-
-
49,364
-
-
-
-
(11,789,282)
-
-
-
-
(7,166,459)
171,405
-
-
-
19,701
$
171,405
-
-
-
(19,138,075)
89,644,354
-
89,644,354
3,100,991
73,571,504
-
73,571,504
6,130,959
7,355,293
-
7,355,293
4,165,394
1,662,833
-
1,662,833
-
9,332,330
-
9,332,330
-
2,674,797
8,241,483
10,916,280
403,327
4,255,168
1,302,592
5,557,760
41,755
40,130,357
(40,130,357)
-
-
228,626,636
(30,586,282)
198,040,354
13,842,426
23,900,748
60,224,207
84,124,955
(5,295,649)
(8,332,327)
858,082,289
849,749,962
34,326,138
$ 15,568,421
$ 918,306,496
$ 933,874,917
$ 29,030,489
43
City of Lubbock, Texas
Balance Sheet
Governmental Funds
September 30, 2018
ASSETS
Cash and cash equivalents
Investments
Taxes receivable (net)
Accounts receivable (net)
Interest receivable
Due from other governments
Due from others
Inventory
Restricted investments
Leases receivable
Nonmajor
Governmental Governmental
General Fund Capital Projects Funds
$ 1,709,515
39,306,229
13,547,756
3,463,628
185,811
1,670,178
121,578
5,007,610
$ 426,549
9,807,488
65,702
61,979
56,640,331
Total
Governmental
Funds
$ 1,210,596
$ 3,346,660
27,834,775
76,948,492
1,524,067
15,071,823
-
3,529,330
28,457
276,247
2,020,342
2,020,342
849,255
2,519,433
-
121,578
22,660,692
84,308,633
400,075
400,075
Total assets
$ 65,012,305
$ 67,002,049
$ 56,528,259
$ 188,542,613
LIABILITIES
Accounts payable
$ 4,376,747
$ 2,703,599
$ 2,774,575
$ 9,854,921
Accrued liabilities
5,577,131
2,401
85,515
5,665,047
Due to other funds
-
-
1,354,833
1,354,833
Unearned revenue
254,895
181,778
4,013,892
4,450,565
Total liabilities
10,208,773
2,887,778
8,228,815
21,325,366
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
1,710,519
-
822,547
2,533,066
Total deferred inflows of resources
1,710,519
-
822,547
2,533,066
FUND BALANCES
Nonspendable
121,578
-
-
121,578
Restricted
5,007,610
54,138,039
34,772,499
93,918,148
Committed
-
9,976,232
12,704,398
22,680,630
Unassigned
47,963,825
-
-
47,963,825
Total fund balances
53,093,013
64,114,271
47,476,897
164,684,181
Total liabilities, deferred inflows of
resources, and fund balances
$ 65,012,305 $ 67,002,049 $ 56,528,259 $ 188,542,613
See accompanying Notes to Basic Financial Statements
44
City of Lubbock, Texas
Reconciliation of the Balance Sheet of Governmental Funds
To the Statement of Net Position
September 30, 2018
Total fund balance - governmental funds $ 164,684,181
Amounts reported for governmental activities in the Statement of Net Position are different
because:
Capital assets used in governmental activities are not financial resources and therefore
are not reported in the funds. 468,327,915
Internal service funds (ISF's) are used by management to charge the costs of certain activities,
such as insurance and telecommunications, to individual funds. The portion of the assets and
liabilities of the ISF's primarily serving governmental funds are included in governmental
activities in the Statement of Net Position as follows:
Net Position
7,509,141
General obligation bonds
15,757,849
Net book value of capital assets
(16,663,125)
Compensated absences
811,907
Post employment benefits
4,279,557
Net pension Liability
3,137,549
Deferred Inflows of Pensions
634,186
Deferred Outflows of Pensions
(476,954)
Deferred Outflows from OPEB
(274,636)
Amounts due from business -type ISF's for amounts undercharged
3,494,778
Certain liabilities are not due and payable in the current period
and therefore are not reported in the funds. Those liabilities are as
follows:
General obligation bonds
(344,583,509)
Capital leases payable
(11,351,252)
Closure/Post Closure
(5,879,342)
Compensated absences
(29,301,843)
Post employment benefits
(98,670,904)
Net pension liability
(141,578,652)
Accrued interest on general obligation bonds
(1,829,406)
Bond premiums and deferred charges on refunding are recognized as an other financing
source in the fund statements. In the government wide statements premiums and deferred
charges on refunding are amortized over the life of the bonds. Unamortized balances as of
fiscal year end equal premiums $31,413,569 and deferred charges on refunding $5,396,625. (26,016,944)
Deferred Inflows of Pensions (12,932,827)
Deferred Outflows of Pensions 27,625,613
Deferred Outflow from OPEB 6,332,073
Revenue earned but unavailable in the funds is deferred. 2,533,066
Net Position of governmental activities $ 15,568,421
See accompanying Notes to Basic Financial Statements.
45
City of Lubbock, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended September 30, 2018
Nonmajor
Total
Governmental
Governmental
Governmental
General Fund
Capital Projects
Funds
Funds
REVENUES
Taxes
$ 129,828,610
$ -
$ 42,439,469
$ 172,268,079
Franchise taxes
8,835,673
-
496,657
9,332,330
Special assessments
-
-
1,186,366
1,186,366
Fees and fines
3,119,379
-
266,228
3,385,607
Licenses and permits
2,746,803
-
-
2,746,803
Intergovernmental
603,012
162,370
6,290,949
7,056,331
Charges for services
25,798,552
-
146,607
25,945,159
Interest
710,521
1,045,814
492,893
2,249,228
IRS Build America Bond Subsidy
-
-
306,422
306,422
Miscellaneous
1,505,720
284,809
2,201,297
3,991,826
Total revenues
173,148,270
1,492,993
53,826,888
228,468,151
EXPENDITURES
Current:
Administrative services and general government
13,783,040
100,000
55,312
13,938,352
Community services
-
-
4,828,621
4,828,621
Cultural and recreation
14,287,015
326,958
85,146
14,699,119
Economic and business development
816,111
243,644
15,439,844
16,499,599
Health
4,019,992
88,517
1,177,978
5,286,487
Fire
48,973,385
167,804
117
49,141,306
Police
62,796,246
16,413
1,373,687
64,186,346
Other public safety
6,659,011
275,884
480,470
7,415,365
Streets and traffic
7,243,138
346,865
-
7,590,003
Solid waste
13,053,045
79,396
-
13,132,441
Intergovernmental
-
-
28,067
28,067
Debt service:
Principal
14,773,745
-
28,474,997
43,248,742
Interest and other charges
655,124
33,222
14,181,284
14,869,630
Capital outlay
2,397,080
33,199,453
3,115,998
38,712,531
Total expenditures
189,456,932
34,878,156
69,241,521
293,576,609
Revenues under expenditures
(16,308,662)
(33,385,163)
(15,414,633)
(65,108,458)
OTHER FINANCING SOURCES (USES)
Long-term debt issued
9,768,979
9,005,000
22,945,000
41,718,979
Bond premium
-
1,030,474
3,054,292
4,084,766
Payment to the refunded bond escrow agent
-
-
(20,510,547)
(20,510,547)
Transfers in
44,337,498
16,125,081
35,907,897
96,370,476
Transfers out
(24,334,333)
(1,169,642)
(18,437,964)
(43,941,939)
Net other financing sources
29,772,144
24,990,913
22,958,678
77,721,735
Net change in fund balances
13,463,482
(8,394,250)
7,544,045
12,613,277
Fund balances - beginning of year
39,629,531
72,508,521
39,932,852
152,070,904
Fund balances - end of year
$ 53,093,013
$ 64,114,271
$ 47,476,897
$ 164,684,181
See accompanying Notes to Basic Financial Statements
46
City of Lubbock, Texas
Reconciliation of the Statement of Revenues, Expenditures and Changes
In Fund Balances of Governmental Funds
To the Statement of Activities
For the Year Ended September 30, 2018
Net change in fund balances - total governmental funds $ 12,613,277
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost
of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the
amount by which capital outlays of $38,712,531 exceeded depreciation of $38,458,681 in the current period. 253,850
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-
term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the
governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. This is
the amount by which proceeds of $41,718,979 were exceeded by debt repayments of $31,423,412, and debt
defeasance of $19,744,688. 9,449,121
Capital lease transactions provide current financial resources to governmental funds and repayment of
principal is an expenditure. There were no proceeds and the amount of repayment was $11,825,330. 11,825,330
Bond premiums are recognized as an other financing source in the governmental funds, but are considered
bonds and notes payable on the Statement of Net Position. Premiums are amortized over the life of the
bonds. This is the amount by which bond premium issued of $4,084,765 exceeded deferred refunding
charges of $765,859 and amortization of $3,264,332. (54,574)
Estimated long-term liabilities, excluding internal service funds, are recognized as expenses in the Statement
of Activities as incurred, but are recognized when current financial resources are used in the governmental
funds.
Compensated absences
1,114,901
Post retirement benefits
(5,819,465)
Net pension liability
(7,750,473)
Property taxes levied and court fines and fees earned, but not available, are deferred in the governmental
funds, but are recognized when earned (net of estimated uncollectibles) in the Statement of Activities. This
amount is the net change in deferred property taxes and court fines and fees for the year.
193,074
Internal service funds are used by management to charge the costs of certain activities, such as insurance and
telecommunications, to individual funds. The net revenue (expense) of certain internal service funds is
reported with governmental activities.
3,251,104
Accrued interest is recognized as expenses in the Statement of Activities as incurred, but is recognized when
current financial resources are used in the governmental funds. This amount is the net change in the accrued
interest this year.
81,775
Capital assets transactions include $14,236,518 developer donated streets plus $24,330,032 capital asset
transfers in from business -type activities and less $489,166 disposition of assets and use of property.
38,077,384
Solid Waste BTA Long Term Assets and Liabilities transferred into GTA
Landfill closure and post closure care
(5,676,084)
Net Pension Liability
(5,213,263)
Leases Payable
(8,611,985)
Bonds Payable
(22,147,015)
Deferred Charge on Refunding
210,940
Deferred Outflow from Pensions
1,565,525
Deferred Inflow from Pensions
(138,140)
Compensated Absences
(598,858)
Accrued Interest Payable
(127,359)
Transfer Fleet Maintenance Net Position to Governmental Activities 1,650,609
Landfill closure and postclosure adjustment in FY 18 (203,258)
Capital lease revenue earned, but not available, is deferred in the governmental funds, but recognized in the
Statement of Activities. This is the change in capital lease unavailable revenue for the year. (45,668)
Change in net position of governmental activities $ 23,900,748
47
City of Lubbock, Texas
Statement of Net Position
Proprietary Funds
September 30, 2018
Enterprise Funds
Water/Waste
LP&L
Water
WTMPA
Storm Water
ASSETS
Current assets:
Cash and cash equivalents
$ 3,644,488
2,100,064
$ 504,320
$ 264,538
Investments
83,796,278
48,285,984
414,703
6,082,406
Accounts receivable, net
30,471,794
17,240,013
602,360
3,141,169
Interest receivable
71,840
317,512
-
33,301
Due from others
-
28,190
-
11,097
Due from other funds
-
-
11,486,903
-
Due from other governments
-
308,372
-
Prepaid expenses
25,000
-
Inventories
1,984,063
236,530
-
-
Total current assets
119,993,463
68,516,665
13,008,286
9,532,511
Noncurrent assets:
Restricted investments
135,717,814
60,588,704
-
18,675,592
Prepaid expenses
1,477,776
-
-
137,195,590
60,588,704
18,675,592
Capital assets:
-
Land
-
40,075,639
-
16,073,059
Electric non -depreciable
17,068,722
-
-
Construction in progress
24,601,082
17,999,425
-
1,535,964
Buildings
-
155,785,840
-
64,580
Improvements other than buildings
995,106,673
-
191,688,885
Machinery and equipment
-
123,310,819
25,200
5,847,235
Electric depreciable
445,456,430
-
-
-
Less accumulated depreciation
(254,140,607)
(373,541,389)
(25,200)
(38,818,098)
Total capital assets
232,985,627
958,737,007
176,391,625
Total noncurrent assets
370,181,217
1,019,325,711
195,067,217
Total assets
$ 490,174,680
$ 1,087,842,376
$ 13,008,286
$ 204,599,728
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
1,003,318
8,434,701
-
3,021,154
Deferred outflow from Goodwill
531,114
-
-
-
Deferred outflows from pensions
2,488,886
1,370,070
-
156,200
Deferred outflows from OPEB
1,241,657
963,156
-
146,987
Total deferred outflows ofresources
5,264,975
10,767,927
-
3,324,341
See accompanying Notes to Basic Financial Statements
48
Enterprise Funds
Nonmajor
Total Enterprise
Internal Service
Enterprise Funds
Funds
Funds
$ 673,290
$ 7,186,700
$ 1,282,234
15,480,708
154,060,079
29,481,906
1,330,402
52,785,738
8,408
35,594
458,247
41,270
165,180
204,467
14,876
1,954,192
13,441,095
-
736,788
1,045,160
-
147,022
172,022
471,930
810,185
3,030,778
553,342
21,333,361
232,384,286
31,853,966
22,601,933
237,584,043
905,811
-
1,477,776
-
22,601,933
239,061,819
905,811
5,179,871
61,328,569
-
-
17,068,722
-
5,942,120
50,078,591
348,090
66,978,052
222,828,472
1,691,882
205,583,186
1,392,378,744
6,048,329
51,634,876
180,818,130
25,328,100
-
445,456,430
-
(181,527,971)
(848,053,265)
(16,683,632)
153,790,134
1,521,904,393
16,732,769
176,392,067
1,760,966,212
17,63 8,580
$ 197,725,428
$ 1,993,350,498
$ 49,492,546
241,378
12,700,551
-
-
531,114
-
382,824
4,397,980
566,342
297,843
2,649,643
332,658
922,045
20,279,288
899,000
49
City of Lubbock, Texas
Statement of Net Position
Proprietary Funds
September 30, 2018
Enterprise Funds
Water/Waste
LP&L
Water
WTMPA
Storm Water
LIABILITIES
Current liabilities:
Accounts payable
$ 18,962,113
9,017,881
$ 11,954,331
$ 1,635,312
Accrued liabilities
3,622,312
575,308
-
60,877
Accrued interest payable
2,471,041
2,565,875
-
458,731
Due to other funds
11,486,904
-
-
Customer deposits
4,552,464
285,018
-
Unearned revenue - other
-
-
-
Compensated absences
2,179,036
1,375,061
-
117,123
Accrued insurance claims
-
-
-
Leases payable
-
333,489
-
105,810
Bonds payable
18,555,000
41,140,702
-
7,662,161
Total current liabilities
61,828,870
55,293,334
11,954,331
10,040,014
Noncurrent liabilities:
Accrued insurance claims
-
-
-
-
Compensated absences
629,202
397,052
-
33,820
Post employment benefits
19,348,418
15,008,586
-
2,290,466
Net pension liability
15,554,807
9,229,039
-
1,080,299
Rebatable arbitrage
-
-
-
50,917
Leases payable
-
1,528,772
-
408,201
Bonds payable
198,588,661
517,162,219
-
123,704,921
Total noncurrent liabilities
234,121,088
543,325,668
-
127,568,624
Total liabilities
295,949,958
598,619,002
11,954,331
137,608,638
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
3,456,159
1,692,580
-
213,565
Total deferred inflows ofresources
3,456,159
1,692,580
-
213,565
NET POSITION (DEFICIT)
Net investment in capital assets
128,869,898
442,604,603
-
61,309,423
Restricted for:
Passenger facility charges
-
-
-
-
Debt service
20,372,130
20,481,855
-
3,498,207
Unrestricted
46,791,510
35,212,263
1,053,955
5,294,236
Total net position (deficit)
$ 196,033,538
$ 498,298,721
$ 1,053,955
$ 70,101,866
See accompanying Notes to Basic Financial Statements
50
Enterprise Funds
Nonmajor
Total Enterprise
Internal Service
Enterprise Funds
Funds
Funds
$ 4,343,234
$ 45,912,871
$ 1,481,765
706,861
4,965,358
231,795
240,893
5,736,540
84,567
599,360
12,086,264
-
135,415
4,972,897
-
3,220
3,220
-
813,624
4,484,844
320,145
-
-
3,313,832
65,433
504,732
6,113
-
-
2,569,975
111,095
1,171,169
527,192
4,641,209
41,288,679
5,183,689
2,797,357
28,661,502
3,699,738
-
50,917
-
174,583
2,111,556
30,666
33,893,734
873,349,535
13,691,921
41,617,978
946,633,358
25,703,181
50,797,463 1,094,929,392 33,207,326
451,503 5,813,807 760,392
131,556,615 764,340,539 1,177,280
4,994,123 4,994,123 -
1,336,936 45,689,128 663,874
9,510,833 97,862,797 14,582,674
$ 147,398,507 $ 912,886,587 $ 16,423,828
51
!4 r4o 1
city 0-f
Lum)o6r� k
52
City of Lubbock, Texas
Reconciliation of the Statement of Net Position - Proprietary Funds
To the Statement of Net Position
September 30, 2018
Total net position - proprietary funds
Amounts reported for business -type activities in the Statement of Net Position are
different because:
Internal service funds (ISF's) are used by management to charge the costs of certain
activities, such as insurance and telecommunications, to individual funds. The portion of
assets and liabilities of the ISF's primarily serving enterprise funds are included in
business -type activities in the Statement of Net Position as follows:
Net position of business -type ISF's
Amounts due to governmental ISF's for amounts overcharged
Net position of business -type activities
$ 912,886,587
8,914,687
(3,494,778)
$ 918,306,496
See accompanying Notes to Basic Financial Statements.
53
City of Lubbock, Texas
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For The Year Ended September 30, 2018
OPERATING REVENUES
Charges for services (net)
Total operating revenues
OPERATING EXPENSES
Personnel services
Insurance and claims
Supplies
Materials
Maintenance
Purchase of fuel and power
Billing office expense
Other services and charges
Depreciation and amortization
Total operating expenses
Operating income (loss)
NONOPERATING REVENUES (EXPENSES)
Interest earnings
Passenger facility charges/Federal grants
Disposition of assets
Miscellaneous
IRS Build America Bond Subsidy
Interest expense
Net nonoperating revenues (expenses)
Income (loss) before contributions and transfers
Capital contributions/grants
Transfers in
Transfers out
Change in net position (deficit)
Total net position - beginning of year, as restated
Total net position (deficit) - end of year
See accompanying Notes to Basic Financial Statements.
Enterprise Funds
Water/Waste
LP&L Water WTMPA Storm Water
$ 239,178,553
$ 134,393,703
$ 159,645,152
$ 26,401,167
239,178,553
134,393,703
159,645,152
26,401,167
19,606,822
14,544,292
-
1,944,392
1,014,137
3,139,821
-
141,427
2,399,163
4,191,322
-
333,712
154,924,035
-
159,391,443
-
-
4,089,230
-
915,910
10,321,429
18,114,781
588,799
954,481
17,608,182
26,729,667
-
3,951,945
205,873,768
70,809,113
159,980,242
8,241,867
33,304,785
63,584,590
(335,090)
18,159,300
1,710,341
5,496,888
6,322
412,410
-
90,000
-
-
43,941
20,017
-
-
827,644
(1,427,300)
202,123
13,560
7,011
1,076,442
-
14,051
(4,172,052)
(22,334,387)
-
(3,405,283)
(1,583,115)
(17,078,340)
208,445
(2,965,262)
31,721,670
46,506,250
(126,645)
15,194,038
300,281
12,595,493
-
2,792,695
1,306,808
148,832
1,461,701
-
(18,348,033)
(17,549,851)
-
(8,732,964)
14,980,726
41,700,724
1,335,056
9,253,769
181,052,812
456,597,997
(281,101)
60,848,097
$ 196,033,538 $ 498,298,721 $ 1,053,955 $ 70,101,866
54
Enterprise Funds
Nonmajor
Total Enterprise
Internal Service
Enterprise Funds
Funds
Funds
$ 19,318,884
$ 578,937,459
$ 62,488,551
19,318,884
578,937,459
62,488,551
13,331,919
49,427,425
6,350,942
-
-
33,385,792
1,801,592
6,096,977
246,613
-
-
7,275,555
2,792,926
9,717,123
8,450,877
-
314,315,478
-
-
5,005,140
-
6,214,096
36,193,586
4,092,538
11,462,814
59,752,608
3,047,986
35,603,347
480,508,337
62,850,303
(16,284,463)
98,429,122
(361,752)
456,689
8,082,650
584,402
7,109,840
7,199,840
-
6,868
70,826
655,162
16,951,808
16,567,835
172,859
-
1,097,504
-
(974,980)
(30,886,702)
(207,570)
23,550,225
2,131,953
1,204,853
7,265,762
100,561,075
843,101
386,826
16,075,295
74,985
6,073,459
8,990,800
2,387,380
(19,060,919)
(63,691,767)
(114,950)
(5,334,872)
61,935,403
3,190,516
152,733,379
850,951,184
13,233,312
$ 147,398,507 $ 912,886,587 $ 16,423,828
55
!4 r4o 1
city 0-f
Lum)o6r� k
56
City of Lubbock, Texas
Reconciliation of the Statement of Revenues, Expenses and Changes in
Fund Net Position - Proprietary Funds
To the Statement of Activities
For the Year Ended September 30, 2018
Net change in fund net position - total enterprise funds
Amounts reported for business -type activities in the statement of activities are different
because:
Transfer Fleet Maintenance Net Position to Governmental Activities
Internal service funds (ISF's) are used by management to charge the costs of certain
activities such as fleet services, central warehousing activities, management
information activities, etc. to individual funds. The net revenue (expense) of certain
ISF's is reported with business -type activities.
Change in net position of business -type activities
$ 61,935,403
(1,650,609)
(60,587)
$ 60,224,207
57
City Of Lubbock, Texas
Statement of Cash Flows
Proprietary Funds
For the Year Ended September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Receipts from interfund services
Payments to suppliers
Payments to employees
Other receipts (payments)
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Transfers in from other funds
Transfers out to other funds
Short-term interfund borrowings
Operating grants
Net cash provided (used) by noncapital
and related financing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets
Sale of capital assets
Principal paid on capital leases
Principal paid on bonds
Issuance of bonds
Bond issuance costs
Interest paid on bonds and capital leases
Payment of rebatable arbitrage
Capital grants and contributions
Net cash provided (used) by capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments
Purchase of investments
Interest earnings on cash and investments
Net cash provided (used) by investing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization
Other income (expense)
Change in current assets and liabilities:
Accounts receivable
Inventory
Prepaid expenses
Due from other governments
Accounts payable
Due to/from other funds
Other accrued expenses
Customer deposits
Change in compensated absences and retirement benefits
Net cash provided (used) by operating activities
Supplemental cash flow information:
Noncash capital contributions and other charges
Enterprise Funds
Water/
LP&L
Wastewater
WTMPA
Storm Water
$ 242,644,414
$ 130,773,574
$ 163,137,224
$ 25,896,910
(156,862,815)
(36,424,050)
(164,729,088)
(5,227,693)
(19,606,821)
(15,119,594)
-
(2,005,273)
1,764,800
(260,858)
202,123
27,610
67,939,578
78,969,072
(1,389,741)
18,691,554
1,306,808
148,832
1,461,701
-
(18,348,033)
(17,549,851)
-
(8,732,964)
(17,041,225)
(17,401,019)
1,461,701
(8,732,964)
(29,380,699)
(31,144,193)
-
(16,653,435)
246,471
82,998
31,033
-
(1,726,719)
(1,037,186)
(15,917,078)
(41,320,928)
(7,495,950)
106,807,292
4,573,674
695,381
(20,055)
(3,354,542)
(38,121)
(5,193,389)
(27,499,680)
(3,808,464)
-
50,917
3,367,119
-
56,542,542 (97,022,271)
(28,255,825)
39,640,664
20,153,111
(109,624,117)
(10,257,312)
(6,321)
(2,332,503)
1,678,979
5,403,152
6,322
400,972
(107,945,138)
34,786,504
1
18,221,580
(504,243)
(667,714)
71,961
(75,655)
4,148,731
2,767,778
432,359
340,193
$
3,644,488
$
2,100,064
$
504,320
$
264,538
$
33,304,785
$
63,584,590
$
(335,090)
$
18,159,300
17,608,182
26,729,667
-
3,951,945
1,764,800
(260,858)
202,123
27,610
3,465,861
(3,620,128)
156,096
(504,257)
(113,868)
(87,173)
-
-
44,413
17,430,505
(8,080,807)
(4,748,846)
(3,016,788)
(3,335,975)
(285,800)
3,335,976
(11,097)
(2,539,983)
37,436
-
(41,762)
(110,899)
6,180
-
466,170
901,552
126,603
$
67,939,578
$
78,969,072
$
(1,389,741)
$
18,691,554
$
7,239,839
$
9,228,374
$
-
$
2,792,695
See accompanying Notes to Basic Financial Statements.
58
Enterprise Funds
Nonmajor Internal
Enterprise Service
Funds Totals Funds
$ 21,759,456
$
584,211,578
$ 61,608,703
-
-
2,249,018
(17,145,966)
(380,389,612)
(55,210,005)
(13,502,848)
(50,234,536)
(6,035,071)
16,951,808
18,685,483
172,859
8,062,450
172,272,913
2,785,504
6,073,459
8,990,800
2,387,380
(19,060,919)
(63,691,767)
(114,950)
(1,119,515)
(1,119,515)
7,109,841
7,109,841
-
(6,997,134)
(48,710,641)
2,272,430
(8,557,871)
(85,736,198)
(8,799,899)
16,914
377,416
770,866
(5,783,349)
(8,547,254)
(1,101,015)
(1,689,900)
(66,423,856)
(1,302,912)
15,951,519
128,027,866
5,342,613
(117,248)
(3,529,966)
542,029
(1,592,792)
(38,094,325)
(462,483)
-
50,917
-
386,826
3,753,945
74,985
(1,385,901)
(70,121,455)
(4,935,816)
16,109,639
75,903,414
2,462,191
(16,979,798)
(139,200,051)
(3,686,024)
446,784
7,936,209
570,235
(423,375)
(55,360,428)
(653,598)
(743,960)
(1,919,611)
(531,480)
1,417,250
9,106,311
1,813,714
$ 673,290
$
7,186,700
$ 1,282,234
$ (16,284,463)
$
98,429,122
$ (361,752)
11,462,814
59,752,608
3,047,986
16,951,808
18,685,483
172,859
2,440,566
1,938,138
-
(4,205)
(205,246)
50,959
(138,128)
(138,128)
(471,930)
4,117,257
4,161,670
1,683,622
3,267,686
(1,130,729)
(1,731,147)
(2,028,043)
92,972
(481,890)
(3,026,199)
1,224,698
(44,944)
(149,663)
-
(9,908,840)
(8,414,515)
160,441
$ 8,062,450
$
172,272,913
$ 2,785,504
$ 29,420,595
$
48,681,503
$ -
59
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Basic Financial Statements (BFS) of the City of Lubbock, Texas (City) have been prepared in conformity
with accounting principles generally accepted in the United States of America (GAAP) as applied to
government units, including specialized industry practices as specified in the American Institute of Certified
Public Accountants audit and accounting guide titled State and Local Governments. The Governmental
Accounting Standards Board (GASB) is the acknowledged standard -setting body for establishing
governmental accounting and financial reporting principles. With respect to proprietary activities related to
business -type activities and enterprise funds, including component units, the City applies all applicable GASB
pronouncements.
The more significant accounting policies are described below.
A. REPORTING ENTITY
The City is a municipal corporation governed by a Council -Manager form of government. The City,
incorporated in 1909, is located in the northwestern part of the state. The City currently occupies a land area
of 136.0 square miles and serves a population approximating 261,946. The City is empowered to levy a
property tax on both real and personal properties located within its boundaries. It is also empowered by state
statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the
City Council.
The City provides a full range of services including public safety (police and fire protection), electric, water
and wastewater, storm water, solid waste, public transportation, health and social services, cultural -recreation,
highways and streets, airport, planning and zoning, and general administrative services.
The BFS present the City and its component units and include all activities, organizations, and functions for
which the City is considered to be financially accountable. The criteria considered in determining activities to
be reported within the City's BFS are based upon and consistent with those set forth in the Codification of
Governmental Accounting Standards, Section 2100, "Defining the Financial Reporting Entity. " The criteria
include the following:
• The organization is legally separate (can sue and be sued in its own name);
• The City holds the corporate powers of the organization;
• The City appoints a voting majority of the organization's board;
• The City is able to impose its will on the organization;
• The organization has the potential to impose a financial benefit or burden on the City; or
• There is fiscal dependency by the organization on the City.
As required by GAAP, the BFS present the reporting entity which consists of the City (the primary
government), organizations for which the City is financially accountable, and other organizations for which
the nature and significance of their relationship with the City are such that exclusion could cause the City's
BFS to be misleading or incomplete.
BLENDED COMPONENT UNIT
West Texas Municipal Power Agency (WTMPA) is a legally separate municipal corporation, a political
subdivision of Texas, and body politic and corporate, formed in 1983, governed by an eight -member Board of
Directors. The board consists of two directors from each participating city. One member is elected as the
president who presides over monthly meetings. Directors serve without compensation. WTMPA has no
employees and instead contracts for services to meet its general operating needs. WTMPA may engage in the
business of generation, transmission, sale, and exchange of electric energy to the four participating public
entities: Lubbock, Tulia, Brownfield, and Floydada. WTMPA may also participate in power pooling and
60
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
power exchange agreements with other entities. WTMPA provides electricity to its four member cities with
the City having a 95.6 percent interest in its operations. Each member city appoints two members to the
WTMPA board; however an affirmative vote of the "majority in interest" is required to approve the operating
budget, capital projects, debt issuance, and any amendments to WTMPA rules and regulations. The "majority
in interest" relates to the following items: 1) WTMPA's operating budget or any budget amendment(s); 2)
capital projects; 3) certain energy sales or sale or exchange of property with a value in excess of $20,000; and
4) any amendments to WTMPA rules and regulations requiring a quorum of seven voting board members, an
affirmative vote of six voting board members, and an affirmative vote of the "majority in interest". The
"majority in interest" weighted vote is assigned according to kilowatt purchases by each city during the
previous year. Lubbock has a 95.6 percent "majority in interest" vote since it accounts for 95.6 percent of
WTMPA's electrical sales. WTMPA provides services almost exclusively to the City and is therefore
presented as a blended enterprise fund. Separate audited financial statements may be obtained through the
City.
Lubbock Metropolitan Planning Organization (the "MPO"). The Federal Aid Highway Act of 1962
mandated that as a condition for the receipt of federal funds, each urban area with a population over 50,000 in
the United States was required to carry on a continuing, cooperative, and comprehensive transportation
planning process. The law also designates additional responsibilities once you reach a 200,000 population
threshold.
The MPO is governed by a nine -member Board of Directors. The Board consists the City Manager, the Mayor
of Lubbock, two City of Lubbock Council members, two Lubbock County elected officials, the Mayor of
Wolfforth, a Texas Department of Transportation district engineer and the General Manager from Citibus.
The City of Lubbock acts as the fiscal agent for the MPO, per an operating agreement between the City, the
MPO and the Texas Department of Transportation. The agreement is to develop transportation plans and
programs for urbanized areas of the State of Texas and to expend federal funds and to provide state matching
funds for allowable costs necessary for the improvement of roads not in the state highway system.
DISCRETELY PRESENTED COMPONENT UNITS
The financial data for the Component Units are shown in the Government -Wide Financial Statements. The
Component Units are reported in a separate column to emphasize that they are legally separate from the City.
The following Component Units are included in the reporting entity because the primary government is
financially accountable, is able to impose its will on the organization, or can significantly influence operations
and/or activities of the organization.
The Urban Renewal Agency (URA) is a legally separate entity that serves as an arm of the City. The URA
is governed by state law and was formed to help eliminate slum and blight within the City. The URA board
oversees loans made to businesses and citizens of Lubbock using funds accumulated by the City of Lubbock
community development program. The URA also oversees the acquisition and disposition of real property.
The URA manages the City of Lubbock Community Development loans and property program. The URA
Board is composed of nine members appointed by the City Council. There are no separate financial statements
available for the URA.
Civic Lubbock, Inc. is a legally separate entity that was organized to foster and promote the presentation of
wholesome educational, cultural, and entertainment programs for the general moral, intellectual and physical
improvement, and welfare of the citizens of Lubbock and the surrounding area. The eleven -member board is
appointed by the City Council. The City Council reviews and accepts the annual budget. Separate audited
financial statements for Civic Lubbock may be obtained from Civic Lubbock, Inc. at 1501 Mac Davis Ln,
Lubbock, Texas.
61
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Market Lubbock Economic Development Corporation, dba Market Lubbock, Inc. is a legally separate
entity that was formed on October 10, 1995 by the City Council to create, manage, operate, and supervise
programs and activities to promote, assist, and enhance economic development within and around the City.
The City Council appoints the seven -member board, and its operations are funded primarily through budgeted
allocations of the City's property and hotel occupancy taxes. Separate audited financial statements may be
obtained from Market Lubbock, Inc. at 1500 Broadway, Sixth Floor, Lubbock, Texas.
Lubbock Economic Development Alliance, Inc. is a legally separate entity that was formed on June 1, 2004
by the City of Lubbock to create, manage, and supervise programs and activities to promote, assist, and enhance
economic development within and around the City. The City Council appoints the seven -member board, and
its operations are funded primarily through budgeted allocations of the City's sales and use taxes. Separate
audited financial statements may be obtained from Lubbock Economic Development Alliance, Inc. at 1500
Broadway, Sixth Floor, Lubbock, Texas.
The Vintage Township Public Facilities Corporation is a legally separate entity that was formed in 2007
with the sole purpose to assist the City in financing, refinancing, providing, or otherwise assisting in the
acquisition, construction, and maintenance of certain public facilities benefiting the Vintage Township Public
Improvement District. The three -member board is appointed by the City Council. The City Council reviews
and accepts the annual budget. Separate audited financial statements are not available.
1.noW.710311XIlill11�IV19.1140U)CKi
The City Council is responsible for appointing the board members of some other organizations, but the City's
accountability for these organizations do not extend beyond the board appointments. The City Council is not
able to impose its will on these entities and there is no financial benefit or burden relationship. Bonds issued
by these organizations do not constitute indebtedness of the City. The following related organizations are not
included in the reporting entity:
The Lubbock Fire Pension Fund (LFPF) operates under provisions of the Texas Local Fire Fighters'
Retirement Act for purposes of providing retirement benefits for the City's firefighters and eligible fire civilian
employees. The Mayor's designee, the Chief Financial Officer or his designee, three firefighters elected by
active firefighters and two at -large members elected by the LFPF Board, govern its affairs. The Pension Fund
is funded by contributions from the firefighters and city matching contributions. As provided by enabling
legislation, the City's responsibility to the LFPF is limited to matching bi-weekly contributions made by the
members. Title to assets is vested in the LFPF and not the City. The Texas State Pension Review Board is
mandated to oversee all Texas public retirement systems in regard to their actuarial soundness and compliance
with state law. The City cannot significantly influence the Pension Fund's operations. Separate audited
financial statements may be obtained from the LFPF or from the City.
The Housing Authority of the City of Lubbock is a legally separate entity. The Mayor appoints the five -
member board.
The Lubbock Health Facilities Development Corporation promotes health facilities development. The City
Council appoints the seven -member board.
The Lubbock Education Facilities Authority, Inc. is a non-profit corporation and instrumentality of the City
and was created pursuant to the Higher Education Authority Act, Chapter 53 Texas Education Code, for the
purpose of aiding institutions of higher education, secondary schools, and primary schools in providing
educational facilities and housing facilities. The seven -member board is appointed by the City Council.
62
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The Government -Wide Financial Statements (GWFS) (i.e., the Statement of Net Position and the Statement of
Activities) report information on all of the activities of the City and its blended component unit as a whole.
The discretely presented component units are also aggregately presented within these statements. The effect
of interfund activity has been removed from these statements by allocation of the activities of the various
internal service funds to the governmental and business -type activities on a fund basis based on the
predominant users of the services. Interfund services are not eliminated in the process of consolidation.
Governmental activities, which are primarily supported by taxes and intergovernmental revenues, are reported
separately from business -type activities, which rely to a significant extent on fees and charges for support. All
activities, both governmental and business -type, are reported in the GWFS using the economic resources
measurement focus and the accrual basis of accounting, which includes long-term assets and receivables as
well as long-term debt and obligations. The GWFS focus more on the sustainability of the City as an entity and
the change in aggregate financial position resulting from the activities of the fiscal period.
The Government -Wide Statement of Net Position reports all financial and capital resources of the City. It is
displayed in the format of assets plus deferred outflows of resources equal liabilities plus deferred inflows of
resources, plus net position, with the assets and liabilities shown in order of their relative liquidity. Net position
represents the difference between all other elements in a statement of financial position and should be displayed
in three components: 1) net investment in capital assets; 2) restricted; and 3) unrestricted. Net investment in
capital assets equals capital assets net of accumulated depreciation and is reduced by outstanding balances of
any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or
improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are
attributable to the acquisition, construction, or improvement of those assets or related debt also should be
included in this component of net position. If there are significant unspent related debt proceeds or deferred
inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources
attributable to the unspent amount should not be included in the calculation of net investment in capital assets.
Instead, that portion of the debt or deferred inflows of resources should be included in the same net position
component (restricted or unrestricted) as the unspent amount. Restricted net position are those with constraints
placed on their use as: 1) externally imposed by creditors (such as through debt covenants), grantors,
contributors, or laws or regulations of other governments; or 2) imposed by law through constitutional
provisions or enabling legislation. All net position not otherwise classified as net investment in capital assets
or restricted, is shown as unrestricted. Reservations or designations of net position imposed by the City,
whether by administrative policy or legislative actions of the City Council that do not otherwise meet the
definition of restricted net position, are considered unrestricted in the GWFS.
The Government -Wide Statement of Activities demonstrates the degree to which the direct expenses for a
given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable
with a specific function or segment. Program revenues include: 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment;
and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among program revenues are
reported instead as general revenues. The general revenues support the net costs of the functions and segments
not covered by program revenues.
Fund Financial Statements (FFS) for governmental and proprietary funds are also part of the BFS. The focus
of the FFS is on major funds, as defined by GASB Statement No. 34. GASB Statement No. 34 sets forth
minimum criteria for the determination of major funds, i.e., a percentage of assets, liabilities, revenue, or
expenditures/expenses of fund category and of the governmental and enterprise funds combined. However, it
also gives governments the option of displaying other funds as major funds. The City can elect to add some
funds as major funds because of outstanding debt or community focus. Major individual governmental funds
and major individual enterprise funds are reported as separate columns in the FFS. Other non -major funds are
combined in a single column in the appropriate FFS.
63
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT
PRESENTATION
The GWFS are reported using the economic resources measurement focus and the accrual basis of accounting,
as are the proprietary FFS. Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year
for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements have been met.
Because the enterprise funds are combined into a single business -type activities column on the GWFS, certain
interfund activities between these funds are eliminated in the consolidation for the GWFS, but are included in
the fund columns in the proprietary FFS. The effect of interfund activity has been eliminated from the GWFS.
For instance, 95.6 percent of the operations of WTMPA representing transactions between WTMPA and
Lubbock Power & Light (LP&L) have been eliminated for the GWFS presentation and for the electric business -
type activities (BTA). Exceptions to this general rule are payments -in -lieu of taxes and other charges between
the City's electric, water and wastewater functions and various other functions of the government. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Fund Financial Statements
Governmental FFS are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. This is the traditional basis of accounting for governmental funds. This
presentation is necessary: 1) to demonstrate legal and covenant compliance; 2) to demonstrate the sources and
uses of liquid resources; and 3) to demonstrate how the City's actual revenues and expenditures conform to the
annual budget. Revenues are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the government considers revenues to be available, generally,
if they are collected within 45 days of the end of the current fiscal period. The City considers the grant
availability period to be one year for revenue recognition. Expenditures generally are recorded when a liability
is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related
to compensated absences, and claims and judgments are recorded only when the liability has matured. Because
the governmental FFS are presented on a different basis of accounting than the GWFS, reconciliations are
provided immediately following each fund statement. These reconciliations explain the adjustments necessary
to convert the FFS into the governmental activities column of the GWFS.
Property taxes, sales taxes, franchise taxes, occupancy taxes, grants, licenses, court fines, and interest
associated with the current fiscal period are all considered to be susceptible to accrual and have been recognized
as revenues of the current fiscal period. Only the portion of special assessments receivable due within the
current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other
revenue items are considered to be measurable and available only when the City receives cash.
Fund Accounting
The City uses funds to report its financial position and the results of its operations. Fund accounting segregates
funds according to their intended purpose and is designed to demonstrate legal compliance and to aid financial
management by segregating transactions related to certain governmental functions or activities. A fund is a
separate accounting entity with a self -balancing set of accounts, which includes assets, deferred outflows,
deferred inflows, liabilities, fund balance/net position, revenues, and expenditures/expenses.
64
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Governmental Funds are those through which most of the governmental functions of the City are financed.
The City reports two major governmental funds:
The General Fund, as the City's primary operating fund, accounts for all financial resources of the general
government, except those required to be accounted for in another fund.
The Governmental Capital Projects Fund accounts for financing and construction of government capital
projects, except for North Overton and Central Business District Tax Increment Financing Reinvestment
Zone (TIF) capital projects and Gateway Streets Fund capital projects. Projects include public safety
improvements, park improvements, street improvements, purchase of and construction of municipal
buildings, and major maintenance, repair, and replacement of public buildings and facilities.
Enterprise Funds are used to account for operations: 1) that are financed and operated in a manner similar to
private business enterprises where the intent of the governing body is that the costs (expenses, including
depreciation) of providing goods or services to the general public on a continuing basis be financed or
recovered through user charges; or 2) where the governing body has decided that periodic determination of
revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy,
management control, accountability, or other purposes. The City reports the following major enterprise funds:
LP&L Fund accounts for the activities of the city -owned electric production and distribution system.
The Water/Wastwater Fund accounts for the activities of the City's water system and sanitary wastewater
system.
The WTMPA Fund accounts for the activities of power generation and power brokering to member cities.
Member cities include Lubbock with 95.4 percent of power usage, Tulia, Brownfield, and Floydada
comprising the remaining 4.4 percent of power usage.
The Storm Water Fund accounts for the activities of the storm water utility.
The City also reports the following non -major funds:
Governmental Funds
Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that
are restricted or committed to expenditures for specified purposes other than debt service or capital
projects.
The Debt Service Fund is used to account for and report financial resources that are restricted to
expenditures for principal and interest (other than debt service payments made by proprietary funds).
Capital Projects Funds are used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for capital outlays (other than those recorded in the proprietary
funds).
Proprietary Funds distinguish operating revenues and expenses from non -operating items. Operating
revenues and expenses generally result from providing services or producing and delivering goods in
connection with a proprietary f ind's principal ongoing operations. The principal operating revenues of the
City's enterprise funds and of the City's internal service funds are charges to customers for sales and
services. Operating expenses for enterprise funds and internal service funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting
this definition are reported as non -operating revenues and expenses.
65
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Enterprise Funds are used to account for services to outside users where the full cost of providing
services, including capital, is to be recovered through fees and charges, e.g., Lubbock Preston Smith
International Airport (Airport Fund), Citibus (Transit Fund), Cemetery, Civic Centers and Lake Alan
Henry Recreational Funds.
Internal Service Funds are used to account for services provided to other departments, agencies of the
departments, or to other governments on a cost reimbursement basis (i.e., fleet maintenance, print shop
and warehouse, information technology, risk management, health benefits, and investment pool).
11�.to Din DV 1F.11 I lelf"
The City Manager submits a proposed operating budget and capital program to the City Council annually for
the upcoming fiscal year. Annual budgets are adopted for the General Fund, Debt Service Fund, Enterprise
Funds, Internal Service Funds, and certain Special Revenue Funds. Public hearings are conducted to obtain
citizen comments, and the budget is legally enacted through passage of an ordinance by the Council. City
Council action is also required for the approval of any supplemental appropriations.
All budget amounts presented in the General Fund Budgetary Comparison Schedule in the Required
Supplementary Information (RSI) section reflect the original budget and the amended budget, which have been
adjusted for legally authorized supplemental appropriations to the annual budget during the fiscal year. The
operating budget is adopted on a basis other than GAAP for the General Fund, with the main difference being
that tax note proceeds and related capital outlay are not budgeted. Budgetary control is maintained at the fund
level. The City Manager may make administrative transfers and increases or decreases between accounts
below the fund level without City Council approval. However, any transfer of funds between Funds, the legal
level of control, or higher level shall be presented to City Council for approval by ordinance before such funds
can be transferred between Funds or expended. All annual operating appropriations lapse at the end of the
fiscal year. Capital Project and grant appropriations do not lapse at fiscal year end, but remain in effect until
the project or grant is completed and closed.
All budget amounts presented in the Special Revenue Funds and Debt Service Fund Budgetary Comparison
Schedule in the Combining and Individual Fund Statements and Schedules section reflect the final budget
amounts, which have been adjusted for legally authorized supplemental appropriations to the annual budget
during the fiscal year. Budgetary control is maintained at the fund level, the legal level of control for Special
Revenue Funds and Debt Service Funds. The following Special Revenue Funds have legally adopted budgets:
Abandoned Motor Vehicle, Animal Assistance, Cable Services, Central Business District TIF, Community
Development Grant, Criminal Investigation, Debt Service, Department of Justice Asset Sharing, Economic
Development Incentive, Gateway Streets, Hotel Motel Tax, Lubbock Business Park TIF, Lubbock Economic
Development Alliance, Municipal Court, North and East Lubbock Neighborhood and Infrastructure, North
Overton PID, North Overton District TIF, North Point PID, Quincy Park PID, Valencia PID, and Vintage
Township PID.
Capital budgets and grant budgets do not lapse at fiscal year end, but remain in effect until the project is
completed and closed. The following funds have project length budgets: Donations, Community Services,
Health, Library, Police, and Other Grants Special Revenue Funds; and the Governmental, TIF, and Gateway
Streets Capital Projects Funds.
In addition to the tax levy for general operations, in accordance with state law, the City Council sets an ad
valorem tax levy for a sinking fund (General Obligation and Certificate of Obligation Debt Service) which,
with cash and investments in the fund, is sufficient to pay all debt service due during the fiscal year.
66
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
E. ENCUMBRANCES
At the end of the fiscal year, encumbrances for goods and services that have not been received are canceled
except in the Capital Projects Fund. Management has authority, by ordinance, to re -appropriate any
encumbrances that were open at the prior fiscal year end. At the beginning of the next fiscal year, management
reviews all open encumbrances and approves needed encumbrances. In FY 2018, management approved
reappropriation of $292,581 in funds as follows: Risk Management - $159,281 and General Fund - $133,300.
There are no other significant encumbrances at year end that have not been restricted, committed, or assigned.
F. ASSETS. LIABILITIES. AND FUND BALANCE/NET POSITION
Equity in Cash and Investments - The City pools the resources of the various funds in order to facilitate the
management of cash and enhance investment earnings. Records are maintained which reflect each fund's
equity in the pooled account. Government agency bonds and municipal bond are stated at fair value; State
Pools (TexStar, Logic, Texas CLASS) are stated at net asset value; and Money Market and TexPool are stated
at amortized cost.
Cash and Cash Equivalents - Cash and cash equivalents include cash on hand and demand deposits.
Investments- - Investments include securities in the Federal Home Loan Bank, Federal Home Loan Mortgage
Corporation, Federal National Mortgage Association, Federal Farm Credit Bank, Federal Agricultural
Mortgage Corporation, Municipal Bonds, Commercial Paper, Certificates of Deposit, and Money Markets.
Investments also include state investment pools. Restricted investments include investments that have been
restricted for bond financed capital projects, funds that have been restricted by bond covenants for debt service
requirements, and funds accumulated for passenger facility charges and customer facility charges.
Property Tax Receivable - The value of all real and business property located in the City is assessed annually
on January 1 in conformity with Subtitle E of the Texas Property Code. Property taxes are levied on October
1 on those assessed values and the taxes are due on receipt of the tax bill. On the following January 1, a tax
lien attaches to property to secure the payment of all taxes, penalties, and interest ultimately imposed. The
taxes are considered delinquent if not paid before February 1. Therefore, at fiscal year-end, all property taxes
receivable are delinquent, but are secured by a tax lien.
At the GWFS level, property tax revenue is recognized upon levy. In governmental funds, the City records
property taxes receivable upon levy and defers tax revenue until the taxes are collected or available. For each
fiscal year, the City recognizes revenue in the amount of taxes collected during the year plus an estimate of
taxes to be collected in the subsequent 45 days. The City allocates property tax revenue between the General,
certain Special Revenue, and Debt Service Funds based on tax rates adopted for the year of levy. The Lubbock
Central Appraisal District assesses property values, bills, collects, and remits the property taxes to the City.
The City adjusts the allowance for uncollectible taxes and deferred inflows of tax revenue at fiscal year-end
based upon historical collection experience. To write off property taxes receivable, the City eliminates the
receivable and reduces the allowance for uncollectible accounts.
Enterprise Funds Receivables - Within the LP&L, Water/Wastewater, Storm Water, and WTMPA Enterprise
Funds, services rendered but not billed as of the close of the fiscal year are accrued. This amount is reflected
in the accounts receivable balances of each fund. Amounts billed are reflected as accounts receivable net of
an allowance for uncollectible accounts.
Inventories - Inventories consist of expendable supplies held for consumption. Inventories are valued using
the average cost method of valuation, and are accounted for using the consumption method of accounting, i.e.,
inventory is expensed when used rather than when purchased.
Prepaid Items - Prepaid items are accounted for under the consumption method.
67
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Capital Assets and Depreciation - Capital assets, including public domain infrastructure (streets, bridges,
sidewalks and other assets that are immovable and of value only to the City), are defined as assets with an
initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. These capital
assets are reported in the GWFS and the proprietary funds. Capital assets are recorded at cost or estimated
historical cost if purchased or constructed. Donated assets are recorded at the estimated acquisition value on
the date of donation.
Major outlays for capital assets and improvements are capitalized as the projects are constructed. The cost of
normal maintenance and repairs that do not add to the value of the asset or materially extend the asset life are
not capitalized. Major improvements are capitalized and depreciated over the remaining useful lives of the
related capital assets.
Depreciation is computed using the straight-line method over the estimated useful lives as follows:
Improvements Other Than Buildings 10-60 years
Buildings 15-50 years
Machinery and Equipment 3-15 years
Water Rights 85 years
Interest Capitalization — Because the City issues general-purpose capital improvement bonds, which are
recorded within the proprietary funds, the City capitalizes interest costs for business -type activities and
enterprise funds according to GASB Statement No.62. The City capitalized interest of approximately
$944,851 net of interest earned, for the business -type activities and the enterprise funds during the current
fiscal year.
Deferred Outflows/Inflows of Resources — Deferred outflows of resources represent a consumption of net
position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense)
until then. The City has a deferred charge on a bond refunding, which is the difference in the carrying value
of refunded debt and its reacquisition price. This amount is deferred or amortized over the shorter of the life
of the refunded and new debt. The City also has deferred outflows for pensions related to contributions,
changes in actuarial assumptions and investment experience and for other post -employment benefits related to
benefit payments and changes in actuarial assumptions.
Deferred inflows of resources represent an acquisition of net position that applies to a future period(s) and so
will not be recognized as an inflow of resources (revenue) until then. The City's deferred inflows include
property taxes and municipal court fines in the governmental funds, pension actuarial differences in expected
and actual experience and investment experience in the proprietary and internal service funds.
For additional information on deferred outflows/inflows related to pensions, reference note III. G. Retirement
Plans and note III. H. Other Post -Employment Benefits (OPEB).
Classification of Fund Equity - Fund balances are classified as nonspendable, restricted, committed, assigned,
or unassigned in governmental funds. Nonspendable fund balance cannot be spent, either because it is not in
spendable form or because of legal or contractual requirements. Restricted fund balances have constraints for
specific purposes which are externally imposed by providers, such as creditors, grantors, or other governments;
or by enabling legislation of the City Council. Committed fund balances can only be used for specific purposes
pursuant to constraints imposed by the City Council through an ordinance, which is the highest action level by
City Council. Assigned fund balances are constrained by intent to be used for specific purposes, but are neither
restricted nor committed. Assignments are made by city management based on Council direction. Unassigned
fund balances include residual positive fund balances within the General Fund that have not been classified
within the other mentioned categories. Unassigned fund balances may also include negative balances for any
68
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific
purposes.
The City designates restricted amounts to be spent first if both restricted and unrestricted fund balances are
available unless there are legal documents/contracts that prohibit doing this, such as in grant agreements
requiring dollar for dollar spending. Additionally, the City would first use committed, followed by assigned,
and lastly unassigned amounts when expenditures are incurred for purposes for which amounts in any of those
unrestricted fund balance classifications could be used.
The proprietary funds and GWFS have three classifications of net position: 1) net investment in capital assets;
2) restricted net position; and 3) unrestricted net position. In the first category, capital assets are netted with
bonded and capital lease debt. Restricted net position includes debt service, grantor, and other government
restrictions for proprietary funds and the same categories as restricted fund balance for governmental activities.
The City Council has approved goals for the General Fund unrestricted fund balance, which is set at a minimum
of an amount equal to twenty percent of operating revenues in order to meet unanticipated contingencies and
fluctuations in revenue. Enterprise funds also have appropriable net position reserve policies, ranging from 10
to 25 percent of operating revenue. The LP&L Fund maintains general reserves equal to three months gross
revenue from all retail electric sales as determined by taking the average monthly retail electric sales from the
previous fiscal year.
Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets, deferred outflows, liabilities,
deferred inflows, and disclosure of contingent assets and liabilities at the date of the financial statements along
with reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could
differ from those estimates.
G. REVENUES. EXPENSES AND EXPENDITURES
Interest Income on pooled cash and investments is allocated monthly based on the percentage of a fund's
pooled cash and investments monthly balance compared to the total city-wide monthly balance in pooled cash
and investments. Bond funds and other separate non -pooled cash are distributed to the fund where the cash and
investment is recorded.
Sales Tax Revenue for the City results from an allocation of 1.5 percent of the total sales tax levy of 8.25
percent, which is collected by the State of Texas and remitted to the City monthly. The tax is collected by the
vendor and is required to be remitted to the State by the 20th of the month following collection. The tax is
then paid to the City by the Friday following the second Wednesday of the subsequent month.
Grant Revenue from federal and state grants is recognized as revenue as soon as all eligibility requirements
have been met. The availability period for grants is considered to be one year.
Interfund Transactions are accounted for as revenues, expenditures, expenses, or other financing sources or
uses. Transactions that constitute reimbursements to a fund for expenditures/expenses initially made from that
fund that are properly applicable to another fund are recorded as expenditures/expenses in the reimbursing fund
and as reductions of expenditures/expenses in the fund that is reimbursed. In addition, transfers are made
between funds to shift resources from a fund legally authorized to receive revenue to a fund authorized to
expend the revenue.
Compensated Absences consists of vacation leave, sick leave, and compensatory leave. Vacation leave of
10-20 days is granted to all regular employees dependent upon the date employed, years of service, and civil
service status. Currently, up to 40 hours of vacation leave may be "carried over" to the next calendar year.
69
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The City is obligated to make payment upon retirement or termination for employees in good standing for any
available, unused vacation leave.
Sick leave for employees is accrued at 1 1/4 days per month with a maximum accrual status of 200 days. After
15 years of continuous full-time service for non -civil service personnel, vested sick leave is paid on retirement
or termination at the current hourly rate for up to 90 days. Upon retirement or termination, Police Civil Service
Personnel are paid for up to 90 days accrued sick leave regardless of reason for leaving or time with the City.
Firefighter Civil Service Personnel are paid for up to 90 days of accrued sick leave upon retirement or
termination. The Texas Civil Service laws dictate certain benefits and personnel policies above and beyond
the policies of the City.
In accordance with the Fair Labor Standards Act and city policy, non-exempt employees may accrue
compensatory time off instead of receiving payment for overtime hours worked. Compensatory time may be
accrued up to 45 hours (30 overtime hours at time and one half) and must be used within 26 pay periods. In
order to be eligible for compensatory time, each employee is required to sign an agreement with the City.
The liability for the accumulated vacation, sick, and compensatory time off is recorded in the GWFS and in
the FFS for proprietary fund employees when earned. The liability is recorded in the governmental FFS to the
extent it is due and payable.
Post -Employment Benefits for retirees of the City include the option to purchase health and life insurance
with health insurance benefits at a subsidized premium. However, employees that retire with 15 or more years
of service or Civil Service employees that retire who have a sick -leave balance in excess of 90 days will be
able to elect to continue receiving medical coverage in full 30-day periods for the term of the balance of their
sick leave. Retirees are required to pay a prorated premium for the days of coverage that are not funded by
their excess sick leave. Amounts to cover premiums and administrative costs, with an incremental charge for
reserve funding, are determined by the City's health care administrator. Employer contributions are funded on
a pay-as-you-go basis and approximated $5.3 million during the measurement period.
H. PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about fiduciary net position of the City's
pension plans (Texas Municipal Retirement System - TMRS and the Lubbock Fire Pension Fund - LFPF) and
additions to/deductions from the pension plans' fiduciary net position have been determined on the same basis
as they are reported by each plan. For this purpose, plan contributions are recognized in the period that
compensation is reported for the employee, which is when contributions are legally due. Benefit payments and
refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value.
I. NEW PRONOUNCEMENTS
In November 2016, GASB issued Statement No. 83 ("GASB 83"), Certain Asset Retirement Obligations
(ARO). GASB 83 establishes uniform criteria for governments to recognize and measure certain asset
retirement obligations, defined as a legally enforceable liability associated with the retirement of a tangible
capital asset. An ARO is recognized when the liability is incurred, which is manifested by the occurrence of
both an external obligating event (such as a legally binding contract or a court judgment) and an internal
obligating event (such as placing a tangible capital asset into service). A government also recognizes a deferred
outflow of resources when it recognizes an ARO liability. The ARO is measured at the best estimate of the
current value of outlays expected to be incurred. Additional note disclosures are required. GASB 83 is effective
for the fiscal period ending September 30, 2019. The City has not determined the impact of this statement.
70
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
In January 2017, GASB issued Statement No. 84 ("GASB 84"), Fiduciary Activities. GASB 84 establishes
criteria for identifying fiduciary activities. It presents separate criteria for evaluating component units, pension
and other postemployment benefit arrangements, and other fiduciary activities. GASB 84 is effective for the
fiscal period ending September 30, 2020; however, implementation will have no impact on the City.
GASB Statement No. 85 ("GASB 85"), "Omnibus 2017", addressing practice issues that have arisen during
implementation of other GASB standards. Implementation of GASB 85 required LP&L to reclassify its
goodwill from a previous acquisition to a deferred outflow of resources.
In June 2017, GASB issued Statement No. 87 ("GASB 87"), Leases. GASB 87 requires recognition of certain
lease assets and liabilities for leases that previously were classified as operating leases and recognized as
inflows of resources or outflows of resources based on the payment provisions of the contract. GASB 86 is
effective for the fiscal period ending September 30, 2021. The City has not determined the impact of this
statement.
In June 2018, GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and
Direct Placements ("GASB 88"). GASB 88 specifies disclosures that should be made in the financial statements
related to debt. It also provides a definition of debt so that governments know which types of liabilities should
be included in those disclosures. If a government has direct borrowings or direct placements, disclosures related
to these should be provided separately from disclosures related to other types of debt. The City has not
determined the impact of this statement.
In December 2019, GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a
Construction Period ("GASB 89"). GASB 89 requires that interest costs incurred before the end of a
construction period be recognized as expenses in the period in which the costs are incurred. As a result, the
interest cost incurred before the end of a construction period will not be included in the historical cost of a
capital asset reported in a business -type activity or enterprise fund. Earlier application is encouraged. GASB
89 will be applied prospectively to interest incurred after the date of adoption. Continued review is necessary
to determine the impact of this statement on the City.
J. IMPLEMENTATION OF NEW PRONOUNCEMENT/RESTATEMENT OF NET POSITION
In FY 2018 the City implemented GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions (OPEB), such as retiree health insurance. This statement
established standards for measuring and recognizing OPEB liabilities, deferred outflows of resources, deferred
inflows of resources, and expense/expenditures. The effects of implementing this statement had a material
effect on net position. The City recognized the total OPEB liability on the statement of net position. The total
OPEB liability totaled $140.9 million as of September 30, 2018. The City also recognized a new measure of
the OPEB expense in the amount of $12.7 million, which was different from our actuarially determined
contributions (annual required contributions). Note disclosures and required supplementary information are
now based on the new standard.
The statement also required that the City record a beginning deferred outflow of resources for contributions
made between the measurement date of December 31, 2016 and our fiscal year-end of September 30, 2017.
As a result of the implementation of GASB Statement No. 75, the City recorded a prior period adjustment to
beginning net position in proprietary fund financial statements and government -wide governmental activities.
In addition, the City was required to eliminate the net OPEB obligation that was previously reported in the
proprietary fund financial statements and government -wide statements with a prior period adjustment.
71
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The total restatement of previously reported net position is as follows:
Government -wide net position - beginning of year
Implementation of New Pronouncement:
Governmental activities
Governmental funds
Internal Service Funds - governmental activities
Business -type activities
LP&L
Water/Wastewater
Storm Water
Nonmajor Enterprise Funds
Internal Service Funds - business type activities
Total Implementation of New Pronouncement
Government -wide net position beginning of year,
as restated
Governmental Business -type
Activities Activities Total
$ 26,298,442 $ 870,331,044 $ 896,629,486
(33,207,167) - (33,207,167)
(1,423,602) - (1,423,602)
- (7,540,120)
(7,540,120)
- (5,525,988)
(5,525,988)
- (934,127)
(934,127)
- 2,148,210
2,148,210
- (396,730)
(396,730)
(34,630,769) (12,248,755)
(46,879,524)
$ (8,332,327) $ 858,082,289 $ 849,749,962
NOTE H. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. RESTRICTED NET POSITION
Restricted net position is only used for its intended purpose. For the majority of projects funded by tax exempt
debt proceeds, the debt proceeds are used first, followed by unrestricted resources.
B. GENERAL FUND BUDGET COMPARISON
The General Fund FY 2018 amended budgeted expenditures and transfers out were $212,964,377, while actual
budgetary basis expenditures and transfers out were $211,830,612; a difference of $1,133,765.
NOTE III. DETAIL NOTES ON ALL ACTIVITIES AND FUNDS
A. DEPOSITS AND INVESTMENTS
On September 30, 2018, the bank balance of the City's deposits was $12,817,243. All of the bank balances
are covered by federal depository insurance or are fully collateralized. Custodial credit risk is the risk that in
the event of a bank failure, a government's deposits may not be returned. The City's deposit policy for
custodial credit risk requires compliance with the provisions of Texas Public Funds Investment Act.
State law requires federal depository insurance or collateralization with the value of eligible securities having
an aggregate value at least equal to the amount of the deposits. The City's Investment Policy requires the
minimum collateral level to be 102.0 percent of the market value of principal and accrued interest.
72
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
On September 30, 2018, bank balances were not exposed to custodial credit risk as follows:
Insured $ 750,000
Uninsured and collateral held by a third party financial institution in the
City's name 12,067,243
$ 12,817,243
On September 30, 2018, the City had the following investments and maturities:
TVpe
Federal Farm Credit Bank (FFCB)
Farmer Mac (FAMCA)
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage
Corporation (FHLMC)
Federal National Mortgage
Association (FNMA)
Municipal Bonds
Commercial Paper
Money Market
State Investment Pools
September 30, 2018
Maturities in Years
Less
Fair Value Than 1 1-5
15,130,682
2,974,771
19,586,275
11,227,329
10,978,599
64,253,811
1,998,508
4,545,183
452,593,806
3,985,119
5,958,854
1,986,601
14,656,803
1,998,508
4,545,183
452,593,806
$ 11,145,563
2,974,771
13,627,421
9,240,728
10,978,599
49,597,008
$ 583,288,964 $ 485,724,874 $ 97,564,090
*State Investment Pools are considered investments for financial reporting purposes.
Investment in State Investment Pools
The State Comptroller of Public Accounts exercises oversight responsibility over TexPool. Oversight includes
the significant ability to influence operations, designation of management, and accountability for fiscal
matters. Additionally, the State Comptroller has established an Advisory Board composed both of participants
in TexPool and of other persons who do not have a business relationship with TexPool. The Advisory Board
members review the investment policy and management fee structure. Finally, Standard & Poor's rates
TexPool AAAm. TexPool is not registered with the Securities and Exchange Commission (SEC) as an
investment company.
TexSTAR's governing body is a five -member board of directors (the "Board"). Three directors are officers or
employees of Participants; one director is an officer or employee of First Southwest Company, LLC; and the
final director is an officer or employee of an affiliate of J.P. Morgan Investment Management Inc. TexSTAR's
bylaws require the Board to appoint an advisory board. The Advisory Board currently consists of six members,
each of whom is either (1) a representative of a Participant or (2) a person who has no business relationship
with the Board, but who is qualified to advise the Board. The Advisory Board shall include at all times at least
one member of each such designation. The investment objective and strategy of the pool is to seek preservation
73
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
of principal, liquidity, and current income through investment in a diversified portfolio of short-term
marketable securities. The pool offers same day access to investment funds.
LOGIC was established pursuant to an Interlocal Agreement, which was subsequently amended and is now
entitled Participation Agreement and Trust Instrument (the "Agreement") between participating Government
Entities. Participation in the Pool is limited to those eligible Government Entities that have become parties to
the Agreement ("Participants"). Participants' assets in the Pool are represented by units of beneficial interest
("Units"), which are issued in discrete series (each a "Portfolio"), as authorized from time to time by the Board.
Assets invested in any Portfolio are managed separately and segregated from the assets of every other Portfolio.
Since September 2005, J.P. Morgan Investment Management Inc. (JPMIM) has served as investment adviser
to LOGIC. FirstSouthwest, a Division of Hilltop Securities (FirstSouthwest) and JPMIM serve as co -
administrators to LOGIC. FirstSouthwest provides administrative, participant support, and marketing services.
JPMorgan Chase Bank N.A. provides custodial services. The investment objective and strategy of the pool is
to seek preservation of principal, liquidity, and current income through investment in a diversified portfolio of
short-term marketable securities. The pool offers same day access to investment funds.
Texas Cooperative Liquid Assets Securities System (Texas CLASS) was created specifically for use by Texas
local government entities and seeks to provide safety, liquidity, convenience, and competitive rates of return.
Public Trust Advisors, LLC serves as the pool's administrator and investment adviser. Public Trust Advisors,
LLC also performs all marketing and operation functions of the portfolio. The pool is subject to the general
supervision of a Board of Trustees and its Advisory Board, both of which are elected by the Texas CLASS
Participants. Wells Fargo Bank, N.A. serves as custodian for the pool. The investment objective and strategy
of the pool is to seek preservation of principal, liquidity, and current income through investment in a diversified
portfolio of short-term marketable securities. The pool offers same day access to investment funds.
Interest Rate Risk - As a means of limiting its exposure to fair value losses due to rising interest rates, the
City's investment policy limits investments to those that are held to maturity and by limiting final stated
maturity to no more than five (5) years. The City uses the specific identification method for positions in fixed-
rate securities. The investment pools have laddered out maturities within their funds but are redeemable in full
within one day to the governments investing in the pooled funds.
Credit Risk - Credit risk is the risk that the issuer or other counterparty to an investment will not fulfill its
obligations. The City's policy allows investment in direct obligations of and other obligations guaranteed as
to principal of the U.S. Treasury and U.S. agencies and instrumentalities with the exception of mortgage -
backed securities. The City's policy also allows investment in obligations of the State of Texas or its agencies
and obligations of states, agencies, counties, cities, and other political subdivisions rated not less than A or its
equivalent. The City may also invest in collateralized certificates of deposit and constant dollar investment
pools authorized by the City Council. On September 30, 2018, Standard & Poor's rated the investment pools
AAAm. The senior unsecured debt for investments in FHLB, FAMCA, FFCB, FHLMC, and FNMA are rated
AA+ by Standard & Poor's and Aaa by Moody's. The municipal bond investments are rated between an AAA
and A- by S&P and between an Aaa and Al by Moody's.
Custodial Credit Risk - For an investment, custodial credit risk is the risk that, in the event of the failure of
the counterparty, the City will not be able to recover the value of its investment or collateral securities that are
in the possession of an outside party. The City requires that deposits and repurchase agreements be held in an
institution that has a minimum collateral level of 102.0 percent of the market value. FNMA, FAMCA, FFCB,
FHLMC, FHLB and Municipal Bond investments are held in the City's name in third party safekeeping by a
Federal Reserve member financial institution designated as a city depository. The City shall maintain a list of
authorized broker/dealers and financial institutions, which are approved by the Audit and Investment
Committee for investment purposes.
74
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Concentration of Credit Risk - The City places limits on the amount that may be invested in any one issuer
with the exception of United States Treasury obligations and State Investment Pools. As of September 30,
2018, the City's investments constituted the following percentages of total investments:
Investment
Percentage
State Investment Pools
77.60
Municipal Bonds
11.02
FHLB
3.36
FFCB
2.59
FHLMC
1.92
FNMA
1.88
Money Market
0.78
FAMCA
0.51
Commercial Paper
0.34
Foreign Currency Risk - This risk relates to adverse effects on the fair value of an investment from changes
in exchange rates. The City has no foreign currency risk.
Disclosures about Fair Value of Assets and Liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Fair value measurements must maximize
the use of observable inputs and minimize the use of unobservable inputs. The following hierarchy of three
levels of inputs is used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated
by observable market data for substantially the full term of the assets or liabilities
Level 3 Unobservable inputs supported by little or no market activity and are significant to the fair value of
the assets or liabilities
75
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Recurring Measurements
The following table presents the fair value measurements of assets and liabilities recognized in the
accompanying financial statements measured at fair value on a recurring basis and the level within the fair
value hierarchy in which the fair value measurements fall at September 30, 2018:
September 30, 2018
Investments by fair value level
Federal Farm Credit Bank (FFCB)
Farmer Mac (FAMCA)
Federal Home Loan Bank (FHLB)
Federal Home Loan Mortgage
Corporation (FHLMC)
Federal National Mortgage Association
(FNMA)
Municipal Bonds
Commercial Paper
Total investments by fair value level
Quoted Prices in Significant
Active Markets for Significant Other Unobservable
Identical Assets Observable Inputs Inputs
Fair Value (Level 1) (Level 2) (Level 3)
15,130,682 $ - $ 15,130,682
2,974,771 - 2,974,771
19,586,275 - 19,586,275
11,227,329 - 11,227,329
10,978,599 - 10,978,599 -
64,253,811 - 64,253,811 -
1,998,508 - 1,998,506 -
$ 126,149,975 $ - $ 126,149,973 $ -
Investments measured at the net asset value
TexStar $ 243,802,594
LOGIC 16,622,464
Texas Class 173,816,186
Total investments measured at the NAV $ 434,241,244
Investments measured at amortized cost
TexPool $ 18,352,562
Money Markets 4,545,183
Investments measured at amortized cost $ 22,897,745
Total Investments
$ 583,288,964
Certain investments that are measured using the net asset value per share (or its equivalent) practical expedient
have not been classified in the fair value hierarchy. The fair value amounts included above approximate net
asset value for all related external investment pool balances.
Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique.
Matrix pricing is used to value securities based on the securities' relationship to benchmark quoted prices.
B. INTERFUND TRANSACTIONS
Interfund balances, specifically, the due to and due from other funds, are short-term loans to cover temporary
cash deficits in various funds. This occasionally occurs prior to bond sales or grant reimbursements.
Interfund balances are loans to cover Council directed internal financing of certain projects. On September 30,
2018 the City had $13,441,095 of internal financing. These balances are assessed an interest charge and are
repaid over time through operations and transfers.
76
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The following amounts due to other funds or due from other funds are included in the fund financial statements
(all amounts in thousands):
Interfund Receivables: (in Thousands)
Governmental Funds Proprietary Funds
Interfund Payables: Nonmajor Nonmajor
(in Thousands) General Governmental WTMPA Enterprise Totals
Governmental Funds:
Nonmajor Governmental $ - $ - $ - $ - $ -
Proprietary Funds:
LP&L - - 11,487 - 11,487
Nonmajor Enterprise - 1,355 - 599 1,954
Totals $ - $ 1,355 $ 11,487 $ 599 $ 13,441
Transfers include: 1) debt service payments made from the debt service fund, but funded from an operating
fund; 2) subsidy transfers from unrestricted funds; and 3) transfers to move indirect cost allocations, payments
in lieu of taxes (PILOT), and franchise fees to the general fund or other funds as appropriate.
The following interfund transfers are reflected in the fund financial statements (all amounts in thousands):
Interfund Transfers In: (in Thousands)
Governmental
Funds
Proprietary Funds
Interfund Transfers
Govt.
Nonmajor
Water/Waste- Nonmajor
Internal
Out: (in Thousands)
General Capital
Govt.
Electric water WTMPA Enterprise
Service
Totals
Governmental Funds:
General Fund
$ - $ 9,121
$ 10,800
$ 188 $ - $ - $ 2,847
$1,378
$ 24,334
Govt. Capital Projects
- -
1,046
- - - -
124
1,170
Nonmajor Govt.
- 7,004
8,333
- - - 3,101
-
18,438
Proprietary Funds:
LP&L
13,789
- 3,095 -
- 1,462 - -
18,346
Water/Wastewater
15,727
- 319 930
- - - 574
17,550
Stormwater
3,039
- 5,310 188
- - - 196
8,733
Nonmajor Enterprise
11,783
- 7,005 -
148 - 125 -
19,061
Internal Service
-
- - -
- - - 115
115
Totals
$44,338
$16,125 $ 35,908 $1,306 $
148 $ 1,462 $ 6,073 $2,387
$107,747
Net transfers on the GWFS amounted to $40,130,357 from business activities to governmental -type activities.
C. PREPAID EXPENSES
The total prepaid expenses (noncurrent assets) of $1,477,776 in the LP&L Enterprise Fund represents an
advertising contract with the United Supermarket Arena. The advertising (and amortization) began with the
opening of the sports arena in FY 2000 and will continue for 30 years.
77
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
D. GOODWILL
The deferred outflow from goodwill of $531,114 in the LP&L Enterprise Fund represents the unamortized
excess purchase price over the estimated value of capital assets related to the purchase of Southwestern Public
Service Company (SPS) in 2011. The goodwill is being amortized over a 10-year period.
E. CAPITAL ASSETS
Capital asset activity for the year ended September 30, 2018, was as follows:
Primary Government:
Governmental Activities
Beginning Ending
Balances Increases Decreases Balances
Capital Assets Not Depreciated:
Land $ 25,331,675 $ 3,527,891 $ 20,452 $ 28,839,114
Construction in Progress 30,307,710 45,038,847 37,701,528 37,645,029
Total Capital Assets Not Depreciated 55,639,385 48,566,738 37,721,980 66,484,143
Capital Assets Depreciated:
Buildings
Improvements Other than Buildings
Machinery and Equipment
Total Capital Assets Depreciated
Less Accumulated Depreciation:
Buildings
Improvements Other than Buildings
Machinery and Equipment
Total Accumulated Depreciation
Total Capital Assets Depreciated, Net
68,600,317
6,444,336
1,002,071
74,042,582
567,889,379
73,446,098
2,011,284
639,324,193
110,402,679
52,407,124
8,505,016
154,304,787
746,892,375
132,297,558
11,518,371
867,671,562
32,960,896
2,798,316
672,010
35,087,202
280,450,714
56,342,037
1,860,978
334,931,773
64,761,569
39,445,510
8,398,264
95,808,815
378,173,179
98,585,863
10,931,252
465,827,790
368,719,196 33,711,695 587,119 401,843,772
Governmental Activities Capital Assets, Net $ 424,358,581 $ 82,278,433 $ 38,309,099 $ 468,327,915
78
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Depreciation expense was charged to functions/programs of the governmental activities as follows:
Governmental activities:
Administrative Services and General Government
Community Services
Cultural and Recreation Services
Economic and Business Development
Fire
Health
Other Public Safety
Police
Streets and Traffic
Solid Waste
Internal Service Funds
Total Depreciation Expense - Governmental Activities
Transfer in of Accumulated Depreciation - Business -Type Activities
Increase in Accumulated Depreciation - Governmental Activities
$ 502,038
140,994
3,839,319
2,054,880
2,384,381
397,097
152,575
2,159,058
22,851,756
3,976,583
3.038.893
41,49 /,J /4
57,088,289
$ 98,585,863
79
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Business Type Activities
Capital Assets Not Depreciated:
Land
Construction in Progress
Electric Production Plant
Electric Transmission Plant
Electric Distribution Plant
Electric General Plant
Total Capital Assets Not Depreciated
Capital Assets Depreciated:
Buildings
Improvements Other than Buildings
Machinery and Equipment
Electric Production Plant
Electric Transmission Plant
Electric Distribution Plant
Electric Regional Trans Mkt Oper Plant
Electric General Plant
Total Capital Assets Depreciated
Less Accumulated Depreciation:
Buildings
Improvements Other than Buildings
Machinery and Equipment
Electric Production Plant
Electric Transmission Plant
Electric Distribution Plant
Electric Regional Trans Mkt Oper Plant
Electric General Plant
Total Accumulated Depreciation
Beginning
Balances
Increases
Decreases
Ending
Balances
$ 57,679,137
$ 5,257,364
$ 1,607,932 $
61,328,569
207,722,079
81,190,304
238,833,792
50,078,591
75,410
-
-
75,410
35,046
-
-
35,046
16,394,512
261,233
-
16,655,745
302,521
-
-
302,521
282,208,705
86,708,901
240,441,724
128,475,882
180,007,623
44,635,038
1,652,072
222,990,589
1,276,220,032
153,351,705
37,192,993
1,392,378,744
187,510,043
40,381,387
46,869,673
181,021,757
89,377,886
345,673
213,094
89,510,465
44,970,711
41,715
984,870
44,027,556
270,393,713
9,884,376
2,671,878
277,606,211
1,193,702
189,684
-
1,383,386
31,529,120
2,129,667
729,975
32,928,812
2,081,202,830
250,959,245
90,314,555
2,241,847,520
80,900,662
2,289,377
914,167
82,275,872
421,014,469
31,531,825
28,556,604
423,989,690
111,917,438
8,418,235
32,392,477
87,943,196
55,586,540
3,515,128
172,650
58,929,018
16,434,969
610,455
984,870
16,060,554
149,436,329
10,870,823
2,657,941
157,649,211
158,092
248,130
-
406,222
19,390,814
2,006,270
301,482
21,095,602
854,839,313
59,490,243
65,980,191
848,349,365
Total Capital Assets Depreciated, Net 1,226,363,517 191,469,002 24,334,364 1,393,498,155
Business Type Activities Capital Assets, Net $ 1,508,572,222 $ 278,177,903 $ 264,776,088 $ 1,521,974,037
80
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Depreciation expense was charged to functions/programs of the business -type activities as follows:
Business -Type Activities:
LP&L
$ 17,209,151
Water
16,650,006
Wastewater
10,079,661
Storm Water
3,951,945
Airport
9,085,502
Transit
1,340,361
Civic Centers
983,766
Cemetery
48,121
Lake Alan Henry
5,064
Internal Service
9,093
Total Depreciation Expense - Business -Type Activities
59,362,670
Transfer in of Accumulated Depreciation - Governmental Activities
127,573
Increase in Accumulated Depreciation - Business -Type Activities
$ 59,490,243
Construction Commitments
The City has active construction projects at fiscal year end.
Proj ects
Governmental Capital Projects
TIT Capital Projects
Gateway Street Projects
LP&L
Water/Wastewater
Storm Water
Airport
Civic Center
Original Remaining
Commitments Spent -to -Date Commitments
$ 157,967,454 $ 94,983,774 $ 62,983,680
18,607,031 8,792,738 9,814,293
10,279,722
159,442,964
305,252,864
79,639,900
47,522,585
10,218,549
5,359,313
36,941,628
257,522,016
68,726,808
8,153,217
9,407,558
4,920,409
122,501,336
47,730,848
10,913,092
39,369,368
810,991
Cemetery
71,375
70,391
984
Internal Service Fund
25,390,088
22,024,264
3,365,824
Total
$ 814,392,532 $
511,981,707 $
302,410,825
LP&L has numerous non -routine capital projects that are in the works. Included in this is $9.6 million
appropriated for a rebuild on the Slaton Substation. This project includes building a new I I5kV substation to
replace the existing 69kV substation. $9.7 million is appropriated for construction of a new substation named
Red Raider. The new substation will be located in north central Lubbock. The station will include two power
transformers and eight distribution circuits and will be designed as a breaker ring bus for two I I5/69kV line
positions and two 115/69kV transformer positions with 12.47kV underground distribution. $35.9 million is
appropriated for a new customer service information system. The Customer Service Information System
(CSIS) will integrate technologies and innovative services such as advanced meters, communication networks,
and data management systems that produce a more efficient, sustainable, economic, and secure supply of utility
services.
81
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Work has begun on engineering and construction of large sewer mains in South and Southwest Lubbock as
recommended by the Wastewater Collection System Master Plan. The areas included are south of 114' Street
and west of University Avenue. The project provides sanitary sewer service to newly annexed areas in South
and Southwest Lubbock. $5.7 million was appropriated to this project as of September 30, 2018.
At the, airport $16 million is appropriated to construct rental car facility improvements. Improvements include
a consolidated rental car service facility and expansion and relocation of the ready/return parking lot.
Work continues on the $63 million Municipal Facilities replacement project that includes replacing the current
City Hall with a renovated facility in the former Omni Building that will provide enough space to allow the
City to locate most departments within one facility.
F. CAPITAL LEASES
In FY 2009, the City constructed a $23,662,637 conference center that is joined to the Overton Hotel and
Conference Center. The City is the lessor of the conference center to the developer of the North Overton Hotel
in a sales -type lease agreement in which the conference center has an estimated life of 50 years and was leased
for a term of 40 years with two optional 20-year renewals. The City expects the lessee to lease the entire 80-
year term; therefore, there is no expected residual value of the conference center to the City. Lease terms
include the greater of $65,000 per year or 15 percent of the excess of the net annual project cash flow, and one
percent of the total daily collected net hotel room revenue. In FY 2018, the City received $94,607 in contingent
hotel revenue. For years 2030 through 2050, there will be no lease payments.
The minimum lease payments (included in leases receivable on GWFS) are estimated as follows:
Fixed
Year
Lease
2019
43,912
2020
42,223
2021
40,599
2022
39,037
2023-2027
173,787
2028-2029
60,517
Total
$400,075
G. RETIREMENT PLANS
Each qualified employee is included in one of two retirement plans in which the City participates. These are
the Texas Municipal Retirement System (TMRS) and the Lubbock Fire Pension Fund (LFPF). The City does
not maintain the accounting records, hold the investments, or administer either retirement plan.
The total (aggregate for the TMRS and LFPF plans) of the City's net pension liabilities, deferred outflows of
resources and deferred inflows of resources related to pensions as of September 30, 2018 and the pension
expense for the year ended is as follows:
Net pension liability
Deferred outflows of resources
Deferred inflows of resources
Pension expense
TMRS LFPF Total
$ 86,450,251
13,338,629
17,723,816
17,043,364
$84,352,092
18,774,352
1,149,026
15,336,719
$170,802,343
32,112,981
18,872,842
32,380,083
82
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Summary of significant data for each retirement plan follows:
TEXAS MUNICIPAL RETIREMENT SYSTEM (TMRS)
Plan Description
The City participates as one of 883 plans in the nontraditional, joint contributory, hybrid defined benefit
pension plan administered by the Texas Municipal Retirement System (TMRS). TMRS is an agency created
by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas
Government Code (the TMRS Act) as an agent multiple -employer retirement system for municipal employees
in the State of Texas. The TMRS Act places the general administration and management of the System with a
six -member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints
the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a
tax -qualified plan under Section 401 (a) of the Internal Revenue Code. TMRS issues a publicly available
comprehensive annual financial report (CAFR) that can be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing
body of the city, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city -
financed monetary credits with interest were used to purchase an annuity. Members may choose to receive
their retirement benefit in one of seven payment options. Members may also choose to receive a portion of
their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which
cannot exceed 75% of the member's deposits and interest.
The plan provisions are adopted by the governing body of the city, within the options available in the state
statutes governing TMRS. Plan provisions for the City were as follows:
Plan Year 2017
Employee Deposit Rate 7.0%
Matching Ratio (City to Employee) 2 to 1
Years Required for Vesting 5
Service Retirement Eligibility
(Expressed as Age/Years of Service) 60/5, 0/20
At the December 31, 2017 valuation and measurement date, the following employees were covered by the
benefit terms:
Inactive employees or beneficiaries currently receiving benefits 1,336
Inactive employees entitled to but not yet receiving benefits 725
Active employees 1,751
Total 3,812
83
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the
city matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the city.
Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary,
using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated
amount necessary to finance the cost of benefits earned by employees during the year, with an additional
amount to finance any unfunded accrued liability.
Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year.
The contribution rates for the City were 17.95% and 18.05% in calendar years 2017 and 2018, respectively.
The City's contribution to TMRS for the year ended September 30, 2018, were $17,788,537, and were equal
to the required contributions.
Net Pension Liability
The City's net pension liability (NPL) was measured as of December 31, 2017, and the total pension liability
(TPL) used to calculate the net pension liability was determined by an actuarial valuation as of that date.
Actuarial assumptions
The total pension liability in the December 31, 2017 actuarial valuation was determined using the following
actuarial assumptions:
Inflation 2.5% per year
Overall payroll growth 3.0% per year
Investment Rate of Return 6.75%, net of pension 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 Tables 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 by scale BB to account for future mortality improvements. For disabled
annuitants, the gender -distinct RP2000 Combined Healthy Tables with Blue Collar Adjustment are used with
male rates multiplied by 109% and female rates multiplied by 103% with a 3-year set -forward for both males
and females. In addition, a 3% minimum mortality rate is applied to reflect the impairment for younger
members who become disabled. The rates are projected on a fully generational basis by scale BB to account
for future mortality improvements subject to the 3% floor.
The actuarial assumptions were developed primarily from the actuarial investigation of the experience of
TMRS over the four year period from December 31, 2010 to December 31, 2014. They were adopted in 2015
and first used in the December 31, 2015 actuarial valuation. The post -retirement mortality assumption for
healthy annuitants and Annuity Purchase Rate (APRs) are based on the Mortality Experience Investigation
Study covering 2009 through 2011 and dated December 31, 2013. In conjunction with these changes first used
in the December 31, 2013 valuation, the System adopted the Entry Age Normal actuarial cost method and a
one-time change to the amortization policy. Plan assets are managed on a total return basis with an emphasis
on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-
term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimate ranges of expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) are developed for each major asset class. These ranges are combined
to produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. In determining their best estimate of a
84
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
recommended investment return assumption under the various alternative asset allocation portfolios, GRS
focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative)
and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and
best estimates of real rates of return for each major asset class in fiscal year 2018 are summarized in the
following table:
Target
Asset Class
Allocation
Long -Term Expected Real Rate of Return (Arithmetic)
Domestic Equity
17.5%
4.55%
International Equity
17.5%
6.35%
Core Fixed Income
10.0%
1.00%
Non -Core Fixed
20.0%
3.90%
Income
Real Return
10.0%
3.80%
Real Estate
10.0%
4.50%
Absolute Return
10.0%
3.75%
Private Equity
5.0%
7.75%
Total
100.0%
Discount rate
The discount rate used to measure the total pension liability was 6.75%. The projection of cash flows used to
determine the discount rate assumed that employee and employer contributions will be made at the rates
specified in 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 plan members. Therefore,
the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the Total Pension Liability.
Changes in the Net Pension Liability
Balance at September 30, 2017
Changes for the year:
Service cost
Interest
Difference between expected and actual
experience
Contributions — employer
Contributions - employee
Net investment income
Benefit payments, including refunds of
employee contributions
Administrative expense
Other changes
Net changes
Balance at September 30, 2018
Increase (Decrease)
Total Pension
Plan Fiduciary
Net Pension
Liability
Net Position
Liability
(a)
(b)
(a)-(b)
$ 680,821,854
$ 554,773,322
$126,048,532
16,420,981
-
16,420,981
45,317,091
-
45,317,091
(709,626)
-
(709,626)
-
17,388,324
(17,388,324)
-
6,781,947
(6,781,947)
-
76,875,125
(76,875,125)
(35,336,067)
(35,336,067)
-
-
(398,475)
398,475
-
(20,194)
20,194
$ 25,692,379
$ 65,290,660
(39,598,281)
$706,514,233
$ 620,063,982
$ 86,450,251
85
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Sensitivity of the net pension liability to changes in the discount rate
The following represents 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 if it were calculated using a discount rate that is I -percentage-
point lower (5.75) or 1-percentage-point higher (7.75%) than the current rate:
1% Decrease in 1% Increase in
Discount Rate (5.75%) Discount Rate (6.75%) Discount Rate (7.75)
City's net pension liability $182,273,369 $86,450,251 $7,678,971
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's fiduciary net position is available in a separately -issued TMRS
financial report. That report may be obtained on the Internet at www.tmrs.com.
Pension Expense and Deferred Outflow of Resources and Deferred Inflows of Resources Related to
Pensions
For the year ended September 30, 2018 the City recognized pension expense of $17,043,364.
At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Difference in expected and actual experience
Difference in assumption changes
Difference between projected and actual
investment earnings
Contributions subsequent to the measurement
date
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
2,170,676
364,367
15,553,140
12,974,262
$ 13,338,629 $ 17,723,816
$12,974,262 reported as deferred outflows of resources related to pensions resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability as of
September 30, 2018. Other amounts reported as deferred outflows and inflows of resources related to pensions
will be recognized in pension expense as follows:
Year ending September 30:
2018
$ (471,010)
2019
(872,417)
2020
(8,067,396)
2021
(7,948,626)
Total
($17,3 59,449)
86
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
LUBBOCK FIRE PENSION FUND (LFPF)
Plan Description
The Board of Trustees of the LFPF is the administrator of a single -employer defined benefit pension plan. This
pension fund is a trust fund. It is reported by the City as a related organization and is not considered to be a
part of the City financial reporting entity. Firefighters in the Lubbock Fire Department are covered by the
LFPF.
Benefits Provided
The LFPF provides service retirement, death, disability, and withdrawal benefits. These benefits fully vest
after 20 years of credited service. A partially vested benefit is provided for firefighters who terminate
employment with at least 10 but less than 20 years of service. Employees may retire at age 50 with 20 years
of service. A reduced early service retirement benefit is provided for employees who terminate employment
with 20 or more years of service. The LFPF Plan, most recently amended on September 9, 2015, provides a
monthly normal service retirement benefit, payable in a Joint and Two -Thirds to Spouse form of annuity, equal
to 68.92 percent of final 48-month average salary plus $335.05 per month for each year of service in excess of
20 years.
A firefighter has the option to participate in a Retroactive Deferred Retirement Option Plan (RETRO DROP)
which provides a lump sum benefit and a reduced annuity upon termination of employment. Firefighters must
be at least 51 years of age with 21 years of service at the selected "RETRO DROP benefit calculation date"
(which is prior to date of employment termination). Early RETRO DROP with benefit reductions is available
at age 50 with 20 years of service for the selected "early RETRO DROP benefit calculation date." A Partial
Lump Sum option is also available where a reduced monthly benefit is determined based on an elected lump
sum amount such that the combined present value of the benefits under the option is actuarially equivalent to
that of the normal form of the monthly benefit. Optional forms are also available at varying levels of surviving
spouse benefits instead of the standard two-thirds form.
There is no provision for automatic post -retirement benefit increases. LFPF has the authority to provide, and
has periodically provided for in the past, ad hoc post -retirement benefit increases. The benefit provisions of
this plan are authorized by the Texas Local Fire Fighter's Retirement Act (TLFFRA). TLFFRA provides the
authority and procedure to amend benefit provisions. Amending the plan requires approval of any proposed
change by: a) an eligible actuary and b) a majority of the participating members of the fund.
At the December 31, 2017 measurement date, the following employees were covered by the benefit terms:
Retirees and beneficiaries currently receiving benefits 307
Terminated employees entitled to but not yet receiving benefits 1
Active employees 407
Total 715
Contributions
The contribution provisions of this plan are authorized by TLFFRA. TLFFRA provides the authority and
procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a
percentage of payroll by the city. While the actual contribution rates are not actuarially determined, state law
requires that each plan of benefits adopted by LFPF be approved by an eligible actuary. The actuary certifies
that the contribution commitment by the firefighters and the city provides an adequate financing arrangement.
Using the entry age actuarial cost method, LFPF's service cost contribution rate is determined as a percentage
87
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
of payrolls. The excess of the total contribution rate over the service cost contribution is used to amortize
LFPF's net pension liability, if any, and the number of years needed to amortize LFPF's net pension liability,
if any is determined using a level percentage of payroll method. The costs of administering the plan are
financed by LFPF.
Employees were required to contribute 12.43% of their annual gross earnings during the fiscal year. The
contribution rates for the City were 21.72% and 21.81% in calendar years 2017 and 2018, respectively. The
City's contributions to LFPF for the year ended September 30, 2018 were $7,111,376 and were equal to the
required contributions.
Net Pension Liability
The LFPF's net pension liability (NPL) was measured as of December 31, 2017, and the total pension liability
(TPL) used to calculate the net pension liability was determined by an actuarial valuation as of December 31,
2016. Update procedures were performed to roll forward to the measurement date.
Actuarial assumptions
The total pension liability in the December 31, 2016 actuarial valuation was determined using the following
actuarial assumptions:
Inflation 3.0% per year
Overall payroll growth 4.0% per year, compounded annually
Investment Rate of Return 7.75%, compounded annually
The mortality, disability, and termination decrements are assumed to be annual rates, rather than probabilities,
and are adjusted for the interaction between competing decrements. There was no adjustment for the
interaction between those three decrements and the retirement decrement. The 7.75 percent rate of return was
set by examining the fund's rate of return history and by taking into account future expected rates of return for
portfolios with similar asset allocations. The assumed 7.75 percent rate can be considered to include provision
for inflation at 3.00 percent per year, although other combinations of real return, risk premium, and inflation
are also accounted for by a 7.75 percent assumed rate. The rate of return is net of trust expenses. The same
inflation component was used in the assumed rate of return on the actuarial value of assets, the assumed
increases in compensation for individual members, and the other actuarial assumptions.
The valuation includes provisions for mortality improvement to 2024. The mortality table used in the valuation
is updated periodically. The actuaries are not aware of any significant event that has occurred since the
valuation date that would have materially changed any of the demographic assumptions selected for the
valuation.
The assumed rate of return was developed using both the plan's historical rates of return and expected future
rates of return. Rate of return experience studies have been performed in connection with the Plan's valuations.
88
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The target allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Asset Class
Target
Allocation
Long -Term Expected Real
Rate of Return (Arithmetic)
Cash and Equivalents
0.00%
0.00%
Fixed Income
a. Core Bonds
10.00%
3.00%
b. Floating Rate Debt
5.00%
3.00%
c. Private Credit and Real Estate Debt
10.00%
4.50%
Equities, Real Estate and Alternative Investments
a. Public Equities
45.00%
7.25%
b. Private Equities
10.00%
7.25%
c. Private Equities (Real Estate)
10.00%
8.60%
d. Value Added Equity (Real Estate)
5.00%
8.60%
e. Low Volatility
5.00%
3.50%
Totals
100.00%
The demographic assumptions were chosen based on expected future rates of retirement, mortality, disability,
and termination. Mortality was taken from published studies and was updated to reflect future improvement.
Retirement and salary increase rates were developed based on the Plan's own experience. Disability and
termination rates were based on published rates, adjusted as necessary, to conform to the Plan's own
experience. Demographic assumptions were tested in connection with the valuation.
Both economic and demographic assumptions were further tested through calculation of the Plan's aggregate
experience with respect to both demographic decrements and economic assumptions.
The assumed rate of return on the actuarial value of assets was 7.75 percent per annum.
The mortality table used for the valuation was changed from (a) the Employee and Healthy Annuitant
Combined Rates from the RP-2000 Mortality Table, projected to 2015 using Scale AA, with separate rates for
males and females, to (b) the Employee and Healthy Annuitant Combined Rates from the RP-2000 Mortality
Table, projected to 2024 using Scale AA, with separate rates for males and females. The mortality changes
were made in order to recognize mortality improvement through the valuation date and provide a margin for
future mortality improvement. Disability rates were changed from SOA Disability Study Table, Class 1 rates,
to tabular rates. Termination rates were not changed; however, they were listed as tabular rates, rather than
under their original name, Table T-1 from the Actuary's Pension Handbook.
The assumed City contribution rate was increased to 21.81 percent of compensation, the rate at which the City
of Lubbock began contributing to the plan in 2018. The assumed City contribution rate for the 2015 valuation
was 21.73 percent of compensation.
Discount rate
The discount rate used to measure the total pension liability was 7.75%. 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.
89
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Changes in the Net Pension Liability
Balance at September 30, 2017
Changes for the year:
Service cost
Interest
Difference between expected and actual experience
Contributions — employer
Contributions — employee
Net investment income
Benefit payments, including refunds of employee
Contributions
Administrative expense
Other changes
Net changes
Balance at September 30, 2018
Increase (Decrease)
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
(a) (bl (al-(bl
$ 268,017,378 $ 176,016,821 $ 92,000,557
6,378,755 - 6,378,755
20,651,840 - 20,651,840
6,897,164 (6,897,164)
3,947,134 (3,947,134)
23,109,838 (23,109,838)
(15,841,569) (15,841,569)
-
- (290,549)
290,549
- 1,015,473
(1,015,473)
$ 11,189,026 $ 18,837,491
$ (7,648,465)
$279,206,404 $ 194,854,312
$ 84,352,092
Sensitivity of the net pension liability to changes in the discount rate
The following represents the net pension liability of the City, calculated using the discount rate of 7.75%, as
well as what the City's net pension liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (6.75%) or 1-percentage-point higher (8.75%) than the current rate:
1% Decrease in
Discount Rate (6.75%)
City's net pension liability $117,123,499
Pension Plan Fiduciary Net Position
1% Increase in
Discount Rate (7.75%) Discount Rate (8.75%)
$84,352,092 $58,103,035
Detailed information about the pension plan's fiduciary net position is available in a separately -issued LFPF
financial report. That report can be obtained by contacting the Board of Trustees, LFPF, 4223 85`b Street,
Lubbock, TX 79423 or at www.lubbockfirepensionfund.com.
Pension Expense and Deferred Outflow of Resources and Deferred Inflows of Resources Related to
Pension
For the year ended September 30, 2018, the City recognized pension expense of $15,336,719.
90
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferred Deferred
Outflows of Resources Inflows of Resources
Difference between expected and actual
economic experience $ 1,034,892 $ 1,149,026
Changes in actuarial assumptions 6,377,407 -
Difference between projected and actual
investment earnings 5,866,009 -
Contributions subsequent to the measurement
date 5,496,044 -
Total $ 18,774,352 $ 1,149,026
$5,496,044 reported as deferred outflows of resources related to pensions resulting from contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability as of
September 30, 2019. Other amounts reported as deferred outflows and inflows of resources related to pensions
will be recognized in pension expense as follows:
Year ending September 30:
2019
$ 6,453,933
2020
3,850,016
2021
31,134
2022
(1,079,397)
2023
847,419
Thereafter
2,026,177
Total
$12,129,282
H. OTHER POST -EMPLOYMENT BENEFITS (OPEB)
Plan Description
The City sponsors and administers an informal single -employer health/dental plan. Texas statute provides that
retirees from a municipality with a population of 25,000 or more and that receive retirement benefits from a
municipal retirement plan are entitled to purchase continued health benefits coverage for the person and the
person's dependents unless the person is eligible for group health benefits coverage through another employer.
The State of Texas has the authority to establish and amend the requirements of this statute. No assets are
accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 75. The City does not issue
stand-alone financial statements for the health/dental plan. However, all required information is presented in
this report.
Benefits Provided
Permanent full-time employees of the City are eligible to participate in the retiree health/dental care plan
provided they meet the criteria for retirement. To be recognized as a "service retiree" and be eligible for group
medical/dental coverage, an employee must have worked for the City for five consecutive years immediately
preceding the date of retirement and satisfy the retirement eligibility criteria listed below. Employees who
retire or are eligible to retire when they leave employment must make an irrevocable decision to accept or deny
retiree insurance at the time they terminate their employment with the City.
91
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Normal Retirement Benefits
Texas Municipal Retirement System (TMRS)
• Completion of 20 years of service, regardless of age; or
• Upon attaining age 60 provided the employee has at least five (5) years of service.
Lubbock Fire Pension Fund (LFPF)
• Upon attaining age 50 provided the employee has at least twenty (20) years of service.
Retiree medical/dental coverage levels for retirees is the same as coverage provided to active City employees
in accordance with the terms and conditions of the current City Benefit Plan.
Employees who retire with 15 or more years of service or Civil Service employees that retire who have a
balance in excess of 90 days sick leave shall be eligible to elect to continue receiving medical coverage in full
30 day periods for the term of their sick leave balance. Retirees are required to pay a prorated premium for the
days of coverage not funded by their excess sick leave.
Retirees may purchase retiree health/dental care coverage for eligible spouses and dependents at their own
expense. Insured dependents of a deceased insured retiree shall remain eligible for insurance or the Medicare
stipend.
The City will provide a $150 per month Health Retirement Account (HRA) contribution or stipend for
Medicare eligible retiree/spouses. Medicare eligible retirees/dependents may not continue coverage on the
City's plan.
The following table provides a summary of the number of participants in the plan as of December 31, 2017:
Inactive plan members or beneficiaries currently receiving benefits 749
Inactive plan members entitled to but not yet receiving benefits -
Active plan members 2,147
Total 2,896
Contributions
The City is not required to make contributions to the plan on behalf of the retirees and funds the plan on a
projected pay-as-you-go financing method. Plan members pay monthly premiums of $380/$23
(medical/dental) for single coverage and $868/$51 (medical/dental) for family coverage, pre-65.
Total OPEB Liability
The City's total OPEB liability was measured as of December 31, 2017 and was determined by an actuarial
valuation as of that date.
92
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Actuarial assumptions
The total OPEB liability in the December 31, 2017 actuarial valuation was determined using the following
actuarial assumptions:
Actuarial Cost Method Individual Entry -Age
Inflation 2.5% per year
Healthcare cost trend rate Initial rate of 7.5% declining to an ultimate rate of 4.75% after 13 years
Discount rate 3.31%
Salary increases TMRS: 3.5% to 10.5%, including inflation
LFPF: 4.0% to 11.28%
Demographic assumptions were based on the experience study covering the four year period ending December
31, 2014 as conducted for TMRS, and assumptions utilized by the LFPF.
Mortality rates for TMRS: for healthy retirees, the gender -distinct RP2000 Combined Healthy Mortality
Tables with Blue Collar Adjustment are used with male rates multiplied by 109% and female rates multiplied
by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality
improvements.
Mortality rates for LFPF: for healthy retirees, the gender -distinct RP2000 Combined Healthy Mortality Tables
are used, projected to 2024 using scale AA to account for future mortality improvements.
Discount rate
For plans that do not have formal assets, the discount rate should equal the tax-exempt municipal bond rate
based on an index of 20-year general obligation bonds with an average AA credit rating as of the measurement
date. For purposes of the most recent OPEB valuation, the municipal bond rate is 3.31% (based on the daily
rate closest to but not later than the measurement date of the Fidelity "20-Year Municipal GO AA Index").
The discount rate was 3.81 % as of the prior measurement date.
Changes in the Total OPEB Liability
Balance at September 30, 2017
Changes for the year:
Service cost
Interest
Changes of assumptions
Benefit payments
Net changes
Balance at September 30, 2018
Total OPEB
Liability
$ 127,087,132
6,889,393
4,871,975
7,332,144
(5,316,929)
$ 13,776,583
$ 140,863,715
93
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Sensitivity of the total OPEB liability to changes in the discount rate
The following represents the total OPEB liability of the City, calculated using the discount rate of 3.31 %, as
well as what the City's total OPEB liability would be if it were calculated using a discount rate that is 1-
percentage-point lower (2.31%) or 1-percentage-point higher (4.31%) than the current rate:
1% Decrease in Discount 1% Increase in
Discount Rate (2.31%) Rate (3.31%) Discount Rate (4.31%)
City's Total OPEB Liability $157,199,793 $140,863,715 $126,698,878
Sensitivity of the Total OPEB Liability to changes in the healthcare cost trend rate
The following represents the total OPEB liability of the City, calculated using the assumed healthcare cost
trend rate, as well as what the City's total OPEB liability would be if it were calculated using a healthcare cost
trend rate that is 1-percentage-point lower or 1-percentage-point higher than the current rate:
City's Total OPEB
Liability
1% Decrease in
Healthcare Cost Trend
Rate
$128,197,080
Current Healthcare
Cost Trend Rate
Assumption
$140,863,715
1% Increase in
Healthcare Cost Trend
Rate
$156,063,501
OPEB Expense and Deferred Outflow of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended September 30, 2018 the City recognized total OPEB expense of $12,744,295.
At September 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Difference in expected and actual experience
Changes in assumptions
Contributions subsequent to the measurement
date
Total
Deferred Deferred
Outflows of Inflows of
Resources Resources
6,349,217
2,690,521
9,039,738
94
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
$2,690,521 reported as deferred outflows of resources related to OPEB resulting from benefit payments
subsequent to the measurement date will be recognized as a reduction of the total OPEB liability as of
September 30, 2019. Other amounts reported as deferred outflows and inflows of resources related to OPEB
will be recognized in OPEB expense as follows:
Year ending September 30:
2019
$ 982,927
2020
982,927
2021
982,927
2022
982,927
2023
982,927
Thereafter
1,434,582
Total
$6,349,217
I. DEFERRED COMPENSATION
The City offers its employees five deferred compensation plans in accordance with Internal Revenue Code
("IRC") Section 457. The plans, available to all city employees, permit them to defer a portion of their salary
until future years. The deferred compensation is not available to employees until termination, retirement, death,
or unforeseeable emergency. The plans' assets are held in trust for the exclusive benefit of the participants and
their beneficiaries. The City does not provide administrative services or have any fiduciary responsibilities for
these plans; therefore, they are not presented in the BFS.
I SURFACE WATER SUPPLY
Canadian River Municipal Water Authority
The Canadian River Municipal Water Authority (CRMWA) is a Conservation and Reclamation Authority
established by the Texas Legislature to construct a dam, water reservoir, and aqueduct system for the purpose
of supplying water to surrounding cities. The Authority was created in 1953 and is comprised of eleven cities,
including Lubbock. The budget, financing, and operations of the Authority are governed by a Board of
Directors selected by the governing bodies of each of the member cities, each city being entitled to one or two
members dependent upon population. At September 30, 2018, the Board was comprised of 18 members, two
of which represented the City. The City contracted with the CRMWA to reimburse CRMWA for a portion of
the cost of the Canadian River Dam and aqueduct system in exchange for surface water. The City's pro-rata
share of annual fixed and variable operating and reserve assessments are recorded as an expense of obtaining
surface water. The City has four contract revenue bonds to pay for the water rights. These assets and liabilities
are recorded in the Water and Wastewater Enterprise Fund.
95
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
K. LONG-TERM DEBT
GENERAL OBLIGATION BONDS AND CERTIFICATES OF OBLIGATION:
Interest
Maturity
Amount
Outstanding
Rate%
Dated
Date
Issued
09/30/18
2.45
06/01/08
08/15/28
22,615,000
12,415,000
4.67
03/01/09
08/15/29
2,645,000
540,000
3.12
03/01/09
08/15/19
20,540,000
515,000
4.53
03/01/09
08/15/29
58,705,000
11,095,000
2.16
01/01/10
02/15/30
19,945,000
13,360,000
3.27
02/15/10
02/15/30
8,840,000
2,345,000
2.70
02/15/10
02/15/30
48,955,000
5,715,000
1.93
10/05/10
02/15/30
41,000,000
27,230,000
3.85
03/15/11
02/15/22
16,320,000
3,455,000
3.85
03/15/11
02/15/31
14,135,000
10,415,000
3.94
03/15/11
02/15/31
112,230,000
76,560,000
3.35
04/01/12
02/15/32
12,395,000
9,585,000
3.43
04/01/12
02/15/32
66,075,000
48,155,000
3.28
04/01/12
02/15/31
15,200,000
9,705,000
1.61
05/21/13
02/15/21
39,705,000
21,085,000
2.05
05/21/13
02/15/33
42,075,000
33,955,000
2.80
05/21/13
02/15/33
49,440,000
36,845,000
2.64
05/01/14
02/15/26
44,920,000
35,395,000
3.25
05/01/14
02/15/34
62,900,000
52,370,000
3.11
04/15/15
02/15/35
102,490,000
92,275,000
2.42
04/15/15
02/15/28
129,665,000
107,950,000
3.21
05/01/15
02/15/31
28,305,000
26,635,000
2.41
04/15/16
02/15/34
26,660,000
26,325,000
2.72
04/15/16
02/15/36
101,305,000
94,170,000
2.47
11/l/2016
02/15/34
36,780,000
32,855,000
0.00
02/16/17
02/15/37
35,000,000
33,250,000
3.20
04/15/17
02/15/37
23,290,000
22,440,000
2.92
04/04/18
02/15/38
18,535,000
18,535,000
3.86
04/04/18
02/15/38
14,675,000
14,675,000
2.76
04/04/18
02/15/30
96,160,000
95,565,000
Total
$ 1,311,505,000
$ 975,415,000 (A)
(A) Excludes net bond premiums and discounts — ($53,146,870) business -type and ($31,413,569) governmental.
Additionally, this amount includes $651,081,459 of bonds used to finance enterprise fund activities.
At September 30, 2018, management of the City believes the City complied with all financial bond covenants
on outstanding general obligation bonded debt, certificates of obligation, tax notes, electric revenue bonded
debt, and water contract bonded debt.
96
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
LP&L REVENUE BONDS
Balance
Final
Amount
Outstanding
Interest Rate (%)
Issue Date
Maturity Date
Issued
09/30/18
2.45
10/15/10
04/15/20
73,295,000
16,970,000
1.90
04/15/13
04/15/24
16,570,000
8,580,000
3.09
05/01/14
04/15/34
16,245,000
12,610,000
3.41
04/15/15
04/15/35
11,865,000
10,630,000
3.04
04/15/16
04/15/46
7,535,000
6,915,000
3.60
08/15/17
02/15/47
17,760,000
17,460,000
3.64
07/12/18
04/15/48
93,925,000
93,925,000
Total
237,195,000
$ 167,090,000
* Balance outstanding excludes ($18,663,454) of net bond premiums and discounts.
Debt is secured by a first lien on and pledge of the net revenues of the City's Electric Light and Power System.
Remaining interest required to amortize all outstanding debt equals $87.9 million.
The general purpose for the debt is for acquiring, purchasing, constructing, improving, renovating, enlarging,
and/or equipping property, buildings, structures, facilities and/or related infrastructure for the Electric Light
and Power System. Net revenue available for debt service is 3.5 times the debt service requirements in FYI 8.
CONTRACT BONDS
Balance
Final
Amount
Outstanding
Interest Rate (%o)
Issue Date
Maturity Date
Issued
09/30/18
4.00 to 5.00
12/22/11
01/15/31
30,594,108
22,765,994
2.00 to 5.00
01/20/13
02/15/25
10,970,000
7,408,333
2.00 to 5.00
12/02/14
02/15/27
11,078,489
8,970,507
2.00 to 5.00
10/01/17
02/15/29
4,723,042
4,307,374
Total
$ 57,365,639
$ 43,452,208
* Balance outstanding excludes ($3,999,820) of bond premiums.
TAX NOTE
Final
Interest Rate (%) Issue Date Maturity Date
1.78 07/11/17 02/15/24
2.50 08/01/18 02/15/25
Total
Balance
Amount Outstanding
Issued 09/30/18
18,220,000 12,505,000
13,290,000 13,290,000
$ 31,510,000 $ 25,795,000
97
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The annual requirements to amortize all outstanding debt of the City as of September 30, 2018 are as follows:
Governmental Activities
Fiscal
General Obligation Bonds
Tax
Notes
Year
Principal
Interest
Principal
Interest
2019
$ 29,126,169
$ 14,175,822
$ 6,906,514
$ 339,781
2020
29,038,552
12,689,624
3,365,791
245,137
2021
28,308,647
11,404,078
2,772,231
180,035
2022
27,951,206
10,107,411
2,632,078
122,372
2023
27,458,332
8,820,230
2,293,215
70,813
2024-2028
110,429,751
26,564,325
2,280,138
34,854
2029-2033
53,345,883
8,030,587
-
-
2034-2038
18,675,000
996,100
-
-
Totals
$ 324,333,541
$ 92,788,175
$ 20,249,968
$ 992,992
Business -Type Activities
Fiscal
General Obligation Bonds
Tax Notes
Revenue/Contract Bonds
Year
Principal
Interest
Principal Interest
Principal
Interest
2019
$ 49,038,831
$ 25,955,538
$ 1,398,486 $
105,567
$ 19,191,991
$ 7,654,593
2020
47,681,448
24,025,535
1,114,209
79,305
19,242,002
8,395,621
2021
47,921,353
22,138,463
917,769
55,926
11,042,391
7,486,654
2022
45,113,794
20,222,324
822,922
36,337
12,360,556
7,303,248
2023
45,926,668
18,281,844
651,785
20,171
12,944,810
7,058,878
2024-2028
234,140,249
60,648,335
639,862
10,078
55,704,072
26,419,725
2029-2033
144,599,117
17,785,680
-
-
26,621,387
16,016,227
2034-2038
36,660,000
1,598,470
-
-
19,825,000
10,644,306
2039-2043
-
-
-
-
15,335,000
6,695,756
2044-2048
-
-
-
-
18,275,000
2,626,625
Totals
$ 651,081,459
$ 190,656,190
$ 5,545,032 $
307,384
$ 210,542,208
$ 100,301,634
98
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Capital leases were used to acquire equipment and vehicles. The lessor holds title to the equipment and vehicles
until the lease is paid. The interest rate on the leases ranged from 1.0 percent to 4.6 percent. The requirements
on capital leases of the City as of September 30, 2018, including interest payments totaling $871,142, are as
follows:
Governmental
Business -type
Total
Capital Lease
Capital Lease
Capital Lease
Fiscal
Minimum
Minimum
Minimum
Year
Payment
Payment
Payment
2019
$ 2,152,361
$ 554,905
$ 2,707,266
2020
2,152,361
554,905
2,707,266
2021
2,152,361
554,905
2,707,266
2022
1,846,027
436,184
2,282,211
2023
1,594,987
336,578
1,931,566
2024-2028
2,179,067
360,818
2,539,885
Less Interest
(725,912)
(145,228)
(871,142)
Total
$ 11,351,252
$ 2,653,067
$ 14,004,318
The carrying values on the leased assets of the City as of September 30, 2018 are as follows:
Governmental Activities
Business -Type Activities
Total Leased Assets
Gross Value
$ 15,020,158
3,373,830
$ 18,393,988
Accumulated
Depreciation
$ 4,572,545
1,056,974
$ 5,629,519
Net Book
Value
$ 10,447,613
2,316,856
$ 12,764,469
99
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Long-term obligations for governmental and business -type activities for the year ended September 30, 2018
are as follows:
Debt Payable
Debt Payable
Due in
9/30/2017*
Additions
Deletions
09/30/18
one year
Governmental activities:
Tax -Supported -
Obligation Bonds
$ 329,436,266
$ 67,618,255
$
52,471,012
$
344,583,509
$
36,032,684
Bond Premiums
30,095,922
6,217,432
4,899,785
31,413,569
-
Capital Leases
15,659,605
8,611,984
12,920,337
11,351,252
1,947,242
Closure/Post Closure
-
5,879,342
-
5,879,342
-
Compensated Absences
29,955,093
10,331,909
10,985,159
29,301,843
10,561,944
Total OPEB Liability**
89,020,811
13,374,446
3,724,353
98,670,904
-
Net Pension Liability
175,468,106
68,511,173
102,400,627
141,578,652
-
Insurance Claims Payable
1,708,169
29,441,716
29,064,021
2,085,864
1,879,494
Total Governmental activities
$ 671,343,972
$ 209,986,257
$
216,465,294
$
664,864,935
$
50,421,364
Business -type activities:
Self -Supported -
Obligation Bonds
$ 717,858,734
$ 95,598,122
$
156,830,365
$
656,626,491
$
50,437,317
Revenue and Contract Bonds
132,469,311
98,173,700
20,100,803
210,542,208
19,191,991
Bond Premiums
62,584,859
24,191,206
10,965,921
75,810,144
-
Note Payable
1,250,000
-
1,250,000
-
-
Capital Leases
14,276,268
11,623,201
2,653,067
510,845
Closure/Post Closure
5,676,084
-
5,676,084
-
-
Compensated Absences
6,300,917
2,895,975
3,505,449
5,691,443
4,512,335
Total OPEB Liability**
38,066,321
5,719,066
1,592,576
42,192,811
-
Net Pension Liability
42,580,983
20,966,712
34,324,004
29,223,691
-
Insurance Claims Payable
2,911,858
5,313,246
4,427,161
3,797,943
1,434,338
Total Business -type activities
$1,023,975,335
$ 252,858,027
$
250,295,564
$
1,026,537,798
$
76,086,826
*Beginning balances have been adjusted due to the Fleet Internal Service Fund changing from a business -type
activity to a governmental activity for FY 2018. This is a result of Solid Waste operations moving from an
Enterprise Fund to the General Fund.
**The Post Employment Benefits Obligation that was previously reported has been eliminated and the Total
OPEB Liability has been recorded per the implementation of GASB Statement No. 75, Accounting and
Financial Reporting for Postemployment Benefits Other than Pensions.
Payments on bonds payable for governmental activities are made in the Debt Service Fund. Bonded debt is
subject to the applicability of federal arbitrage regulations. In FY 2018, the City did had $50,917 outstanding
federal arbitrage. Accrued compensated absences that pertain to governmental activities will be liquidated by
the General Fund and Special Revenue Funds. The Risk Management Internal Service Fund will liquidate
100
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
insurance claims payable that pertain to governmental activities. Payments for the capital leases that pertain
to the governmental activities will be liquidated by the General Fund and Special Revenue Funds.
The General Fund will liquidate the other postemployment benefit liability that pertains to governmental
activities. The net pension liability that pertains to the governmental activities will be liquidated mainly by the
General Fund.
The total long-term debt is reconciled to the total annual requirements to amortize long-term debt as follows:
Long -Term Debt - Governmental Activities $ 664,864,935
Long -Term Debt - Business -Type Activities 1,026,537,798
Interest 385,046,375
Total Amount of Debt $ 2,076,449,108
Less: Bond Discounts/Premiums
(107,223,713)
Less: Capital Leases
(14,004,319)
Less: Notes Payable
-
Less: Closure/Post Closure
(5,879,342)
Less: Compensated Absenses
(34,993,286)
Less: Post Employment Benefits
(140,863,715)
Less: Net Pension Liability
(170,802,343)
Less: Insurance Claims Payable
(5,883,807)
Total Other Debt
(479,650,525)
Total Future Bonded Debt Requirements
$ 1,596,798,583
New Bond Issuance
In April 2018, the City issued $18,535,000 Tax and Waterworks System Surplus Revenue Certificates of
Obligation, Series 2018A (Certificates), with interest rates ranging from 3.00 percent to 5.00 percent. The
Certificates were issued at a premium of $2,105,259 and incurred issuance cost of $210,259. The $20,640,259
proceeds from the sale of the Certificates will be used for the purpose of paying contractual obligations to be
incurred for various public improvements and renovations including: (i) purchase of computing assets for the
Secondary Data Center; (ii) renovations, improvements and extensions to City streets, including sidewalks,
street lighting, traffic signals/controllers and traffic signal communication systems, signage, landscaping,
utility improvements, extensions, relocations and acquisition of land, rights -of -way and equipment in
connection therewith; and (iii) payment of professional services of attorneys, financial advisors, engineers and
other professionals in connection with the Project and the issuance of the Certificates. The proceeds of the debt
are recorded in the various Capital Projects Funds.
In April 2018, the City issued $14,675,000 Tax and Waterworks System Surplus Revenue Certificates of
Obligation, Taxable Series 2018B (Certificates), with interest rates ranging from 2.30 percent to 4.06 percent.
The Certificates were issued at par and incurred issuance cost of $175,000. The $14,675,000 proceeds from
the sale of the Certificates will be used for the purpose of paying contractual obligations to be incurred for
various public improvements and renovations including: (i) construction, renovations and improvements to the
Lubbock Preston Smith International Airport facilities, including terminal building remodeling and
construction of a consolidated rental car parking facility; and (ii) payment of professional services of attorneys,
financial advisors, engineers and other professionals in connection with the Project and the issuance of the
Certificates. The proceeds of the debt are recorded in the various Capital Projects Funds.
In August 2018, the City issued $93,925,000 Electric Light and Power System Revenue Bonds, Series 2018
(Bonds), with interest rates from 4.00 percent to 5.00 percent. The Bonds were issued at a premium of
$12,858,194 and incurred issuance costs of $942,947. $106,783,194 of the proceeds of the sale of the Bonds
will be used for the purpose of paying contractual obligations to be incurred for the purposes of. (i) paying the
costs of acquiring, purchasing, constructing, improving, renovating, enlarging, and/or equipping property,
101
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
buildings, structures, facilities, and/or related infrastructure for the System, (ii) funding capitalized interest,
(iii) funding the reserve fund requirement for the Bonds, and (iv) paying the costs of issuing the Bonds.
Refunding
In April 2018, the City issued $96,160,000 General Obligation Refunding Bonds, Series 2018 (Bonds), with
interest rates ranging from 2.00 percent to 5.00 percent. The Bonds were issued at a premium of $13,366,461
and incurred issuance cost of $807,927. The $96,160,000 bond proceeds were used to refund a portion of the
City's outstanding indebtedness for the purpose of achieving debt service savings. The net proceeds were
deposited with the Escrow Agent in an amount necessary to accomplish, on their scheduled redemption date,
the discharge and final payment on the Refunded Bonds. These funds will be held by the Escrow Agent in a
special escrow fund and used to purchase direct obligations of the United States of America. Under the
escrow agreements between the City and the Escrow Agent, the escrow funds are irrevocably pledged to the
payment of principal and interest on the Refund Bonds. The bonds refunded $104,665,000 of outstanding debt.
Because of the refunding, the City decreased total debt service requirements by $4,890,083, which resulted in
net present value savings of $4,199,997, or 4.01 percent savings on refunded bonds.
Prior year defeasance of debt. In prior years, the City defeased bonds by placing the proceeds of the new
bonds in an irrevocable trust account to provide for all future debt service payments on the old bonds.
Accordingly, the trust account assets and the liability for the defeased bonds are not included in the
government's financial statements. At September 30, 2018, $104,665,000 of defeased bonds remain
outstanding.
L. CONDUIT DEBT
In the past, the City has approved the issuance of Health Facilities Development Corporation Bonds and
Education Facilities Authority Bonds to provide financial assistance to private sector entities for the acquisition
and construction of public facilities. The bonds are secured by the property financed. Upon repayment of the
bonds, ownership of the acquired facilities transfers to the private -sector entity served by the bond issuance.
The City, nor the State, nor any political subdivision thereof is obligated in any manner for repayment of the
bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements.
As of September 30, 2018, there was one series of Lubbock Health Facilities Development Corporation Bonds
outstanding with an aggregate principal amount payable of $70,580,000. The bonds were issued in 2008. Also
as of September 30, 2018, there was one series of Lubbock Education Facilities Authority Inc. Bonds
outstanding with an aggregate principal amount payable of $20,585,000. The bonds were issued in 2007 and
refunded in FY 2016.
M. SPECIAL ASSESSMENT DEBT
In FY 2008, the Vintage Township Public Facilities Corporation (PFC), a discretely presented component unit
of the City, issued special assessment debt for the acquisition and construction of certain public facilities
benefiting Vintage Township. The PFC had $2,057,000 outstanding special assessment debt as of September
30, 2018. The City collects assessments and forwards the collections to the bondholders. The City is not
obligated in any manner for special assessment debt and is not liable for repayment of the debt. As the PFC
completes construction of certain public facilities, the assets are donated to the City. As of September 30,
2018, $4,677,257 in completed construction costs was contributed to the City. The PFC has a deficit in
unrestricted net position, which is a result of the debt held in the PFC name while the assets are donated to the
City and held in the City's name.
102
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
N. FUND BALANCE
The City classified governmental fund balances as follows:
Nonmajor
Total
Governmental
Governmental
Governmental
General Fund Capital Projects
Funds
Funds
Fund Balances
Nonsp endable:
Inventory
$ 121,578 $ -
$ -
$ 121,578
Restricted:
Debt Service
5,007,610 -
9,763,864
14,771,474
Economic and Business Development
- -
132,353
132,353
Tourism, Convention Centers, Arts
- -
449,401
449,401
Animal Assistance
- -
407,594
407,594
Tax Improvement Financing Areas
- -
3,839,818
3,839,818
Public Improvement Districts
- -
1,595,805
1,595,805
Cable Services to Public Buildings
- -
3,236,123
3,236,123
Community Services Grants
- -
261,966
261,966
Health Grants
- -
40,294
40,294
Police Grants
- -
65,903
65,903
Cultural and Recreation Grants
- -
14,680
14,680
Law Enforcement Purposes
- -
974,336
974,336
Court Technology
- -
704,365
704,365
Donations for Community Services
- -
52,895
52,895
Donations for Animal Services
- -
42,575
42,575
Donations for Museums
- -
188,346
188,346
Donations for Parks and Recreational
- -
118,354
118,354
Donations for Fire Services
- -
16,426
16,426
Donations for Police Services
- -
7,476
7,476
Donations for Cultural
- -
18,807
18,807
Donations for Other Programs
- -
1,375
1,375
Street Capital Projects
- 4,602,426
5,197,621
9,800,047
General Facility Capital Projects
- 4,172,365
-
4,172,365
Public Safety Capital Projects
- 44,952,759
-
44,952,759
Parks Capital Projects
- 410,489
-
410,489
TIF Capital Projects
- -
7,642,122
7,642,122
Committed:
Gateway Street Capital Projects
- -
11,010,947
11,010,947
Infrastructure and neighborhood dev
- -
1,693,451
1,693,451
Other Capital Projects
- 9,976,232
-
9,976,232
Unassigned
47,963,825 -
-
47,963,825
Total Fund Balances
$ 53,093,013 $ 64,114,271
$ 47,476,897
$ 164,684,181
The restricted special revenue fund balances are also restricted for GWFS net position.
103
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
O. RISK MANAGEMENT
The Risk Management Fund was established to account for liability claims, workers' compensation claims,
and premiums for property/casualty insurance coverage. The Risk Management Fund generates its revenue
through charges to other departments, which are based on costs.
In April 1999, the City purchased workers' compensation coverage, with no deductible, from Texas Municipal
League Intergovernmental Risk Pool (TML-IRP) with continuous coverage through September 30, 2009.
Effective October 1, 2009 the City purchased workers' compensation coverage from Texas Political
Subdivisions Joint Self -Insurance Fund (TPS). TPS operates as a self-insurance pool offering coverage to
municipalities and other political subdivisions in accordance with the local government code and the terms of
interlocal agreements among members. The City obtains workers' compensation coverage through a
guaranteed -cost plan. Guaranteed -cost members combine their contributions to cover pooled losses and
expenses. As required by interlocal agreement, TPS obtains specific excess of loss coverage over and above
the self -insured retention stated in the agreement so that members will not have joint and several liabilities
beyond their required contribution. Prior to April 1999, the City was self -insured for workers' compensation
claims. Any claims outstanding prior to April 1999 continue to be the City's responsibility.
The City's self-insurance liability program was funded on a cash flow basis, which means that the servicing
contractor processes, adjusts, and pays claims from a deposit account provided by the City until October 1,
2017. After October 1, 2017 all self-insurance liability claims are being adjusted and paid through the use of
an in-house claims adjuster who, with the assistance of the Risk Manager, sets reserves. The City accounts
for the liability program by charging premiums to replenish funds based upon losses, administrative fees,
premiums, and reserve requirements. In order to control the risks associated with liability claims, the City
purchases excess liability coverage with an $18 million annual aggregate limit and is subject to a $500,000
self -insured retention per claim.
For self -insured coverage, the Risk Management Fund establishes claim liabilities based on estimates of the
ultimate cost of claims (including future claim adjustment expenses) that have been reported but not settled,
and of claims that have been incurred but not reported (IBNR). The length of time for which such costs must
be estimated varies depending on the coverage involved. Because actual claim costs depend on complex factors
such as inflation, changes in doctrines of legal liability, and damage awards, the process used in computing
claim liabilities does not necessarily result in an exact amount, particularly for liability coverage. Claim
liabilities are recomputed periodically using a variety of actuarial and statistical techniques to produce current
estimates that reflect recent settlements, claim frequency, and other economic and social factors. Adjustments
to claim liabilities are charged or credited to an expense account in the period in which they are incurred.
Additionally, property and boiler coverage is accounted for in the Risk Management Fund. In FY 2018, the
City of Lubbock separated Lubbock Power and Light's property and boiler and machinery as a cost savings
measure. The property insurance policy was purchased from an outside insurance carrier. The policy has a
$500,000 wind/hail deductible per occurrence and a $250,000 deductible for all other forms of loss. The boiler
and machinery insurance policy was purchased from an outside insurance carrier. The policy has a $25,000
deductible. Lubbock Power and Light purchases package property and boiler and machinery coverage from
an outside carrier. The policy has various deductibles for both property and boiler and machinery ranging from
$100,000 to 2.5% of location values. Premiums are charged to funds based upon estimated premiums for the
upcoming year. Departments that sustain property damage in excess of $1,000 are eligible to request assistance
from the Risk Management Fund for payment of those damages up to the policy deductible.
Other small insurance policies, such as surety bond coverage and miscellaneous floaters, are also accounted
for in the Risk Management Fund. Funds are charged based on premium amounts and administrative charges.
The Department of Justice settlement exceeded our self -insured retention by $392,582.92 in the current year
but the preceding two years have not exceeded insurance coverage. The City accounts for all insurance activity
in the Internal Service Funds.
104
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
P. HEALTH INSURANCE
The City provides medical and dental insurance for all full-time employees and accounts for these activities in
the Health Benefits Fund. Revenue for the health insurance program is generated from each cost center, based
upon the number of active full-time employees. The City's plan is self -insured under an Administrative
Services Only (ASO) Agreement. The City purchases excess coverage of $700,000 per covered individual
annually. Beginning on January 1, 2012, the City discontinued coverage that included an aggregate cap. The
insurance vendor, based on medical trend, claims history, and utilization assists in the determination of the
individual deductible. The actuarially determined calculation of the claim liability was $2.06 million at
September 30, 2018 for all health coverages including medical, prescription drugs, and dental.
The City also provides full-time employees basic term life insurance. The life insurance policy has a face value
of $10,000 per employee.
Full-time employees may elect to purchase medical insurance for eligible dependents at a reduced rate. The
Health Fund paid for employee only dental coverage from January 1, 2013 through October 15, 2015 and then
it resumed to being charged to departments. Employees may elect to purchase dental insurance for eligible
dependents. Employees may also elect, at their cost, to participate in several voluntary insurance programs
such as a cancer policy, voluntary life, and personal accident insurance.
The Risk Management and Health Benefits Funds established a liability for self-insurance for both reported
and unreported insured events, which included estimates of future payments of losses and related claim
adjustment expenses.
The following represents changes in those aggregate liabilities for these funds during the past two years ended
September 30:
Workers' Compensation and Liability Reserves at
Beginning of Fiscal Year
Claims Expenses
Claims Payments
Workers' Compensation and Liability Reserves at
End of Fiscal Year
Medical and Dental Claims Liability at Beginning
of Fiscal Year
Claims Expenses
Claim Payments
Medical and Dental Claims Liability at End of
Fiscal Year
Total Self -Insurance Liability at End of Fiscal Year
Total Assets to Pay Claim at End of Fiscal Year
Accrued Insurance Claim Payable - Current
Accrued Insurance Claim Payable - Noncurrent
Total Accrued Insurance Claim
FY2018 FY2017
$ 2,911,858 $ 1,291,107
5,313,246 7,406,037
(4,427,161) (5,785,286)
3,797,943 2,911,858
1,708,169
1,692,743
29,441,716
27,751,203
(29,064,021)
(27,735,777)
2,085,864
1,708,169
$ 5,883,807
$
4,620,027
$ 23,148,358
$
22,525,450
$ 3,313,832
$
2,544,687
2,569,975
2,075,340
$ 5,883,807
$
4,620,027
105
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Q. LANDFILL CLOSURE AND POSTCLOSURE CARE COST
State and federal laws and regulations require the City to place final covers on its landfill sites at closure and
to perform certain maintenance and monitoring functions for 30 years thereafter. Although closure and post
closure care costs will be paid only near or after the date that the landfills stop accepting waste, the City reports
a portion of these closure and post closure costs as operating expenses (and recognizes a corresponding
liability) in each period based on landfill capacity used as of each statement of net position date.
The $5,879,342 included in landfill closure and post closure care liability at September 30, 2018, represents
the cumulative amount expensed by the City to date for its two landfills, that are registered under TCEQ permit
numbers 69 (Landfill 69) and 2252 (Landfill 2252), less amounts that have been paid. Approximately 96.5
percent of the estimated capacity of Landfill 69 has been used, with $603,168 remaining to be recognized over
the remaining closure period. Approximately 7.3 percent of the estimated capacity of Landfill 2252 has been
used to date, with $19,504,968 remaining to be recognized over the remaining closure period. Post closure
care costs are based on prior estimates and have been adjusted for inflation. Actual costs may differ due to
inflation, deflation, changes in technology, or other regulatory changes.
The City is required by state and federal laws and regulations to provide assurance that financial resources will
be available for landfill closure, post closure care, and remediation or containment of environmental hazards.
The City is in compliance with these requirements and has chosen the Local Government Financial Test
mechanism for providing assurance. The City expects to finance costs through normal operations.
R. DISAGGREGATION OF ACCOUNTS — FUND FINANCIAL STATEMENTS
Accounts Receivable Summary
Court Consumer Property Balance at
Fines Metered D
Governmental Funds:
Misc. 09/30/18
General Fund $ 3,834,483 $ 3,107,722 $ 460,508 $ 221,417 $ 10,241 $ 7,634,371
Capital Projects - - - - 65,702 65,702
Nonmajor - - - - - -
Total $ 3,834,483 $ 3,107,722 $ 460,508 $ 221,417 $ 75,943 $ 7,700,073
Accounts Receivable Summary
General
Balance at
Consumer
Misc.
09/30/18
Proprietary Funds:
LP&L
$ 31,977,662
$ 1,279,535
$ 33,257,197
Water/Wastewater
18,709,737
536,467
19,246,204
WTMPA
602,360
-
602,360
Storm Water
3,471,863
-
3,471,863
Nonmajor
1,307,691
28,884
1,336,575
Total
$ 56,069,313
$ 1,844,886
$ 57,914,199
106
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
Allowance for Doubtful Accounts Summary
Balance at
09/30/18
Governmental Funds:
General Fund
$ 4,170,743
Proprietary Funds:
LP&L
2,785,403
Water/Wastewater
2,006,191
Storm Water
330,694
Nonmajor
6,173
Total
$ 9,299,204
Accounts Payable Summary
Balance at
Vouchers
Accounts
Miscellaneous
09/30/18
Governmental Funds:
General Fund
$ 723,285
$ 3,653,462
$ -
$ 4,376,747
Govt. Capital Projects
2,061,276
185,149
457,174
2,703,599
Nonmajor
981,006
1,237,348
556,221
2,774,575
Proprietary Funds:
LP&L
4,443,607
683,020
13,835,486
18,962,113
Water/Wastewater
2,371,269
5,253,408
1,393,204
9,017,881
WTMPA
-
11,954,331
-
11,954,331
Storm Water
207,624
1,399,268
28,420
1,635,312
Nonmajor
3,574,154
26,506
742,574
4,343,234
Internal Service
976,101
257,397
248,267
1,481,765
Total
$ 15,338,322
$ 24,649,889
$ 17,261,346
$ 57,249,557
107
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
S. DISAGGREGATION OF ACCOUNTS - GOVERNMENT -WIDE
Governmental
Activities
Business -Type
Activities
Total
Net Receivables
Accounts Interest Taxes Internal Service Balance at
Receivable Receivable Receivable Receivables 09/30/18
$ 3,529,330 $ 304,627 $ 15,071,823 $ 8,408 $ 18,914,188
52,785,738 471,137 - - 53,256,875
$ 56,315,068 $ 775,764 $ 15,071,823 $ 8,408 $ 72,171,063
Accounts Payable
Accounts Internal Service Balance at
Payable Payables 09/30/18
Governmental
Activities
Business -Type
Activities
Total
T. FUND CLOSURES
$ 9,854,921 $ 1,412,860 $ 11,267,781
45,912,871 68,905 45,981,776
$ 55,767,792 $ 1,481,765 $ 57,249,557
The Solid Waste nonmajor enterprise fund was closed. Long-term assets and liabilities were included as
miscellaneous expense ($16,721,688) and current assets and liabilities were included as transfers out
($16,991,909) on the Nonmajor Enterprise Fund Combining Statement of Revenues, Expenses and Changes in
Net Position. The operations were moved to the General Fund.
NOTE IV. CONTINGENT LIABILITIES
A. FEDERAL GRANTS
In the normal course of operations, the City receives grant funds from state and federal agencies. The grant
programs are subject to audits by agents of the granting authority to ensure compliance with conditions
precedent to the granting of funds. Any liability for reimbursement which may arise as the result of audits of
grants is not believed to be significant.
B. LITIGATION
The City is involved in various legal proceedings related to alleged personal and property damages, breach of
contract and civil rights cases, some of which involve claims against the City that exceed $500,000. State law
limits municipal liability for personal injury to $250,000 per person/$500,000 per occurrence and property
damage to $100,000 per claim for activities arising out of its governmental functions. This limit is not
applicable to claims pertaining to the City's electric utility.
The City's insurance coverage, if available, contains a $500,000 self -insured retention. As of September 30,
2018, the City has $909,556 reserved on general liability claims, as determined by an actuarial calculation.
108
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
The following represents the significant litigation against the City at this time.
Lazaro Walck v. City of Lubbock
The Plaintiff is alleging an adverse personnel action was taken against him and is suing the City under the
Whistleblower Statute. The City filed a Motion for Summary Judgment and a Plea to the Jurisdiction asserting
that the Plaintiff could not sue the City since the Plaintiff filed two grievances and received all the relief he
requested in each grievance. It was denied, and the City appealed. The Court of Appeals ruled that the Plaintiff
could pursue damages as to one of the grievances but not the other. The City filed a Petition to Review with
the Texas Supreme Court and they declined to hear the case. The City filed an Amended Motion for Summary
Judgment and an Amended Plea to the Jurisdiction. It was granted in March 2017 and Plaintiff has appealed.
Beck Steel, Inc. et al. v. City of Lubbock et al.
The Plaintiff is asserting that the City illegally charged storm water fees to residents as the City used the fees
to pay for expenses not related to storm water and not allowed by state law. The City filed a Plea to the
Jurisdiction regarding the Plaintiff s claim for recovery of the fees and it was denied by the court. Both parties
filed Motions for Summary Judgment in August 2017. Oral arguments were heard by trial court in December
2017 and the trial court granted the City's First Amended Motion for Summary Judgment on January 11, 2018.
Plaintiff has appealed decision to the Court of Appeals.
Alexa Jarpe and Jeremy Leech v. City of Lubbock
The Plaintiffs were injured in an auto accident with a City police vehicle that was responding to an armed
robbery and are claiming negligence for speeding and responding to an emergency without use of lights and
siren.
Paul Valderas v. Officer Billy Mitchell and City of Lubbock
This is a civil rights case in which the Plaintiff is alleging use of excessive force resulting in injury during his
arrest. Both Officer Mitchell and the City of Lubbock have filed a Motion for Summary Judgment.
Omega Flex, Inc. v. City of Lubbock
The Plaintiff is asserting than an ordinance pertaining to the regulation of corrugated stainless steel tubing
(CSST) that was passed by the City Council was illegal.
Lynn Frame v. City of Lubbock
The Plaintiff is claiming the City unlawfully took her property, a computer, when it was seized during an
investigation. When the computer was no longer being held as evidence, parties were notified more than once
that it could be picked up. However, Plaintiff claims she was never notified. The property was subsequently
destroyed and the Plaintiff is claiming the computer contained valuable research that she had conducted over
a period of years regarding work at Texas Tech University.
C. SITE REMEDIATION
The City accounts for pollution remediation obligations in accordance with Governmental Accounting
Standards Board (GASB) Statement No. 49, Accounting and Financial Reporting for Pollution Remediation
Obligations. The City contracts with an engineering firm to perform the necessary remediation activities and
cost estimates. Pollution remediation obligations are estimates and subject to changes resulting from price
increases or reductions, technology, or changes in applicable laws or regulations.
109
City of Lubbock, Texas
Notes to Basic Financial Statements
September 30, 2018
As of September 30, 2018, the City owns one property with environmental issues that meet the criteria for
"obligating events" and disclosure under GASB Statement No. 49. The LP&L Cook Plant issue resulted from
underground storage tanks. This property meeting the criteria has been in existence for several years and is at
the "remediation design and implementation, through and including operation and maintenance, and post
remediation monitoring" benchmark discussed in GASB 49. In fact, the City has been monitoring and
recording this obligation for at least ten years.
The City contracts with an engineering firm (eHT/Enprotec) to perform the necessary remediation activities.
Enprotec works closely with the Texas Commission on Environmental Quality (TCEQ) on this property. The
remediation activities the City is required to perform have been approved by TCEQ. The City has a set plan
of action for this property that TCEQ requires the City to follow.
As of September 30, 2018, the City recorded pollution remediation obligation in the LP&L enterprise fund as
follows:
• LP&L Cooke Plant - $44,700
110
City of Lubbock, Texas
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Texas Municipal Retirement System
2018 2017 2016 2015
Total pension liability
Service Cost $
16,420,981 $
15,823,941 $
15,646,134 $
13,880,535
Interest (on the total pension liability)
45,317,091
43,569,660
43,381,064
41,941,717
Difference between expected and actual experience
(709,626)
(116,124)
(2,308,849)
(5,561,662)
Change of assumptions
-
1,083,512
Benefit payments, including refunds of employee
contributions
(35,336,067)
(32,040,199)
(32,247,421)
(28,915,142)
Net Change in Total Pension Liability
25,692,379
27,237,278
25,554,440
21,345,448
Total Pension Liability - Beginning
680,821,854
653,584,576
628,030,136
606,684,688
Total Pension Liability - Ending (a) $
706,514,233 $
680,821,854 $
653,584,576 $
628,030,136
Plan Fiduciary Net Position
Contributions - Employer $
17,388,324 $
16,727,368 $
17,455,926 $
16,809,722
Contributions - Employee
6,781,947
6,519,575
6,580,584
6,187,966
Net Investment Income
76,875,125
35,696,237
791,199
29,351,843
Benefit payments, including refunds of employee
contributions
(35,336,067)
(32,040,199)
(32,247,421)
(28,915,142)
Administrative Expense
(398,475)
(403,223)
(481,936)
(306,464)
Other
(20,194)
(21,725)
(23,803)
(25,196)
Net Change in Plan Fiduciary Net Position
65,290,660
26,478,033
(7,925,451)
23,102,729
Plan Fiduciary Net Position - Beginning
554,773,322
528,295,289
536,220,740
513,118,011
Plan Fiduciary Net Position - Ending (b) $
620,063,982 $
554,773,322 $
528,295,289 $
536,220,740
City's Net Pension Liability - Ending (a) - (b) $
86,450,251 $
126,048,532 $
125,289,287 $
91,809,396
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability
87.76%
81.49%
80.83%
85.38%
Covered Payroll
96,821,824
93,136,791
93,914,371
88,287,852
City's Net Pension Liability as a Percentage
of Covered Payroll
89.29%
135.34%
133.41%
103.99%
NOTE: The City implemented GASB Statement No. 68 in FY 2015. Information in this table has been determined as of the measurement
date (December 31) of the net pension liability and will ultimately contain information for ten years.
Changes in assumptions: In 2016, the discount rate was lowered from 7.0% to 6.75%; the inflation rate was lowered from
3% to 2.5%; the experience study for retirement age was updated.
City of Lubbock, Texas
Required Supplementary Information
Schedule of Contributions
Texas Municipal Retirement System
2018 2017 2016 2015
Actuarially Determined Contribution $ 17,788,537 $ 17,128,597 $ 16,819,070 $ 16,822,154
Contributions in relation to the actuarially
determined contribution 17,788,537 17,128,597 16,819,070 16,822,154
Covered payroll 98,700,040 95,409,809 92,797,625 90,076,485
Contributions as a percentage of covered
payroll 18.02% 17.95% 18.12% 18.68%
Notes to Schedule of Contributions
Valuation Date:
December 31, 2017
Notes
Actuarially determined contribution rates are calculated as of December 31
and become effective in January, 12 months and one day later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level Percentage of Payroll, Closed
Remaining Amortization Period
28 years
Asset Valuation Method
10 Year smoothed market, 15% soft corridor
Inflation
2.5%
Salary Increases
3.5% to 10.5% including inflation
Investment Rate of Return
6.75%
Retirement Age
Experience -based table of rates that are specific to the City's plan of benefits.
Last updated for the 2015 valuation pursuant to an experience study of the
period 2010 - 2014
Mortality
RP2000 Combined Mortality Table with Blue Collar Adjustment with male
rates multiplied by 109% and female rates multiplied by 103% and projected
on a fully generational basis with scale BB
Other Information
Notes There were no benefit changes during the year.
NOTE: The City implemented GASB Statement No. 68 in FY 2015. Information in this table has been determined as of the City's
most recent fiscal year-end (September 30) and will ultimately contain information for ten years.
112
City of Lubbock, Texas
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios
Lubbock Fire Pension Fund
Total pension liability
Service Cost
Interest (on the total pension liability)
Difference between expected and actual experience
Change of assumptions
Benefit payments, including refunds of employee
contributions
Net Change in Total Pension Liability
Total Pension Liability - Beginning
Total Pension Liability - Ending (a)
Plan Fiduciary Net Position
Contributions - Employer
Contributions - Employee
Net Investment Income
Benefit payments, including refunds of employee
contributions
Administrative Expense
Other
Net Change in Plan Fiduciary Net Position
Plan Fiduciary Net Position - Beginning
Plan Fiduciary Net Position - Ending (b)
City's Net Pension Liability - Ending (a) - (b)
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability
Covered Payroll
City's Net Pension Liability as a Percentage
of Covered Payroll
2018
2017
2016
2015
$ 6,378,755 $
6,133,418 $
5,897,517 $
5,670,689
20,651,840
19,752,539
18,983,849
18,188,061
-
1,284,558
-
(1,634,184)
-
-
9,070,157
(15,841,569)
(15,782,381)
(14,614,970)
(13,429,152)
11,189,026
11,388,134
10,266,396
17,865,571
268,017,378
256,629,244
246,362,848
228,497,277
$ 279,206,404 $
268,017,378 $
256,629,244 $
246,362,848
$ 6,897,164 $
6,598,900 $
6,652,094 $
6,234,058
3,947,134
3,774,706
3,716,202
3,424,188
23,109,838
7,668,252
(5,133,050)
991,921
(15,841,569)
(15,782,381)
(14,614,970)
(13,429,152)
(290,549)
(322,882)
(244,762)
(205,266)
1,015,473
1,244,040
136,500
53,411
18,837,491
3,180,635
(9,487,986)
(2,930,840)
176,016,821
172,836,186
182,324,172
185,255,012
$ 194,854,312 $
176,016,821 $
172,836,186 $
182,324,172
$ 84,352,092 $
92,000,557 $
83,793,058 $
64,038,676
69.79%
65.67%
67.35%
74.01%
31,754,899
30,367,707
29,897,052
27,547,772
265.63%
302.96%
280.27%
232.46%
NOTE: The City implemented GASB Statement No. 68 in FY 2015. Information in this table has been determined as of the measurement
date (December 31) of the net pension liability and will ultimately contain information for ten years.
Changes in assumptions: In 2015, the discount rate was lowered from 8.0% to 7.75%.
113
City of Lubbock, Texas
Required Supplementary Information
Schedule of Contributions
Lubbock Fire Pension Fund (LFPF)
2018 2017 2016 2015
Contractually Determined Contribution $ 7,111,376 $ 7,071,721 $ 6,591,298 $ 6,316,139
Contributions in relation to the contractually
determined contribution
7,111,376 7,071,721 6,591,298 6,316,139
Covered payroll
32,636,722 32,554,784 30,141,037 28,277,981
Contributions as a percentage of covered
payroll
21.79% 21.72% 21.87% 22.34%
Notes to Schedule of Contributions
Valuation Date:
December 31, 2016
Notes
Contractually determined contribution rates were based on the
contracted contribution rate.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method
Entry Age Normal
Amortization Method
Level Percentage of Payroll, Open
Remaining Amortization Period
33.5 years
Asset Valuation Method
5 Year smoothed market, 20% market value corridor
Inflation
3.0%
Salary Increases
4.00% to 11.28% including inflation based on service at attained age
Investment Rate of Return
7.75%
Retirement Age
Experience -based table of rates that are specific to the LFPF plan of benefits.
Mortality
Employee and healthy annuitant combined rates from the RP2000 Mortality
Table, projected to 2024 using Scale AA, with separate rates for males and
females.
Other Information
Notes There were no benefit changes during the year.
NOTE: The City implemented GASB Statement No. 68 in FY 2015. Information in this table has been determined as of the City's
most recent fiscal year-end (September 30) and will ultimately contain information for ten years.
114
City of Lubbock, Texas
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios
2018
Total OPEB liability
Service Cost $
6,889,393
Interest (on the total OPEB liability)
4,871,975
Changes of benefit terms
-
Change of assumptions
7,332,144
Benefit payments
(5,316,929)
Net Change in Total OPEB Liability
13,776,583
Total OPEB Liability - Beginning
127,087,132
Total OPEB Liability - Ending (a) $
140,863,715
Covered Payroll
120,830,434
City's Total OPEB Liability as a Percentage
of Covered Payroll
116.58%
NOTE: The City implemented GASB Statement No. 75 in FY 2018. Information in this table has been determined as of the
measurement date (December 31) of the total OPEB liability and will ultimately contain information for ten years.
Changes in assumptions: reflects a change in the discount rate from 3.81% as of December 31, 2016 to 3.31% as of
December 31, 2017.
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.
115
City of Lubbock, Texas
Required Supplementary Information
Mandatory Budgetary Comparison Schedule
General Fund
For the Year Ended September 30, 2018
Variance with
Final Budget -
Actual Amounts
Positive
Original Budget
Final Budget
Budgetary Basis
(Negative)
REVENUES
Taxes
Property Tax $
59,820,411
$ 59,820,411
$ 60,226,061
$ 405,650
Delinquent Taxes
730,000
730,000
499,171
(230,829)
Sales Tax
65,299,798
65,299,798
67,440,546
2,140,748
Mixed Beverage Tax
1,313,250
1,313,250
1,431,793
118,543
Bingo Tax
250,000
250,000
231,039
(18,961)
Suddenlink
1,972,156
1,972,156
1,882,925
(89,231)
Excel
5,066
5,066
11,917
6,851
South Plains Electric Cooperative
1,073,055
1,073,055
1,474,381
401,326
Atmos
2,290,185
2,290,185
2,546,208
256,023
West Texas Gas Company
15,000
15,000
13,805
(1,195)
Telecom Right of Way
2,900,000
2,900,000
2,906,438
6,438
Development Services
221,520
221,520
227,269
5,749
General Government
111,608
111,608
191,818
80,210
City Secretary
332,360
332,360
344,549
12,189
Public Safety
765,491
765,491
802,453
36,962
Public Works
22,921,658
22,921,658
22,967,881
46,223
Health
50,623
50,623
68,219
17,596
Animal Shelter
127,000
127,000
83,203
(43,797)
Cultural/Recreational
1,103,553
1,103,553
984,828
(118,725)
Museum
298,520
298,520
262,951
(35,569)
Licenses and Permits
3,271,483
3,271,483
2,746,529
(524,954)
Intergovernmental
363,627
363,627
420,809
57,182
Fines and Forfeitures
2,877,000
2,877,000
3,088,354
211,354
Interest Earnings
269,852
269,852
710,521
440,669
Rental
7,000
7,000
3,728
(3,272)
Recoveries of Expenditures
989,944
989,944
822,809
(167,135)
Other
616,100
616,100
758,065
141,965
Transfers from Electric Fund
15,526,145
15,526,145
13,789,411
(1,736,734)
Transfers from Water/Wastewater Fund
15,726,566
15,726,566
15,726,566
-
Transfers from Solid Waste
-
-
9,987,288
9,987,288
Transfers from Airport Fund
1,795,178
1,795,178
1,795,178
-
Transfers from Stormwater
2,633,864
3,039,055
3,039,055
-
Total Revenue $
205,678,013
$ 206,083,204
$ 217,485,768
$ 11,402,564
EXPENDITURES
Administrative Services
City Attorney $
2,094,813
$ 2,094,813
$ 2,100,325
$ (5,512)
City Council
618,270
618,270
526,754
91,516
City Manager
1,560,389
1,560,389
1,303,079
257,310
City Secretary
1,599,731
1,599,731
1,147,707
452,024
Facilities Management
3,376,149
3,376,149
3,098,866
277,283
Finance
2,989,629
2,989,629
2,915,153
74,476
Human Resources
618,086
618,086
544,897
73,189
Internal Audit
321,049
321,049
321,411
(362)
Non -departmental
1,333,742
1,353,233
8,093,204
(6,739,971)
Public Information
590,539
590,539
549,193
41,346
Total Administrative Services
15,102,397
15,121,888
20,600,589
(5,478,701)
116
City of Lubbock, Texas
Required Supplementary Information
Mandatory Budgetary Comparison Schedule (Continued)
General Fund
For the Year Ended September 30, 2018
Variance with
Final Budget -
Actual Amounts
Positive
Original Budget
Final Budget
Budgetary Basis
(Negative)
EXPENDITURES (Continued)
Development Services*
Building Inspection
$ 2,270,307
$ 2,270,307
$ 2,241,985
$ 28,322
Codes and Environmental Health
3,019,252
3,019,252
2,803,662
215,590
Planning
717,503
717,503
816,111
(98,608)
Total Development Services
6,007,062
6,007,062
5,861,758
145,304
Cultural and Recreation Services
Library
3,863,011
3,863,011
3,596,860
266,151
Museums
1,243,065
1,243,065
1,225,146
17,919
Parks
11,370,699
11,370,699
10,180,049
1,190,650
Total Cultural and Recreation Services
16,476,775
16,476,775
15,002,055
1,474,720
Public Works
Solid Waste
15,546,319
15,623,677
15,580,975
42,702
Engineering
1,459,736
1,459,736
1,329,872
129,864
Streets
4,923,341
4,923,341
4,100,862
822,479
Traffic
3,899,612
3,899,612
3,723,324
176,288
Total Public Works
25,829,008
25,906,366
24,735,033
1,171,333
Public Safety and Health Services
Animal Services
2,124,581
2,124,581
2,068,966
55,615
Fire
51,589,685
51,584,640
51,468,455
116,185
Municipal Court
1,921,707
1,921,707
1,859,530
62,177
Police
67,073,581
67,018,586
64,563,991
2,454,595
Public Health
1,505,453
1,505,453
1,335,902
169,551
Total Public Safety and Health Services
124,215,007
124,154,967
121,296,844
2,858,123
Transfers
Payroll Accrual/Other Adjustments
Total Expenditures
25,237,279 25,254,881
- 42,438
$ 212,867,528 $ 212,964,377
24,334,333 920,548
- 42,438
$ 211,830,612 $ 1,133,765
Revenues less expenditures $ (7,189,515) $ (6,881,173) $ 5,655,156 $ 12,536,329
*Building Inspection and Codes & Environmental Health are included in "Other public safety" and Planning is included in 'Economic and
business development" on the General Fund Statement of Revenues, Expenditures and Changes in Fund Balance.
117
City of Lubbock, Texas
Required Supplementary Information
Mandatory Budget Comparison Schedule (Continued)
General Fund
For the Year Ended September 30, 2018
Explanation of Differences between Budgetary Revenues and Expenditures to the General Fund Statement
of Revenues, Expenditures and Changes in Fund Balances - Revenues, Expenditures, and Other Financing
Sources (Uses)
Revenues and Other Financing Sources
Actual amounts (budgetary basis) "Total Revenue" from the
Budget Comparison Schedule
Adjustments:
Proceeds from the issuance of debt are classified as other
financing sources for GAAP reporting, but are not included in total
revenue on the budget basis
Total general fund revenues and other financing sources as reported
on the Statement of Revenues, Expenditures, and Changes in Fund
Balances — Governmental Funds
Expenditures and Other Financing Uses
Actual amounts (budgetary basis) "Total Expenditures" from
the Budget Comparison Schedule
Adjustments:
Capital outlay that has or will be purchased from tax note
proceeds are classified as expenditures for GAAP reporting, but
are not included in total expenditures on the budget basis
Total general fund expenditures and other financing uses as reported
on the Statement of Revenues, Expenditures, and Changes in Fund
Balances — Governmental Funds
$217,485,768
9,768,979
227,254,747
$211,830,612
1,960,650
213,791,262
118
CITY OF LUBBOCK, TEXAS
Special Revenue Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other
than special assessments, expendable trusts, or major capital projects) that are legally restricted
or committed by City Council to expenditures for specified purposes.
Criminal Investigation Fund — Accounts for the allocation of revenues derived from court
ordered forfeitures of monies from criminal investigations and related activities.
Municipal Court Fund — Accounts for certain revenues from municipal court fees collected to
be used on court technology and juvenile case managers.
Abandoned Motor Vehicle Fund — Accounts for the proceeds from the sale of abandoned
vehicles and payments to wrecker services.
Economic Development Incentive Fund — Accounts for a portion of tax revenues to promote
industrial and economic development.
Donations Fund — Accounts for various special interest donations and the distribution of those
funds.
Hotel/Motel Tax Fund — Accounts for total hotel/motel occupancy tax receipts and distributions.
Animal Assistance Program — Accounts for registration/identification fees collected to be used
to promote the sterilization program for dogs and cats.
Lubbock Economic Development Alliance Fund — Accounts for sales tax received and
distribution to Lubbock Economic Development Alliance.
North Overton District Tax Increment Finance (TIF) Reinvestment Zone Fund — Accounts
for incremental property tax funds dedicated to the development of the North Overton District.
Central Business District (CBD) Tax Increment Finance (TIF) Reinvestment Zone Fund —
Accounts for incremental property tax funds dedicated to the development of the Central Business
District.
Lubbock Business Park Tax Increment Finance (TIF) Fund — Accounts for incremental
property tax funds dedicated to the development of the Lubbock Business Park.
North Overton Public Improvement District (PID) Fund — Accounts for dedicated
assessments, which are used in the payment of professional services and special security charges.
North Point Public Improvement District (PID) Fund — Accounts for dedicated assessments,
which are used to maintain the North Point area. This includes maintaining common areas and
landscaping at the entry stations, and constructing a hike and bike trail.
Vintage Township Public Improvement District (PID) Fund — Accounts for dedicated
assessments, which are used to construct public improvements in the PID.
119
CITY OF LUBBOCK, TEXAS
Special Revenue Funds (Continued)
Quincy Park Public Improvement District (PID) Fund — Accounts for dedicated assessments,
which are used to maintain the Quincy Park area. This includes maintaining common areas,
landscaping on the boulevard and entrances, and the park at 91 st and Quitman.
Valencia Park Public Improvement District (PID) Fund — Accounts for dedicated
assessments, which are used to maintain the amenities in the 871}i Street right-of-way (ROW),
median, and park.
Gateway Streets Fund — Accounts for collection of franchise fees from various utility
companies. Amounts are distributed to a Capital Projects Gateway Streets fund for street
improvements.
Cable Services — Accounts for franchise fees received on cable/video services to be used by the
City as allowed by federal law.
North and East Lubbock Neighborhood & Infrastructure Fund — Accounts for a percentage
of mineral interest revenue to be used for downtown redevelopment, neighborhood infrastructure
projects, and community development in the north and east portions of the City.
Community Development Fund — Accounts for the receipt and disbursement of Community
Development Block Grant funds from the United States Department of Housing and Urban
Development.
Community Services Fund — Accounts for the receipt and disbursement of funds received from
the Texas Department of Housing and Community Affairs, United States Department of Energy,
and United States Department of Health and Human Services.
Health Fund — Accounts for the receipt and disbursement of funds received from the Texas
Department of State Health Services and the United States Department of Health and Human
Services.
Library Fund — Accounts for the receipt and disbursement of funds received from the Texas
State Library and Archives Commission and United States Department of Education.
Police Fund — Accounts for the receipt and disbursement of funds received from the United States
Department of Transportation, United States Department of Treasury, Texas Department of
Highways and Public Transportation, Office of the Governor, Office of Justice Program, Criminal
Justice Division, and United States Department of Justice.
Other Grants Fund — Accounts for the receipt and disbursement of funds received from the
United States Department of Commerce, Texas Department of Transportation, Texas Forest
Service, United States Department of Energy, Texas Department of Aging and Disability
Services, Lubbock Emergency Communication District and the Governor's Emergency
Management Grant.
120
CITY OF LUBBOCK, TEXAS
Debt Service Fund
This fund is used to account for the accumulation of financial resources for the payment of interest
and principal on the general long-term debt of the City, other than debt service payments made
by enterprise funds. Ad valorem taxes and interest earned on the investments of the Debt Service
Funds are used for the payment of principal, interest, and commissions to fiscal agents on the
City's general obligation bonds, which are reflected in the Government -Wide Financial
Statements.
Capital Project Funds
The Capital Projects Funds account for all capital improvements, except for those accounted for
in proprietary funds, which are financed by the City's general obligation bond issues, certain sales
taxes, certain Federal capital grants, and other specific receipts.
Tax Increment Finance (TIF) Capital Projects Fund — Accounts for the financing and
expenditures related to the Central Business and North Overton Districts.
Gateway Streets Project Fund — Accounts for the financing and expenditures related to major
street improvements.
121
City of Lubbock, Texas
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2018
Special Revenue Funds
Economic
Criminal
Municipal
Abandoned
Development
Investigation
Court
Motor Vehicle
Incentive
ASSETS
Cash and cash equivalents
$
35,044
$ 29,327
$
24,430
$ 5,927
Investments
805,747
674,311
561,701
136,277
Taxes receivable (net)
-
-
-
70,063
Interest receivable
361
727
606
-
Due from other governments
-
-
-
-
Due from others
-
-
-
Restricted investments
-
-
-
Leases receivable
-
-
-
-
Total assets
$
841,152
$ 704,365
$
586,737
$ 212,267
LIABILITIES
Accounts payable
$
366,458
$ -
$
87,095
$ 10,955
Accrued liabilities
-
-
-
3,657
Due to other funds
-
-
-
Uneamed revenue - other
-
-
-
Total liabilities
366,458
-
87,095
14,612
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
-
-
-
65,302
Total deferred inflows of resources
-
-
65,302
FUND BALANCES (DEFICIT)
Restricted
474,694
704,365
499,642
132,353
Committed
-
-
-
-
Unassigned
-
-
-
Total fund balances (deficit)
474,694
704,365
499,642
132,353
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$
841,152
$ 704,365
$
586,737
$ 212,267
122
Special Revenue Funds
Lubbock
Animal
Economic
Central
Lubbock
Hotel/Motel
Assistance
Development
North Overton
Business
Business Park
Donations
Tax
Program
Alliance
TIF
District TIF
TIF
$ 18,667
$
$ 17,174
$ 1,199
$ 32,442
$ 33,648
$ 94,440
429,222
394,884
27,570
745,923
773,645
2,171,413
-
-
1,070,793
-
-
-
463
426
30
-
1,027
2,858
-
846,834
-
-
-
-
-
-
-
-
1,412,154
290,880
-
-
-
-
400,075
-
$ 448,352
$ 846,834
$ 412,484
$ 1,099,592
$ 2,590,594
$ 1,099,200
$ 2,268,711
$ 2,097
$ 112,390
$ 4,890
$ 1,099,592
$ -
$ 12,500
$ -
-
-
-
-
430
2,386
262
-
285,043
-
-
-
-
-
2,097
397,433
4,890
1,099,592
430
14,886
262
400,075 -
- - - - 400,075 -
446,255 449,401 407,594 - 2,190,089 1,084,314 2,268,449
446,255 449,401 407,594 - 2,190,089 1,084,314 2,268,449
$ 448,352 $ 846,834 $ 412,484 $ 1,099,592 $ 2,590,594 $ 1,099,200 $ 2,268,711
123
City of Lubbock, Texas
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2018
Special Revenue Funds
North
North Point
Vintage
Quincy Park
Overton PID
PID
Township PID
PID
ASSETS
Cash and cash equivalents
$ 41,668
$
18,313
$
-
$
6,598
Investments
958,046
421,063
151,701
Taxes receivable (net)
-
-
-
Interest receivable
1,023
454
164
Due from other governments
-
-
-
Due from others
-
-
1
27
Restricted investments
-
-
130,480
-
Leases receivable
-
-
-
-
Total assets
$ 1,000,737
$
439,830
$
130,481
$
158,490
LIABILITIES
Accounts payable
$ 41,570
$
5,650
$
-
$
-
Accrued liabilities
754
497
497
Due to other funds
-
-
-
Uneamed revenue - other
-
-
-
Total liabilities
42,324
6,147
497
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
-
-
-
-
Total deferred inflows of resources
-
-
-
-
FUND BALANCES (DEFICIT)
Restricted
958,413
433,683
130,481
157,993
Committed
-
-
-
-
Unassigned
-
-
-
-
Total fund balances (deficit)
958,413
433,683
130,481
157,993
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 1,000,737
$
439,830
$
130,481
$
158,490
124
Special Revenue Funds
North and East
Lubbock
Neighborhood
and
Community
Community
Valencia PID
Gateway Streets
Cable Services
Infrastucture
Development
Services
Health
$ 1,903
$ 401,370
$ 134,983
$ 25,847
$ 161,341
$ -
$ -
43,765
9,228,552
3,103,622
594,285
3,709,649
-
-
47
12,635
3,318
617
-
-
-
-
-
-
-
399,428
465,431
158,015
-
-
-
-
2,393
3,281,410
-
-
-
-
$ 45,715
$ 12,923,967
$ 3,241,923
$ 620,749
$ 4,270,418
$ 465,431
$ 160,408
5,800 $ - $ 100,730 $ 193,941 $ 41,511
- 13 31,690 2,966 25,264
- - 268,524 53,339
- - 4,013,136 - -
5,800 13 4,145,556 465,431 120,114
45,715 3,281,410 3,236,123 - 124,862 40,294
- 9,642,557 - 620,736 - -
45,715 12,923,967 3,236,123 620,736 124,862 - 40,294
$ 45,715 $ 12,923,967 $ 3,241,923 $ 620,749 $ 4,270,418 $ 465,431 $ 160,408
125
City of Lubbock, Texas
Combining Balance Sheet
Nonmajor Governmental Funds
September 30, 2018
Special Revenue Funds
Total Special
Debt Service
Library
Police
Other Grants
Revenue Funds
Fund
ASSETS
Cash and cash equivalents
$
$
-
$
$ 1,084,321
$
Investments
-
24,931,376
Taxes receivable (net)
-
1,140,856
383,211
Interest receivable
-
24,756
3,701
Due from other governments
24,142
226,066
747,260
2,020,342
-
Due from others
-
-
-
849,255
-
Restricted investments
-
5,114,924
4,619,198
Leases receivable
-
-
400,075
-
Total assets
$
24,142
$
226,066
$
747,260
$ 35,565,905
$
5,006,110
LIABILITIES
Accounts payable
$
-
$
-
$
19,647
$ 2,104,826
$
Accrued liabilities
-
3,684
7,767
79,867
Due to other funds
24,142
156,479
567,306
1,354,833
Unearned revenue - other
-
-
756
4,013,892
Total liabilities
24,142
160,163
595,476
7,553,418
-
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue
-
-
465,377
357,170
Total deferred inflows of resources
-
-
465,377
357,170
FUND BALANCES (DEFICIT)
Restricted
65,903
151,784
17,283,817
4,648,940
Committed
-
-
10,263,293
-
Unassigned
-
-
-
Total fund balances (deficit)
65,903
151,784
27,547,110
4,648,940
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$
24,142
$
226,066
$
747,260
$ 35,565,905
$
5,006,110
126
Capital Projects Funds
Total Nonmajor
TIF Capital Gateway Streets Total Capital Governmental
Projects Projects Projects Funds Funds
$ 69,241 $ 57,034 $ 126,275 $ 1,210,596
1,592,043 1,311,356 2,903,399 27,834,775
- - - 1,524,067
- - 28,457
- - 2,020,342
- - - 849,255
7,642,122 5,284,448 12,926,570 22,660,692
- - - 400,075
$ 9,303,406 $ 6,652,838 $ 15,956,244 $ 56,528,259
$ 582,921 $ 86,828 $ 669,749 2,774,575
5,648 - 5,648 85,515
- - - 1,354,833
- - 4,013,892
588,569 86,828 675,397 8,228,815
- - - 822,547
- - 822,547
7,642,122 5,197,620 12,839,742 34,772,499
1,072,715 1,368,390 2,441,105 12,704,398
8,714,837 6,566,010 15,280,847 47,476,897
$ 9,303,406 $ 6,652,838 $ 15,956,244 $ 56,528,259
127
City of Lubbock, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2018
Special Revenue Funds
Abandoned
Economic
Criminal
Municipal
Motor
Development
Investigation
Court
Vehicle
Incentive
REVENUES
Property taxes
$
$
$
$ 3,620,821
Sales taxes
-
Occupancy taxes
Franchise taxes
Special assessments
Fees and fines
266,228
Intergovernmental
-
Charges for services
-
-
Interest
6,165
7,827
7,218
IRS Build America Bond Subsidy
-
-
-
Miscellaneous
125,613
1,228,808
-
Total revenues
131,778
274,055
1,236,026
3,620,821
EXPENDITURES
Current:
Administrative services and general government
Community services
Cultural and recreation
-
Economic and business development
3,137,864
Health
-
Fire
Police
227,495
-
797,399
Other public safety
-
134,629
-
Intergovernmental
-
Debt Service:
Principal
Interest and other charges
-
Capital outlay
138,393
-
Total expenditures
227,495
134,629
935,792
3,137,864
Excess (deficiency) of revenues
over (under) expenditures
(95,717)
139,426
300,234
482,957
OTHER FINANCING SOURCES (USES)
Long -tern debt issued
-
-
-
Bond premium
Payment to the refunded bond escrow agent
Transfers in
Transfers out
(400,000)
Net other financing sources (uses)
-
(400,000)
Net change in fund balances (deficit)
(95,717)
139,426
300,234
82,957
Fund balances (deficit) - beginning of year
570,411
564,939
199,408
49,396
Fund balances (deficit) - end of year
$ 474,694
$ 704,365
$ 499,642
$ 132,353
128
Special Revenue Funds
Lubbock
Animal
Economic
Central
Lubbock
Hotel/Motel
Assistance
Development
North
Business
Business Park
Donations
Tax
Program
Alliance
Overton TIF
District TIF
TIF
$
$
$
$ -
$ 4,018,755
$ 961,188
$ 548,442
6,130,959
-
-
7,355,293
-
146,607
-
-
-
8,140
4,998
46,476
16,741
35,668
189,360
-
-
-
159,607
-
-
197,500
7,355,293
151,605
6,130,959
4,224,838
977,929
584,110
12,658
-
-
-
-
-
-
4,956
68,615
-
-
-
-
-
-
4,606,269
-
6,130,959
21,894
228,365
13,426
87,033
-
113,048
-
-
-
-
117
-
29,527
9,587
202,906
4,615,856
113,048
6,130,959
21,894
228,365
13,426
(5,406)
2,739,437
38,557
-
4,202,944
749,564
570,684
543,421
91,498
(2,799,681)
(4,880,972)
(980,750)
(500,000)
(2,799,681)
(4,337,551)
(889,252)
(500,000)
(5,406)
(60,244)
38,557
(134,607)
(139,688)
70,684
451,661
509,645
369,037
2,324,696
1,224,002
2,197,765
$ 446,255
$ 449,401
$ 407,594
$
$ 2,190,089
$ 1,084,314
$2,268,449
129
City of Lubbock, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2018
Special Revenue Funds
North
North Point
Vintage
Quincy Park
Overton PID
PID
Township PID
PID
REVENUES
Property taxes
$
$
$
$
Sales taxes
Occupancy taxes
Franchise taxes
-
Special assessments
693,400
150,900
184,104
136,839
Fees and fines
-
-
-
-
Intergovernmental
Charges for services
-
-
-
-
Interest
13,340
5,846
962
4,163
IRS Build America Bond Subsidy
-
-
-
-
Miscellaneous
-
-
-
-
Total revenues
706,740
156,746
185,066
141,002
EXPENDITURES
Current:
Administrative services and general government
-
-
-
-
Community services
Cultural and recreation
-
-
-
-
Economic and business development
489,539
104,196
181,212
169,813
Health
-
-
-
-
Fire
Police
Other public safety
Intergovernmental
Debt Service:
Principal
Interest and other charges
-
Capital outlay
-
-
114,780
Total expenditures
489,539
104,196
181,212
284,593
Excess (deficiency) of revenues
over(under)expenditures
217,201
52,550
3,854
(143,591)
OTHER FINANCING SOURCES (USES)
Long-tenn debt issued
-
-
-
Bond premium
Payment to the refunded bond escrow agent
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balances (deficit)
217,201
52,550
3,854
(143,591)
Fund balances (deficit) - beginning of year
741,212
381,133
126,627
301,584
Fund balances (deficit) - end of year
$ 958,413
$ 433,683
$ 130,481
$ 157,993
130
Special Revenue Funds
North and East
Lubbock
Neighborhood
Valencia Gateway Cable and Community Community
PID Streets Services Infrastructure Development Services Health
- 496,657
21,123 -
735 108,802 36,348
2,452,444 1,731,984
671,140
330,791 -
93,409
2,783,235 1,731,984
764,549
42,654 - -
- 2,658,373 1,731,984
3,911 352,396 -
- - 766,009
- 29,000 -
3,911 - 71,654 352,396 2,658,373 1,731,984 766,009
17,947 108,802 461,351 (352,396) 124,862 - (1,460)
8,576,521 282,811
(8,168,324) -
408,197 - 282,811
17,947 516,999 461,351 (69,585) 124,862 (1,460)
27,768 12,406,968 2,774,772 690,321 - 41,754
$ 45,715 $ 12,923,967 $ 3,236,123 $ 620,736 $ 124,862 $ $ 40,294
131
City of Lubbock, Texas
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Governmental Funds
For the Year Ended September 30, 2018
Special Revenue Funds
Total Special
Debt Service
Library
Police
Other Grants
Revenue Funds
Fund
REVENUES
Property taxes
$
$
$
$ 9,149,206
$ 19,804,011
Sales taxes
6,130,959
-
Occupancy taxes
7,355,293
Franchise taxes
496,657
Special assessments
1,186,366
Fees and fines
266,228
Intergovernmental
28,067
314,184
1,093,130
6,290,949
Charges for services
-
-
-
146,607
-
Interest
1,326
304,755
8,466
IRS Build America Bond Subsidy
-
-
-
306,422
Miscellaneous
-
31,494
2,159,082
-
Total revenues
28,067
315,510
1,124,624
33,486,102
20,118,899
EXPENDITURES
Current:
Administrative services and general government
-
-
-
55,312
-
Community services
433,308
4,828,621
Cultural and recreation
16,531
85,146
Economic and business development
-
15,439,844
Health
211,888
1,177,978
Fire
-
117
Police
319,266
-
1,373,687
Other public safety
-
345,841
480,470
Intergovernmental
28,067
-
28,067
-
Debt Service:
Principal
-
-
28,474,997
Interest and other charges
-
-
9,587
14,005,106
Capital outlay
-
42,578
115,779
440,530
-
Total expenditures
28,067
361,844
1,123,347
23,919,359
42,480,103
Excess (deficiency) of revenues
over (under) expenditures
-
(46,334)
1,277
9,566,743
(22,361,204)
OTHER FINANCING SOURCES (USES)
Long-term debt issued
-
-
18,140,000
Bond premium
2,521,537
Payment to the refunded bond escrow agent
-
-
(20,510,547)
Transfers in
46,837
9,541,088
24,002,761
Transfers out
-
(17,729,727)
(528,565)
Net other financing sources (uses)
46,837
(8,188,639)
23,625,186
Net change in fund balances (deficit)
503
1,277
1,378,104
1,263,982
Fund balances (deficit) - beginning of year
65,400
150,507
26,169,006
3,384,958
Fund balances (deficit) - end ofyear
$
$ 65,903
$ 151,784
$ 27,547,110
$ 4,648,940
132
Capital Projects Funds
Total Nonmajor
TIF Capital Gateway Streets Total Capital Governmental
Projects Projects Projects Funds Funds
$ $ $ $ 28,953,217
6,130,959
7,355,293
496,657
1,186,366
266,228
6,290,949
146,607
115,448 64,224 179,672 492,893
- - - 306,422
42,215 - 42,215 2,201,297
157,663 64,224 221,887 53,826,888
55,312
4,828,621
85,146
15,439,844
1,177,978
117
1,373,687
480,470
28,067
- - 28,474,997
- 166,591 166,591 14,181,284
846,679 1,828,789 2,675,468 3,115,998
846,679 1,995,380 2,842,059 69,241,521
(689,016) (1,931,156) (2,620,172) (15,414,633)
4,805,000 4,805,000 22,945,000
532,755 532,755 3,054,292
- - - (20,510,547)
2,364,048 2,364,048 35,907,897
(115,448) (64,224) (179,672) (18,437,964)
2,248,600 5,273,531 7,522,131 22,958,678
1,559,584 3,342,375 4,901,959 7,544,045
7,155,253 3,223,635 10,378,888 39,932,852
$ 8,714,837 $ 6,566,010 $ 15,280,847 $ 47,476,897
133
City of Lubbock, Texas
Budgetary Comparison Schedule
Special Revenue Funds and Debt Service Fund
For the Year Ended September 30, 2018
Actual Amounts
Final Budget Budgetary Basis
Abandoned Motor Vehicle
Revenues and transfers in 811,400 1,236,026
Expenditures and transfers out (741,668) (935,792)
Animal Assistance
Revenues and transfers in
125,000
151,605
Expenditures and transfers out
(97,339)
(113,048)
Cable Services
Revenues and transfers in
701,677
533,005
Expenditures and transfers out
(500,000)
(71,654)
Central Business District TIF
Revenues and transfers in
1,107,697
1,069,427
Utilization of fund balance
380,917
-
Expenditures and transfers out
(1,488,614)
(1,209,115)
Community Development Grant
Revenues and transfers in
2,775,718
2,783,235
Expenditures and transfers out
(2,775,718)
(2,658,373)
Criminal Investigation
Revenues and transfers in
277,000
131,778
Utilization of fund balance
270,179
-
Expenditures and transfers out
(547,179)
(227,495)
Debt Service
Revenues and transfers in
43,207,085
64,783,197
Utilization of fund balance
69,493
-
Expenditures and transfers out
(43,276,578)
(63,519,215)
Economic Development Incentive
Revenues and transfers in
3,610,889
3,620,821
Expenditures and transfers out
(3,610,889)
(3,537,864)
134
City of Lubbock, Texas
Budgetary Comparison Schedule (Continued)
Special Revenue Funds and Debt Service Fund
For the Year Ended September 30, 2018
Actual Amounts
Final Budget
Budgetary Basis
Gateway Streets
Revenues and transfers in
8,099,018
8,685,323
Utilization of fund balance
123,537
-
Expenditures and transfers out
(8,222,555)
(8,168,324)
Hotel Motel Tax
Revenues and transfers in
7,211,829
7,355,293
Expenditures and transfers out
(7,211,829)
(7,415,537)
Lubbock Business Park TIF
Revenues and transfers in
477,347
584,110
Expenditures and transfers out
(12,853)
(513,426)
Lubbock Economic Development Alliance
Revenues and transfers in
5,936,345
6,130,959
Expenditures and transfers out
(5,936,345)
(6,130,959)
Municipal Court
Revenues and transfers in
219,816
274,055
Expenditures and transfers out
(207,362)
(134,629)
North and East Lubbock Neighborhood and Infrastructure Fund
Revenues and transfers in
170,000
282,811
Utilization of fund balance
184,900
-
Expenditures and transfers out
(354,900)
(352,396)
North Overton PID
Revenues and transfers in
777,804
706,740
Expenditures and transfers out
(774,925)
(489,539)
North Overton District TIF
Revenues and transfers in
5,790,937
4,768,259
Expenditures and transfers out
(4,934,850)
(4,902,866)
135
City of Lubbock, Texas
Budgetary Comparison Schedule (Continued)
Special Revenue Funds and Debt Service Fund
For the Year Ended September 30, 2018
Actual Amounts
Final Budget Budgetary Basis
North Point PID
Revenues and transfers in 150,785 156,746
Utilization of fund balance 40,099 -
Expenditures and transfers out (190,884) (104,196)
Quincy Park PID
Revenues and transfers in
124,700
141,002
Utilization of fund balance
108,394
-
Expenditures and transfers out
(233,094)
(284,593)
Valencia PID
Revenues and transfers in
19,468
21,858
Expenditures and transfers out
(4,925)
(3,911)
Vintage Township PID
Revenues and transfers in
192,778
185,066
Expenditures and transfers out
(192,778)
(181,212)
The following Governmental Funds have been intentionally excluded from this schedule due to
the fact that they do not have legally adopted budgets or they are budgeted on a project or grant
cumulative basis, crossing fiscal years: Donations, Community Services, Health, Police, Library,
Other Grants, and the two Capital Project Funds.
136
CITY OF LUBBOCK-, TEXAS
Nonmajor Enterprise Funds
The Proprietary Funds are used to account for the operations of the City financed and operated in
a manner similar to private business enterprises, where the intent is that the cost of providing
goods or services to the general public on a continuing basis be financed or recovered in whole
or part through user charges.
Airport Fund — Accounts for the operations of Lubbock Preston Smith International Airport.
Solid Waste Fund — Accounts for the operations of the City's landfills and its solid waste
collection system.
Transit Fund — Accounts for the City -owned transportation system.
Cemetery Fund — Accounts for the operations of the City's cemetery.
Civic Centers Fund — Accounts for the utilization of the Civic Center, Coliseum, Municipal
Auditorium and Amphitheater.
Lake Alan Henry Fund — Accounts for fees and charges collected at the Lake site and the costs
of operations of that facility.
137
City of Lubbock, Texas
Combining Statement of Net Position
Nonmajor Enterprise Funds
September 30, 2018
Airport Solid Waste
Transit
Cemetery
ASSETS
Current assets:
Cash and cash equivalents
$ 517,089 $ -
$ 15,882
$ 10,808
Investments
11,889,244 -
365,163
248,505
Accounts receivable, net
356,741 -
835,404
44,393
Interest receivable
26,436 -
-
305
Due from others
164,322 -
-
474
Due from other funds
1,954,192 -
-
-
Due from other governments
- -
736,788
-
Prepaid expenses
- -
147,022
-
Inventories
- -
810,185
-
Total current assets
14,908,024 -
2,910,444
304,485
Noncurrent assets:
Restricted investments
21,533,390 -
872,586
21,457
21,533,390 -
872,586
21,457
Capital assets:
Land
3,608,781 -
318,539
14,097
Construction in progress
5,906,945 -
-
-
Buildings
39,457,700 -
4,394,676
846,652
Improvements other than buildings
192,938,863 -
3,956,935
125,686
Machinery and equipment
19,893,713 -
24,499,113
596,015
Less accumulated depreciation
(133,405,543) -
(21,833,500)
(543,278)
Total capital assets
128,400,459 -
11,335,763
1,039,172
Total noncurrent assets
149,933,849 -
12,208,349
1,060,629
Total assets
$164,841,873 $ -
$ 15,118,793
$ 1,365,114
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding
98,285 -
-
20,876
Deferred outflows from pensions
246,663 -
-
24,467
Deferred outflows from OPEB
189,536 -
-
23,209
Total deferred outflows of resources
534,484 -
-
68,552
138
Total
Nonmajor
Lake Alan Enterprise
Civic Centers Henry Funds
$ 114,537
$ 14,974
$ 673,290
2,633,510
344,286
15,480,708
93,864
-
1,330,402
8,503
350
35,594
384
-
165,180
-
-
1,954,192
-
-
736,788
-
-
147,022
-
-
810,185
2,850,798
359,610
21,333,361
174,500 - 22,601,933
174,500 - 22,601,933
1,238,454
-
5,179,871
35,175
-
5,942,120
22,279,024
-
66,978,052
8,561,702
-
205,583,186
6,510,239
135,796
51,634,876
(25,625,782)
(119,868)
(181,527,971)
12,998,812
15,928
153,790,134
13,173,312
15,928
176,392,067
$ 16,024,110
$ 375,538
$ 197,725,428
122,217
-
241,378
98,523
13,171
382,824
81,230
3,868
297,843
301,970
17,039
922,045
139
City of Lubbock, Texas
Combining Statement of Net Position
Nonmajor Enterprise Funds
September 30, 2018
Airport
Solid Waste Transit
Cemetery
LIABILITIES
Current liabilities:
Accounts payable
$ 3,089,641
$ - $ 1,118,734
$ 10,848
Accrued liabilities
124,072
- 515,290
8,127
Accrued interest payable
214,944
- -
2,294
Due to other funds
-
- 599,360
-
Customer deposits
-
- -
-
Unearned revenue - other
-
- -
3,220
Compensated absences
220,881
- 428,882
17,290
Leases payable
-
- 48,992
11,367
Bonds payable
1,586,467
- 360,679
46,472
Total current liabilities
5,236,005
- 3,071,937
99,618
Noncurrent liabilities:
Compensated absences
63,780
- -
4,992
Post employment benefits
2,953,496
- -
361,653
Net pension liability
1,695,485
- -
253,389
Leases payable
-
- 100,050
47,264
Bonds payable
27,124,497
- 2,048,482
389,022
Total noncurrent liabilities
31,837,258
- 2,148,532
1,056,320
Total liabilities
37,073,263
- 5,220,469
1,155,938
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
322,634
- -
16,797
Total deferred inflows of resources
322,634
- -
16,797
NET POSITION (DEFICIT)
Net investment in capital assets
112,845,193
- 9,650,146
565,942
Restricted for passenger facility charges
4,994,123
- -
-
Restricted for debt service
1,141,278
- -
21,438
Unrestricted
8,999,866
- 248,178
(326,449)
Total net position (deficit)
$127,980,460
$ - $ 9,898,324
$ 260,931
140
Total
Nonmajor
Lake Alan Enterprise
Civic Centers Henry Funds
$ 116,789
$ 7,222
$ 4,343,234
52,012
7,360
706,861
23,655
-
240,893
-
-
599,360
135,415
-
135,415
-
-
3,220
125,056
21,515
813,624
5,074
-
65,433
274,251
3,576
2,271,445
732,252
39,673
9,179,485
36,110
6,213
111,095
1,265,785
60,275
4,641,209
771,054
77,429
2,797,357
27,269
-
174,583
4,324,353
7,380
33,893,734
6,424,571
151,297
41,617,978
7,156,823
190,970
50,797,463
93,747
18,325
451,503
93,747
18,325
451,503
8,490,361
4,973
131,556,615
-
-
4,994,123
174,220
-
1,336,936
410,929
178,309
9,510,833
$ 9,075,510 $ 183,282 $ 147,398,507
141
City of Lubbock, Texas
Combining Statement of Revenues, Expenses and
Changes in Fund Net Position
Nonmajor Enterprise Funds
For Fiscal Year Ended September 30, 2018
OPERATING REVENUES
Charges for services (net)
Total operating revenues
OPERATING EXPENSES
Personnel services
Supplies
Maintenance
Other services and charges
Depreciation and amortization
Total operating expenses
Operating income (loss)
NONOPERATING REVENUES (EXPENSES)
Interest earnings
Passenger facility charges/Federal grants
Disposition of assets
Miscellaneous
Interest expense
Net nonoperating revenues (expenses)
Income (loss) before contributions and
transfers
Capital contributions/grants
Transfers in
Transfers out
Change in net position (deficit)
Total net position - beginning of year, as restated
Total net postion (deficit) - ending
Airport
$ 11,640,261
11,640,261
3,035,056
192,969
1,208,236
3,571,181
9,085,502
17,092,944
(5,452,683)
Solid Waste Transit
Cemetery
$ - $ 5,872,405
$ 370,857
- 5,872,405
370,857
- 8,115,260
330,206
- 1,488,748
34,789
- 1,240,773
30,792
- 1,397,519
145,649
- 1,340,361
48,121
- 13,582,661
589,557
- (7,710,256) (218,700)
407,210 -
1,410 6,882
3,036,300 -
4,073,540 -
2,526 -
4,342 -
219,606 16,721,688
- -
(740,310) -
(35,522) (16,307)
2,925,332 16,721,688
4,043,770 (9,425)
(2,527,351) 16,721,688
386,826 -
(1,795,178) (16,991,909)
(3,935,703) (270,221)
(3,666,486) (228,125)
3,047,383 200,000
`V 17,1 VJ)
131,916,163 270,221 10,517,427 289,056
$ 127,980,460 $ - $ 9,898,324 $ 260,931
142
Lake Alan Total Nonmajor
Civic Centers Henry Enterprise Funds
$ 819,382 $
615,979
$ 19,318,884
819,382
615,979
19,318,884
1,669,088
182,309
13,331,919
74,608
10,478
1,801,592
296,630
16,495
2,792,926
924,238
175,509
6,214,096
983,766
5,064
11,462,814
3,948,330
389,855
35,603,347
(3,128,948)
226,124
(16,284,463)
37,461
3,726
456,689
-
-
7,109,840
-
-
6,868
10,514
-
16,951,808
(182,368)
(473)
(974,980)
(134,393)
3,253
23,550,225
(3,263,341) 229,377 7,265,762
- - 386,826
2,826,076 - 6,073,459
(125,000) (148,832) (19,060,919)
(562,265) 80,545 (5,334,872)
9,637,775 102,737 152,733,379
$ 9,075,510 $ 183,282 $ 147,398,507
143
City Of Lubbock, Texas
Combining Statement of Cash Flows
Nonmajor Enterprise Funds
For the Year Ended September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
Payments to employees
Other receipts
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Transfers in from other funds
Transfers out to other funds
Short-term interfund borrowings
Operating grants
Net cash provided (used) by noncapital
and related financing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases of capital assets
Sale of capital assets
Principal paid on capital leases
Principal paid on bonds
Issuance of bonds
Bond issuance costs
Interest paid on bonds and capital leases
Capital grants and contributions
Net cash provided (used) by capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments
Purchase of investments
Interest earnings on cash and investments
Net cash provided (used) by investing activities
Net increase (decresase)in cash
and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
Reconciliation of operating income (loss) to net
cash provided (used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization
Other income
Change in current assets and liabilities:
Accounts receivable
Inventory
Prepaid expenses
Due from other governments
Accounts payable
Other accrued expenses
Due to/from other funds
Customer deposits
Change in compensated absences and retirement benefits
Net cash provided (used) by operating activities
Supplemental cash flow information:
Noncash capital contributions and other charges
Airport
Solid Waste
Transit
Cemetery
$ 11,777,944 $
2,154,821
$ 6,023,777
$ 376,313
(2,785,303)
(10,949,085)
(1,405,525)
(203,930)
(3,138,496)
-
(8,115,260)
(338,336)
219,606
16,721,688
6,073,751
7,927,424
(3,497,008)
(165,953)
-
-
3,047,383
200,000
(1,795,178)
(16,991,909)
-
-
-
-
(1,119,515)
3,036,300
-
4,073,541
-
1,241,122
(16,991,909)
6,001,409
200,000
(5,551,000)
(588,646)
(1,977,121)
-
2,526
8,555
4,342
1,491
(85,306)
(5,542,046)
(48,317)
(73,205)
(1,109,082)
(235,116)
(35,000)
14,738,681
887,333
51,359
(786,643)
(538,732)
(35,522)
(19,408)
386,826
-
7,596,002
(6,660,869)
(1,404,401)
(74,763)
15,269,761
(15,504,071) -
395,720 4,413
(15,108,351) 15,274,174
(197,476) (451,180)
714,565 451,180
$ 517,089 $ -
$ (5,452,683) $ -
9,085,502
219,606
137,682
1,491,595
2,181,943
(17,915)
(1,730,289)
158,310
$ 6,073,751
16,721,688
2,154,821
(532,303)
(346,090)
(9,872)
(10,060,820)
$ 7,927,424
52,024
(1,094,947)
(25,434)
1,410
6,796
(1,093,537)
33,386
6,463
(7,330)
9,419
18,138
$ 15,882 $
10,808
$ (7,710,256) $ (218,700)
1,340,361 48,121
151,372
5,453
(4,205)
-
(138,128)
2,625,662
402,242
(18,609)
(122,992)
(3,992)
(474)
(41,064)
22,248
$ (3,497,008)
$ (165,953)
$ 1,068,053 $ 28,081,723 $
- $ 66,670
144
Total Nonmajor
Lake Alan Enterprise
Civic Centers Henry Funds
$ 802,087
$ 624,514
$ 21,759,456
(1,605,475)
(196,648)
(17,145,966)
(1,721,100)
(189,656)
(13,502,848)
10,514
16,951,808
(2,513,974)
238,210
8,062,450
2,826,076 6,073,459
(125,000) (148,832) (19,060,919)
(1,119,515)
7,109,841
2,701,076
(148,832)
(6,997,134)
(441,104)
(8,557,871)
-
16,914
(20,131)
(14,344)
(5,783,349)
(310,702)
-
(1,689,900)
263,190
10,956
15,951,519
(117,248)
-
(117,248)
(211,979)
(508)
(1,592,792)
-
-
386,826
(837,974)
(3,896)
(1,385,901)
787,854
16,109,639
(264,549)
(90,797)
(16,979,798)
34,877
3,568
446,784
558,182
(87,229)
(423,375)
(92,690)
(1,747)
(743,960)
207,227
16,721
1,417,250
$ 114,537
$
14,974
$
673,290
$ (3,128,948)
$
226,124
$
(16,284,463)
983,766
5,064
11,462,814
10,514
-
16,951,808
(17,297)
8,535
2,440,566
-
-
(4,205)
-
(138,128)
-
4,117,257
(341,650)
(8,001)
1,683,622
4,844
4,255
(481,890)
(384)
-
(1,731,147)
(35,072)
-
(44,944)
10,253
2,233
(9,908,840)
$ (2,513,974)
$
238,210
$
8,062,450
$ 189,153
$
14,996
$
29,420,595
145
!4 r4o 1
city 0-f
Lum)o6r� k
146
CITY OF LUBBOCK, TEXAS
Internal Service Funds
The Internal Service Funds are used to account for the financing of goods and services provided
by one department or agency to other departments or agencies of the City, or to other
governments, on a user charge basis.
Print Shop and Warehouse Fund — Accounts for central warehouse operations, printing services
and central office supplies provided to City departments.
Risk Management Fund — Accounts for activities related to general liability, auto liability,
public officials liability, and workers' compensation liability.
Fleet Maintenance Fund — Accounts for vehicle service operations.
Information Technology Fund — Accounts for the information processing services provided to
City departments and other governmental agencies and for the telephone and radio shop
operations.
Health Benefits Fund — Accounts for the health, dental, and other employee benefits activities.
Investment Pool Fund — Accounts for the operations of centralizing the activities relative to the
City's investment portfolio.
147
City of Lubbock, Texas
Combining Statement of Net Position
Internal Service Funds
September 30, 2018
Business -type Activities
Print Shop and
Risk
Total Business -
Warehouse
Management
type Activities
ASSETS
Current assets:
Cash and cash equivalents
$ 67,644
$ 509,222
$ 576,866
Investments
1,555,308
11,708,351
13,263,659
Accounts receivable (net)
-
-
-
Interest receivable
265
12,625
12,890
Due from others
571
12,784
13,355
Prepaid expenses
-
-
-
Inventories
403,961
-
403,961
Total current assets
2,027,749
12,242,982
14,270,731
Noncurrent assets:
Restricted investments
-
-
-
Capital assets:
Construction in Progress
-
-
-
Buildings
162,117
-
162,117
Improvements other than buildings
-
-
-
Machinery and equipment
146,155
57,472
203,627
Less accumulated depreciation
(282,373)
(13,727)
(296,100)
Total capital assets
25,899
43,745
69,644
Total noncurrent assets
25,899
43,745
69,644
Total assets
$ 2,053,648
$ 12,286,727
$ 14,340,375
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions
24,643
64,745
89,388
Deferred outflows from OPEB
23,209
34,813
58,022
Total deferred outflows of resources
47,852
99,558
147,410
148
Fleet Information
Maintenance Technology
Governmental Activities
Total
Investment Governmental Total Internal
Health Benefits Pool Activities Service Funds
$ 57,963
$ 187,808
$ 454,061
$ 5,536
$ 705,368
$ 1,282,234
1,332,720
4,318,191
10,440,058
127,278
16,218,247
29,481,906
-
8,408
-
-
8,408
8,408
2,328
14,795
11,257
-
28,380
41,270
555
966
-
-
1,521
14,876
-
471,930
-
-
471,930
471,930
138,402
10,979
-
-
149,381
553,342
1,531,968
5,013,077
10,905,376
132,814
17,583,235
31,853,966
14,136
891,675
-
-
905,811
905,811
318,576
29,514
-
-
348,090
348,090
1,469,765
60,000
-
-
1,529,765
1,691,882
1,298,286
4,750,043
-
-
6,048,329
6,048,329
4,133,050
20,991,423
-
-
25,124,473
25,328,100
(2,533,843)
(13,853,689)
-
-
(16,387,532)
(16,683,632)
4,685,834
11,977,291
-
-
16,663,125
16,732,769
4,699,970
12,868,966
-
-
17,568,936
17,638,580
$ 6,231,938
$ 17,882,043
$ 10,905,376
$ 132,814
$ 35,152,171
$ 49,492,546
96,189
344,199
31,339
5,227
476,954
566,342
73,495
181,800
15,473
3,868
274,636
332,658
169,684
525,999
46,812
9,095
751,590
899,000
149
City of Lubbock, Texas
Combining Statement of Net Position
Internal Service Funds
September 30, 2018
Business -type Activities
Print Shop and
Risk
Total Business -
Warehouse
Management
type Activities
LIABILITIES
Current liabilities:
Accounts payable
$ 64,676
$ 4,229
$ 68,905
Accrued liabilities
10,828
30,606
41,434
Accrued interest payable
50
30
80
Compensated absences
6,504
20,987
27,491
Accrued insurance claims
-
1,434,338
1,434,338
Leases payable
2,652
3,461
6,113
Bonds payable
-
-
-
Total current liabilities
84,710
1,493,651
1,578,361
Noncurrent liabilities:
Accrued insurance claims
-
2,363,605
2,363,605
Compensated absences
1,879
6,060
7,939
Post employment benefits
361,653
542,479
904,132
Net pension liability
186,801
375,388
562,189
Leases payable
19,925
10,741
30,666
Bonds payable
-
-
-
Total noncurrent liabilities
570,258
3,298,273
3,868,531
Total liabilities
654,968
4,791,924
5,446,892
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
24,765
101,441
126,206
Total deferred inflows of resources
$ 24,765
101,441
126,206
NET POSITION (DEFICIT)
Net investment in capital assets 3,322 29,543 32,865
Restricted for debt service - - -
Unrestricted 1,418,445 7,463,377 8,881,822
Total net position (deficit) $ 1,421,767 $ 7,492,920 $ 8,914,687
150
Fleet Information
Maintenance Technology
Governmental Activities
Total
Investment Governmental Total Internal
Health Benefits Pool Activities Service Funds
$ 321,578
$ 520,113
$ 571,169
$ -
$ 1,412,860
$ 1,481,765
42,840
134,979
12,542
-
190,361
231,795
2,434
82,053
-
-
84,487
84,567
22,870
260,013
9,771
-
292,654
320,145
-
-
1,879,494
-
1,879,494
3,313,832
-
-
-
-
-
6,113
37,137
2,028,791
-
-
2,065,928
2,065,928
426,859
3,025,949
2,472,976
-
5,925,784
7,504,145
-
-
206,370
-
206,370
2,569,975
40,578
461,338
17,337
-
519,253
527,192
1,145,234
2,832,946
241,102
60,275
4,279,557
5,183,689
651,941
2,310,620
104,827
70,161
3,137,549
3,699,738
-
-
-
-
-
30,666
460,923
13,230,998
-
-
13,691,921
13,691,921
2,298,676
18,835,902
569,636
130,436
21,834,650
25,703,181
2,725,535
21,861,851
3,042,612
130,436
27,760,434
33,207,326
116,393
455,771
60,549
1,473
634,186
760,392
$ 116,393
455,771
60,549
1,473
634,186
760,392
4,188,384
(3,043,969)
-
-
1,144,415
1,177,280
13,526
650,348
-
-
663,874
663,874
(642,216)
(1,515,959)
7,849,027
10,000
5,700,852
14,582,674
$ 3,559,694
$ (3,909,580)
$ 7,849,027
$ 10,000
$ 7,509,141
$ 16,423,828
151
City of Lubbock, Texas
Combining Statement of Revenues, Expenses
And Changes in Net Position
Internal Service Funds
For The Year Ended September 30, 2018
Business -type Activities
Print Shop and
Risk
Total Business -
Warehouse
Management
type Activities
OPERATING REVENUES
Charges for services (net)
$ 3,592,091
$ 5,092,408
$ 8,684,499
Total operating revenues
3,592,091
5,092,408
8,684,499
OPERATING EXPENSES
Personnel services
292,927
762,282
1,055,209
Insurance and claims
-
5,313,246
5,313,246
Supplies
137,301
17,564
154,865
Materials
3,165,159
-
3,165,159
Maintenance
17,946
2,498
20,444
Other services and charges
197,968
190,715
388,683
Depreciation and amortization
4,069
5,024
9,093
Total operating expenses
3,815,370
6,291,329
10,106,699
Operating income (loss)
(223,279)
(1,198,921)
(1,422,200)
NONOPERATING REVENUES (EXPENSES)
Interest earnings 21,224 137,609 158,833
Disposition of assets - - -
Miscellaneous - 29,845 29,845
Interest expense (426) (278) (704)
Net nonoperating revenues (expenses)
Income (loss) before contributions and transfers
Capital contributions
Transfers in
Transfers out
Change in net position (deficit)
Total net position (deficit) - beginning of year,
as restated
Total net position (deficit) - end of year
20,798 167,176 187,974
(202,481) (1,031,745) (1,234,226)
4,950 4,950
(114,950) (114,950)
(202,481) (1,141,745) (1,344,226)
1,624,248 8,634,665 10,258,913
$ 1,421,767 $ 7,492,920 $ 8,914,687
152
Governmental Activities
Total
Fleet
Information
Investment
Governmental
Total Internal
Maintenance
Technology
Health Benefits
Pool
Activities
Service Funds
$ 9,469,863
$15,250,168
$ 29,084,021
$ -
$ 53,804,052
$ 62,488,551
9,469,863
15,250,168
29,084,021
-
53,804,052
62,488,551
1,160,964
3,703,063
364,551
67,155
5,295,733
6,350,942
-
-
28,072,546
-
28,072,546
33,385,792
44,076
40,252
6,625
795
91,748
246,613
4,076,682
33,714
-
-
4,110,396
7,275,555
4,313,714
4,116,719
-
-
8,430,433
8,450,877
236,832
3,196,263
160,047
110,713
3,703,855
4,092,538
407,003
2,631,890
-
-
3,038,893
3,047,986
10,239,271
13,721,901
28,603,769
178,663
52,743,604
62,850,303
(769,408)
1,528,267
480,252
(178,663)
1,060,448
(361,752)
20,222
66,301
123,715
215,331
425,569
584,402
644,156
11,006
-
-
655,162
655,162
1,548
-
141,466
-
143,014
172,859
(17,615)
(189,251)
-
-
(206,866)
(207,570)
648,311
(111,944)
265,181
215,331
1,016,879
1,204,853
(121,097)
1,416,323
745,433
36,668
2,077,327
843,101
70,035
-
-
-
70,035
74,985
2,387,380
-
-
-
2,387,380
2,387,380
(114,950)
2,336,318 1,416,323 745,433 36,668 4,534,742 3,190,516
1,223,376
(5,325,903)
7,103,594
(26,668)
2,974,399
13,233,312
$ 3,559,694
$ (3,909,580)
$ 7,849,027
$ 10,000
$ 7,509,141
$ 16,423,828
153
City of Lubbock, Texas
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended September 30, 2018
Business -type Activities
Print Shop
Total
and
Risk
Business -type
Warehouse
Management
Activities
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
$ 3,338,997
$ 5,092,408
$ 8,431,405
Receipts from interfund services
253,094
-
253,094
Payments to suppliers
(3,525,937)
(5,300,532)
(8,826,469)
Payments to employees
(270,630)
(728,837)
(999,467)
Other receipts
29,845
29,845
Net cash provided (used) by operating activities
(204,476)
(907,116)
(1,111,592)
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Transfers in from other funds
-
Transfers out to other funds
(114,950)
(114,950)
Net cash provided (used) by noncapital
and related financing activities
(114,950)
(114,950)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Purchases ofcapital assets
(122,150)
(122,150)
Sale of capital assets
114,950
114,950
Principal paid on capital leases
(2,606)
(3,403)
(6,009)
Bond issuance costs
-
Principal paid on bonds
-
-
Issuance of bonds
-
(285)
(285)
Interest paid on bonds and capital leases
(431)
-
(431)
Capital contributed
-
4,950
4,950
Net cash provided (used) by capital and related
financing activities
(3,037)
(5,938)
(8,975)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments
288,524
1,739,535
2,028,059
Purchase of investments
(146,528)
(1,103,068)
(1,249,596)
Interest earnings on cash and investments
21,203
134,307
155,510
Net cash provided (used) by investing activities
163,199
770,774
933,973
Net increase (decrease) in cash and cash equivalents
(44,314)
(257,230)
(301,544)
Cash and cash equivalents - beginning of year
111,958
766,452
878,410
Cash and cash equivalents - end of year
$ 67,644
$ 509,222
$ 576,866
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss)
$ (223,279)
$ (1,198,921)
$ (1,422,200)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation and amortization
4,069
5,024
9,093
Other income
-
29,845
29,845
Change in current assets and liabilities:
Inventory
12,660
-
12,660
Prepaid expenses
-
-
-
Accounts payable
(13,850)
(733,142)
(746,992)
Due from other funds
(469)
75,185
74,716
Other accrued expenses
(892)
886,262
885,370
Change in compensated absences and retirement benefits
17,285
28,631
45,916
Net cash provided (used) by operating activities
$ (204,476)
$ (907,116)
$ (1,111,592)
154
Governmental Activities
Total
Total
Fleet
Information
Health
Investment
Governmental
Internal Service
Maintenance
Technology
Benefits
Pool
Activities
Funds
$ 9,469,863
$
13,254,244
$
30,453,191
$
$ 53,177,298
$ 61,608,703
-
1,995,924
-
1,995,924
2,249,018
(8,514,690)
(8,252,304)
(29,505,461)
(111,081)
(46,383,536)
(55,210,005)
(1,090,358)
(3,528,404)
(349,687)
(67,155)
(5,035,604)
(6,035,071)
1,548
141,466
143,014
172,859
(133,637)
3,469,460
739,509
(178,236)
3,897,096
2,785,504
2,387,380
-
-
-
2,387,380
2,387,380
-
-
-
-
(114,950)
2,387,380
-
-
-
2,387,380
2,272,430
(3,111,487)
(5,566,262)
-
-
(8,677,749)
(8,799,899)
644,910
11,006
-
-
655,916
770,866
(45,057)
(1,049,949)
-
-
(1,095,006)
(1,101,015)
-
542,029
-
-
542,029
542,029
(28,058)
(1,274,854)
-
-
(1,302,912)
(1,302,912)
37,565
5,305,333
-
-
5,342,898
5,342,613
(21,366)
(440,686)
-
-
(462,052)
(462,483)
70,035
-
-
70,035
74,985
(2,453,458)
(2,473,383)
-
-
(4,926,841)
(4,935,816)
268,267
165,865
-
434,132
2,462,191
(126,889)
(1,246,044)
(1,026,013)
(37,482)
(2,436,428)
(3,686,024)
19,039
60,761
119,594
215,331
414,725
570,235
160,417
(1,019,418)
(906,419)
177,849
(1,587,571)
(653,598)
(39,298)
(23,341)
(166,910)
(387)
(229,936)
(531,480)
97,261
211,149
620,971
5,923
935,304
1,813,714
$ 57,963
$
187,808
$
454,061
$ 5,536
$ 705,368
$ 1,282,234
$ (769,408)
$
1,528,267
$
480,252
$ (178,663)
$ 1,060,448
$ (361,752)
407,003
2,631,890
-
3,038,893
3,047,986
1,548
-
141,466
143,014
172,859
34,891
3,408
-
38,299
50,959
-
(471,930)
(471,930)
(471,930)
135,433
(244,682)
(274,488)
(383,737)
(1,130,729)
(555)
18,811
-
18,256
92,972
(21,702)
(14,034)
378,584
(3,520)
339,328
1,224,698
79,153
17,730
13,695
3,947
114,525
160,441
$ (133,637)
$
3,469,460
$
739,509
$ (178,236)
$ 3,897,096
$ 2,785,504
155
!4 r4o 1
city 0-f
Lum)o6r� k
156
CITY OF LUBBOCK, TEXAS
Nonmajor Component Units
The following Component Units, which are legally separate entities, are included in the reporting
entity because the City is financially accountable and is able to impose its will.
Urban Renewal Agency (URA) — Accounts for housing rehabilitation, housing acquisition, and
land disposition. The URA is governed by a board appointed by the City Council.
Civic Lubbock, Inc. was organized to foster and promote the presentation of wholesome
educational and cultural programs, attractions and entertainment for the general moral,
intellectual, physical improvement, and welfare of the people of the City of Lubbock and
surrounding area.
Market Lubbock Economic Development Corporation, dba Market Lubbock, Inc. was
formed to create, manage, operate, and supervise programs and activities that assist and enhance
economic development within and around the City.
Lubbock Economic Development Alliance was formed to create, manage and supervise
programs and activities to promote, assist, and enhance economic development within and around
the City.
Vintage Township Public Facilities Corporation was formed to assist the City in financing,
refinancing, providing or otherwise assisting in the acquisition, construction and maintenance of
certain public facilities benefiting the Vintage Township.
157
City of Lubbock, Texas
Combining Statement of Net Position
Nonmajor Component Units
September 30, 2018
ASSETS
Current assets:
Cash and cash equivalents
Investments
Accounts receivable, net
Interest receivable
Due from other governments
Inventories
Prepaid expenses
Restricted assets:
Cash and cash equivalents
Investment in property
Mortgage receivables
Land inventory
Capital assets (net of accumulated depreciation):
Non -depreciable
Depreciable
Total assets
LIABILITIES
Current liabilities:
Accounts payable
Accrued liabilities
Accrued interest payable
Due to other governments
Unearned revenues
Noncurrent liabilities due within one year:
Contracts and leases payable
Bonds
Noncurrent liabilities due in more than one year:
Contracts and leases payable
Bonds payable
Total liabilities
NET POSITION (DEFICIT)
Net investment in capital assets
Restricted for:
Primary government agreement
Special revenue
Unrestricted
Total net position (deficit)
Urban
Renewal
Agency Civic Market
(URA) Lubbock, Inc. Lubbock, Inc.
$ - $ 741,014 $ 8,690,593
- 870,466
- 80,085 889,000
- - 300,127
21,830 286,236
- 18,652 -
- 2,262,276 -
187,028 - -
3,394,507 - -
366,332 -
- 7,777 111,388
3,581,535 3,497,966 11,147,810
- 1,884,828 192,109
- 43,879
380,862 -
3,860,683
4,100,000
2,265,690 8,196,671
374,109 111,388
- 100,000 -
3,581,535 - -
- 758,167 2,839,751
$ 3,581,535 $ 1,232,276 $ 2,951,139
158
Vintage
Lubbock
Township
Total
Economic
Public
Nonmajor
Development
Facilities
Component
Alliance
Corporation
Units
$ 7,250,663 $ - $ 16,682,270
11,265,007 - 12,135,473
1,320,482 - 2,289,567
11,574 - 11,574
- - 300,127
308,066
- - 18,652
- - 2,262,276
- 187,028
- - 3,394,507
3,245,662 - 3,245,662
3,324,954 - 3,691,286
- - 119,165
26,418,342 - 44,645,653
100,597 - 2,177,534
83,208 - 127,087
- 75,852 75,852
- - 380,862
858,146 - 4,718,829
- 24,000 24,000
1,978,000 - 6,078,000
- 2,033,000 2,033,000
3,019,951 2,132,852 15,615,164
3,324,954 - 3,810,451
- - 100,000
- - 3,581,535
20,073,437 (2,132,852) 21,538,503
$ 23,398,391 $ (2,132,852) $ 29,030,489
159
City of Lubbock, Texas
Combining Statement of Activities
Nonmajor Component Units
For the Year Ended September 30, 2018
Operating
Charges for
Grants and
Expenses
Services
Contributions
Urban Renewal Agency (URA)
Community services
$ 463,357
$ 211,958
$ -
Civic Lubbock, Inc.
Cultural and recreation
2,763,361
2,434,027
378,698
Market Lubbock, Inc.
Economic and business development
12,119,377
93,891
236,204
Lubbock Economic Development Alliance
Capital
Grants and
Contributions
Economic and business development 7,259,784 - 93,325 -
Vintage Township Public Facilities Corporation
Interest on long-term debt 151,704 - - 171,405
Total component units $ 22,757,583 $ 2,739,876 $ 708,227 $ 171,405
General revenues:
Property taxes
Sales taxes
Occupancy taxes
Investment earnings
Miscellaneous
Total general revenues
Change in net position (deficit)
Net position (deficit) - beginning of year
Net position (deficit) - end of year
160
Net (Expense) Revenue and
Changes in Net Position
Vintage
Urban
Lubbock
Township
Renewal
Civic
Market
Economic
Public
Agency
Lubbock,
Lubbock,
Development
Facilities
(URA)
Inc.
Inc.
Alliance
Corporation
Total
$ (251,399)
$ -
$ -
$ -
$ -
$ (251,399)
-
49,364
-
-
-
49,364
-
-
(11,789,282)
-
-
(11,789,282)
-
-
-
(7,166,459)
-
(7,166,459)
-
-
-
-
19,701
19,701
(251,399)
49,364
(11,789,282)
(7,166,459)
19,701
(19,138,075)
-
-
3,100,991
-
-
3,100,991
-
-
-
6,130,959
-
6,130,959
-
-
4,165,394
-
-
4,165,394
89,545
8,054
30,780
274,948
-
403,327
-
-
16,177
25,578
-
41,755
89,545
8,054
7,313,342
6,431,485
-
13,842,426
(161,854)
57,418
(4,475,940)
(734,974)
19,701
(5,295,649)
3,743,389
1,174,858
7,427,079
24,133,365
(2,152,553)
34,326,138
$ 3,581,535
$ 1,232,276
$ 2,951,139
$ 23,398,391
$ (2,132,852)
$ 29,030,489
161
City of Lubbock, Texas
Statement of Net Position
Discretely Presented Component Unit
Urban Renewal Agency (URA)
September 30, 2018
ASSETS
Restricted assets:
Investment in Property $ 187,028
Mortgage receivables 3,394,507
Total assets $ 3,581,535
LIABILITIES
Total liabilities
NET POSITION
Restricted for:
Special revenue 3,581,535
Total net position $ 3,581,535
162
City of Lubbock, Texas
Statement of Revenues, Expenses and
and Changes in Fund Net Position
Discretely Presented Component Unit
Urban Renewal Agency (URA)
For Fiscal Year Ended September 30, 2018
OPERATING REVENUES
Other services and charges
Interest income
Total operating revenues
OPERATING EXPENSES
Other services and charges
Total operating expenses
Operating loss
Change in net position
Total net position - beginning
Total net position - ending
$ 211,958
89,545
301,503
463,357
463,357
(161,854)
(161,854)
3,743,389
$ 3,581,535
163
City Of Lubbock, Texas
Statement of Cash Flows
Urban Renewal Agency
For the Year Ended September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
$ 373,812
Payments to suppliers
(427,218)
Payments to employees
-
Other receipts (payments)
(36,139)
Net cash provided (used) by operating activities
(89,545)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments -
Purchase of investments -
Interest earnings on cash and investments 89,545
Net cash provided by (used for) investing activities 89,545
Net increase (decrease) in cash
and cash equivalents -
Cash and cash equivalents - beginning of year -
Cash and cash equivalents - end of year -
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss) (161,854)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Other income (expense) (89,545)
Change in current assets and liabilities:
Mortgage receivable 161,854
Net cash provided (used) by operating activities (89,545)
Supplemental cash flow information:
Noncash capital improvements and other changes $ -
164
City of Lubbock, Texas
Statement of Net Position
Discretely Presented Component Unit
Vintage Township Public Facilities Corporation
September 30, 2018
ASSETS
Total assets $ -
LIABILITIES
Current liabilities:
Accrued interest payable $ 75,852
Bonds payable 24,000
Total current liabilities 99,852
Noncurrent liabilities:
Bonds payable 2,033,000
Total noncurrent liabilities 2,033,000
Total liabilities 2,132,852
NET POSITION (DEFICIT)
Unrestricted (2,132,852)
Total net position (deficit) $ (2,132,852)
165
City of Lubbock, Texas
Statement of Revenues, Expenses and
and Changes in Fund Net Position
Discretely Presented Component Unit
Vintage Township Public Facilities Corporation
For Fiscal Year Ended September 30, 2018
NONOPERATING REVENUES (EXPENSES)
Grants $ 171,405
Interest expense (151,704)
Net nonoperating revenues (expenses) 19,701
Change in net position 19,701
Total net position (deficit) - beginning (2,152,553)
Total net position (deficit) - ending $ (2,132,852)
166
City Of Lubbock, Texas
Statement of Cash Flows
Vintage Township Public Facilities Corporation
For the Year Ended September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers
Payments to employees
Net cash provided (used) by operating activities
CASH FLOWS FROM NONCAPITAL AND RELATED
FINANCING ACTIVITIES
Operating grants
Net cash provided (used) by noncapital
and related financing activities
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal paid on bonds
Interest paid on bonds
Net cash provided (used) for capital and related
financing activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales and maturities of investments
Purchase of investments
Interest earnings on cash and investments
Net cash provided by (used for) investing activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
Reconciliation of operating income (loss) to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Accounts receivable
Net cash provided (used) by operating activities
Supplemental cash flow information:
Noncash capital improvements and other changes
171,405
171,405
(19,000)
(152,405)
(171,405)
167
!4 r4o 1
city 0-f
Lum)o6r� k
168
City of Lubbock, Texas
Statistical Section
(Unaudited — for Analytical Purposes Only)
September 30, 2018
The following portion of the City of Lubbock Comprehensive Annual Financial Report presents detailed information
as a context for understanding the information in the financial statements, note disclosures, and required
supplementary information regarding the City's overall financial health.
TABLE CONTENTS
Financial Trends - These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Entity -wide information:
A Net position by component, last ten fiscal years
B Changes in net position, last ten fiscal years
Governmental funds information:
C Fund balance, last ten fiscal years
D Changes in fund balances, last ten fiscal years
Revenue Capacity - These tables contain information to help the reader assess one of the City's most significant
revenue sources, the property tax.
E Tax revenues by source, last ten fiscal years
F Assessed and estimated actual value of taxable property, last ten fiscal years
G Principal taxpayers, current year and nine years ago
H Property tax levies and collections, last ten fiscal years
I Property tax rates - direct and overlapping governments, last ten fiscal years
Debt Capacity - These tables present information to help the reader assess the affordability of the City's current
levels of outstanding debt and the City's ability to issue additional debt in the future.
J Ratio of outstanding debt by type, last ten fiscal years
K Ratio of net general bonded debt to assessed value and net bonded debt per capita, last ten fiscal years
L Computation of legal debt margin, last ten fiscal years
M Revenue bond coverage — LP&L and Water Bonds, last ten fiscal years
N Ratio of annual debt service expenditures for general obligation bonded debt to total general
governmental expenditures
O Computation of direct and overlapping bonded debt - general obligation bonds in governmental activities
Demographic and Economic Information - These tables offer demographic and economic indicators to help
understand the environment within which the City's financial activities take place and to help make comparisons over
time and with other governments.
P Demographic statistics, last ten years
Q Principal employers, current year and nine years ago
Operating Information - These tables contain information about the City's operations and resources to help the
reader understand how the City's financial information relates to the services the City provides and activities it
performs.
R Full-time equivalents city government employees by function, last ten fiscal years
S Operating indicators by function/program, last ten fiscal years
T Capital assets statistics by function/program, last ten fiscal years
Sources: Unless otherwise noted, the information in these tables is derived from the Comprehensive Annual Financial
Reports for the relevant years.
169
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Restricted
Unrestricted
Total business -type activities net position
Primary Government
Net investment in capital assets
Restricted
Unrestricted
Total Primary government net position
CITY OF LUBBOCK, TEXAS
Table A - Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
2018
2017
2016 2015 2014
2013
2012
2011
2010
2009
$ 152,999 $
126,549
$ 107,639 $ 94,271 $ 89,047 $
77,399 $
55,235 $
54,813 $
52,476 $
62,414
22,597
20,190
17,194 15,158 26,791
11,035
9,996
17,234
17,147
11,540
(160,028)
(120,441)
(97,536) (76,919) (14,099)
(1,718)
(2,049)
(3,185)
11,439
26,954
15,568
26,298
27,297 32,510 101,739
86,716
63,182
68,862
81,062
100,908
764,280
730,908
676,613 614,404 574,512
561,354
542,640
492,011
435,249
424,165
32,147
39,889
38,728 40,576 39,069
35,740
33,035
32,563
28,247
21,631
121,879
99,534
100,079 97,774 121,430
115,333
108,667
118,671
127,994
117,250
918,306
870,331
815,420 752,754 735,011
712,427
684,342
643,245
591,490
563,046
917,279
857,457
784,252 708,675 663,559
638,753
597,875
546,824
487,725
486,579
54,744
60,079
55,922 55,734 65,860
46,775
43,031
49,797
45,394
33,171
(38,149)
(20,907)
2,543 20,855 107,331
113,615
106,618
115,486
139,433
144,204
$ 933,874 $
896,629
$ 842,717 $ 785,264 $ 836,750 $
799,143 $
747,524 $
712,107 $
672,552 $
663,954
Beginning FY 2013 net position restated due to implementation of GASB Statement No. 65, "Items Previously Reported as Assets and Liabilities."
Beginning FY 2015 net position restated due to implementation of GASB Statement No. 68, "Accounting and Financial Reporting for Pensions - an Amendment of GASB Statement No. 27."
Beginning FY 2018 net position restated due to implementation of GASB Statement No. 75, "Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (OPEB)."
EXPENSES
Governmental activities:
Administrative services and general government
Community services
Cultural and recreation
Economic and business development
Fire
Health
Police
Other public safety
Streets and traffic
Solid Waste
hiterest on long-term debt
Total governmental activities
Business -type activities:
Electric
Water/Wastewater
Solid Waste
Storm Water
Transit
Airport
Civic Centers
Cemetery
Lake Alan Henry
Total business -type activities
Total primary government expenses
PROGRAM REVENUES
Governmental activities:
Charges for services:
Cultural and recreation
Other public safety
Other activities
Solid Waste
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities
Charges for services:
Electric
Water/Wastewater
Solid Waste
Storm Water
Transit
Airport
Civic Centers
Cemetery
Lake Alan Henry
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
CITY OF LUBBOCK, TEXAS
Table B - Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
$ 14,854,781 $ 14,598,216 $ 14,944,792 $ 12,678,745 $ 13,842,443 $ 13,287,438 $ 11,564,122 $ 11,786,924 $ 12,005,910 $ 11,078,376
5,064,842
6,219,680
5,254,214
5,518,501
5,904,999
6,983,062
5,493,264
10,707,989
12,231,817
7,037,569
18,894,418
20,145,662
19,132,813
17,538,405
17,548,024
17,581,835
16,968,404
16,832,528
16,590,119
15,039,074
18,938,568
17,207,379
16,833,858
16,349,405
15,737,748
16,258,386
15,100,595
15,944,038
15,335,806
37,221,152
61,089,454
61,435,103
56,337,294
50,954,425
45,293,942
42,646,239
41,335,751
39,619,927
36,803,080
33,097,947
5,790,308
5,905,200
5,702,354
5,222,280
4,918,230
4,409,889
5,437,035
6,332,178
5,599,276
5,818,547
67,835,367
69,597,467
69,246,130
62,607,334
61,580,048
59,261,383
58,549,406
56,537,522
54,171,638
48,342,376
8,014,293
7,991,003
9,573,985
7,052,342
6,484,824
6,803,117
6,881,024
5,919,681
6,343,372
6,325,692
30,656,165
28,674,025
28,459,651
28,143,677
25,346,304
22,366,616
26,411,247
21,244,252
28,180,967
30,138,853
16,820,311
-
-
-
-
-
-
-
-
-
11,857,748
12,348,553
12,566,751
11,887,688
12,006,271
13,058,063
13,653,174
13,290,050
12,207,377
9,840,431
259,816,255
244,122,288
238,051,842
217,952,802
208,662,833
202,656,028
201,394,022
198,215,089
199,469,362
203,940,017
217,957,566
224,783,283
206,965,251
213,356,425
216,615,556
202,250,921
187,682,253
197,364,239
135,633,692
117,977,960
94,690,532
84,788,838
87,463,378
82,860,997
83,791,332
81,561,871
82,552,925
64,534,448
58,611,172
58,845,757
-
19,276,982
18,085,516
17,810,415
18,590,913
18,066,734
16,761,293
16,742,968
20,034,944
18,262,805
11,658,461
11,900,754
11,482,663
11,195,526
11,155,160
11,251,520
10,881,637
10,891,537
7,927,175
8,208,206
13,613, 841
13,293,179
12,721,209
13,494,416
13,379,227
12,904,611
12,810,078
11,335,385
12,166,089
11,389,555
17,864,799
16,719,986
15,882,259
15,188,492
13,671,449
14,111,055
11,738,776
11,192,345
10,873,761
10,084,828
4,147,240
4,344,371
4,865,583
5,053,790
4,448,109
3,961,490
3,876,483
3,920,726
4,049,027
4,293,789
606,304
760,032
752,734
718,990
654,949
667,863
726,256
699,852
693,689
680,123
390.539
382.614
359.639
367.216
420.804
514.491
509.291
386.160
-
-
$ 1,344,698 $
1,358,711 $
1,394,377 $
1,400,867 $
1,310,187 $
1,283,204
$ 1,307,978
$ 1,286,773 $
1,633,944 $
1,586,591
7,111,784
7,193,605
7,369,011
7,381,112
6,936,464
7,358,641
6,646,970
6,316,394
6,509,356
6,493,905
2,377,728
2,354,065
2,240,458
2,087,636
2,015,819
1,893,433
1,745,560
1,801,943
1,846,533
1,584,953
22,656,887
-
-
-
-
-
-
-
-
-
6,447,093
7,240,734
6,362,542
6,212,820
6,862,991
7,220,886
12,094,607
13,834,623
13,665,834
8,525,602
15,152,177
10,831,852
12,889,721
12,841,939
12,024,981
21,259,390
8,961,808
8,397,119
8,137,579
11,766,248
55,090,367
28,978,967
30,256,109
29,924,374
29,150,442
39,015,554
30,756,923
31,636,852
31,793,246
29,957,299
246,862,911
252,069,677
230,349,802
228,310,467
234,136,509
220,111,810
195,765,095
209,076,452
149,640,110
139,236,837
134,393,703
122,897,934
118,514,604
111,728,950
111,731,060
114,477,673
104,639,943
104,127,781
86,195,317
76,468,944
-
20,738,031
20,483,239
20,662,231
19,716,606
19,538,678
19,483,045
18,807,531
17,037,506
16,979,975
26,401,167
25,538,337
24,970,570
23,119,087
19,606,904
19,285,819
19,043,611
16,195,959
12,118,701
8,108,040
5,872,405
5,732,262
5,638,145
5,926,672
5,763,642
5,921,604
5,211,423
4,809,766
4,647,586
4,385,580
11,640,261
9,419,404
9,335,596
9,082,072
8,471,833
7,780,680
7,677,538
7,483,750
7,129,257
6,926,643
819,382
834,156
728,652
698,421
691,871
701,855
663,415
693,467
640,228
693,798
370,857
363,327
402,480
476,144
450,267
434,993
410,604
438,741
436,534
462,333
615,979
571,513
600,320
506,207
466,343
476,437
490,211
458,303
-
-
8,297,344
7,902,035
8,054,492
7,724,257
8,407,207
8,242,942
8,399,969
9,387,243
5,854,918
6,431,052
16,465,762
15,325,835
31,914,754
29,158,083
13,287,745
16,324,187
28,428,061
16,060,921
11,995,639
11,573,283
451,739,771
461,392,511
450,992,654
437,392,591
422,729,987
413,296,678
390,212,915
387,539,914
295,695,796
271,266,485
CITY OF LUBBOCK, TEXAS
Table B - Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
Total primary government program revenues
$
506,830,138
$ 490,371,478
$ 481,248,763
$ 467,316,965
$ 451,880,429
$ 452,312,232
$ 420,969,838
$ 419,176,766
$ 327,489,042
$ 301,223,784
NET (EXPENSES) AND
PROGRAM REVENUES
Governmental activities
$
(204,725,888)
$ (215,143,321)
$ (207,795,733)
$ (188,028,428)
$ (179,512,391)
$ (163,640,474)
$ (170,637,099)
$ (166,578,237)
$ (167,676,116)
$ (173,982,718)
Business -type activities
90,810,489
85,142,472
92,414,422
77,346,324
60,002,488
68,006,122
62,673,923
70,472,254
45,706,247
41,523,462
Total net (expenses) and program revenues
$
(113,915,399)
$ (130,000,849)
$ (115,381,311)
$ (110,682,104)
$ (119,509,903)
$ (95,634,352)
$ (107,963,176)
$ (96,105,983)
$ (121,969,869)
$ (132,459,256)
GENERAL REVENUE, SPECIAL ITEMS,
AND TRANSFERS
Governmental activities:
Property taxes
89,644,354
86,301,543
80,613,271
74,227,519
69,083,591
65,361,484
60,935,080
57,534,225
55,064,777
52,598,485
Sales taxes
73,571,504
70,417,997
67,978,112
68,037,340
64,650,937
62,250,140
57,303,792
53,672,769
51,008,384
50,705,301
Occupancy taxes
7,355,293
7,025,004
6,852,082
6,769,286
6,252,188
6,147,539
5,209,971
4,860,489
4,238,675
4,179,036
Other taxes
1,662,833
1,603,945
1,562,933
1,562,665
1,494,361
1,266,378
1,160,654
1,305,151
1,219,092
1,272,278
Franchise taxes
9,332,330
9,073,332
9,279,073
10,841,411
9,270,352
9,126,818
9,727,782
8,307,268
11,702,985
10,765,289
Investment earnings
2,674,797
1,371,387
1,068,978
754,439
346,953
204,991
345,626
239,542
432,819
1,963,448
Miscellaneous
4,255,168
3,362,347
3,413,969
2,760,695
3,745,458
5,843,077
9,686,138
5,614,852
4,293,491
3,434,985
Transfers, net
38,479,748
34,989,088
31,814,641
36,189,998
39,692,321
36,973,388
25,571,122
22,844,004
19,869,774
10,039,415
Total governmental activities
$
226,976,027
$ 214,144,643
$ 202,583,059
$ 201,143,353
$ 194,536,161
$ 187,173,815
$ 169,940,165
$ 154,378,300
$ 147,829,997
$ 134,958,237
Business -type activities:
Investment earnings
8,241,483
2,841,137
1,873,424
1,412,364
720,378
229,354
485,569
430,806
477,365
3,593,675
Miscellaneous
1,302,592
1,916,621
192,436
1,744,209
1,552,742
1,774,039
3,507,720
3,696,582
2,130,124
1,431,840
Transfers, net
(38,479,748)
(34,989,088)
(31,814,641)
(36,189,998)
(39,692,321)
(36,973,388)
(25,571,122)
(22,844,004)
(19,869,774)
(10,039,415)
Total business -type activities
$
(28,935,673)
$ (30,231,330)
$ (29,748,781)
$ (33,033,425)
$ (37,419,201)
$ (34,969,995)
$ (21,577,833)
$ (18,716,616)
$ (17,262,285)
$ (5,013,900)
Total primary government
$
198,040,354
$ 183,913,313
$ 172,834,278
$ 168,109,928
$ 157,116,960
$ 152,203,820
$ 148,362,332
$ 135,661,684
$ 130,567,712
$ 129,944,337
CHANGES IN NET POSITION
Governmental activities
$
22,250,139
$ (998,678)
$ (5,212,674)
$ 13,114,925
$ 15,023,770
$ 23,533,341
$ (696,934)
$ (12,199,937)
$ (19,846,119)
$ (39,024,481)
Business -type activities
61,874,816
54,911,142
62,665,641
44,312,899
22,583,287
33,036,127
41,096,090
51,755,638
28,443,962
36,509,562
Total primary government
$
84,124,955
$ 53,912,464
$ 57,452,967
$ 57,427,824
$ 37,607,057
$ 56,569,468
$ 40,399,156
$ 39,555,701
$ 8,597,843
$ (2,514,919)
CITY OF LUBBOCK, TEXAS
Table C - Fund Balance of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Pre-GASB 54
2010 2009
General Fund
Reserved $ 128,880 $ 124,955
Unreserved 19,681,719 19,756,460
Total general fund $ 19,810,599 $ 19,881,415
All other governmental funds
Reserved $ 60,166,524 $ 64,351,061
Unreserved, reported in:
Permanent fund - -
Special revenue funds 20,046,736 20,738,359
W
Total all other governmental funds $ 80,213,260 $ 85,089,420
Post-GASB 54
2018
2017
2016
2015
2014
2013
2012
2011
General Fund
Nonspendable
$ 121,578 $
119,300 $
107,770 $
118,303 $
127,283 $
115,585 $
105,079
$ 155,079
Restricted
5,007,610
1,966,885
-
-
-
-
-
-
Committed
-
-
-
-
-
-
-
-
Assigned
-
-
-
-
1,232,042
-
-
-
Unassigned
47,963,825
37,543,346
35,565,756
39,072,190
29,251,491
33,721,048
28,056,366
21,714,802
Total general fund
$ 53,093,013 $
39,629,531 $
35,673,526 $
39,190,493 $
30,610,816 $
33,836,633 $
28,161,445
$ 21,869,881
All other governmental funds
Nonspendable
- -
-
-
-
-
-
-
Restricted
88,910,538 94,749,432
105,010,204
64,688,760
47,613,171
52,018,973
59,977,760
66,585,144
Committed
22,680,630 18,313,066
20,737,501
18,127,157
17,820,561
11,923,822
13,255,916
17,710,680
Assigned
- -
-
-
-
-
-
-
Unassigned
- (621,125)
(2,469,447)
(1,988,475)
(2,759,378)
(3,405,424)
(3,420,029)
(2,919,878)
Total all other governmental funds $
111,591,168 $ 112,441,373 $
123,278,258 $
80,827,442 $
62,674,354 $
60,537,371 $
69,813,647
$ 81,375,946
REVENUES
Taxes
Franchise taxes
Special assessments
Fees and fines
Licenses and permits
Intergovernmental
Charges for services
Interest
IRS Build America Bond subsidy
Miscellaneous
Total revenues
EXPENDITURES
Current:
Administrative services and general government
Community services
Cultural and recreation
Economic and business development
Fire
Health
!7; Police
Other public safety
Streets and traffic
Solid Waste
Intergovernmental
Debt services:
Principal
Interest and other charges
Capital outlay
Total expenditures
Deficiency of revenues under
expenditures
OTHER FINANCING SOURCES (USES)
Long-term debt issued
Payment of refunded debt to escrow agent
Bond premium (discount)
Capital leases issued
Transfers in
Transfers out
Net other financing sources (uses)
Net change in fund balances
Debt service as a percentage of
noncapital expenditures
CITY OF LUBBOCK, TEXAS
Table D - Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
$ 172,268,079 $ 165,214,167 $ 156,881,965 $ 150,651,856 $ 141,477,923 $ 135,096,438 $ 124,533,946 $ 117,622,237 $ 111,534,008 $ 108,737,498
9,332,330
9,073,332
9,279,072
10,841,411
9,270,352
9,126,818
9,727,782
8,307,268
11,702,985
10,765,289
1,186,366
1,196,693
972,073
932,227
885,509
834,233
763,467
787,732
761,550
515,597
3,385,607
2,970,915
3,154,394
3,657,410
3,355,397
4,000,374
3,746,075
3,367,325
3,393,410
3,581,092
2,746,803
3,274,043
3,568,885
3,004,539
2,821,135
2,625,478
2,396,476
2,076,776
2,493,594
2,213,041
7,056,331
7,630,355
6,879,827
6,982,323
7,498,343
7,982,061
13,568,745
15,237,464
15,565,962
10,718,849
25,945,159
3,261,092
3,369,472
3,283,699
3,185,206
3,237,358
3,077,199
3,114,280
3,381,047
3,399,510
2,249,228
1,121,782
837,193
471,663
201,945
59,537
218,949
117,158
236,957
1,446,200
306,422
427,246
427,694
425,399
425,858
439,395
459,377
702,370
-
-
3,991,826
3,105,525
3,111,861
3,982,473
3,600,811
6,472,860
6,377,161
5,412,327
6,394,870
3,357,849
228,468,151
197,275,150
188,482,436
184,233,000
172,722,479
169,874,552
164,869,177
156,744,937
155,464,383
144,734,925
13,938,352
13,068,496
12,567,136
11,602,733
12,605,166
12,041,031
10,383,779
10,214,049
10,572,200
9,848,596
4,828,621
5,674,147
4,529,775
5,157,325
5,449,045
6,473,828
5,055,939
9,851,912
11,324,436
6,621,943
14,699,119
15,153,618
13,740,289
13,781,678
13,560,730
13,624,228
13,113,048
12,714,602
13,176,905
12,484,184
16,499,599
15,123,557
14, 847,901
14,486,273
13,918,302
14,448,168
13,350,288
14,233,073
13,951,887
12,686,636
49,141,306
48,371,296
46,749,381
44,678,736
42,577,899
40,155,876
37,491,054
33,832,336
31,913,521
31,007,703
5,286,487
5,160,284
4,792,986
4,708,040
4,424,436
3,953,392
4,717,731
5,491,131
4,958,573
5,348,942
64,186,346
62,152,361
59,349,562
58,715,559
56,433,835
54,990,627
53,222,559
48,536,715
46,745,951
44,096,012
7,415,365
7,389,499
8,595,231
6,676,285
6,031,998
6,422,086
6,320,537
5,107,733
5,472,089
5,608,495
7,590,003
7,165,545
7,301,215
7,602,508
7,230,024
7,339,900
10,804,451
6,395,120
9,092,438
8,292,113
13,132,441
-
-
-
-
-
-
-
-
-
28,067
90,482
69,671
85,493
80,292
84,547
99,423
121,469
8,042,288
13,586,131
43,248,742
31,871,125
26,293,733
25,150,914
24,498,506
21,866,286
18,994,553
16,876,387
14,634,941
11,966,304
14,869,630
15,203,216
13,661,955
12,964,382
13,107,141
13,882,409
14,211,356
13,971,386
12,494,750
10,015,365
38,712,531
33,945,200
45,440,546
24,805,107
28,179,762
37,012,362
34,503,433
41,655,381
41,300,518
65,424,779
293,576,609
260,368,826
257,939,381
230,415,033
228,097,136
232,294,740
222,268,151
219,001,294
223,680,497
236,987,203
(65,108,458) (63,093,676) (69,456,945) (46,182,033) (55,374,657) (62,420,188) (57,398,974) (62,256,357) (68,216,114) (92,252,278)
41,718,979 33,336,596 75,465,000 69,145,000 32,715,000 43,695,000 31,841,471 36,890,184 38,381,773 45,791,118
(20,510,547) (14,745,470) (17,872,864) (45,972,814) (20,768,374) (30,465,061) (9,703,645) (4,594,201) - (3,206,295)
4,084,766 2,560,230 10,646,353 9,344,831 5,319,643 5,990,123 1,847,580 1,954,464 871,742 1,460,474
- - 6,591,692 4,555,298 5,842,667 5,778,891 5,537,998 3,588,154 4,015,386 8,714,556
96,370,476 60,402,576 63,706,307 58,318,909 56,926,661 53,679,599 47,625,755 45,929,973 38,679,233 30,508,238
(43,941,939) (25,341,136) (30,145,694) (22,476,426) (25,749,774) (19,859,452) (20,038,143) (18,290,249) (18,678,996) (16,578,433)
77,721,735 56,212,796 108,390,794 72,914,798 54,285,823 58,819,100 57,111,016 65,478,325 63,269,138 66,689,658
$ 12,613,277 $ (6,880,880) $ 38,933,849 $ 26,732,765 $ (1,088,834) $ (3,601,088) $ (287,958) $ 3,221,968 $ (4,946,976) $ (25,562,620)
22.80% 20.79% 18.80% 18.54% 18.81% 18.31% 17.68% 17.39% 14.88% 12.81%
CITY OF LUBBOCK, TEXAS
Table E - Tax Revenues by Source
Last Ten Fiscal Years
Fiscal
Year
Property
Tax
Revenues (1)
Sales Tax
Revenues
Hotel and
Motel Tax
Revenues
Other Tax
Revenues (2)
Total Tax
Revenues (3)
2009
52,580,883
50,705,301
4,179,036
1,272,278
108,737,498
2010
55,067,857
51,008,384
4,238,675
1,219,092
111,534,008
2011
57,783,828
53,672,769
4,860,489
1,305,151
117,622,237
2012
60,859,529
57,303,792
5,209,971
1,160,654
124,533,946
2013
65,432,381
62,250,140
6,147,539
1,266,378
135,096,438
2014
69,080,437
64,650,937
6,252,188
1,494,361
141,477,923
2015
74,282,565
68,037,340
6,769,286
1,562,665
150,651,856
2016
80,488,838
67,978,112
6,852,082
1,562,933
156,881,965
2017
86,167,221
70,417,997
7,025,004
1,603,945
165,214,167
2018
89,678,449
73,571,504
7,355,293
1,662,833
172,268,079
Notes:
(1) Includes
General, Special Revenue, and Debt Service Funds.
(2) Includes
bingo tax and mixed beverage tax.
(3) Excludes Franchise Fees
CITY OF LUBBOCK, TEXAS
Table F - Assessed and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Real Propertv
Personal Property
Exemptions
Total
Ratio of
total
assessed value
Fiscal
Estimated
Estimated
Estimated
to total
Year
Assessed
actual
Assessed
actual
All
Assessed
actual
estimated
Total
Ending
value
value
value
value
Property
value
value
actual value
Direct Rate
2009
9,999,003,791
10,302,954,536
1,674,070,341
1,719,807,066
349,687,470
11,673,074,132
12,022,761,602
97.1%
0.44640
2010
10,337,645,420
10,810,721,017
1,664,970,760
1,680,501,668
488,606,505
12,002,616,180
12,491,222,685
96.1%
0.44640
2011
10,595,561,504
11,026,452,390
1,692,799,194
1,701,604,691
439,696,383
12,288,360,698
12,728,057,081
96.5%
0.45617
2012
11,006,904,078
11,464,577,135
1,622,705,187
1,665,501,335
500,469,205
12,629,609,265
13,130,078,470
96.2%
0.47400
2013
11,377,170,895
11,815,025,106
1,723,036,203
1,770,854,435
485,672,443
13,100,207,098
13,585,879,541
96.4%
0.49211
2014
11,802,709,058
12,238,826,319
1,732,964,199
1,797,878,859
501,031,921
13,535,673,257
14,036,705,178
96.4%
0.50441
2015
12,215,957,184
12,666,291,180
1,885,618,746
1,949,879,589
514,594,839
14,101,575,930
14,616,170,769
96.5%
0.52240
2016
12,882,158,966
13,361,592,620
1,984,707,241
2,010,300,306
505,026,719
14,866,866,207
15,371,892,926
96.7%
0.53802
2017
13,970,641,963
14,479,415,338
1,977,345,557
2,014,425,875
545,853,693
15,947,987,520
16,493,841,213
96.7%
0.53802
2018
14,842,866,044
15,402,907,644
1,998,744,101
2,006,854,629
568,152,128
16,841,610,145
17,409,762,273
96.7%
0.53802
Source:
Lubbock Central Appraisal District
Note: FY
2016 has been restated to correct an error.
CITY OF LUBBOCK, TEXAS
Table G - Principal Taxpayers
Current Year and Nine Years Ago
FYE 2018
FYE 2009
% of Total
% of Total
Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
Name of Taxpayer
Type of Business
Valuation
Rank
Valuation
Valuation
Rank
Valuation
Macerich South Plains LP
Regional Shopping Mall
$ 122,400,718
1
0.73%
$ 128,778,473
1
1.18%
United Supermarkets LLC
Food Wholesale
118,774,706
2
0.71%
52,459,356
4
0.48%
Wal-Mart Stores
Discount Retail Store
103,760,523
3
0.62%
61,630,242
2
0.63%
Atmos Energy
Natural Gas Utility
61,023,330
4
0.36%
35,364,580
7
0.32%
ACC OP LLC
Student Housing
48,560,499
5
0.29%
Tyco Fire Products
Fire Suppresion Manufacturer
40,674,827
6
0.24%
29,621,046
9
0.27%
Southwestern Public Service
Electric Utility
37,297,635
7
0.22%
38,786,891
6
0.36%
CHP Raider Ranch TX Owner LLC
Assisted Living
37,012,031
8
0.22%
Vesper Fountains LLC
Student Housing
34,000,000
9
0.20%
TTUC LLC
Student Housing
33,400,000
10
0.20%
Southwestern Bell Telephone LP
Telephone Utility
58,830,186
3
0.54%
Plains Co-op Oil Mill, Inc.
Agricultural Processing
47,483,420
5
0.44%
X-Fab Texas, Inc.
Electronics Manufacturer
30,461,471
8
0.28%
Lubbock Property LLC
Apartments
29,141,397
10
0.27%
$ 636,904,269
3.76%
$ 512,557,062
4.77%
Source: Lubbock Central Appraisal District
00
CITY OF LUBBOCK, TEXAS
Table H - Property Tax Levies and Collections
Last Ten Fiscal Years
Collected within the
Fiscal
Taxes Levied
Total
Total
Fiscal Year
of the Levy
Collections
Total Collections to Date
Year
for the
Adjustments
Adjusted
Percentage
in Subsequent
Percentage
Ending
Fiscal Year
as of 9/30/18
Levy
Amount
of Original Levy
Years
Amount
of Adjusted Levy
2009
51,616,589
(375,576)
51,241,013
50,472,997
97.8%
661,944
51,134,941
99.8%
2010
53,455,322
(137,568)
53,317,754
52,485,686
98.2%
714,041
53,199,727
99.8%
2011
55,783,339
(321,406)
55,461,933
54,819,823
98.3%
511,168
55,330,991
99.8%
2012
59,220,369
(187,829)
59,032,540
58,284,680
98.4%
594,622
58,879,302
99.7%
2013
63,279,229
(164,638)
63,114,591
62,375,516
98.6%
564,426
62,939,942
99.7%
2014
66,684,667
(141,996)
66,542,671
65,871,343
98.8%
451,782
66,323,125
99.7%
2015
71,916,404
(109,117)
71,807,287
71,106,766
98.9%
340,782
71,447,548
99.5%
2016
78,237,757
(162,359)
78,075,398
77,183,471
98.7%
104,106
77,287,577
99.0%
2017
83,561,044
(423,597)
83,137,447
82,225,855
98.4%
(220,074.58)
82,005,780
98.6%
2018
88,363,187
(969,487)
87,393,700
86,398,109
97.8%
-
86,398,109
98.9%
Source: Lubbock Central Appraisal District
CITY OF LUBBOCK, TEXAS
TABLE I - Property Tax Rates - Direct and Overlapping Governments
(per $100 of Assessed Value)
Last Ten Fiscal Years
City Direct Rates
Fiscal
Interest
Year
General
Economic
& Sinking
Total
Ending
Fund
Development
Fund
Direct
2009
0.32540
0.03000
0.09100
0.44640
2010
0.33240
0.03000
0.08400
0.44640
2011
0.33240
0.03000
0.09377
0.45617
2012
0.34200
0.03000
0.10200
0.47400
2013
0.35683
0.02937
0.10591
0.49211
2014
0.36080
0.02705
0.11656
0.50441
2015
0.38500
0.02315
0.11425
0.52240
2016
0.39220
0.02315
0.12267
0.53802
2017
0.37825
0.02315
0.13662
0.53802
2018
0.38825
0.02315
0.12662
0.53802
Source: Lubbock Central Appraisal District
Overlapping Rates
Lubbock
Independent
School District
(LISD)
Lubbock
County
(County)
High Plains
Underground
Water District
(High Plains)
Lubbock
County Hospital
District
(Hospital)
1.23500
0.32620
0.00794
0.12067
1.23500
0.32946
0.00794
0.12084
1.23500
0.32946
0.00785
0.12081
1.23500
0.32946
0.00776
0.12072
1.23500
0.34648
0.00754
0.11919
1.23500
0.34531
0.00810
0.11844
1.23500
0.34136
0.00803
0.11680
1.23500
0.35816
0.00803
0.11501
1.23500
0.35816
0.00750
0.11206
1.23500
0.35816
0.00690
0.10978
CITY OF LUBBOCK, TEXAS
Table J - Ratio of Outstanding Debt By Type
Last Ten Fiscal Years
Governmental
Percentage of
General
Estimated
Actual
Fiscal
Obligation
Tax
Capital
Taxable Value
Year
Bonds (1)
Note
Leases
Total
of Property
Per Capita
2009 *
237,272,007
-
18,005,903
255,277,910
2.19%
1,169
2010 *
265,281,335
-
18,023,375
283,304,710
2.36%
1,234
2011 *
285,888,111
-
18,347,806
304,235,917
2.48%
1,312
2012
294,238,000
-
20,237,786
314,475,786
2.49%
1,346
2013
301,188,957
-
21,698,987
322,887,944
2.46%
1,366
2014
301,142,375
-
23,327,397
324,469,772
2.40%
1,359
2015
317,369,524
-
23,073,398
340,442,922
2.41%
1,411
2016
365,513,797
-
25,549,907
391,063,704
2.63%
1,604
2017
348,248,886
10,791,284
15,614,548
374,654,718
2.35%
1,484
2018
355,747,110
20,249,968
12,077,164
388,074,242
2.30%
1,482
Business -type
General
Percentage
Fiscal
Obligation
Tax
Revenue
Capital
Notes
of Personal
Year
Bonds (2)
Note
Bonds (3)
Leases
Payable
Total
Income
Per Capita
2009
455,285,494
-
47,523,031
23,709,725
-
526,518,250
5.92%
2,412
2010
583,260,708
-
52,092,358
22,093,860
-
657,446,926
8.20%
2,864
2011
693,830,651
-
114,035,652
18,833,944
-
826,700,247
8.77%
3,564
2012
718,563,390
-
137,153,954
16,970,843
-
872,688,187
8.97%
3,735
2013
723,897,798
-
142,207,974
21,461,977
-
887,567,749
8.27%
3,755
2014
732,210,640
-
147,699,694
20,139,670
-
900,050,004
8.09%
3,771
2015
771,109,866
-
147,305,321
19,700,974
3,750,000
941,866,161
8.18%
3,904
2016
767,552,642
-
140,885,848
23,449,316
2,500,000
934,387,806
8.09%
3,834
2017
761,858,677
7,428,716
144,117,529
14,321,325
1,250,000
928,976,247
7.91%
3,679
2018
704,228,328
5,545,032
233,205,483
2,798,295
-
945,777,138
7.48%
3,611
* Includes HUD 108 Debt
Amounts in this table have been restated to match amounts reported in the basic financial statements (net of related premiums,
discounts, and adjustments).
CITY OF LUBBOCK, TEXAS
Table K - Ratio of Net General Bonded Debt to Assessed Value and
Net Bonded Debt per Capita
Last Ten Fiscal Years
Ratio
Debt
Debt
of Net
Debt
Payable
Payable
Bonded
Net
Assessed Gross Service
from Other
from
Net Debt to
Bonded
Fiscal Popu- Value Bonded Monies
Government
Enterprise
Bonded Assessed
Debt Per
year lation* (in thousands) Debt(') Available(2)
Revenues (3)
Revenues(4)
Debt(5) Value
Capita
2009
218,327
11,673,074
692,557,501
2,611,960
91,426,295
451,090,013
2010
229,573
12,002,616
848,542,043
2,671,291
98,987,524
578,026,089
2011
231,937
12,288,361
979,718,762
2,454,822
99,313,180
677,112,181
2012
233,651
12,629,609
1,012,801,390
2,461,377
95,402,075
696,661,487
2013
236,362
13,100,207
1,025,086,755
2,631,050
94,061,709
689,773,914
2014
238,706
13,535,673
1,033,353,015
2,923,907
91,933,011
691,330,969
2015
241,233
14,101,576
1,088,479,390
3,413,579
89,353,562
713,358,056
2016
243,736
15,947,988
1,133,066,439
4,233,996
84,137,838
707,242,657
2017
252,506
16,841,610
1,128,327,563
5,041,637
74,179,187
706,181,391
2018
261,946
17,793,732
1,085,770,438
6,452,712
55,526,409
656,626,491
*Sources: City of Lubbock Business Development estimates, 2010 Census
150,041,193
1.29%
687
171,528,430
1.43%
747
203,293,401
1.65%
877
220,737,828
1.75%
945
241,251,132
1.84%
1,021
250,089,035
1.85%
1,048
285,767,772
2.03%
1,185
341,685,944
2.14%
1,402
347,966,985
2.07%
1,378
373,617,538
2.10%
1,426
Note: (1) Includes all long-term general obligation debt. (2) Includes restricted investments in the Debt Service Fund and Special
Revenue TIF funds. (3) Includes debt paid for from HUD loans, franchise fees, and hotel taxes.(4) Excludes Civic Center debt
which is paid from governmental funds (5) Includes TIF debt.
Amounts in this table have been restated to match amounts reported in the basic financial statements (net of related premiums,
discounts, and adjustments).
CITY OF LUBBOCK, TEXAS
Table L - Computation of Legal Debt Margin
Last Ten Fiscal Years
2018 2017 2016 2015 2014
Total Taxable Property Value 17,793,732,000 16,841,610,145 15,947,987,520 14,183,510,930 $ 13,535,673,257
Total Debt Margin Available ($1.50 per $100 Assessed Valuation)*
266,905,980
252,624,152
239,219,813
212,752,664
203,035,099
General Obligation & Certificate Obligation principal payments
(78,365,000)
(72,370,000)
(66,210,000)
(64,864,113)
(61,700,000)
Capital lease principal payments
(14,004,319)
(19,063,350)
(10,341,126)
(10,640,995)
(10,571,409)
Margin of Indebtedness Available
$ 174,536,661 $
161,190,802 $
162,668,687 $
137,247,556 $
130,763,690
Total Taxable Property Value
2013 2012 2011 2010 2009
$ 13,100,207,098 $ 12,629,609,265 $ 12,288,360,698 $ 12,002,616,180 $ 11,673,074,132
Total Debt Margin Available ($1.50 per $100 Assessed Valuation)*
196,503,106
189,444,139
184,325,410
180,039,243
175,096,112
General Obligation & Certificate Obligation principal payments
(39,665,000)
(50,335,000)
(43,580,000)
(35,190,000)
(30,435,000)
Capital lease principal payments
(9,908,108)
(10,588,477)
(10,666,928)
(10,356,147)
(7,099,497)
Margin of Indebtedness Available $
146,929,998 $
128,520,662 $
130,078,482 $
134,493,096 $
137,561,615
*There is no statutory debt limitation in the City Charter or under State Law. The City operates under a Home Rule Charter that limits the maximum tax rate, for all City Purposes, to $2.50 per $100 assessed
Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for general obligation debt service.
CITY OF LUBBOCK, TEXAS
Table M - Revenue Bond Coverage - LP&L and Water Bonds
Last Ten Fiscal Years
ELECTRIC BONDS:
Net Revenue
Direct
Available
Debt Service Requirements
Fiscal
Net
Operating
for Debt
Year
Revenue(l)
Expenses(2)
Service
Principal
Interest
Total
Coverage
2009
132,731,430
97,484,329
35,247,101
1,720,000
781,655
2,501,655
14.09
2010
143,222,344
111,975,325
31,247,019
1,715,000
700,945
2,415,945
12.93
2011
201,459,258
162,825,323
38,633,935
8,035,000
1,875,990
9,910,990
3.90
2012
189,208,522
154,396,274
34,812,248
6,600,000
3,176,315
9,776,315
3.56
2013
212,656,108
169,615,904
43,040,204
6,845,000
2,804,445
9,649,445
4.46
2014
227,244,632
186,020,860
41,223,772
8,250,000
2,890,312
11,140,312
3.70
2015
221,215,135
176,975,146
44,239,989
9,400,000
3,247,888
12,647,888
3.50
2016
222,951,614
176,380,524
46,571,090
10,060,000
3,476,834
13,536,834
3.44
2017
243,928,151
195,200,312
48,727,839
10,780,000
3,363,294
14,143,294
3.45
2018
239,178,553
188,265,586
50,912,967
11,515,000
2,999,119
14,514,119
3.51
W
WATER BONDS:
Net Revenue
Direct
Available
Debt Service Requirements
Fiscal
Net
Operating
for Debt
Year(l)
Revenue(2)
Expenses(3)
Service
Principal
Interest
Total
Coverage
2009
51,989,393
23,034,101
28,955,292
1,296,933
1,666,541
2,963,474
9.77
2010
59,474,560
22,582,295
36,892,265
1,527,987
1,935,692
3,463,679
10.65
2011
74,184,937
24,019,142
50,165,795
1,680,824
1,871,941
3,552,765
14.12
2012
73,013,404
24,767,762
48,245,642
2,427,367
2,984,031
5,411,398
8.92
2013
80,899,076
27,824,918
53,074,158
14,579,520
2,807,990
17,387,510
3.05
2014
78,027,115
27,116,338
50,910,777
3,017,055
2,926,363
5,943,418
8.57
2015
76,767,339
27,439,885
49,327,454
3,147,287
2,744,582
5,891,869
8.37
2016
80,239,689
32,755,854
47,483,835
3,236,807
2,558,769
5,795,576
8.19
2017
80,819,568
30,840,543
49,979,025
3,346,948
2,433,670
5,780,618
8.65
2018
134,393,703
44,079,446
90,314,257
3,555,180
2,185,941
5,741,121
15.73
(1) The Water and Wastewater Systems are reported as a combined system beginning in 2018.
(2) Net Revenue is gross revenue less refunds and allowances.
(3) Direct Operating expenses exclude depreciation. For Water, it includes CRMWA debt payment in years
2006-2007, 2007-2008, 2008-2009 AND 2009-2010.
CITY OF LUBBOCK, TEXAS
Table N - Ratio of Annual Debt Service Expenditures for
General Obligation Bonded Debt to Total General
Governmental Expenditures
Last Ten Fiscal Years
Total
Fiscal
Debt
Year
Principal
Interest
Service(l)
2009
6,400,891
4,769,322
11,170,213
2010
6,986,147
5,190,324
12,176,471
2011
8,360,106
6,382,594
14,742,700
2012
9,727,011
6,759,287
16,486,298
2013
8,368,806
5,885,847
14,254,653
2014
13,435,702
6,435,703
19,871,405
2015
13,665,060
6,375,646
20,040,706
2016
14,912,306
7,118,493
22,030,799
2017
15,941,391
9,327,776
25,269,167
2018
17,941,952
9,138,451
27,080,403
Total
General
Expenditures(2)
166,110,455
177,316,661
184,085,585
189,604,352
200,012,330
205,386,853
208,586,280
219,106,422
229,677,979
258,698,453
Percentage of
Debt Service
to Total
General
Expenditures
6.7%
6.9%
8.0%
8.7%
7.1%
9.7%
9.6%
10.1%
11.0%
10.5%
Includes debt service requirements on General Obligation and Certificate of Obligation bonds. Excludes bonds issued in
TIF, Gateway, Hotel Tax Supported, and HUD funds.
(2) Includes General, Special Revenue, and Debt Service Funds.
CITY OF LUBBOCK, TEXAS
Table O - Computation of Direct and Overlapping Bonded Debt
General Obligation Bonds in Governmental Activities
Funded
Percentage
Amount
Debt
Applicable to
Applicable to
Outstanding
City of
City of
at 09/30/2018
Lubbock
Lubbock
City of Lubbock
$ 344,583,509 (1)
100.00%
$ 344,583,509
Subtotal Directs
344,583,509
344,583,509
Lubbock County
(2)
32,550,000
83.20%
27,081,600
Lubbock Independent School District
(2)
217,971,000
93.53%
203,868,276
Lubbock- Cooper Independent
(2)
School District
257,666,711
69.62%
179,387,564
Frenship Independent School District
(2)
225,649,575
75.00%
169,237,181
Idalou Independent School District
(2)
12,030,000
3.29%
395,787
Roosevelt Independent School District
(2)
8,640,000
2.92%
252,288
Subtotal Overlapping
754,507,286
580,222,697
Total
$ 1,099,090,795
$ 924,806,206
(1) General purpose funded debt payable from ad valorem taxes in governmental activities. Also, includes all
self-supporting debt and capital lease balances - governmental activities.
(2) "Texas Municipal Reports" published by the Municipal Advisory Council of Texas.
CITY OF LUBBOCK, TEXAS
Table P - Demographic Statistics
Last Ten Years
Education Level
Personal
Per
in Years of
Income
Capita
Median
Formal Schooling
School
Unemployment
Year
Population
(1) (in thousands) (2)
Income
(1) Age (1)
Completed (1)
Enrollment (3)
Rate (4)
2009
218,327
8,899,000
20,817
*
30.6
12.5
28,682
5.40%
2010
229,573
(5) 8,018,680
21,233
(5) 30.7 (5)
12.5
28,808
6.20%
2011
231,937
9,428,347
23,092
31.5
12.7
28,728
6.20%
2012
233,651
9,725,542
23,237
30.3
12.8
29,226
5.60%
2013
236,362
10,290,498
24,196
(3) 29.7
13.0
29,287 (6)
5.20% (3)
2014
238,706
11,084,148
23,521
(3) 29.9
13.4
29,253 (6)
4.00% (3)
2015
241,322
11,066,436
24,168
(3) 30.0
13.4
29,265 (6)
3.40% (3)
2016
243,736
11,546,015
38,557
31.0
14.7
28,921
3.50%
2017
254,565
11,748,703
38,757
30.6
14.9
28,519
3.40%
2018
261,946
12,646,303
41,433
30.9
14.7
28,026
3.10%
Sources:
(1) City of Lubbock GIS & Data Services Department
(2) www.bea.gov
(3) City of Lubbock Finance Department (Based on Calendar Year Average)
(4) Texas Workforce Commission Labor Market Information
(5) Census Bureau
(6) Lubbock Independent School District
*Source: Decision Data Resources 2008 estimate
CITY OF LUBBOCK, TEXAS
Table Q - Principal Employers
Current Year and Nine Years Ago
Employer
Texas Tech University
Covenant Health System
United Supermarkets (Corporate)
TTU Health Sciences Center
University Medical Center
Lubbock Independent School District
City of Lubbock
Lubbock County
Frenship ISD
Lubbock State Supported Living Center
AT&T Communications
Convergys Corporation
Total
2018
Percentage
of Total City
Employees Rank Employment
5,509
1
3.90%
5,215
2
3.69%
3,821
3
2.71%
3,588
4
2.54%
3,575
5
2.53%
3,457
6
2.45%
2,307
7
1.63%
1,254
8
0.89%
1,180
9
0.84%
856
10
0.61%
30,762 21.79%
2009
Percentage
of Total City
Employees Rank Employment
10,372
1
7.84%
4,865
2
3.68%
2,832
5
2.14%
2,752
6
2.08%
3,150
4
2.38%
3,606
3
2.73%
2,392
7
1.81%
1,107
10
0.84%
2,370 8
1,125 9
1.79%
0.85%
34,571
26.13%
Source: Survey performed by City of Lubbock economic analyst based on Lubbock MSA.
00
00
CITY OF LUBBOCK, TEXAS
Table R - Full-time Equivalents City Government Employees by Function
Last Ten Fiscal Years
Function
Governmental activities:
Administrative services and general government
Community development
Cultural and recreation
Economic and business development
Fire
Health
Police
Other public safety
Streets and traffic
Solid Waste*
Internal service
Total governmental activities
Business -type activities:
Electric
Water/Wastewater**
Sewer**
Solid waste
Storm water
Transit
Airport
Cemetery
Civic Centers
Lake Alan Henry
Internal service
Total business -type activities
Total
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
102
99
97
97
83
80
79
82
80
76
13
13
14
14
16
16
18
22
22
18
124
125
125
125
124
124
128
131
131
131
7
7
7
7
5
7
7
15
15
15
434
429
429
429
414
398
375
358
355
355
48
47
47
44
43
43
48
61
59
73
555
544
545
545
545
540
536
535
535
535
87
83
80
83
83
81
82
75
76
73
101
89
90
90
89
89
90
89
89
92
94
-
-
-
-
-
-
-
-
-
72
52
48
48
56
56
54
45
43
43
1,637
1,488
1,482
1,482
1,458
1,434
1,417
1,413
1,405
1,411
324
303
303
303
303
289
288
284
249
245
249
171
170
170
168
167
166
166
155
156
-
79
76
76
74
74
71
72
72
77
-
113
113
112
112
111
110
110
110
110
38
38
38
38
37
36
35
34
33
34
171
170
169
168
165
166
153
151
142
129
49
48
48
48
48
48
48
48
48
48
6
7
7
7
7
7
7
7
7
7
21
27
27
27
27
27
27
27
30
30
1
1
1
1
1
1
1
1
1
1
15
31
29
30
28
28
28
28
28
28
874
988
981
980
970
954
934
928
875
865
2,511 2,476 2,463 2,462 2,428 2,388 2,351 2,341 2,280 2,276
Source: City of Lubbock Budget Department
*Solid Waste was incorporated into the General Fund in FY 2017-18
**Water/Wastewater were combined for FY 2017-18
CITY OF LUBBOCK, TEXAS
Table S - Operating Indicators by Function/Program
Last Ten Fiscal Years
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Cultural and Recreation Services
Civic Center number of events with greater
than 500 attendees
220
226
195
195
185
132
139
131
151
129
Library Visits
453,736
466,606
467,939
447,593
475,372
513,555
538,119
566,462
583,932
537,393
Softball Team Registrations
254
254
314
332
320
379
377
365
372
372
Community Center Attendance
180,490
166,153
169,401
214,652
153,526
133,312
134,802
122,432
134,724
173,787
Senior Center Attendance
133,527
138,245
142,061
112,028
108,843
111,794
106,109
106,986
108,085
92,085
Garden and Arts Attendance
27,008
37,726
28,916
31,519
53,761
50,433
58,473
42,707
46,738
60,544
Other Public Safety
Construction Permits
7,784
3,714
3,522
3,493
2,611
3,893
2,737
2,471
3,521
4,748
Building Department Inspections
49,050
65,056
60,334
45,607
23,039
40,232
33,370
31,475
33,158
34,530
Police
Police Reports Processed
85,139
91,524
82,472
82,075
65,306
77,106
79,920
78,648
79,810
81,772
Police Crime/Incident Reports
44,930
36,479
49,693
49,950
39,813
36,535
37,059
39,242
38,385
41,328
Police Calls
565,324
563,881
382,746
412,962
389,669
363,293
363,297
332,425
352,791
316,049
Fire
Public Fire Safety Education Presentations
923
940
1042
177
215
194
174
188
183
221
Fire/Arson Investigations Conducted
179
173
156
136
189
178
170
262
136
177
Inspection Activities Performed
1,749
2,464
2,145
2,358
1,961
1,976
2,206
2,198
2,457
2,416
LP&L
Average daily consumption (kwh)
7,175,924
7,309,335
7,331,135
7,532,819
7,056,681
7,503,996
7,089,327
7,089,091
4,736,004
4,516,842
Water
Average daily consumption (gal)
34,559,677
32,353,126
33,178,203
31,667,400
35,214,103
37,130,000
36,550,000
41,207,000
31,630,000
32,700,000
Airport
Number of airline passengers
enplaned (annual projection)
502,000
471,565
463,621
462,257
467,236
470,570
492,073
521,678
531,504
547,333
Daily average of airplane
departures and landings
238
208
199
201
230
217
188
200
220
212
Number of major airlines
3
3
3
3
3
3
3
4
4
4
Number of scheduled daily flights
20
18
18
18
18
19
22
24
34
54
Source: City of Lubbock Departments
CITY OF LUBBOCK, TEXAS
Table T - Capital Assets Statistics by Function/Program
Last Ten Fiscal Years
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Streets and Traffic Engineering
Miles of Streets Paved
1,192
1,178
1,127*
1,095
1,095
Miles of Streets Unpaved
63
57
62
57
57
Fire
Number of stations
19
19
19
19
18
Number of fire fighters and officers (civil service)
404
404
404
404
389
Police
Number of stations
1
1
1
1
1
Number of authorized police officers
443
433
433
477
477
Culture and Recreation Services
1,095 1,090 1,080 1,076 1,071
57 57 60 60 60
18 17 16 16 16
389 336 335 335 335
1 1 1 1
433 423 423 422
Number of parks and playgrounds
137
141
141
140
140
140
140
140
140
Number of dog parks
2
-
-
-
-
-
-
-
-
Number of recreation centers
9
9
9
9
9
9
9
9
9
Number of golf courses
2
2
2
2
2
2
2
2
2
Number of swimming pools
4
4
4
4
4
4
4
4
4
Number of auditoriums/coliseums
2
2
2
2
2
2
2
2
2
Number of amphitheaters
1
1
1
1
1
1
1
1
1
Number of civic centers
1
1
1
1
1
1
1
1
1
Number of libraries (excl. education)
4
4
4
4
4
4
4
4
4
LP&L
Number of meters
106,555
105,788
104,103
103,475
102,079
101,637
100,462
99,399
75,975
Number of sub -stations
37
37
37
37
37
36
37
38
14
Number of steam turbines
6
6
6
6
6
6
6
6
6
Number of diesel engines
-
-
-
-
-
-
-
2
2
Number of gas turbine engines
4
4
4
4
4
4
4
5
5
Miles of distribution lines
4,312
4,322
4,831
4,879
4,879
2,202
2,202
2,202
1,062
Miles of transmission lines
105
105
105
105
105
105
96
85
85
Water
Number of meters
88,834
87,370
85,761
84,332
83,260
82,231
81,021
79,740
79,200
Miles of distribution lines
1,780
1,747
1,727
1,777
1,732
1,625
1,595
1,508
1,471
Number of fire hydrants
6,670
6,491
6,359
6,134
5,885
5,710
5,527
5,466
5,206
Number of water wells (active)
175
175
175
175
175
175
175
175
164
Acres of water rights
246,547
246,547
246,547
246,547
246,547
246,547
246,547
246,547
182,656
Number of gallons allocated annually by
Canadian River Municipal Water
Authority (in millions of gallons) 10,747 10,747* 9,057 7,982 7,982
Sewer
Miles of sanitary sewer lines 1,203 1,181 1,152 1,167 1,145
Source: City of Lubbock Departments
*Note: FY 2017 Canadian River Municipal Water Authority made a mid -year adjustment to the number of gallons allocated annually.
1
422
138
9
2
4
2
1
1
3
74,930
14
6
2
5
1,054
90
78,312
1,452
5,121
150
99,152
7,982
7,982
8,786
9,660
9,660
1,119
1,103
1,105
1,016
1,007
City of Lubbock, Texas
Schedule of Expenditures of Federal Awards
For the Year Ended September 30, 2018
FEDERAL GRANTOR/
City
FEDERAL
Grant/
Passed
Federal
PASS -THROUGH GRANTOR/
Fund
CFDA
Contract
Through to
Awards
PROGRAM TITLE
Number
NUMBER
Number
Sub -recipients
Expended
U. S. DEPARTMENT OF HOUSING & URBAN DEVELOPMENT
Direct Programs:
Community Development Block Grant 17-18
80062
14.218
B-17-MC48-0022
$ 323,240
$ 1,393,835
Community Development Block Grant 16-17
80059
14.218
B-16-MC-48-0022
2,973
286,565
Community Development Block Grant 15-16
80056
14.218
B-15-MC48-0022
-
285,056
Community Development Block Grant 13-14
80050
14.218
B-13-MC-48-0022
11,585
Community Development Block Grant 10-11
80040
14.218
B-10-MC48-0022
-
61,293
Total CDBG Entitlement Grants Cluster
326,213
2,038,334
Emergency Solutions Grant 17-18
Emergency Solutions Grant 16-17
Emergency Solutions Grant 15-16
HOME Program 16-17
HOME Program 15-16
HOME Program 14-15
HOME Program 13-14
Total CFDA 14.231
Total CFDA 14.239
Total U. S. Department of Housing & Urban Development
U. S. DEPARTMENT OF JUSTICE
Passed through Texas Office of Justice Programs:
Byrne Memorial (JAG 15)
Total CFDA 16.738
Internet Crimes Against Children Task Force 16-18
Total CFDA 16.800
80064
14.231
E-17-MC48-0022
80061
14.231
E-16-MC48-0022
80058
14.231
E-15-MC-48-0022
80060
14.239
M-16-MC-48-0205
80057
14.239
M-15-MC-48-0205
80054
14.239
M-14-MC-48-0205
80051
14.239
M-13-MC-48-0205
86074 16.738
86080 16.800
Total U. S. Department of Justice
U. S. DEPARTMENT OF TRANSPORTATION
Direct Programs:
Federal Aviation Administration:
Terminal Building Modification Construction
92361
20.106
Total CFDA 20.106
Federal Transit Administration:
5307 Funds - Capital, Operating and Planning 17-18
88055
20.507
5307 Funds - Capital, Operating and Planning 16-17
88051
20.507
5307 Funds - Capital, Operating and Planning 15-16
88047
20.507
5307 Funds - Capital, Operating and Planning 14-15
88042
20.507
Total Federal Transit Cluster
Federal Highway Administration:
Passed through Texas Department of Transportation:
Under the Unified Planning Work Program:
Lubbock Metropolitan Planning Organization 17-18
Regional Bicycle and Pedestrian Master Plan 17-18
Total Highway Planning and Construction Cluster
Passed through Texas Department of Transportation:
5310 Funds - FED CAP & NF 17-18
5310 Funds - FED CAP & NF 16-17
Transit Services Program Cluster
2015-DJ-BX-0906
2016-MC-FX-KO34
154,895
167,512
5,735
6,600
-
172
160,630
174,284
-
203,814
85,806
175,114
-
13,747
-
14,946
85,806
407,621
572,649
2,620,239
11,769
11,769
20,037
20,037
31,806
348-0138-041-2016 581,174
581,174
TX-2018-062-00 3,018,325
TX-2018-063-00 11,123
TX-2016-075 86,600
TX-90-YO78 98,071
3,214,119
85016
20.205
50-15XF0005
433,308
8605
20.205
0905-06-102
138,764
572,072
88056
20.521
N/A
59,345
88052
20.521
TX-2017-077-00
42,919
$
$ 102,264
191
City of Lubbock, Texas
Schedule of Expenditures of Federal Awards
For the Year Ended September 30, 2018
FEDERAL GRANTOR/
City
FEDERAL
Grant/
Passed Federal
PASS -THROUGH GRANTOR/
Fund
CFDA
Contract
Through to Awards
PROGRAM TITLE
Number
NUMBER
Number
Sub -recipients Expended
Passed through Texas Department of Transportation:
STEP Comprehensive 17-18
86040
20.600
2018-Lubbock-S- I YG-00 17
$ $ 41,798
Safety City Teaching Kids to be Street Smart 17-18
84030
20.600
2018-LubbockP-G-lYG-0241
16,471
STEP Click It or Ticket 17-18
86087
20.616
2018-Lubbock-PD-CIOT-00010
7,722
Total Highway Safety Cluster
65,991
Total U. S. Department of Transportation
4,535,620
NATIONAL ENDOWMENT FOR THE HUMANITIES
Passed through Humanities Texas:
African American History Month Program & Exhibit
5216
45.129
2018-5391
564
Ancient Egypt Lecture & Exhibit
5216
45.129
2018-5392
228
Total CFDA 45.129
792
Total National Endowment For The Humanities
- 792
U.S INSTITUTE OF MUSEUM AND LIBRARY SERVICES
Passed through Texas State Library and Archives Comission:
Interlibrary Loan Lending Reimbursement Program 17-18
83066
45.310
LS-00-17-0044-17
- 24,142
Total CFDA 45.310
- 24,142
Total U.S. Institute of Museum and Library Services
24,142
U.S. ENVIRONMENTAL PROTECTION AGENCY
Passed through Texas Water Development Board:
Clean Water State Revolving Fund
92174
66.458
L1000549
- 16,951,816
Total Clean Water State Revolving Fund Cluster
- 16,951,816
Total U.S. Evironmental Protection Agency
- 16,951,816
U. S. FOOD AND DRUG ADMINISTRATION
Passed through the Association of Food and Drug Officials:
Retail Program Standards
86071
93.103
G-SP-1402-00878
- 824
Total CFDA 93.103
824
Total U. S. Food and Drug Administration
- 824
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through South Plains Association of Governments:
Special Program for the Aging Title III B 17-18
84011
93.044
83124-17-A100
- 38,831
Special Program for the Aging Title III C 17-18
84012
93.045
83124-17-A100
- 146,685
Total Aging Cluster
- 185,516
Passed through Texas Department of State Health Services:
Immunization / Locals 18-19
81119
93.268
HHS000109800001
- 23,116
Immunization / Locals 17-18
81116
93.268
537-18-0086-00001
- 47,336
Total CFDA 93.268
- 70,452
Public Health Emergency Preparedness 18-19
81120
93.074
537-18-0127-00001
- 57,678
Public Health Emergency Preparedness 17-18
81114
93.074
537-18-0127-00001
- 195,419
Total CFDA 93.074
- 253,097
Epidemiology and Laboratory Capacity for Infectious Disease 17-18
81115
93.323
537-18-0347-00001
- 8,000
Total CFDA 93.323
- 8,000
Immunization / Locals 17-18
81116
93.539
537-18-0086-00001
- 132,663
Total CFDA 93.539
- 132,663
Preventive Health & Health Services Block Grant (RLSS/LPHS) 17-18
81117
93.758
537-18-0232-00001
- 62,583
Total CFDA 93.758
$
- $ 62,583
192
City of Lubbock, Texas
Schedule of Expenditures of Federal Awards
For the Year Ended September 30, 2018
FEDERAL GRANTOR/
City
FEDERAL
Grant/
Passed
Federal
PASS -THROUGH GRANTOR/
Fund
CFDA
Contract
Through to
Awards
PROGRAM TITLE
Number
NUMBER
Number
Sub -recipients
Expended
Passed through Texas Department of Housing & Comm. Affairs:
Comprehensive Energy Assistance Program (LEAP) 2018
82064
93.568
58180002776
$
$ 1,015,902
Comprehensive Energy Assistance Program (CEAP) 2017
82062
93.568
58170002879
342,930
Total CFDA 93.568
1,358,832
Community Services Block Grant 2018
82063
93.569
61180002843
177,707
205,431
Community Services Block Grant 2017
82061
93.569
61170002618
104,685
167,721
Total477 Cluster
282,392
373,152
Total U. S. Department of Health & Human Services
U. S. DEPARTMENT OF HOMELAND SECURITY
Passed through Governor's Division of Emergency Management:
FEMA Public Assistance Grant - 2015 Blizzard
Total CFDA 97.036
Emergency Management Performance Grant 17-18
Total CFDA 97.042
HSGP-Urban Search and Rescue Team 17-18
HSGP-Public Safety Dive Team Sustainment Grant 17-18
Total CFDA 97.067
Total U. S. Department of Homeland Security
TOTAL FEDERAL FINANCIAL ASSISTANCE
87084 97.036
87090 97.042
87094 97.067
87093 97.067
282,392 23444,295
FEMA-4255-DR-TX 62,646
- 62,646
18TX-EMPG-0944 11,545 61,267
11,545 61,267
3401201 58,368
3113502 51,996
- 110,364
11,545 234,277
$ 866,586 $ 26,843,811
193
CITY OF LUBBOCK, TEXAS
Notes to Schedule of Expenditures of Federal Awards
For the Year Ended September 30, 2018
(1) General
The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal
award activity of the City under programs of the federal government for the year ended September
30, 2018. The information in this Schedule is presented in accordance with the requirements of Title
2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents
only a selected portion of the operations of the City, it is not intended to and does not present the
financial position, changes in net position, or cash flows of the City.
(2) Basis of Accounting
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such
expenditures are recognized, as applicable, either under the cost principles in OMB Circular A-87,
Cost Principles for State, Local and Indian Tribal Governments, or the cost principles contained in
the Uniform Guidance, wherein certain types of expenditures are not allowed or are limited as to
reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in
the normal course of business to amounts reported as expenditures in prior years. The City has elected
not to use the 10% de minimis indirect cost rate allowed under Uniform Guidance.
(3) Outstanding Loans
The federal loan programs listed subsequently are administered directly by the City, and balances and
transactions relating to these programs are included in the City's basic financial statements. Loans
outstanding at the beginning of the year and loans made during the year are included in the federal
expenditures presented in the Schedule. There are no continuing compliance requirements at
September 30, 2018. The balance of loans outstanding at September 30, 2018 consist of:
Federal
CFDA Outstanding Balance at
Number Program Name September 30, 2018
14.218 Community Development Block Grant $ 190,562
14.239 HOME Program 2,566,654
14.240 HOPE 3 Program 888,110
Total 3
194
City of Lubbock, Texas
Schedule of Expenditures of State Awards
For the Year Ended September 30, 2018
STATE GRANTOR/
PROGRAM TITLE
FEDERAL
CFDA
NUMBER
Grant/
Contract
Number
Passed State
Through to Awards
Sub -recipients Expended
Texas Department of State Health Services
Epidemiology Capacity Expansion Grant
N/A
537-18-0296-00001
$ $ 62,345
Preventive Health & Health Services Block Grant (RLSS/LPHS) 17-18
N/A
537-18-0232.00001
25,185
Immunization / Locals 17-18
N/A
537-18-0086-00001
83,956
Total Texas Department of State Health Services
- 171,486
Texas Forest Service
California EMAC FY 18
N/A
1470-RE2A-7917-0-3
95,864
Fort Davis Scenic Loop Fire FY 18
N/A
TX-TXMS-18004
61,733
Jefferson Davis Deployment FY 18
N/A
TX-TXMS-18002
61,850
Wolfforth Fire Support FY 18
N/A
TX-TXS-018902
7,374
Total Texas Forest Service
- 226,821
Texas Department of Transportation
5307 Funds - FY 18 State Operation
N/A
URB 180 (05)
704,294
Total Texas Department of Transportation
- 704,294
Texas OOG Criminal Justice Division & Homeland Security Division
Rifle -Resistant Body Armor Grant Program
N/A
3457701
187,500
Total Texas OOG Criminal Justice Division & Homeland Security Division
187,500
TOTAL STATE FINANCIAL ASSISTANCE
$ - $ 1,290,101
195
CITY OF LUBBOCK, TEXAS
Notes to Schedule of Expenditures of State Awards
For the Year Ended September 30, 2018
(1) General
The accompanying schedule of expenditures of state awards presents the activity of all applicable state
awards of the City. The City's reporting entity is defined in Note 1 to the City's basic financial
statements. State awards received directly from the state agencies, not passed through the State by the
Federal Government, as well as state awards passed through other government agencies are included
on the schedule.
(2) Basis of Accounting
The accompanying schedule of state awards is presented using the modified accrual basis of
accounting, which is described in Note 1 to the City's basic financial statements.
(3) Relationship to State Financial Reports
Grant expenditure reports as of September 30, 2018, which have been submitted to grantor agencies
will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor
agencies are typically prepared at a later date and often reflect refined estimates of the year-end
accruals. The reports will agree at termination of the grant as the discrepancies noted are timing
differences.
196
weaver Austin I Conroe I Dallas I Fort Worth I Houston
Los Angeles I Midland I New York City I San Antonio
Independent Auditor's Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards
The Honorable Mayor and
Members of the City Council
City of Lubbock, Texas
We have audited, 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, 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 Lubbock, Texas (the City) as of and
for the year ended September 30, 2018, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements, and have issued our report thereon dated
February 6, 2019. Our report includes an "emphasis of matter" paragraph about a change in accounting
principle and a reference to other auditors who audited the financial statements of Civic Lubbock, Inc.,
Market Lubbock Economic Development Corporation d/b/a Market Lubbock, Inc. and Lubbock
Economic Development Alliance, as described in our report on the City's financial statements. This report
does not include the results of the other auditors' testing of internal control over financial reporting or
compliance and other matters that are reported on separately by those auditors. The financial
statements of Civic Lubbock, Inc., a component unit included in the financial statements of the
aggregate discretely presented component units, and West Texas Municipal Power Agency, a blended
component unit reported as a major fund, which are included in the City's financial statements, were not
audited in accordance with Government Auditing Standards.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the City's financial statements will not be prevented, or detected and corrected, on a
timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be material weaknesses or significant deficiencies. Given these limitations,
during our audit we did not identify any deficiencies in the City's internal control over financial reporting
that we consider to be material weaknesses. However, material weaknesses may exist that have not been
identified.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main: 972.490.1970 1 Fax:972.702.8321
CPAs AND ADVISORS I WEAVER.COM
197
The Honorable Mayor and Members of the City Council of the
City of Lubbock, Texas
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect
on the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City's internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 6, 2019
198
weaver Austin I Conroe I Dallas I Fort Worth I Houston
Los Angeles I Midland I New York City I San Antonio
Independent Auditor's Report on Compliance for Each
Major Program and on Internal Control over Compliance in
Accordance with Uniform Guidance and the State of Texas
Uniform Grant Management Standards
To the Honorable Mayor and
Members of the City Council
City of Lubbock, Texas
Report on Compliance for Each Major Federal and State Program
We have audited the City of Lubbock, Texas' (City) compliance with the types of compliance
requirements described in U.S. Office of Management and Budget (OMB) Compliance Supplement and
the State of Texas Uniform Grant Management Standards (UGMS) that could have a direct and material
effect on each of the City's major federal and state programs for the year ended September 30, 2018.
The City's major federal and state programs are identified in the summary of auditor's results section of the
accompanying schedule of findings and questioned costs.
Management's Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal and state programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the City's major federal and state
programs based on our audit of the types of compliance requirements referred to above. We conducted
our audit of compliance in accordance with auditing standards generally accepted in the United States
of America; the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States; Title 2 U.S. Code of Federal Regulations (CFR) Part
200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance), and UGMS. Those standards, Uniform Guidance and UGMS, require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the types of
compliance requirements referred to above that could have a direct and material effect on a major
federal or state program occurred. An audit includes examining, on a test basis, evidence about the
City's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major
federal and state program. However, our audit does not provide a legal determination of the City's
compliance.
Opinion on Each Major Federal and State Program
In our opinion, the City complied, in all material respects, with the types of compliance requirements
referred to above that could have a direct and material effect on each of its major federal and state
programs for the year ended September 30, 2018.
Weaver and Tidwell, L.L.P.
2300 North Field Street, Suite 1000 1 Dallas, Texas 75201
Main:972.490.1970 1 Fax:972.702.8321
CPAs AND ADVISORS I WEAVER.COM
199
The Honorable Mayor and Members of the City Council of the
City of Lubbock, Texas
Report on Internal Control over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above. In planning and performing
our audit of compliance, we considered the City's internal control over compliance with the types of
requirements that could have a direct and material effect on each major federal and state program to
determine the auditing procedures that are appropriate in the circumstances for the purpose of
expressing an opinion on compliance for each major federal and state program and to test and report
on internal control over compliance in accordance with Uniform Guidance and UGMS, but not for the
purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly,
we do not express an opinion on the effectiveness of the City's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their
assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance
requirement of a federal or state program on a timely basis. A material weakness in internal control over
compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that
there is a reasonable possibility that material noncompliance with a type of compliance requirement of
a federal or state program will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance with a type of compliance requirement of a federal or
state program that is less severe than a material weakness in internal control over compliance, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing
of internal control over compliance and the results of our testing, based on the requirements of Uniform
Guidance and UGMS. Accordingly, this report is not suitable for any other purpose.
WEAVER AND TIDWELL, L.L.P.
Dallas, Texas
February 6, 2019
200
City of Lubbock, Texas
Schedule of Findings and Questioned Costs
For the Fiscal Year Ended September 30, 2018
Section 1. Summary of Auditor's Results
Financial Statements
An unmodified opinion was issued on the financial statements.
Internal control over financial reporting:
• Material weakness(es) identified? Yes X No
• Significant deficiency(ies) identified
that are not considered to be material weakness(es)? Yes X None reported
Noncompliance material to the
financial statements noted? Yes X No
Federal and State Awards
An unmodified opinion was issued on compliance for each major program.
Internal control over major program:
• Material weakness(es) identified?
• Significant deficiencies identified that are not
considered to be material weakness(es)?
Any audit findings disclosed that are required to
be reported in accordance with 2 CFR 200.516(a)
or the State of Texas Uniform Grant Management
Standards?
Identification of major programs:
CFDA Number
66.458
STATE
Yes X No
Yes X None reported
Yes X No
Name of Federal Program or Cluster
Clean Water State Revolving Fund
5307 Funds - FY 18 State Operations
Dollar threshold used to distinguish between
Type A and Type B federal programs: $805,314
Dollar threshold used to distinguish between
Type A and Type B state programs: $300,000
Auditee qualified as low -risk auditee for federal single audit? X Yes No
Auditee qualified as low -risk auditee for state single audit? Yes X No
201
City of Lubbock, Texas
Schedule of Findings and Questioned Costs - Continued
For the Fiscal Year Ended September 30, 2018
Section 2. Financial Statement Findings
None
Section 3. Federal and State Award Findings and Questioned Costs
None
Section 4. Schedule of Prior Year Findings and Questioned Costs
None
202
No Text