HomeMy WebLinkAbout2025 0318Agenda Item No:1.5
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Miscellaneous
Agenda Section:
Subject:
Items of Community Interest
Suggested Action:
Attachments:
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Agenda Item No:1.6
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Megan Charters
Submitting Department: Library
Item Type: Announcement
Agenda Section:
Subject:
Receive presentation from the Library regarding upcoming events and activities. (Charters)
Suggested Action:
Attachments:
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Agenda Item No:3.1
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Jackie Kopsa
Submitting Department: Parks & Recreation
Item Type: Presentation
Agenda Section:
Subject:
Receive updates on public-private partnerships with Stewart Peninsula Golf Course and The Athletic Club.
(Kopsa)
Suggested Action:
Attachments:
6
Agenda Item No:3.2
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Isaac Williams
Submitting Department: Planning
Item Type: Discussion
Agenda Section:
Subject:
Receive a presentation regarding amendments to Appendix A, Section 10-100, "schedule of uses by district,”
and “definitions and explanations applicable to use schedule” regarding “smoking lounge”, and “smoking room”
uses. (Williams)
Suggested Action:
Attachments:
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Agenda Item No:3.3
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Discussion
Agenda Section:
Subject:
Council to provide direction to staff regarding future agenda items. (Council)
Suggested Action:
Attachments:
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Agenda Item No:4.1
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Minutes
Agenda Section:
Subject:
Consider approving City Council Regular Session meeting minutes from March 5, 2025. (Stewart)
Suggested Action:
Attachments:
March 5, 2025 DRAFT Minutes.docx
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1 These items are strictly public service announcements. Expressions of thanks, congratulations or condolences; information
regarding holiday schedules; honorary recognition of city officials, employees or other citizens; reminders about upcoming
events sponsored by the City or other entity that are scheduled to be attended by a city official or city employee. No action
will be taken and no direction will be given regarding these items.
MINUTES OF THE CITY COUNCIL REGULAR SESSION
HELD ON
MARCH 5, 2025
The Regular Session of the City Council of the City of The Colony, Texas, was called to order
at 6:30p.m. on the 5
th day of March,2025, at City Hall, 6800 Main Street, The Colony, Texas,
with the following roll call:
Richard Boyer, Mayor
Judy Ensweiler, Mayor Pro Tem
Robyn Holtz, Councilmember
Brian Wade, Councilmember
Dan Rainey, Councilmember
Perry Schrag, Councilmember
Joel Marks, Deputy Mayor Pro Tem
Present
Present
Present
Present
Present
Present
Present
And with 7 councilmembers present a quorum was established and the following items were
addressed:
1.0 ROUTINE ANNOUNCEMENTS, RECOGNITIONS and PROCLAMATIONS
1.1 Call to Order
Mayor Boyer called the meeting to order at 6:30 p.m.
1.2 Invocation
Pastor James Walola with New Covenant Baptist Church delivered the invocation.
1.3 Pledge of Allegiance to the United States Flag
The Pledge of Allegiance to the United States Flag was recited.
1.4 Salute to the Texas Flag
Salute to the Texas Flag was recited.
1.5 Items of Community Interest
1.5.1 Receive presentation from Parks and Recreation regarding upcoming events and
activities.
Special Events Supervisor, Chloe Hancock, provided upcoming events and
activities to the Council.
2.0 CITIZEN INPUT
None
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City Council – Regular Meeting Agenda
March 5, 2025
Page| 2
3.0 WORK SESSION
3.1 Receive updates on public-private partnerships with Hawaiian Waters, Matthews
Southwest, and Marine Quest.
Community Services Director, Jackie Kopsa, provided an overview on this item to
Council.
Matthews Southwest (The Tribute Golf Course/Marina Park), Kristian Teleki,
Senior Vice President, provided a presentation.
EPR Holdings (Hawaiian Waters Waterpark), Kyle Taylor, General Manager, and
Holly Ng, Marketing & Customer Relations Manager, provided a presentation on
this item.
Justin Bosworth with MarineQuest (Hidden Cove Park), provided a presentation.
3.2 Council to provide direction to staff regarding future agenda items.
Mayor Boyer requested a future agenda item concerning short-term rentals for the
first meeting in April.
4.0 CONSENT AGENDA
Motion to approve all items from the Consent Agenda- Wade; second by Rainey, motion carried
with all ayes.
4.1 Consider approving City Council Regular Session meeting minutes from February
18, 2025.
4.2 Consider accepting the 2024 Police Department Traffic Stop Analysis Report.
4.3 Consider approving a resolution authorizing the City Manager to issue a purchase
order to Reliable Chevrolet in the amount of $50,397.00 to purchase a 2025
Chevrolet Tahoe patrol car for the traffic division.
RESOLUTION NO. 2025-033
4.4 Consider approving a resolution authorizing the City Manager to execute an
Engineering Services Contract in the amount of $120,000.00 with Freese and
Nichols, Inc. to prepare an update to the City Water Master Plan.
RESOLUTION NO. 2025-034
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City Council – Regular Meeting Agenda
March 5, 2025
Page| 3
4.5 Consider approving a resolution authorizing the City Manager to issue a purchase
order to Solid Lines in the amount of $69,408.80 for the replacement and repainting
of road markings including solid/skip lines as well as surface prep, stop bars,
chevrons, and traffic buttons
RESOLUTION NO. 2025-035
5.0 REGULAR AGENDA ITEMS
5.1 Discuss and consider all matters incident and related to the issuance and sale of
“City of The Colony, Texas, Combination Tax and Limited Surplus Revenue
Certificates of Obligation, Series 2025”, including the adoption of an ordinance
authorizing the issuance of such certificates of obligation.
Assistant City Manager, Tim Miller, introduced Jason Hughes, Managing Director
with Hilltop Securities to Council. Mr. Hughes provided an overview on the
proposed ordinance.
Motion to approve- Ensweiler; second by Wade, motion carried with all ayes.
ORDINANCE NO. 2025-2596
Executive Session was convened at 7:22 p.m.
6.0 EXECUTIVE SESSION
6.1 A. Council shall convene into a closed executive session pursuant to Sections
551.072 and 551.087 of the Texas Government Code to deliberate regarding
purchase, exchange, lease or value of real property and commercial or financial
information the city has received from a business prospect(s), and to deliberate the
offer of a financial or other incentive to a business prospect(s).
Regular Session was reconvened at 7:59 p.m.
7.0 EXECUTIVE SESSION ACTION
7.1 A. Any action as a result of executive session regarding purchase, exchange, lease
or value of real property and commercial or financial information the city has
received from a business prospect(s), and the offer of a financial or other incentive
to a business prospect(s).
Motion to approve a Performance Agreement between The Colony Economic Development
Corporation and Taurus Commercial, Inc. on the terms discussed in Executive Session- Wade;
second by Ensweiler, motion carried with all ayes.
12
City Council – Regular Meeting Agenda
March 5, 2025
Page| 4
ADJOURNMENT
With there being no further business to discuss, the meeting adjourned at 8:00 p.m.
APPROVED:
__________________________________
Richard Boyer, Mayor
City of The Colony, Texas
ATTEST:
_____________________________________
Tina Stewart, TRMC, CMC, City Secretary
13
Agenda Item No:4.2
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Expenditures
Agenda Section:
Subject:
Consider approving Council expenditures for September, October, November, December 2024 and January
2025. (Council)
Suggested Action:
Attachments:
Council September 2024 Expenditures.pdf
Council October 2024 Expenditures.pdf
Council November 2024 Expenditures.pdf
Council December 2024 Expenditures.pdf
Council January 2025 Expenditures.pdf
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Agenda Item No:5.1
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tim Miller
Submitting Department: Finance
Item Type: Presentation
Agenda Section:
Subject:
Receive presentation of the FY 2023-2024 City of The Colony Annual Comprehensive Financial Report (ACFR)
from Eide Bailly. (Miller)
Suggested Action:
The following is the 2023-2024 FY ACFR for the general government, enterprise, component unit funds as well
as the financial statements for The Colony Local Development Corporation and the single audit for federal grant
funds.
Attachments:
City of The Colony 2024 Final ACFR.cleaned.pdf
TCLDC 2024 Final Financial Statements.cleaned.pdf
City of The Colony 2024 Final Single Audit Report.cleaned.pdf
133
The Colony, Texas
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR 2023/2024
STEWART
CREEK
PARK
PUBLIC
SAFETY
HOTELS
It's A Golden Jubilee
Celebrating 50 years
GRANDSCAPE
SPORTS
DINING
Photo Credit: Roy F. Martin, Jr.
134
Annual Comprehensive Financial Report of the
City of The Colony, Texas
The Colony, Texas
For the Year Ended September 30, 2024
As Prepared by The Finance Department
135
City of The Colony, Texas
Table of Contents
September 30, 2024
INTRODUCTORY SECTION
Letter of Transmittal ............................................................................................................................................... i
GFOA Certificate of Excellence in Financial Reporting .......................................................................................... v
Executive Organizational Chart ............................................................................................................................. vi
City Staff ............................................................................................................................................................... vii
FINANCIAL SECTION
Independent Auditor’s Report ..................................................................................................................................................... 2
MANAGEMENT’S DISCUSSION AND ANALYSIS ...................................................................................................... 5
BASIC FINANCIAL STATEMENTS
Statement of Net Position (Exhibit A-1) ........................................................................................................... 15
Statement of Activities (Exhibit A-2) ................................................................................................................ 16
Balance Sheet – Governmental Funds (Exhibit A-3) ........................................................................................ 18
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position (Exhibit A-4) 19
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds (Exhibit A-5) 20
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental
Funds to the Statement of Activities (Exhibit A-6) ........................................................................................... 21
Statement of Net Position – Proprietary Funds (Exhibit A-7) .......................................................................... 22
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds (Exhibit A-8) ...... 24
Statement of Cash Flows – Proprietary Funds (Exhibit A-9) ............................................................................ 25
Statement of Net Position – Discretely Presented Component Units (Exhibit A-10) ...................................... 27
Statement of Activities – Discretely Presented Component Units (Exhibit A-11) ........................................... 28
Notes to Financial Statements ............................................................................................................................. 30
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule – General Fund (Exhibit B-1) ........................................................................... 63
Schedule of Changes in Net Pension Liability and Related Ratios – Texas Municipal Retirement System (Exhibit
B-2) ....................................................................................................................................................................... 64
Schedule of Employer Contributions – Texas Municipal Retirement System (Exhibit B-3) ................................. 65
Schedule of Changes in Total OPEB Liability and Related Ratios – Supplemental Death Benefits Plan (Exhibit B-
4) .......................................................................................................................................................................... 66
Notes to Required Supplementary Information .................................................................................................. 67
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES
Budgetary Comparison Schedule – Debt Service Fund (Exhibit C-1) ................................................................... 71
Non-Major Governmental Funds ......................................................................................................................... 72
Combining Balance Sheet – Nonmajor Governmental Funds (Exhibit C-2) ..................................................... 73
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental
Funds (Exhibit C-3) ........................................................................................................................................... 75
Budgetary Comparison Schedule – Lake Parks Fund (Exhibit C-4) .................................................................. 77
136
Budgetary Comparison Schedule – Special Events Fund (Exhibit C-5) ............................................................ 78
Budgetary Comparison Schedule – Hotel/Motel Taxes Fund (Exhibit C-6) ..................................................... 79
Budgetary Comparison Schedule – Child Safety Fund (Exhibit C-7) ................................................................ 80
Budgetary Comparison Schedule – Storm Water Utility Fund (Exhibit C-8) .................................................... 81
DISCRETELY PRESENTED COMPONENT UNITS
Combining Balance Sheet – Component Units (Exhibit F-1) ............................................................................ 83
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position – Component
Units (Exhibit F-2) ............................................................................................................................................. 84
Statement of Revenues, Expenditures, and Changes in Fund Balance – Component Units (Exhibit F-3) ....... 85
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental
Funds to the Statement of Activities – Component Units (Exhibit F-4) ........................................................... 86
STATISTICAL SECTION
Net Position by Component (Accrual Basis of Accounting) ................................................................................. 89
Changes in Net Position (Accrual Basis of Accounting)........................................................................................ 90
Fund Balances, Governmental Funds (Modified Accrual Basis of Accounting) ................................................... 92
Changes in Fund Balances, Governmental Funds (Modified Accrual Basis of Accounting) ................................. 93
Assessed Value and Estimated Actual Value of Taxable Property ....................................................................... 94
Direct and Overlapping Property Tax Rates ......................................................................................................... 95
Principal Tax Payers ............................................................................................................................................. 96
Ad Valorem Tax Levies and Collections ............................................................................................................... 97
Ratio of Outstanding Debt by Type ...................................................................................................................... 98
Ratio of General Bonded Debt Outstanding ........................................................................................................ 99
Legal Debt Margin Information .......................................................................................................................... 100
Direct and Overlapping Governmental Activities Debt ..................................................................................... 101
Pledged Revenue Coverage ............................................................................................................................... 102
Demographic and Economic Statistics ............................................................................................................... 103
Principal Employers ............................................................................................................................................ 104
Full-Time Equivalent City Government Employees by Function/Program ........................................................ 105
Operating Indicators by Function/Program ....................................................................................................... 106
Capital Asset Statistics by Function/Program .................................................................................................... 107
137
INTRODUCTORY SECTION
138
i
March 18th, 2025
The Honorable Mayor and Members of the City Council and Citizens of the
City of The Colony, Texas
The Finance Department of the City of The Colony is pleased to submit the Annual Comprehensive
Financial Report of the City of The Colony, Texas, for the fiscal year ended September 30, 2024.
This report is published to provide the City Council, Management Staff, our Citizens and other
interested parties with detailed information concerning the financial condition and performance of
the City Government. Responsibility for the accuracy and completeness of the presented data and the
fairness of the presentation, including all disclosures, rests with the City of The Colony.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal controls established for
this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective
is to provide reasonable, rather than absolute, assurance that the financial statements are free of any
material misstatements.
THE REPORT
The Financial Section includes the Management's Discussion and Analysis (MD&A) and basic
financial statements. This section also includes the auditor's report on the basic financial statements.
The MD&A provides narrative introduction, overview, and analysis. This letter of transmittal is
designed to complement the MD&A and should be read in conjunction with it. The Statistical Section
includes selected tables of comparative economic and financial data, generally presented on a multi-
year basis, as well as demographic and other pertinent miscellaneous and operational statistics.
Main item to note this year is a restatement of the beginning net position and fund balance as
described in the MD&A and Note 13 of the Notes to the Financial Statements.
The Financial Statements included in this report were prepared in accordance with accounting
principles generally accepted in the United States of America for local governments as prescribed by
the Governmental Accounting Standards Board (GASB), The National Council on Governmental
Accounting (NCGA), and the American Institute of Certified Public Accountants (AICPA). The
financial statements have been audited by the independent accounting firm of Certified Public
Accountants, Eide Bailly L.L.P., whose report is included herein.
139
POPULATION
The City's population has grown steadily since the early 2000's and is currently estimated at
55,000. Most recent residential growth is due to continued development at the Tribute (formerly
known as Wynnewood Peninsula) and Austin Ranch just south of SH121. The City's 2024 Ad
Valorem tax base increased from the prior year by a little over 3% to $7.275 billion.
Sales tax revenues in the General Fund decreased by $897,000 or 3.5% from the previous year
due to the overall muted growth from both consumer and business spending driving sectors as
spending continued to subside from the post pandemic inflationary surge. Sales tax revenues
represents approximately 19.9% of the City’s General Fund total income.
Water and sewer revenues in 2023-2024 increased by about $1.9 million to $29.4 million due
primarily to drier summer months resulting in more water usage.
Ad Valorem Tax Rate
Ad Valorem tax rate was reduced from $.6450 to $.6400 per $100 valuation for fiscal year 2023-
2024. Council's expectation is to continue to reduce the tax rate as additional revenues from growth
and increased property valuations permit.
Fund Balance - General Fund
Reserves in the General Fund decreased by $4.1 million from the prior fiscal year to
$37.1 million or 254 operating days. Council's goal is 90 days.
Fund Balance - Other Funds
All other fund reserves decreased by $13.9 million during the fiscal year to
$19.9 million due mainly to net change in fund balance of Capital Projects of ($19.4 million).
PROSPECT FOR THE FUTURE
The Colony's prospects for the future are promising and very optimistic. Most recent economic
drivers are:
The Nebraska Furniture Matt TIRZ was established November 2011 for a 433 acre $1.5 billion
Grandscape development. The Nebraska Furniture Mart store, the anchor store of the development,
opened in early March 2015. The site has remained viable and revenue producing even through the
pandemic and has seen numerous new stores open in the past year, to include, entertainment, dining,
and retail offerings on the site.
In June 2020, Scheels opened the largest sporting goods store in the World offering 85 specialty
shops. Numerous restaurants and a hotel have also located in the Zone. PopStroke, 151 Coffee,
Roam, Worldsprings and COSM opened this past year. On the north side of SH121, in The Colony
and across from Grandscape, Rooms To-Go, Mattress Firm, and Floor and Decor have opened. Other
new commercial development on the north side of SH121 in the City include Topgolf, numerous
hotels, a medical office building, couple of shopping centers, and several restaurants and other
businesses. Business activity has brought numerous jobs to the City. The Nebraska Furniture Mart
store itself employs around 1,800 people.
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The Tribute, the only remaining sizeable residential development in the City, continues to
increase the number of buildable lots. Housing permits have remained strong for the past couple of
years and are expected to do so for the next several years.
FINANCIAL MANAGEMENT
The Colony continues to evaluate operating activity to help ensure services are provided as
efficiently as possible. Service levels are reviewed in conjunction with revenues, expenses, and
reserves to help ensure the best possible use is made of available resources.
Long-term Financial Planning
The budget process provides a road map for short-term and long-term needs and aids in the
allocation of limited resources to prioritized services and needs. Each year a Capital Improvement
Program is developed which helps gauge future funding priorities and is the foundation on which
annual budgets are built. Revenues, expenses, and capital needs are projected for each of the five
following years to identify service needs and financing available. Staff helps Council with the
challenge of prioritizing and providing efficient and effective services to the community with current
and future available funds.
As a combined effort, the City Manager's Office, Finance Director, and all departments monitor
revenues and expenditures throughout the year. Appropriate actions are taken to control expenditures,
and to make adjustments when revenues fall short of expectations.
Relevant Financial Policies
The City has strong financial management policies that provide the basis for the City's financial
operations.
The City's goal is to always maintain at least 80 operating days in unassigned fund balance for
the general fund, and 60 operating days in water and sewer unrestricted net positions.
AWARDS
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of The
Colony; Texas, for its annual comprehensive financial report for the fiscal year ended September 30,
2023. (This was the 33rd consecutive year that The Colony has achieved this prestigious award.)
In order to be awarded a Certificate of Achievement, a government must publish an easily
readable and efficiently organized annual comprehensive financial report. This report must satisfy
both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
annual comprehensive financial report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
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In addition, the government also received the GFOA’s Distinguished Budget Presentation
Award for its annual budget document for the year beginning October 1, 2023. The City has received
the award annually since the budget year beginning on October 1, 1993. In order to qualify for the
Distinguished Budget Presentation Award, the government's budget document was judged to be
proficient in several categories, including as a policy document, a financial plan, an operation guide,
and a communications device.
ACKNOWLEDGEMENTS
The preparation of this report on a timely basis could not have been accomplished without the
efficient and dedicated services of the entire staff of the Finance Department. We would also like to
thank the Mayor and City Council for their interest and leadership in planning and conducting the
financial operations of the City of The Colony in a responsible and progressive manner.
Respectfully submitted,
Troy Powell, City Manager Tim Miller, Assistant City Manager
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of The Colony
Texas
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
September 30, 2023
Executive Director/CEO
v 143
Staff Organization Citizens of The ColonyCity
Council
Municipal
Court Judge
City Secretary
City Attorney
Boards/
Commissions
City Manager
Assistant City
Manager
Deputy City Manager
Information Technology
Director
Community Services
Director
CVB Director
Court Administration
Director
Facilities Director
Communications Director
Finance Director
Engineering Director
Customer Service Director
Public Works Director
Deputy City Manager
Community Image Director
Planning Director
Police Chief
Fire Chief
Executive Business Liaison
Outside Agenices
Human Resources
Director
Security Advisor
Library Director
Animal Services
Director
Economic
Development Director
vi 144
City Staff
City Manager’s Office Troy Powell, City Manager
City Manager’s Office Tim Miller, Assistant City Manager
City Manager’s Office Joe Perez, Deputy City Manager
City Manager’s Office Brant Shallenburger, Deputy City Manager
City Secretary’s Office Tina Stewart, City Secretary
Information Technology Chris Cuellar, Director
Human Resources Rodney Wallican, Director
Finance Latonjia Williams, Director
Public Services James Whitt, Director
Engineering Ron Hartline, Director
Fire Scott Thompson, Chief
Police Phillip Foxall, Chief
Municipal Court Jacob Wetzel, Director
Parks and Recreation/ Jackie Kopsa, Director of Community Services
Community Development
Economic Development Keri Samford, Director
Library Megan Charters, Director
Utility Administration/ Molly Owczar, Director
Customer Services
vii 145
1
FINANCIAL SECTION
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What inspires you, inspires us. | eidebailly.com
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2
Independent Auditor’s Report
To the Mayor and
Members of the City Council
City of The Colony, Texas
The Colony, Texas
Report on the Audit of the Financial Statements
Opinions
We have audited 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 The Colony, Texas (the City) as of and for the year ended September 30, 2024, and the related notes
to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of
contents.
In our opinion, the accompanying 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 of The
Colony, Texas, as of September 30, 2024, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
(GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section
of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in
accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Correction of Error
As discussed in Note 13 to the financial statements, certain errors resulting in an understatement of amounts
previously reported for capital assets and long-term liabilities, and an overstatement of accounts payable and
prepaid assets as of September 30, 2024 were discovered by management of the City during the current year.
Accordingly, a restatement has been made to the fund balance of the Capital Projects Fund and the Water and
Sewer Enterprise Fund, the aggregate discretely presented component units, governmental activities and business-
type activities net position as of October 1, 2023 to correct the error. Our opinions are not modified with respect
to that matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance
with accounting principles generally accepted in the United States of America, and for the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that
are free from material misstatement, whether due to fraud or error.
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3
In preparing the financial statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for
twelve months beyond the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a
guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a
reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, and design and perform audit procedures responsive to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that
raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of
time.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that
we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, Budgetary Comparison Schedule – General Fund, Schedule of Changes in Net Pension
Liability and Related Ratios – Texas Municipal Retirement System, Schedule of Employer Contributions – Texas
Municipal Retirement System, Schedule of Changes in Total OPEB Liability and Related Ratios – Supplemental
Death Benefits Plan be presented to supplement the basic financial statements. Such information is the
responsibility of management and, 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 GAAS, 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.
148
4
Supplementary 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 combining and individual nonmajor fund financial statements
and schedules 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. Such information is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to prepare the basic
financial statements. The 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 statements themselves, and other additional procedures in accordance with GAAS. In our opinion,
the combining and individual nonmajor fund financial statements and schedules are fairly stated, in all material
respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information
comprises the introductory and statistical sections but does not include the basic financial statements and our
auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and
we do not express an opinion or any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and
consider whether a material inconsistency exists between the other information and the basic financial
statements, or the other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information exists, we are
required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12, 2025 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.
Abilene, Texas
March 12, 2025
149
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
5
The City of The Colony (the City) is providing this narrative overview and analysis of its financial activities for the fiscal year
ended September 30, 2024. This Management’s Discussion and Analysis (MD&A) provides additional information that was not
contained in the Letter of Transmittal. Readers are advised to read both to gain understanding of the financial picture of the
City. This discussion and analysis includes prior year data for comparison purposes.
Financial Highlights
□ The City’s total assets and deferred outflows of resources exceeded the City’s total liabilities and deferred inflows
of resources at the close of the fiscal year by $390,559,342. Of this amount $49,535,191 (unrestricted net
position) may be used to meet the government’s ongoing obligations to citizens and creditors.
□ The government’s total net position increased by $13,912,363 which was primarily due to an increase of business-
type activity operations.
□ At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$57,084,818, a decrease of $18,074,993. The general fund reported a decrease in fund balance of $4,126,524.
The capital projects fund had a decrease in fund balance of $19,428,302 primarily due to an increase in capital
outlay. Out of the $57,084,818 of fund balances in the governmental funds, $35,930,912 is available for spending at
the government’s discretion (unassigned fund balance).
□ At the end of the current fiscal year, unassigned fund balance for the general fund was $35,930,912 or 67%
total general fund expenditures.
□ During the current fiscal year, the City determined that reported amounts in the prior fiscal year financial
statements were not accurate, resulting in a restatement of the beginning fund balance of the Capital Projects
Fund and the Water and Sewer Enterprise Fund, component units, governmental activities and business-type
activities net position. The City identified certain accounts payable that had been recorded for a number of years
without clearing. Accordingly, accounts payable was overstated by $136,798 in the Capital Projects Fund.
Additionally, the City identified discrepancies between its fixed asset subledger and the financial statements,
including a financed purchase that had been entered into the 2023 fiscal year that was not recorded. Accordingly,
governmental activities capital assets was understated by $9,565,179, business-type activities capital assets were
understated by $22,983, and governmental activities long-term obligations were understated by $6,240,484.
Lastly, the City identified that prepaid insurance recorded upon issuance of the 2013 revenue bonds at TCLDC had
not been been amortized. Accordingly, prepaid assets was overstated by $926,361. For additional information, see
Note 13 of the Notes to the Financial Statements section of the Basic Financial Statements section of this report.
Overview of the Financial Statements
The MD&A serves as an introduction to the City’s basic financial statements. The City’s basic financial statements comprise
three components:
1. Government-wide financial statements
2. Fund financial statements
3. Notes to the financial statements
The report also contains other supplementary information in addition to the basic financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in
a manner similar to a private-sector business.
150
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
6
The statement of net position presents information on all of the City’s assets and deferred outflows of resources and
liabilities and deferred inflows of resources, with the difference as net position. Over time, increases or decreases in net
position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal
year. All changes in net position are reported as incurred regardless of when cash is received or paid. Thus, revenues and
expenses are reported on accrual basis even though cash flows occur in future fiscal periods (e.g., uncollected taxes and
earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes
and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business- type activities). The governmental activities of the
City include general government, public safety, streets, sanitation, and culture and recreation. The business-type activities of
the City include water and sewerage operation.
The government-wide financial statements include not only the City itself (known as the primary government), but also a
legally separate economic development corporation, legally separate community development corporation, and a legally
separate local development corporation, for which the City of The Colony is financially accountable. Financial information for
these component units is reported separately from the financial information presented for the primary government itself.
In the Statement of Net Position and the Statement of Activities, the City is divided into three kinds of activities:
□ Governmental Activities – Most of the City’s basic services are reported as governmental activities, including the
general government, public safety, municipal court, public works, culture and recreation, planning and zoning,
public improvements, and code enforcement. Taxes and intergovernmental revenues principally support these
services.
□ Business-type Activities – Functions that are intended to recover all or a significant portion of their costs through user
fees and charges are considered business-type activities. The business-type activities of the City include Water and
Sewer Utility.
□ Component Units – The City includes three separate legal entities, The Colony Economic Development
Corporation, The Colony Community Development Corporation, and The Colony Local Development Corporation in
its report. Although they are legally separate, they are included as component units because the City is accountable
for them. Financial information for these component units is reported separately from the financial information
presented for the primary government.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for
specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements.
All of the funds of the City can be divided into two categories:
1. Governmental funds – Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike the government-wide
financial statements, governmental fund financial statements focus on near-term inflows and outflows of
spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such
information may be useful in evaluating a government’s near-term financing requirements.
151
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
7
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains 18 individual governmental funds. Information is presented separately in the governmental
funds balance sheet and in the governmental funds statement of revenues, expenditures, and changes in fund
balances for the General Fund, the Debt Service Fund, the Capital Projects Fund, and the Pandemic Response Fund
all of which are considered to be major funds. Non-major governmental funds are aggregated in total.
The City adopts annual appropriated budgets for its General Fund, Debt Service Fund, Lake Parks Fund, Special
Events Fund, Hotel/Motel Taxes Fund, Child Safety Fund, and Storm Water Utility Fund. The budgetary comparison
schedules have been provided for these funds to demonstrate compliance with the budgets.
2. Proprietary funds – Enterprise funds are used to report the same functions presented as business-type activities in
the government-wide financial statements. The City uses enterprise funds to account for its water and sewer
operation. Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail. The water and sewer utility fund is considered to be a major fund of the City.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the government-
wide and fund financial statements.
Other information
In addition to the basic financial statements and accompanying notes, this report also presents certain required
supplementary information concerning the City. This MD&A is part of the required supplementary information.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. As of the close
of the current fiscal year, the City’s net position totaled $390,559,342.
The largest portion of the City’s net position (82.1%) reflects its investment in capital assets (e.g., land, buildings,
machinery, and equipment); less any related debt used to acquire those assets that is still outstanding. The City uses these
capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the
City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay
this debt must be provided from other sources, since the capital assets themselves cannot generate revenues to liquidate
these liabilities.
152
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
8
An additional portion of the City’s net position (5.2%) represents resources that are subject to external restrictions on how
they may be used (primarily for debt service and infrastructure improvements). The remaining balance of net position
($49,535,191) may be used to meet the government’s ongoing obligations to citizens and creditors.
2024 2023 2024 2023 2024 2023
(as restated) (as restated) (as restated)
ASSETS
Current and other assets 82,467,371$ 100,624,146$ 33,942,522$ 27,492,389$ 116,409,893$ 128,116,535$
Capital assets 282,712,180 260,765,814 155,447,395 155,503,783 438,159,575 416,269,597
Total assets 365,179,551 361,389,960 189,389,917 182,996,172 554,569,468 544,386,132
Deferred outflows of resources
Deferred charge on refunding 80,058 124,043 162,437 280,149 242,495 404,192
Deferred outflows - pension 6,847,677 10,501,653 1,099,750 1,399,586 7,947,427 11,901,239
Deferred outflows - OPEB 175,229 233,950 28,143 31,902 203,372 265,852
Total deferred outflows of resources 7,102,964 10,859,646 1,290,330 1,711,637 8,393,294 12,571,283
LIABILITIES
Long-term liabilities 86,499,066 91,087,568 57,332,045 63,777,422 143,831,111 154,864,990
Other liabilities 19,755,844 19,841,491 2,705,141 2,903,526 22,460,985 22,745,017
Total liabilities 106,254,910 110,929,059 60,037,186 66,680,948 166,292,096 177,610,007
Deferred inflows of resources
Deferred inflows - lease related 5,432,587 5,676,579 - - 5,432,587 5,676,579
Deferred inflows - pension 236,607 - 37,999 - 274,606 -
Deferred inflows - OPEB 348,209 447,327 55,922 60,999 404,131 508,326
Total deferred inflows of resources 6,017,403 6,123,906 93,921 60,999 6,111,324 6,184,905
NET POSITION
Net investment in capital assets 211,834,115 205,888,249 108,929,168 105,513,597 320,763,283 311,401,846
Restricted 17,695,407 23,818,322 2,565,461 952,104 20,260,868 24,770,426
Unrestricted 30,480,680 28,951,563 19,054,511 11,523,144 49,535,191 40,474,707
Total net position 260,010,202$ 258,658,134$ 130,549,140$ 117,988,845$ 390,559,342$ 376,646,979$
Governmental Activities Business-Type Activities Total
At the end of the current fiscal year, the City has positive balances in all three categories of net position, for the
government as a whole, as well as for its separate governmental and business-type activities.
153
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
9
2024 2023 2024 2023 2024 2023
REVENUES (as restated) (as restated) (as restated)
Program revenues
Charges for services 8,219,593$ 8,474,524 29,399,479$ 27,426,435 37,619,072$ 35,900,959$
Operating grants and contributions 745,364 894,411 - - 745,364 894,411
Capital grants and contributions 11,841,212 14,545,732 6,954,214 1,025,239 18,795,426 15,570,971
General revenues
Property taxes 34,615,211 38,027,152 - - 34,615,211 38,027,152
Sales taxes 9,990,559 11,812,142 - - 9,990,559 11,812,142
Franchise taxes 5,159,631 2,911,718 - - 5,159,631 2,911,718
Hotel occupancy tax 2,538,159 2,356,975 - - 2,538,159 2,356,975
Vehicle tax 925,917 - - 925,917 -
Investment income 4,504,997 4,202,359 1,740,533 1,183,203 6,245,530 5,385,562
Other income 3,356,911 5,819,039 - 306,118 3,356,911 6,125,157
Total revenues 81,897,554 89,044,052 38,094,226 29,940,995 119,991,780 118,985,047
EXPENSES
General government 18,523,136 14,176,393 - - 18,523,136 14,176,393
Public safety 33,148,673 31,659,259 - - 33,148,673 31,659,259
Public works 14,521,855 11,679,662 - - 14,521,855 11,679,662
Culture and recreation 8,504,034 7,786,848 - - 8,504,034 7,786,848
Interest on long-term debt 1,447,788 1,733,621 - - 1,447,788 1,733,621
Water and sewer - - 29,933,931 27,072,765 29,933,931 27,072,765
Total expenses 76,145,486 67,035,783 29,933,931 27,072,765 106,079,417 94,108,548
Increase in net position before transfers 5,752,068 22,008,269 8,160,295 2,868,230 13,912,363 24,876,499
Net transfers (4,400,000) (100,000) 4,400,000 100,000 - -
Change in net position 1,352,068 21,908,269 12,560,295 2,968,230 13,912,363 24,876,499
Net position, beginning, as previously reported 255,196,641 234,333,051 117,965,862 114,997,632 373,162,503 349,330,683
Prior period adjustment 3,461,493 2,416,814 22,983 22,983 3,484,476 2,439,797
Net position, beginning, as restated 258,658,134 236,749,865 117,988,845 115,020,615 376,646,979 351,770,480
Net position, ending 260,010,202$ 258,658,134$ 130,549,140$ 117,988,845$ 390,559,342$ 376,646,979$
Governmental Activities Business-Type Activities Total
The City’s net position increased by $13,912,363. Total assets increased by $10,183,336. Capital assets increased by
$21,889,978, while current and other assets decreased by $11,706,642.
154
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
10
Governmental Activities - Governmental activities increased the City’s net position by $1,352,068 compared to prior year
primarily due to investment income being greater than budgeted.
Business-type Activities - Business-type activities increased the City’s net position by $12,560,295. The overall increase in
net position is primarily due to operating revenues.
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
GENERAL GOVERNMENT PUBLIC SAFETY PUBLIC WORKS CULTURE AND RECREATION
EXPENSE AND PROGRAM REVENUE - GOVERNMENTAL ACTIVITIES
Expenses Program Revenue
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
WATER AND SEWER
EXPENSE AND PROGRAM REVENUE - BUSINESS TYPE ACTIVITIES
Expenses Program Revenue
155
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
11
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance- related legal
requirements.
Governmental funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In
particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending
at the end of the fiscal year.
At the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of
$57,084,818 a decrease of $18,074,993 in comparison with the prior year. Approximately 62.9% of this total amount
($35,930,912) constitutes unassigned fund balance, which is available for spending at the City’s discretion. The remainder
of fund balance is not available for new spending because it has already been committed, restricted, or is nonspendable for:
Nonspendable fund balance consisted of $339,064 for inventories and prepaid items.
Restricted fund balance consisted of $920,680 for TIRZ, $72 restricted for Pandemic Response, $7,124,759 restricted for
debt service, $809,584 restricted for capital projects, $3,868,961 restricted for hotel/motel taxes, $26,787 restricted for
police forfeited fund, $12,935 restricted for federal seized fund, $97,499 restricted for child safety fund, $3,464,731
restricted for storm water utility, $337,732 restricted for court security, $35,593 restricted for court technology, $10,894
restricted for citizens donations, $855,250 restricted for PID No. 1, $157,590 restricted for Trinity North Medical, and
$218,118 restricted for juvenile case.
Charges for Services
77%
Investment Income
5%
Grants and
Contributions
18%
REVENUE BY SOURCE - BUSINESS TYPE ACTIVITIES
156
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
12
Committed balance consisted of $2,759,290 committed for Lake Parks, $100,441 committed for special events, and $13,926
committed for Keep the Colony Beautiful.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the
General Fund was $35,930,912. As a measure of the General Fund’s liquidity, it may be useful to compare unassigned fund
balance to total fund expenditures. Unassigned fund balance represents 67.11% of total general fund expenditures
(excluding transfers to other funds).
The fund balance of the City’s General Fund decreased by $4,126,524 during the current fiscal year due to an excess of
expenditures over revenue.
The Debt Service Fund has a total fund balance of $7,124,759, all of which is restricted for the payment of debt service. The
increase in fund balance during the current year in the Debt Service Fund was $1,530,933. The City has a dedicated
property tax for general debt service. The property tax produced debt service fund revenues of $8,689,061, in the current
fiscal year while debt service payments for principal and interest on debt were $7,158,128.
The Capital Projects Fund has a total fund balance of $809,584, with the fund balance restricted for future expenditures of
currently-approved capital items. The $19,428,302 decrease in fund balance during the year was attributable an increase in
capital outlay.
The Pandemic Response Fund has a total fund balance of $72, which is restricted grant funding. There was no change in the
fund balance during the year.
Proprietary funds. The City’s proprietary funds provide the same type of information found in the governmental-wide
financial statements, but in more detail. Operating revenues in the water and sewer fund totaled $29,399,479, an increase
of $1,973,044 from the prior year due to an increase in water consumption. Operating expenses totaled $28,070,602, an
increase of $3,072,298 driven by an increase in maintenance costs.
General Fund Budgetary Highlights
During the year, there was a slight increase in appropriations of $605,929 between the original and final budget. Overall,
revenues had a $1,862,947 positive variance primarily due to receiving more investment income due to the effects of higher
interest rates during fiscal year. There was an unfavorable variance of $163,633 between final budget and actual
expenditures which was primarily due to budget overages in capital outlay.
157
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
13
Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets for its governmental and business-type activities as of September 30,
2024, amounts to $438,159,575 (net of accumulated depreciation and amortization). This investment in capital assets
includes land, buildings and system, water and sewer system infrastructure improvements, machinery and equipment, park
facilities, roads and right of use assets. The City’s total depreciation/amortization expense for its governmental activities
amounts to $14,535,687 and business-type activities $7,169,354.
Capital Assets
(Net of Depreciation and Amortization)
2024 2023 2024 2023 2024 2023
(as restated) (as restated) (as restated)
Land 7,999,486$ 7,995,486$ 3,273,473$ 3,273,473$ 11,272,959$ 11,268,959$
Rights-of-way 25,571,036 25,571,036 - - 25,571,036 25,571,036
Construction in progress 34,465,849 17,894,691 5,937,663 3,665,293 40,403,512 21,559,984
Buildings 30,420,494 31,729,151 12,119,669 12,400,153 42,540,163 44,129,304
Improvements other than buildings 10,243,341 10,483,558 - - 10,243,341 10,483,558
Swimming pool 411,130 475,701 - - 411,130 475,701
Water system - - 61,180,214 61,741,216 61,180,214 61,741,216
Sanitary system - - 64,912,344 65,961,819 64,912,344 65,961,819
Drainage system - - 25,696 67,805 25,696 67,805
Machinery and equipment 7,861,887 7,565,959 1,725,410 1,580,369 9,587,297 9,146,328
Infrastructure 164,620,580 167,497,296 6,272,926 6,758,518 170,893,506 174,255,814
Right to use leased assets 905,953 852,827 - - 905,953 852,827
Right to use SBITA assets 212,424 265,288 - - 212,424 265,288
282,712,180$ 270,330,993$ 155,447,395$ 155,448,646$ 438,159,575$ 425,779,639$
Additional information on the City’s capital assets can be found in note 6 to the financial statements.
Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of
$106,420,000. The entire amount represents debt backed by the full faith and credit of the City. The City also had leases
payable of $828,236, subscription payables of $209,568, and financed purchase liabilities of $5,574,372 at fiscal year-end.
Additional information on the City’s long-term debt can be found in the note 6 to the financial statements.
The City’s general and revenue obligations maintain an AA+ rating, respectively from Standard & Poor’s and an Aa2 rating
respectively from Moody’s Investors Service. The high rating speaks well of the City’s proactive approach to economic
development and financial management.
The revenue supported debt in the Water and Sewer Fund is limited to the net revenues equal to at least 1.10 times the
maximum annual principal and interest requirements and 1.25 times the average annual principal and interest requirements
of all parity bonds to be outstanding.
158
CITY OF THE COLONY, TEXAS
MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED SEPTEMBER 30, 2024
14
Economic Factors and Next Year’s Budgets and Rates
□ Total current Ad Valorem Taxes budget for fiscal year 2024-2025 are approximately $46 million which
is a 3% increase from the prior year.
□ Total sales tax is projected to remain strong due to continued economic growth from commercial
Construction.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances. Questions concerning any of the
information provided in this report or requests for additional financial information should be addressed to the Finance
Director, The City of The Colony, 6053 Main Street, The Colony, Texas 75056.
159
The accompanying notes are an integral part of these financial statements. 15
City of The Colony, Texas
Statement of Net Position (Exhibit A-1)
September 30, 2024
Governmental Business-Type
Activitites Activities Total Component Units
Assets
Cash and investments 70,170,468$ 18,835,972$ 89,006,440$ 38,343,929$
Receivables (net of allowance) 11,957,839 3,385,542 15,343,381 3,953,114
Inventories 171,965 77,016 248,981 -
Prepaid items 167,099 1,236 168,335 2,534,231
Restricted:
Cash and investments - 11,642,756 11,642,756 28,857,772
Capital assets:
Non-depreciable 68,036,371 9,211,136 77,247,507 29,414,783
Depreciable (net) 213,557,432 146,236,259 359,793,691 148,924
Right-to-use assets (net) 1,118,377 - 1,118,377 -
Total assets 365,179,551 189,389,917 554,569,468 103,252,753
Deferred Outflows of Resources
Deferred charge on refunding 80,058 162,437 242,495 304,308
Deferred outflows - pension 6,847,677 1,099,750 7,947,427 108,265
Deferred outflows - OPEB 175,229 28,143 203,372 2,770
Total deferred outflows of resources 7,102,964 1,290,330 8,393,294 415,343
Liabilities
Accounts payable 6,094,895 1,135,058 7,229,953 45,646
Accrued liabilities 586,212 - 586,212 2,418,317
Accrued interest payable 281,833 - 281,833 5,158,288
Retainage payable 438,684 - 438,684 -
Customer meter deposits - - - -
Other liabilities 2,216,324 - 2,216,324 -
Unearned revenues 10,137,896 - 10,137,896 -
Payable from restricted assets:
Accounts payable and accrued liabilities - 444,006 444,006 -
Accrued interest payable - 253,413 253,413 -
Customer meter deposits - 872,664 872,664 -
Noncurrent liabilities
Due within one year 9,964,863 5,124,909 15,089,772 4,951,612
Due in more than one year 76,534,203 52,207,136 128,741,339 183,585,192
Total liabilities 106,254,910 60,037,186 166,292,096 196,159,055
Deferred Inflows of Resources
Deferred inflows - lease related 5,432,587 - 5,432,587 -
Deferred inflows - pension 236,607 37,999 274,606 3,741
Deferred inflows - OPEB 348,209 55,922 404,131 5,505
Total deferred inflows of resources 6,017,403 93,921 6,111,324 9,246
Net Position
Net investment in capital assets 211,834,115 108,929,168 320,763,283 (477,413)
Restricted for capital projects 809,584 2,565,461 3,375,045 -
Restricted for specific programs 10,006,842 - 10,006,842 -
Restricted for debt service 6,878,981 - 6,878,981 -
Unrestricted 30,480,680 19,054,511 49,535,191 (92,022,792)
Total net position 260,010,202$ 130,549,140$ 390,559,342$ (92,500,205)$
Primary Government
160
The accompanying notes are an integral part of these financial statements. 16
City of The Colony, Texas
Statement of Activities (Exhibit A-2)
Year Ended September 30, 2024
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Primary Government
Governmental activities
General government 18,523,136$ 3,558,535$ 745,364$ 2,042,307$
Public safety 33,148,673 866,841 - -
Public works 14,521,855 3,350,243 - 9,798,905
Culture and recreation 8,504,034 443,974 - -
Interest on
long-term debt 1,447,788 - - -
Total governmental
activities 76,145,486 8,219,593 745,364 11,841,212
Business-type activities
Water and sewer 29,933,931 29,399,479 - 6,954,214
Total business-type
activities 29,933,931 29,399,479 - 6,954,214
Total primary
government 106,079,417 37,619,072 745,364 18,795,426
Component units
The Colony Economic
Development Corporation 6,697,934 - - -
The Colony Community
Development Corporation 8,895,437 - - -
The Colony Local
Development Corporation 6,531,254 - 1,522,060 -
Total component units 22,124,625$ -$ 1,522,060$ -$
General Revenues
Taxes
Property taxes
Sales taxes
Franchise taxes
Hotel occupancy tax
Vehicle tax
Investment income (loss)
Other income
Transfers
Total general revenues and transfers
Change in net position
Net position, beginning, as previously reported
Prior period adjustment (Note 13)
Net position, beginning, as restated
Net position, ending
Program Revenue
161
The accompanying notes are an integral part of these financial statements. 17
City of The Colony, Texas
Statement of Activities (Exhibit A-2) - continued
Year Ended September 30, 2024
Governmental
Activities
Business-type
Activities Total
Component
Units
(12,176,930)$ -$ (12,176,930)$
(32,281,832) - (32,281,832)
(1,372,707) - (1,372,707)
(8,060,060) - (8,060,060)
(1,447,788) - (1,447,788)
(55,339,317) - (55,339,317)
- 6,419,762 6,419,762
- 6,419,762 6,419,762
(55,339,317) 6,419,762 (48,919,555)
(6,697,934)
(8,895,437)
(5,009,194)
(20,602,565)
34,615,211 - 34,615,211 -
9,990,559 - 9,990,559 29,283,853
5,159,631 - 5,159,631 -
2,538,159 - 2,538,159 -
925,917 - 925,917 -
4,504,997 1,740,533 6,245,530 2,496,707
3,356,911 - 3,356,911 1,760
(4,400,000) 4,400,000 - -
56,691,385 6,140,533 62,831,918 31,782,320
1,352,068 12,560,295 13,912,363 11,179,755
255,196,641 117,965,862 373,162,503 (102,753,599)
3,461,493 22,983 3,484,476 (926,361)
258,658,134 117,988,845 376,646,979 (103,679,960)
260,010,202$ 130,549,140$ 390,559,342$ (92,500,205)$
Net (Expense) Revenue and Changes in Net Position
Primary Government
162
The accompanying notes are an integral part of these financial statements. 18
City of The Colony, Texas
Balance Sheet – Governmental Funds (Exhibit A-3)
September 30, 2024
Other Total
Pandemic Debt Capital Governmental Governmental
General Response Service Projects Funds Funds
Assets
Cash and investments 36,183,397$ 10,137,968$ 7,116,481$ 4,763,946$ 11,968,676$ 70,170,468$
Receivables (net of allowance)
Property taxes 412,931 - 44,787 - - 457,718
Sales taxes 3,953,114 - - - - 3,953,114
Hotel/motel taxes - - - - 263,000 263,000
Franchise taxes 461,814 - - - - 461,814
Service accounts 285,034 - - - - 285,034
Leases 4,180,934 - - - 1,476,339 5,657,273
Miscellaneous 799,826 - - - 80,060 879,886
Due from other funds 13,102 - - - - 13,102
Inventories 171,965 - - - - 171,965
Prepaid items 166,283 - - - 816 167,099
Total assets 46,628,400$ 10,137,968$ 7,161,268$ 4,763,946$ 13,788,891$ 82,480,473$
Liabilities
Accounts payable 2,189,155$ -$ 454$ 3,515,678$ 389,608$ 6,094,895$
Accrued salaries 577,230 - - - 8,982 586,212
Retainage payable - - - 438,684 - 438,684
Other liabilities 2,198,377 - - - 17,947 2,216,324
Due to other funds - - - - 13,102 13,102
Unearned revenue - 10,137,896 - - - 10,137,896
Total liabilities 4,964,762 10,137,896 454 3,954,362 429,639 19,487,113
Deferred Inflows of Resources
Leases 4,033,898 - - - 1,398,689 5,432,587
Unavailable property taxes 377,152 - 36,055 - - 413,207
Unavailable revenue 62,748 - - - - 62,748
Total deferred inflows
of resources 4,473,798 - 36,055 - 1,398,689 5,908,542
Fund Balances
Nonspendable 338,248 - - - 816 339,064
Restricted 920,680 72 7,124,759 809,584 9,086,090 17,941,185
Committed - - - - 2,873,657 2,873,657
Unassigned 35,930,912 - - - - 35,930,912
Total fund balances 37,189,840 72 7,124,759 809,584 11,960,563 57,084,818
Total liabilites,
deferred inflows of
resources, and
fund balances 46,628,400$ 10,137,968$ 7,161,268$ 4,763,946$ 13,788,891$ 82,480,473$
163
The accompanying notes are an integral part of these financial statements. 19
City of The Colony, Texas
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position (Exhibit A-4)
September 30, 2024
Total Fund Balances - Governmental Funds 57,084,818$
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not current financial resources and
therefore are not reported in the governmental funds balance sheet. 282,712,180
Long-term liabilities are not due and payable in the current period and therefore are not
reported in the governmental funds. As a result, these liabilities decrease net position:
Leases payable (828,236)
SBITAs payable (209,568)
Bonds payable (55,956,660)
Financed purchases payable (5,574,372)
Unamortized premium on issuance of debt (4,434,925)
Accrued compensated absences (4,623,411)
Deferred charge on bond refunding is not included in the governmental funds but is
deferred and amortized in the government wide statements. 80,058
Payables for bond interest which are not due in the current period are not reported in
the fund financial statements but are included in the statement of net position.
This results in a decrease in net position. (281,833)
Included in liabilities is the recognition of the City's net pension liability in the
amount of $13,999,708, a deferred inflow of resources of $236,607 and a deferred
outflow of resources of $6,847,677. This results in a decrease in net position. (7,388,638)
Included in liabilities is the recognition of the City's total OPEB liability in the
amount of $872,186, a deferred inflow of resources of $348,209, and a deferred
outflow of resources of $175,229. This results in a decrease in net position. (1,045,166)
Other adjustments are necessary to convert from the modified accrual basis of
accounting to the accrual basis of accounting. Net property taxes receivable of
$413,207 and net fines, fees and court costs receivable of $62,748
were unavailable to pay for the current period expenditures and are deferred inflows
in the governmental funds but are recognized as revenue in the government wide
statements. This results in an increase in net position. 475,955
Net Position of Governmental Activities 260,010,202$
164
The accompanying notes are an integral part of these financial statements. 20
City of The Colony, Texas
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds (Exhibit A-5)
Year Ended September 30, 2024
Other Total
Pandemic Debt Capital Governmental Governmental
General Response Service Projects Funds Funds
Revenues
Taxes
Property 26,525,113$ -$ 8,053,759$ -$ -$ 34,578,872$
Sales 9,990,559 - - - - 9,990,559
Mixed beverage tax 925,917 - - - - 925,917
Hotel occupancy tax - - - - 2,538,159 2,538,159
Franchise 5,159,631 - - - - 5,159,631
Licenses and permits 1,909,454 - - 62,965 1,759,050 3,731,469
Fines and forfeitures 826,086 - - - 82,565 908,651
Charges for services 2,162,854 - - - 1,337,421 3,500,275
Gifts and contributions - - - 58,013 247 58,260
Intergovernmental 745,364 - - 4,510,823 - 5,256,187
Grants 694,343 894,976 - 400,000 52,988 2,042,307
Investment income 3,725,189 - 635,302 - 144,506 4,504,997
Miscellaneous income 1,931,515 - - 777,469 647,927 3,356,911
Total revenues 54,596,025 894,976 8,689,061 5,809,270 6,562,863 76,552,195
Expenditures
Current
General government 11,053,749 - - - 1,135,080 12,188,829
Culture and recreation 5,142,564 - - - 2,320,547 7,463,111
Public works 4,347,408 - - 8,168,415 8,923 12,524,746
Public safety 31,710,033 - - - 127,973 31,838,006
Capital outlay 780,639 894,976 - 16,340,641 48,698 18,064,954
Debt service
Principal 470,149 - 4,792,498 666,111 16,177 5,944,935
Interest 32,545 - 2,365,630 62,405 565 2,461,145
Total expenditures 53,537,087 894,976 7,158,128 25,237,572 3,657,963 90,485,726
Excess (Deficiency) of Revenues
over (under) Expenditures 1,058,938 - 1,530,933 (19,428,302) 2,904,900 (13,933,531)
Other Financing Sources (Uses)
Lease proceeds 205,487 - - - - 205,487
Subscription IT proceeds 53,051 - - - - 53,051
Transfers out (5,444,000) - - - (410,000) (5,854,000)
Transfers in - - - - 1,454,000 1,454,000
Total other financing sources (uses) (5,185,462) - - - 1,044,000 (4,141,462)
Net Change in Fund Balance (4,126,524) - 1,530,933 (19,428,302) 3,948,900 (18,074,993)
Fund balance, beginning, as previously reported 41,316,364 72 5,593,826 20,101,088 8,011,663 75,023,013
Prior period adjustment (Note 13) - - - 136,798 - 136,798
Fund balance, beginning, as restated 41,316,364 72 5,593,826 20,237,886 8,011,663 75,159,811
Fund balance, ending 37,189,840$ 72$ 7,124,759$ 809,584$ 11,960,563$ 57,084,818$
165
The accompanying notes are an integral part of these financial statements. 21
City of The Colony, Texas
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental
Funds to the Statement of Activities (Exhibit A-6)
Year Ended September 30, 2024
Net Change in Fund Balances - Total Governmental Funds (18,074,993)$
Amounts reported for governmental activities in the statement of activities are different because:
Current year capital outlays are expenditures in the fund financial statements, but they
are shown as increases in capital assets in the government-wide financial statements. 21,634,154
Developer contributions increase capital assets in the government-wide financial statements. 5,288,082
The net book value of capital assets disposed reduces net position. (5,362)
Depreciation and amortization are not recognized as an expenditure in governmental funds
since it does not require the use of current financial resources. (14,535,687)
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of principal of long-term debt consumes the current financial
resources of governmental funds. Neither transaction, however, has any effect on net
position.
Issuance of leases (205,487)
Issuance of SBITAs (53,051)
Bond principal repayments 4,684,237
Lease principal repayment 237,054
SBITA principal repayment 117,340
Notes payable principal repayment 906,304
Amortization of bond premium 1,003,560
Amortization of deferred gain on bond refunding (43,985)
6,645,972
Changes in long-term liabilities for compensated absences are not reported in the
governmental funds but are included in the statement of activities. 52,569
Interest payable on long-term debt is accrued in the government-wide financial statements,
whereas in the fund financial statements, interest expenditures are reported when due.
The current year change in the interest accrual is a decrease in net position. 53,782
Certain pension expenditures that are recorded in the fund financial statements must be
recorded as deferred outflows of resources. Contributions made after the measurement
date caused the change in net position to increase in the amount of $279,372. The City's
unrecognized deferred inflows and outflows for TMRS as of the measurement date
must be amortized and the City's pension expense must be recognized. These cause the
change in net position to decrease in the amount of $19,614. 259,758
Certain OPEB expenditures that are recorded in the fund financial statements must be
recorded as deferred outflows of resources. Contributions made after the measurement
date caused the change in net position to decrease in the amount of $38,842. The City's
unrecognized deferred inflows and outflows for TMRS as of the measurement date
must be amortized and the City's OPEB expense must be recognized. These cause the
change in net position to increase in the amount of $15,358. (23,484)
Various other reclassifications and eliminations are necessary to convert from the
modified accrual basis of accounting to accrual basis of accounting. These include
recognizing deferred inflows of resources as revenue, adjusting current year revenue to
include the revenue earned from current year's tax levy, and eliminating interfund
transactions. These adjustments result in an increase in net position. 57,277
Change in Net Position of Governmental Activities 1,352,068$
166
The accompanying notes are an integral part of these financial statements. 22
City of The Colony, Texas
Statement of Net Position – Proprietary Funds (Exhibit A-7)
September 30, 2024
Business-Type
Activities
Water and
Sewer Enterprise
Fund
Assets
Current assets
Cash and investments 18,835,972$
Receivables (net of allowance)
Accounts 3,371,941
Miscellaneous 13,601
Inventories 77,016
Prepaid items 1,236
Restricted cash and investments 11,642,756
Total current assets 33,942,522
Noncurrent assets
Capital assets
Land 3,273,473
Water system and sanitary sewer system 197,449,044
Drainage system 1,684,364
Buildings 13,221,303
Machinery and equipment 6,059,771
Infrastructure 16,615,671
Construction in progress 5,937,663
Less accumulated depreciation (88,793,894)
Total capital assets, net 155,447,395
Total assets 189,389,917
Deferred Outflows of Resources
Deferred charge on refunding 162,437
Deferred outflows - pension 1,099,750
Deferred outflows - OPEB liability 28,143
Total deferred outflows
of resources 1,290,330
167
The accompanying notes are an integral part of these financial statements. 23
City of The Colony, Texas
Statement of Net Position – Proprietary Funds (Exhibit A-7) - continued
September 30, 2024
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,135,058
Accrued compensated absences due within one year 484,038
Current portion of total OPEB liability 3,662
Payable from restricted assets:
Accounts payable and accrued liabilities 444,006
Revenue bonds payable 4,637,209
Accrued interest payable 253,413
Customer meter deposits 872,664
Total current liabilities 7,830,050
Noncurrent liabilities
Revenue bonds payable 49,816,735
Accrued compensated absences not due within one year 5,610
Net pension liability 2,248,378
Total OPEB liability 136,413
Total noncurrent liabilities 52,207,136
Total liabilities 60,037,186
Deferred Inflows of Resources
Deferred inflows - pension 37,999
Deferred inflows - OPEB 55,922
Total deferred inflows of resources 93,921
Net Position
Net investment in capital assets 108,929,168
Restricted for construction 2,565,461
Unrestricted 19,054,511
Total net position 130,549,140$
168
The accompanying notes are an integral part of these financial statements. 24
City of The Colony, Texas
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds (Exhibit A-8)
Year Ended September 30, 2024
Water and
Sewer Enterprise
Fund
Operating Revenues
Charges for sales and services:
Water service 17,685,449
Wastewater treatment service 9,294,773
Other fees and penalties 1,351,080
Service charges 977,119
Miscellaneous 91,058
Total Operating Revenues 29,399,479
Operating Expenses
Personnel services 7,464,617
Contractual services 2,505,494
Supplies 3,772,318
Maintenance 2,667,347
Water purchases 42,842
Overhead 4,448,630
Depreciation 7,169,354
Total Operating Expenses 28,070,602
Operating Income 1,328,877
Nonoperating Revenues (Expenses)
Investment income 1,740,533
Interest and fiscal charges (1,863,329)
Total Nonoperating (Expenses) Revenues (122,796)
Income Before Contributions
and Transfers 1,206,081
Contributions and Transfers
Capital contributions 3,925,581
Development fees 3,028,633
Transfers in 4,400,000
Total Contributions and Transfers 11,354,214
Change in net position 12,560,295
Net position, beginning, as previously reported 117,965,862
Prior period adjustment (Note 13)22,983
Net position, beginning, as restated 117,988,845
Net position, ending 130,549,140$
Business-Type
Activities
169
The accompanying notes are an integral part of these financial statements. 25
City of The Colony, Texas
Statement of Cash Flows – Proprietary Funds (Exhibit A-9)
Year Ended September 30, 2024
Business-Type
Activities
Water and
Sewer Enterprise
Fund
Cash Flows from Operating Activities
Receipts from customers 29,564,032$
Payments to or on behalf of employees (7,267,930)
Payments to suppliers (13,501,361)
Net Cash Provided by Operating Activities 8,794,741
Cash Flows from Noncapital Financing Activities
Transfers in 4,400,000
Net Cash Used by Noncapital Financing Activities 4,400,000
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets (3,164,402)
Principal paid on bonds (5,935,763)
Interest paid on bonds (2,186,796)
Development fees 3,028,633
Net Cash Provided (Used) by Capital and Related Financing Activities (8,258,328)
Cash Flows from Investing Activities
Interest received 1,740,533
Net Cash (Used) Provided by Investing Activities 1,740,533
Net Change in Cash and Cash Equivalents 6,676,946
Cash and Cash Equivalents, Beginning 23,801,782
Cash and Cash Equivalents, Ending 30,478,728$
170
The accompanying notes are an integral part of these financial statements. 26
City of The Colony, Texas
Statement of Cash Flows – Proprietary Funds (Exhibit A-9)
Year Ended September 30, 2024
Activities
Water and
Sewer Enterprise
Fund
Reconciliation of Operating Income to Net
Cash Provided by Operating Activities
Operating income 1,328,877$
Adjustments to reconcile operating income to net cash
provided by operating activities
Depreciation and amortization 7,169,354
(Increase) decrease in accounts receivable 222,873
(Increase) decrease in inventories 3,940
(Increase) decrease in prepaid items -
Increase (decrease) in accounts payable 435,989
Increase (decrease) in customer deposits (58,320)
Increase (decrease) in accrued liabilities (307,972)
Net Cash Provided by Operating Activities 8,794,741$
Noncash Investing and Financing Activities
Infrastructure contributed by developers 3,925,581$
171
The accompanying notes are an integral part of these financial statements. 27
City of The Colony, Texas
Statement of Net Position – Discretely Presented Component Units (Exhibit A-10)
September 30, 2024
Total
The Colony The Colony The Colony Discretely
Economic Community Local Presented
Development Development Development Component
Corporation Corporation Corporation Units
Assets
Cash and investments 21,792,414$ 9,261,083$ 7,290,432$ 38,343,929$
Receivables (net of allowance)
Sales taxes 1,976,557 1,976,557 - 3,953,114
Prepaid items - - 2,534,231 2,534,231
Restricted cash and investments 8,560,464 8,560,290 11,737,018 28,857,772
Capital assets
Non-depreciable 7,092,872 - 22,321,911 29,414,783
Depreciable (net) 148,924 - - 148,924
Total assets 39,571,231 19,797,930 43,883,592 103,252,753
Deferred Outflows of Resources
Deferred outflows - pension 81,491 26,774 - 108,265
Deferred outflows - OPEB 2,085 685 - 2,770
Deferred charge on refunding - - 304,308 304,308
Total deferred outflows of resources 83,576 27,459 304,308 415,343
Liabilities
Accounts payable 29,005 16,641 - 45,646
Accrued liabilities 1,210,478 1,197,839 10,000 2,418,317
Accrued interest payable 996,222 977,138 3,184,928 5,158,288
Non-current liabilities
Due within one year 1,051,612 530,000 3,370,000 4,951,612
Due in more than one year 29,041,718 25,266,120 129,042,224 183,350,062
Net pension liability 166,604 54,737 - 221,341
Total OPEB liability 10,379 3,410 - 13,789
Total liabilities 32,506,018 28,045,885 135,607,152 196,159,055
Deferred Inflows of Resources
Deferred inflows - pension 2,816 925 - 3,741
Deferred inflows - OPEB 4,144 1,361 - 5,505
Total deferred inflows of resources 6,960 2,286 - 9,246
Net Position
Net investment in capital assets (22,799,324) - 22,321,911 (477,413)
Unrestricted 29,941,153 (8,222,782) (113,741,163) (92,022,792)
Total net position 7,141,829$ (8,222,782)$ (91,419,252)$ (92,500,205)$
172
The accompanying notes are an integral part of these financial statements. 28
City of The Colony, Texas
Statement of Activities – Discretely Presented Component Units (Exhibit A-11)
Year Ended September 30, 2024
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Component Units
The Colony Economic
Development Corporation 6,697,934$ -$ -$ -$
The Colony Community
Development Corporation 8,895,437 - - -
The Colony Local
Development Corporation 6,531,254 - 1,522,060 -
Total Component Units 22,124,625 - 1,522,060 -
General Revenues
Taxes
Sales taxes
Investment income
Other income
Total general revenues
Change in net position
Net position, beginning, as previously reported
Prior period adjustment (Note 13)
Net position, beginning, as restated
Net position, ending
Program Revenue
173
The accompanying notes are an integral part of these financial statements. 29
City of The Colony, Texas
Statement of Net Activities – Discretely Presented Component Units (Exhibit A-11) - continued
Year Ended September 30, 2024
The Colony
Economic
Development
Corporation
The Colony
Community
Development
Corporation
The Colony Local
Development
Corporation Total
(6,697,934)$ -$ -$ (6,697,934)$
- (8,895,437) - (8,895,437)
- - (5,009,194) (5,009,194)
(6,697,934) (8,895,437) (5,009,194) (20,602,565)
10,221,064 10,221,065 8,841,724 29,283,853
1,190,620 919,453 386,634 2,496,707
1,760 - - 1,760
11,413,444 11,140,518 9,228,358 31,782,320
4,715,510 2,245,081 4,219,164 11,179,755
2,426,319 (10,467,863) (94,712,055) (102,753,599)
- - (926,361) (926,361)
2,426,319 (10,467,863) (95,638,416) (103,679,960)
7,141,829$ (8,222,782)$ (91,419,252)$ (92,500,205)$
Net (Expense) Revenue and Changes in Net Position
Component Units
174
30
City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Note 1 - Reporting Entity
The City of The Colony (the City), originally incorporated in 1977, is a municipal corporation incorporated under Article XI of
the Constitution of the State of Texas (Home Rule Amendment). The City operates under a Council-Manager form of
government and provides such services as are authorized by its charter to advance the welfare, health, comfort, safety and
convenience of the City and its inhabitants.
The City is governed by an elected mayor and a six-member council and has the authority to make decisions, appoint
administrators and managers, and significantly influence operations. It also has the primary accountability for fiscal matters.
The financial statements of the City have been prepared in conformity with accounting principles applicable to
governmental units which are generally accepted in the United States of America. The Governmental Accounting Standards
Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting
principles.
The City’s basic financial statements include the accounts of all its operations. The City evaluated whether any other entity
should be included in these financial statements. The criteria for including organizations as component units within the
City’s reporting entity, as set forth in GASB Statement No. 14, “The Financial Reporting Entity,” as amended, include
whether:
the organization is legally separate (can sue and be sued in their 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/burden on the City,
there is fiscal dependency by the organization on the City.
The City also evaluated each legally separate, tax-exempt organization whose resources are used principally to provide
support to the City to determine if its omission from the reporting entity would result in the financial statements which are
misleading or incomplete. GASB Statement No. 39 requires inclusion of such an organization as a component unit when: 1)
the economic resources received or held by the organization are entirely or almost entirely for the direct benefit of the City,
its component units or its constituents; and 2) the City or its component units is entitled to, or has the ability to otherwise
access, a majority of the economic resources received or held by the organization; and 3) such economic resources are
significant to the City.
Based on the criteria above, the City has the following component units:
Discretely Presented Component Units
The Colony Economic Development Corporation (TCEDC) - Organized exclusively for the public purposes of the promotion
and development of new and expanded business enterprises to provide and encourage employment in the furtherance of
public welfare
The Colony Community Development Corporation (TCCDC) - Responsible for promoting economic development within the
City and the State of Texas in order to eliminate unemployment and underemployment, and to promote and encourage
employment and the public welfare of, for, and on behalf of the City by developing, implementing, providing and financing
projects under the Development Corporation Act of 1979. This includes the construction, renovation and operation of
municipal buildings, the acquisition and improvement of parks as well as the promotion and expansion of manufacturing
and industrial facilities, and other economic development purposes.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
The Colony Local Development Corporation (TCLDC) – Established as the primary governing body for funding Tax Increment
Reinvestment Zone (TIRZ) Number One public infrastructure. Surrounding these activities are performance agreements
between the TCLDC and the developer, NMF Services, which commenced November 2011 and will terminate on the 75th
anniversary of the date in which the City collects its first sales tax dollar from the respective facility.
A majority of the members of the TCEDC’s, TCCDC’s, and TCLDC’s Boards of Directors are appointed by the City Council. The
TCEDC, TCCDC, and TCLDC are each fiscally dependent upon the City as the City Council approves their budgets and must
approve any debt issuance. However, the component units do not qualify for blending because the component units’
services directly benefit the community rather than the City itself. The TCEDC and TCCDC do not issue separate financial
statements and TCLDC does issue separate financial statements which are
available through the City’s Finance Department. TCEDC, TCCDC, and TCLDC are presented as governmental fund types
within these financial statements.
Note 2 - Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all activities of the primary government and its component units. For the most part, the effect of interfund
activity has been removed from these statements, except for interfund services provided and used. Elimination of these
charges would distort the direct costs and program revenues reported for the various functions concerned. Governmental
activities, which normally are supported by taxes and intergovernmental revenue, are reported separately from business-
type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is
reported separately from the legally separate component units for which the primary government is financially
accountable.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset
by program revenue. Direct expenses are those that are clearly identifiable with a specific function or segment. Program
revenue includes 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function or segment. Taxes and other items not properly included among
program revenue are reported instead as general revenue.
Separate financial statements are provided for governmental and proprietary funds. Major individual governmental funds
and major individual proprietary funds are reported in separate columns in the fund financial statements.
Note 3 - Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources measurement focus and the accrual
basis of accounting, as are the proprietary fund financial statements. 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
revenue in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the City considers revenue to be available if collected within 60 days of
the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as expenditures related to compensated absences, claims, and
judgments, are recorded only when payment is due.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Property taxes, franchise taxes, sales taxes, certain charges for services and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenue of the current fiscal period.
All other revenue items are considered to be measurable and available only when cash is received by the City.
The City reports the following major governmental funds:
The General Fund is the general operating fund of the City. It is used to account for all financial resources not
accounted for in other funds. All general tax revenues and other receipts that are not restricted by law or
contractual agreement to some other fund are accounted for in this fund. General operating expenditures, fixed
charges and capital improvement costs that are not paid through other funds are paid from the General Fund.
The Pandemic Response Fund is to account for revenues and expenditures related to the City of The Colony
emergency response to COVID 19 from grant and contribution funding.
The Debt Service Fund is used to account for the accumulation of financial resources for the payment of principal,
interest and related costs on long-term debt paid primarily from taxes levied by the City. The fund balance of the
Debt Service Fund is restricted to signify the amounts that are exclusively for debt service expenditures.
The Capital Projects Fund is used to account for the acquisition and construction of capital assets financed
primarily through the issuance of general obligation debt.
The City reports the following major proprietary fund types:
The Water and Sewer Enterprise Fund is used to account for the acquisition, operation and maintenance of a
municipal water and sewer utility, supported primarily by user charges to the public.
Additionally, the City reports the following fund types:
Nonmajor special revenue funds account for specific revenue sources that are legally restricted to expenditures for
specialized purposes or committed for special projects.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources are
reported as general revenues rather than as program revenues.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund’s
principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for
sales and services. Operating expenses include cost of sales and services, administrative expenses and depreciation expense
on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
Implementation of GASB Statement No. 100
As of October 1, 2023, the City adopted GASB Statement No. 100, Accounting Changes and Error Corrections. The
implementation of this standard requires additional presentation and disclosure requirements for accounting changes and
error corrections. The financial statements have been updated to conform to the presentation requirements related to the
error correction and accounting changes in the financial statements for the year ended September 30, 2024. The additional
disclosures required by this standard are included in Note 13.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Note 4 - Assets, Liabilities, and Net Position or Fund Balance
Cash and Cash Equivalents
State statutes and policy as established by the City Council authorize the City to invest in certificates of deposit, direct
obligations of the U.S. Treasury, investment pools consisting of such U.S. Treasury obligations, repurchase agreements,
commercial paper and mutual funds. Substantially all operating cash and cash equivalents are maintained in pooled cash
and time deposit accounts. Interest income relating to pooled deposits is allocated to the individual funds based on each
fund’s pro rata share of total pooled deposits.
Restricted cash and investments is classified separately in the balance sheet of governmental funds and statement of net
position for proprietary funds and represents cash and cash equivalents restricted for specific infrastructure projects
(governmental funds) or the payment of long-term debt and for the acquisition of capital assets (proprietary funds).
For purposes of the statement of cash flows, the proprietary funds consider all highly liquid investments (including
restricted assets) with an original maturity of three months or less when purchased to be cash equivalents, as they are
available for withdrawal on demand.
Fair Value Measurements
Fair value accounting requires characterization of the inputs used to measure fair value into three-level fair value hierarchy
as follows:
Level 1 inputs are based on unadjusted quoted market prices for identical assets or liabilities in an active market
the entity has the ability to access.
Level 2 inputs are observable inputs other than quoted prices included within Level 1 that are for similar assets or
liabilities. U.S. government-backed securities are valued using Level 2 inputs that are based on market data
obtained from independent sources.
Level 3 inputs are unobservable inputs for an asset or liability either directly or indirectly.
Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as “due to/from other funds.” Any residual balances outstanding between the governmental activities and
business-type activities are reported in the government-wide financial statements as “internal balances.” All trade and
property tax receivables are shown net of an allowance for uncollectibles. The allowance totaled $959,488 for General
Fund, $7,164 for Debt Service Fund, and $336,394 for Water and Sewer Fund.
Inventory
Inventory is valued at cost using the first-in, first-out (FIFO) method. Inventories consist of expendable supplies held for
consumption or the construction of plant and equipment. Inventories are recorded as expenditures when consumed rather
than when purchased.
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 the fiduciary net position of the Texas Municipal Retirement
System (TMRS) and additions to/deductions from TMRS’s fiduciary net position have been determined on the same basis as
they are reported by TMRS. For this purpose, plan contributions are recognized in the period that compensation is reported
for the employee, which is when contributions are legally due. Benefit payments and refunds are recognized when due and
payable in accordance with the benefit terms. Investments are reported at fair value.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
OPEB
The fiduciary net position of the TMRS Supplemental Death Benefits Plan (SDBP) has been determined using the flow of
economic resources measurement focus and full accrual basis of accounting. This includes for purposes of measuring the
total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, OPEB expense, and
information about assets, liabilities and additions to/deductions from SDBP’s fiduciary net position. Benefit payments
(including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This
separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies
to a future period(s) and will not be recognized as an outflow of resources (expense/expenditure) until then. The City has
three items that qualify for reporting in this category. The City has a deferred charge on bond refunding reported in the
government-wide statement of net position. A deferred charge on refunding results from the difference in the carrying
value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the
refunded or refunding debt. The City has deferred outflows of resources related to pensions as described in Note 7. The City
also has deferred outflows of resources related to its Supplemental Death Benefits Plan as described in Note 8.
In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources. This
separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to
a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has four items
that qualify for reporting in this category. The first item, unavailable revenue, is reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenues from property taxes, fines, ambulance services and
other items. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become
available. The second item is deferred inflows related to leases where the City is the lessor and is reported in the
governmental funds balance sheet and statement of net position. The deferred inflows of resources related to leases are
recognized as an inflow of resources (revenue) on the straight-line basis over the term of the lease. The City also has
deferred inflows of resources related to pensions as described in Note 7 and related to its Supplemental Death Benefits
Plan as described in Note 8.
Capital Assets
Capital assets, which include property, plant and equipment and infrastructure assets (e.g., roads, bridges, sidewalks and
similar items), are reported in the applicable governmental or business-type activities columns in the government-wide
financial statements as well as the proprietary fund financial statements. Capital assets are defined by the City as assets
with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. All purchased capital
assets are valued at cost where historical records are available and at an estimated historical cost where no historical
records exist.
In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the
government chose to include all such items regardless of their acquisition date or amount. The City was able to estimate
the historical cost for the initial reporting of these assets through back trending (i.e., estimating the current replacement
cost of the infrastructure to be capitalized and using an appropriate price-level index to deflate the cost to the acquisition
year or estimated acquisition year). As the government constructs or acquires additional capital assets each period,
including infrastructure assets, they are capitalized and reported at historical cost. Donated capital assets are recorded at
acquisition value, which is the price that would be paid to acquire an asset with equivalent service potential at the
acquisition date.
The costs of normal maintenance and repairs that do not add to the value of the asset, or materially extend asset lives, are
not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Land and construction in progress are not depreciated. Other property, plant, equipment, and infrastructure of the City, as
well as the component units, are depreciated using the straight-line method over the following useful lives:
Buildings 40 years
Improvements other than buildings 10-30 years
Machinery and equipment 5-10 years
Infrastructure 40 years
Right-to-use assets 5-10 years
Right to use leased assets are recognized at the lease commencement date and represent the City’s right to use an
underlying asset for the lease term. Right to use leased assets are measured at the initial value of the lease liability plus any
payments made to the lessor before commencement of the lease term, less any lease incentives received from the lessor at
or before the commencement of the lease term, plus any initial direct costs necessary to place the lease asset into service.
Right to use leased assets are amortized over the shorter of the lease term or useful life of the underlying asset using the
straight-line method. The amortization period varies from 3 to 5 years.
Right to use subscription IT assets are recognized at the subscription commencement date and represent City’s right to use
the underlying IT asset for the subscription term. Right to use subscription IT assets are measured at the initial value of the
subscription liability plus any payments made to the vendor at the commencement of the subscription term, less any
subscription incentives received from the vendor at or before the commencement of the subscription term, plus any
capitalizable initial implementation costs necessary to place the subscription asset into service. Right to use subscription IT
assets are amortized over the shorter of the subscription term or useful life of the underlying asset using the straight-line
method. The amortization period varies from 3 to 5 years.
Lease Receivables
Lease receivables are recorded by the City as the present value of future lease payments expected to be received from the
lessee during the lease term, reduced by any provision for estimated uncollectible amounts. Lease receivables are
subsequently reduced over the life of the lease as cash is received in the applicable reporting period. The present value of
future lease payments to be received are discounted based on the interest rate the City charges the lessee.
Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities,
or proprietary fund type statements of net position. Bond premiums and discounts are deferred and amortized over the life
of the bonds using the straight-line method which approximates the effective interest method. Bonds payable are reported
net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs are reported as debt service expenditures.
Lease liabilities represent the City’s obligation to make lease payments arising from the lease. Lease liabilities are
recognized at the lease commencement date based on the present value of future lease payments expected to be made
during the lease term. The present value of lease payments are discounted based on a borrowing rate determined by the
City.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Subscription liabilities represent the City’s obligation to make subscription payments arising from the subscription contract.
Subscription liabilities are recognized at the subscription commencement date based on the present value of future
subscription payments expected to be made during the subscription term. The present value of subscription payments are
discounted based on a borrowing rate determined by the City.
Transactions between Funds and Component Units
Interfund services are accounted for as revenues, expenditures or expenses. Transactions that constitute reimbursements
to a fund for expenditures/expenses initially made from it that are properly applicable to another fund, are recorded as
expenditures/ expenses in the reimbursing fund and as a reduction of expenditures/expenses in the fund reimbursed. All
other interfund transactions, except interfund services and reimbursements, are recorded as transfers. Transactions
between the component units and the primary government are accounted for as external transactions. During the year
ended September 30, 2023, the TCCDC contributed $4,000,000 to the capital projects fund and $299,845 to the General
Fund. Additionally, the TCEDC contributed $445,519 to the General Fund.
Compensated Absences
Accumulated earned but unused vacation, holiday, compensatory time and sick leave are accrued when incurred in the
government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental
funds only if they have matured, for example, as a result of employee resignations and retirements. It is the City's policy to
permit employees to accumulate earned but unused vacation, compensatory time and sick pay benefits. Eligible employees
are reimbursed upon separation from service for accumulated vacation, holiday, sick pay; non-exempt employees are
reimbursed for vacation, holiday, compensatory time and sick leave.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and
liabilities and deferred inflows of resources and disclosures of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these
estimates.
Property Taxes
The City’s ad valorem property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real
and certain personal property located within the City. Property taxes attach as an enforceable lien on property as of
January 1 after they are levied. The assessed value upon which the fiscal year 2024 levy was based was $7,796,834,161.
Taxes are due on October 1 and are delinquent after the following January 31. Current tax collections for the year ended
September 30, 2024 were 98.34% of the tax levy.
The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed
valuation for general governmental services, including the payment of principal and interest on general obligation long-
term debt. The combined tax rate to finance general governmental services including the payment of principal and interest
on long-term debt for the year ended September 30, 2024 was $0.64000 per $100 of assessed valuation.
The ordinance levying the ad valorem taxes specifies the percentage of the taxes applicable to the General Fund, and Debt
Service Fund therefore, ad valorem tax revenues are recorded as revenues in the respective funds.
In Texas, countywide central appraisal districts are required to assess all property within the appraisal district on the basis
of 100% of its appraised value and are prohibited from applying any assessment ratios. The value of property within the
appraisal district must be reviewed every five years; however, the City may, at its own expense, require annual reviews of
appraised values.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
The City may challenge appraised values established by the appraisal district through various appeals and, if necessary, legal
action. Under this legislation, the City continues to set tax rates on City property. However, if the revenues from the
effective tax rate times the appraised values, excluding tax rates for bonds and other contractual obligations, adjusted for
new improvements, exceeds the property tax revenues from previous year by more than 3%, the City must have an election
to approve effective interest rates.
Fund Balance
The City classifies governmental fund balance in accordance with Governmental Accounting Standards Board (GASB)
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions:
Nonspendable fund balance includes fund balance that cannot be spent either because it is not in spendable form
or because of legal or contractual constraints. The City had $171,965 and $166,283 in nonspendable fund balance
for inventory and prepaid items, respectively, in the General Fund, and $816 in nonspendable fund balance for
prepaid items in other governmental funds at September 30, 2024.
Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by
constitution, external resource providers, or through enabling legislation. General fund balance restricted for TIRZ
1 totaled $920,680 as of September 30, 2024. Debt service fund balance restricted for the retirement of funded
indebtedness totaled $7,124,759 as of September 30, 2024. Capital projects fund balance restricted for future
capital projects totaled $809,584. The Pandemic Response fund included $72 of fund balance restricted for grant
activities. At September 30, 2024, fund balance restricted for special revenue fund activities included:
Restricted
Fund Balance
Hotel/motel taxes 3,868,961$
Police forfeitures fund 26,787
Federal seized fund 12,935
Child safety fund 97,499
Storm water utility fund 3,464,731
Court security 337,732
Court technology 35,593
Citizen donations fund 10,894
PID No. 1 855,250
Trinity North Medical 157,590
Juvenile case 218,118
9,086,090$
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Committed fund balance is established and modified by a resolution from City Council, the City’s highest level of
decision-making authority, and can be used only for the specified purposes determined by the Council's resolution.
At September 30, 2024, fund balance committed for special revenue fund activities included:
Committed
Fund Balance
Lake parks 2,759,290$
Special events 100,441
Keep the Colony Beautiful 13,926
2,873,657$
Assigned fund balance includes the portion of net resources for which an intended use has been established by the
City Council or the City Official authorized to do so by the City Council. Assignments of fund balance are much less
formal than commitments and do not require formal action for their imposition or removal. In governmental
funds, other than the General Fund, assigned fund balance represents the amount that is not restricted or
committed which indicates that resources are, at a minimum, intended to be used for the purpose of that fund but
does not meet the criteria to be classified as restricted or committed. The Council has authorized the City Manager
to assign fund balance.
Unassigned fund balance is the residual classification for the City's general fund and includes all spendable
amounts not contained in the other classifications, as well as negative unassigned fund balance in other
governmental funds.
Flow Assumptions
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first,
then unrestricted resources as they are needed. It is the City’s policy to consider restricted fund balance to have been
depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted
fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned, then
unassigned fund balance.
Note 5 - Stewardship, Compliance and Accountability
Budgetary Information
The City adopts annual appropriated budgets for its General Fund, Debt Service Fund, Lake Parks Fund, Special Events Fund,
Hotel/Motel Taxes Fund, Child Safety Fund, and Storm Water Utility Fund. The budgetary comparison schedules have been
provided for these funds to demonstrate compliance with the budgets.
For the year ended September 30, 2024, expenditures exceeded appropriations in the general fund as follows:
Public works ($66,112)
Public safety ($425,317)
Capital outlay ($620,049)
Debt Service ($502,694)
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Note 6 - Detailed Notes on All Funds
Cash and Investments
Custodial Credit Risk. Cash deposits of the City, TCEDC, TCCDC, and TCLFD at September 30, 2024, were entirely secured by
FDIC insurance and pledged collateral held by the City’s agent bank.
State statutes authorize the City to invest in (1) obligations of the United States or its agencies and instrumentalities; (2)
direct obligations of the State of Texas or its agencies; (3) Texas local government investment pools; (4) obligations of
states, agencies, counties, cities, and other political subdivisions of any state having been rated as investment quality by a
nationally recognized investment rating firm and having received a rating of not less than A or its equivalent; (5) certificates
of deposit by state and national banks domiciled in this state that are (a) guaranteed or insured by the Federal Deposit
Insurance Corporation, or its successor; or (b) secured by obligations that are described by (1) – (4); (6) and reverse
repurchase agreements not to exceed 90 days to stated maturity.
Cash and investments as of September 30, 2024 consist of the following:
2024
Cash on hand 5,134$
Deposits with financial institutions 39,180,916
Investment pools and money market mutual funds 128,664,847
167,850,897$
Following are the City’s investments at September 30, 2024, including classification by level, within the fair value hierarchy:
Weighted
Percent of Average
Reported Value Level Total Maturity
Investment Pools
TexPool 64,184,595$ N/A 99.00% < 60 days
TexPool Prime 32,408,367 N/A 49.99% < 60 days
Other Investments
Money Market
BMutual Funds 647,611 Level 1 1.00% < 60 days
Total Investments 64,832,206$ 100.00%
Primary Government
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Weighted
Percent of Average
Reported Value Level Total Maturity
Investment Pools
TexPool 19,329,857$ N/A 69.31% < 60 days
TexPool Prime 2,462,557 N/A 8.83% < 60 days
Other Investments
Money Market
BMutual Funds 8,560,464 Level 1 30.69% < 60 days
Total Investments 27,890,321$ 100.00%
TCEDC
Weighted
Percent of Average
Reported Value Level Total Maturity
Investment Pools
TexPool 8,354,580$ N/A 49.39% < 60 days
TexPool Prime 906,503 N/A 5.36% < 60 days
Other Investments
Money Market
BMutual Funds 8,560,290 Level 1 50.61% < 60 days
Total Investments 16,914,870$ 100.00%
Weighted
Percent of Average
Reported Value Level Total Maturity
Other Investments
Money Market
BMutual Funds 19,027,450$ Level 1 100.00% < 60 days
Total Investments 19,027,450$ 100.00%
TCCDC
TCLDC
The City is a voluntary participant in two investment pools: TexPool and TexPool Prime. Each of these pools operate in a
manner consistent with the SEC’s Rule 2a-7 of the Investment Company Act of 1940. Each uses amortized costs rather than
market value to report the net position to compute share prices. Accordingly, the value of the City’s position in the pools is
the same as the value of the shares in the pool.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
The State Comptroller of Public Accounts exercises responsibility over TexPool and TexPool Prime. This oversight includes
the ability to significantly influence operations, designation of management, and accountability for fiscal matters.
Additionally, the State Comptroller has established an advisory board composed of both participants in TexPool and other
persons who do not have a business relationship with TexPool.
Interest Rate Risk. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in
market interest rates. One of the ways that the City manages its exposure to interest rate risk is by investing mainly in
investment pools which purchase a combination of shorter term investments with an average maturity of less than 60 days
thus reducing the interest rate risk. The City monitors the interest rate risk inherent in its portfolio by measuring the
weighted average maturity of its portfolio. The City has no specific limitations with respect to this metric.
As of September 30, 2024 the City did not invest in any securities which are highly sensitive to interest rate fluctuations.
Credit Risk. State law and City policy limit investments in local government investment pools to those rated no lower than
AAA or an equivalent rating by at least one nationally recognized rating service. As of September 30, 2024, the City’s
investments in TexPool and TexPool Prime were both rated AAAm by Standard & Poor’s.
Concentration of Credit Risk. Statutes and the City’s investment policy limits the investment portfolio by the following:
Maximum Maximum
Maximum Percentage Investment in
Maturity of Portfolio One Issuer
U.S. Government securities 5 Years 100% None
State of Texas 5 Years 25% None
States, Agencies, Counties, Cities and Other 5 Years 25% None
Repurchase Agreements 90 Days 100% None
Certificates of Deposit 5 Years 25% None
Commercial Paper 270 Days 25% None
No-Load Money Market Mutual Funds 90 Days 25% None
Eligible Investment Pools 90 Days 100% None
Authorized Investment Type
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Capital Assets
A summary of changes in capital assets follows:
(Restated)
Beginning Ending
Balance Additions Transfers Retirements Balance
Governmental activities
Capital assets, not being depreciated
Land 7,995,486$ 4,000$ -$ -$ 7,999,486$
Rights-of-way 25,571,036 - - - 25,571,036
Construction in progress 17,894,691 18,838,534 (2,267,376) - 34,465,849
Total assets not being depreciated 51,461,213 18,842,534 (2,267,376) - 68,036,371
Capital assets, being depreciated:
Buildings 46,946,115 53,136 143,670 - 47,142,921
Improvements other than buildings 21,417,151 855,064 - - 22,272,215
Swimming pool 1,839,255 - - - 1,839,255
Machinery and equipment 20,787,717 1,612,454 2,123,706 (15,448) 24,508,429
Infrastructure 301,840,172 5,300,510 - (88,311) 307,052,371
Total capital assets being depreciated 392,830,410 7,821,164 2,267,376 (103,759) 402,815,191
Less accumulated depreciation
Buildings 15,216,964 1,505,463 - - 16,722,427
Improvements other than buildings 10,933,593 1,095,281 - - 12,028,874
Swimming pool 1,363,554 64,571 - - 1,428,125
Machinery and equipment 13,221,758 3,440,232 - (15,448) 16,646,542
Infrastructure 134,342,876 8,177,226 - (88,311) 142,431,791
Total accumulated depreciation 175,078,745 14,282,773 - (103,759) 189,257,759
Total capital assets being depreciated, net 217,751,665 (6,461,609) 2,267,376 - 213,557,432
Right to use leased assets, being amortized
Machinery and equipment 1,265,639 205,487 - (149,975) 1,321,151
Less accumulated amortization
Machinery and equipment 412,812 146,999 - (144,613) 415,198
Total right to use leased assets being
amortized, net 852,827 58,488 - (5,362) 905,953
Right to use SBITA assets, being amortized 360,919 53,051 - - 413,970
Less accumulated amortization 95,631 105,915 - - 201,546
Net right to use SBITA assets 265,288 (52,864) - - 212,424
Total leased and subscription IT assets, net 1,118,115 5,624 - (5,362) 1,118,377
Governmental activities capital assets, net 270,330,993$ 12,386,549$ -$ (5,362)$ 282,712,180$
187
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
(Restated)
Beginning Ending
Balance Additions Transfers Retirements Balance
Business-type activities
Capital assets, not being depreciated
Land 3,273,473$ -$ -$ -$ 3,273,473$
Construction in progress 3,665,293 2,333,361 (60,991) - 5,937,663
Total assets not being depreciated 6,938,766 2,333,361 (60,991) - 9,211,136
Capital assets, being depreciated:
Buildings 13,214,803 6,500 - - 13,221,303
Water system 95,657,772 2,153,112 - - 97,810,884
Sanitary system 97,787,570 1,850,590 - - 99,638,160
Drainage system 1,684,364 - - - 1,684,364
Machinery and equipment 5,174,240 824,540 60,991 - 6,059,771
Infrastructure 16,615,671 - - - 16,615,671
Total capital assets being depreciated 230,134,420 4,834,742 60,991 - 235,030,153
Less accumulated depreciation
Buildings 814,650 286,984 - - 1,101,634
Water system 33,916,556 2,714,114 - - 36,630,670
Sanitary system 31,825,751 2,900,065 - - 34,725,816
Drainage system 1,616,559 42,109 - - 1,658,668
Machinery and equipment 3,593,871 740,490 - - 4,334,361
Infrastructure 9,857,153 485,592 - - 10,342,745
Total accumulated depreciation 81,624,540 7,169,354 - - 88,793,894
Total capital assets being depreciated, net 148,509,880 (2,334,612) 60,991 - 146,236,259
Business activities capital assets, net 155,448,646$ (1,251)$ -$ -$ 155,447,395$
Beginning Ending
Balance Additions Transfers Retirements Balance
TCEDC
Capital assets, not being depreciated
Land 6,355,178$ -$ -$ -$ 6,355,178$
Construction in progress 291,735 445,959 - - 737,694
Total assets not being depreciated 6,646,913 445,959 - - 7,092,872
Capital assets, being depreciated:
Vehicles 186,414 - - - 186,414
Total capital assets being depreciated 186,414 - - - 186,414
Less accumulated depreciation
Vehicles 6,311 31,179 - - 37,490
Total accumulated depreciation 6,311 31,179 - - 37,490
Total capital assets being depreciated, net 180,103 (31,179) - - 148,924
TCEDC capital assets, net 6,827,016$ 414,780$ -$ -$ 7,241,796$
Beginning Ending
Balance Additions Transfers Retirements Balance
TCLDC
Capital assets, not being depreciated
Land 22,321,911$ -$ -$ -$ 22,321,911$
Total assets not being depreciated 22,321,911 - - - 22,321,911
TCLDC capital assets, net 22,321,911$ -$ -$ -$ 22,321,911$
188
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Depreciation and amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities
General government 6,395,411$
Public safety 2,029,473
Public works 5,048,826
Culture and recreation 1,061,977
Total depreciation/amortization expense - Governmental activities 14,535,687$
Business-type activities
Water and sewer 7,169,354$
Total depreciation/amortization expense - Business-type activities 7,169,354$
Lessee Activities
The City entered into various lease agreements as lessee for the use of buildings, machinery and equipment, and
infrastructure. As of September 30, 2024, the value of the lease liability was $828,236. The City is required to make monthly
or annual principal and interest payments through November 2028. The lease liability was valued using a discount rate
ranging from 0.25% to 2.70% as determined by the City’s management based on the City’s estimated incremental
borrowing rate.
Lessor Activities
The City has accrued a receivable for one land lease and two infrastructure leases. The remaining receivable for these leases
was $5,657,273 for the year ended September 30, 2024. Deferred inflows related to these leases were $5,431,874 as of
September 30, 2024. The interest rate on the leases ranged from 0.28% – 5.71%. Final receipt is expected in fiscal year
2067.
The agreements call for payments that are partially or completely variable and therefore were not included in lease receivable
or deferred inflow of resources for leases. These variable payments are a result of the underlying lease measured not on a
fixed rate, but rather variable due to the underlying payments derived from a percentage of revenue. A total of $276,934 was
recognized as revenue from these variable payments for the year ended September 30, 2024.
Subscription IT Activities
As of September 30, 2024, the value of the SBITA liability was $209,568. The City is required to make annual principal and
interest payments through November 2027. The SBITA liability was valued using a discount rate ranging from 2.426% to
3.495% as determined by the City’s management based on the City’s estimated incremental borrowing rate.
Interfund Transfers
The composition of interfund transfers in/out as of September 30, 2024, is as follows:
Fund Transfers In
Transfers Out Purpose
General -$ 5,444,000$ Funding for capital projects, special events, and programs
Other Governmental 1,454,000 410,000 Funding for capital projects, special events, and programs
Water and Sewer 4,400,000 - Funding for capital projects
5,854,000$ 5,854,000$
189
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Long-term Obligations
Long-term obligations of the City’s governmental activities consist of general obligation bonds, certificates of obligation,
financed purchases, lease liabilities, and SBITA liabilities. Sources of retirement of general obligation bond and certificates
of obligation are provided from ad valorem tax. Governmental activities long-term obligations are paid by the debt service
fund, general fund, and capital projects fund.
Long-term obligations of the City’s business-type activities consist of general obligation bonds and certificates of obligation.
Business-type activities long-term obligations are serviced by revenue from the Water and Sewer and Storm Drainage
systems.
Compensated absences, net pension liability and total OPEB liability are paid from the fund out of which an employee is
regularly paid, primarily the General Fund, Water and Sewer Fund, Storm Drainage Fund and TCEDC. The following is a
summary of changes in long-term obligations for the year ended September 30, 2024:
(Restated)
Beginning Transfers/ Ending Due Within
Balance Additions Retirements Balance One Year
Governmental activities
Certificates of obligation 52,291,100$ -$ (2,898,650)$ 49,392,450$ 2,902,400$
General obligation bonds 8,349,797 - (1,785,587) 6,564,210 1,485,391
Financed purchases 6,480,676 - (906,304) 5,574,372 672,773
Bond premiums/discounts (net) 5,438,485 - (1,003,560) 4,434,925 -
Lease obligation 859,803 205,487 (237,054) 828,236 200,572
SBITA obligation 273,857 53,051 (117,340) 209,568 103,749
Net pension liability 18,150,049 - (4,150,341) 13,999,708 -
Total OPEB liability 808,305 63,881 - 872,186 22,801
Compensated absences 4,675,980 4,768,352 (4,820,921) 4,623,411 4,577,177
Total governmental
activities 97,328,052$ 5,090,771$ (15,919,757)$ 86,499,066$ 9,964,863$
Business-type activities
Certificates of obligation 48,538,900$ -$ (2,841,350)$ 45,697,550$ 2,907,600$
General obligation bonds 7,860,203 - (3,094,413) 4,765,790 1,729,609
Bond premiums/discounts (net) 4,360,388 - (369,784) 3,990,604 -
Net pension liability 2,418,910 - (170,532) 2,248,378 -
Total OPEB liability 110,223 29,852 - 140,075 3,662
Compensated absences 488,798 772,007 (771,157) 489,648 484,038
Total business type
activities 63,777,422 801,859 (7,247,236) 57,332,045 5,124,909
Primary government 161,105,474$ 5,892,630$ (23,166,993)$ 143,831,111$ 15,089,772$
Component Units
Revenue bonds 195,395,000$ -$ (4,575,000)$ 190,820,000$ 4,900,000$
Bond premiums/discounts (net) (2,706,627) - 136,091 (2,570,536) -
Net pension liability - 221,341 - 221,341 -
Total OPEB liability - 13,789 - 13,789 -
Compensated absences 60,211 79,325 (87,326) 52,210 51,612
192,748,584$ 314,455$ (4,526,235)$ 188,536,804$ 4,951,612$
190
46
City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
The following is a schedule of the City’s outstanding bonds:
Governmental Business Type Component
Activities Activities Units
Outstanding Outstanding Outstanding
Certificates of Obligation
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2013, 2.00%
to 4.375%, maturing in annual installments of $155,000 to $675,000 through 2033. 1,125,000$ -$ -$
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2014, 3.00%
to 6.00%, maturing in annual installments of $510,000 to $1,550,000 through 2035. 2,004,800 12,315,200 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2015, 3.00%
to 4.00%, maturing in annual installments of $470,000 to $690,000 through 2035. - 6,580,000 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2016, 3.00%
to 4.00%, maturing in annual installments of $685,000 to $1,025,000 through 2037. 7,766,500 3,328,500 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2018, 3.00%
to 4.00%, maturing in annual installments of $555,000 to $850,000 through 2038. 8,500,500 944,500 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2019, 3.00%
to 5.00%, maturing in annual installments of $845,000 to $1,095,000 through 2039. 8,754,400 5,365,600 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2020, 3.00%
to 5.00%, maturing in annual installments of $252,850 to $761,813 through 2040. 2,903,750 8,711,250 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2021, 2.00%
to 5.00%, maturing in annual installments of $290,000 to $540,000 through 2040. 6,790,500 754,500 -
Combination Tax and Surplus Revenue Certificates of Obligation, Series 2022, 4.00%
to 5.00%, maturing in annual installments of $475,000 to $1,335,000 through 2039. 11,547,000 7,698,000 -
49,392,450 45,697,550 -
General Obligation Bonds
General Obligation Refunding Bonds, Series 2014, 2.00% to 5.00%, maturing
in annual installments of $55,000 to $1,535,000 through 2026. 514,250 2,510,750
General Obligation Refunding Bonds, Series 2015, 3.00% to 4.00%, maturing
in annual installments of $840,000 to $1,715,000 through 2027. 1,941,400 913,600
General Obligation Refunding Bonds, Series 2020, 3.00% to 4.00%, maturing
in annual installments of $806,446 to $263,304 through 2030. 4,108,560 1,341,440
6,564,210 4,765,790 -
191
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Governmental Business Type Component
Activities Activities Units
Outstanding Outstanding Outstanding
Revenue Bonds
Sales Tax Revenue Bonds, Series 2013 (Infrastructure Bonds), 4.50% to 7.25%,
maturing in annual installments of $195,000 to $2,770,000 through 2042. - - 27,070,000
Sales Tax Revenue Bonds, Series 2013 (Infrastructure Bonds), 4.50% to 7.25%,
maturing in annual installments of $195,000 to $2,770,000 through 2042. - - 27,070,000
Sales Tax Increment Contract Revenue Bonds, Series 2013 (Infrastructure Bonds),
5.00% to 7.625%, maturing in annual installments through 2042. - - 14,705,000
Sales Tax Increment Contract Revenue Bonds, Series 2013 (Infrastructure Bonds),
2.594% to 4.881%, maturing in annual installments through 2047. - - 100,765,000
Sales Tax Revenue Bonds, Series 2017 (Infrastructure Bonds), 3.520%,
maturing in annual installments through 2032 - - 4,245,000
Tax Increment Contract Revenue Refunding Bonds, Series 2021, 3.580%,
maturing in annual installments through 2034. - - 16,965,000
- - 190,820,000
55,956,660$ 50,463,340$ 190,820,000$
Nebraska Furniture Mart
During March 2012, the TCEDC, TCCDC and TCLDC individually entered into a pledge agreement where the consideration of
future sales tax revenue from the tax increment reinvestment zone would be used to repay debt issued by the component
units to provide funding for the Nebraska Furniture Mart Texas project. This pledge was effectively an incentive agreement
to secure the development of Nebraska Furniture Mart, through NFM Services, within the City of The Colony.
TCEDC and TCCDC have each pledged a portion of their future sales tax revenues to repay $29,580,000 of sales tax revenue
bond series 2013 that each corporation issued in February 2013 to finance the acquisition of land and cost of construction
and infrastructure associated with the Nebraska Furniture Mart Texas project. Total principal and interest remaining on
each issuance is approximately $53.2 million as of September 30, 2024. Interest and principal paid and incremental sales tax
revenues recognized were $2,422,255 and $4,573,540, respectively, for both TCCDC and TCEDC with regards to each
corporation’s 2013 bond series during the year ended September 30, 2024.
TCLDC has pledged a portion of its future sales tax revenues to repay $142,080,000 of sales tax incremental contract
revenue bonds that the Corporation issued in February 2013 to finance the acquisition of land and cost of construction and
infrastructure associated with the Nebraska Furniture Mart Texas project. Total principal and interest remaining on these
bonds is approximately $208.5 million as of September 30, 2024. Interest and principal paid and incremental sales tax
revenues recognized were $9,613,787 and $8,841,724, respectively, during the year ended September 30, 2024.
192
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Annual Requirements to Retire Bond Obligations
The annual requirements to retire general long-term debt, including interest, as of September 30, 2024 are as follows:
Fiscal Year Ending
September 30 Principal Interest Total Principal Interest Total
2025 2,902,400$ 1,876,646$ 4,779,046$ 2,907,600$ 1,759,067$ 4,666,667$
2026 3,043,500 1,742,726 4,786,226 2,916,500 1,626,912 4,543,412
2027 3,167,350 1,604,833 4,772,183 3,027,650 1,503,154 4,530,804
2028 3,041,000 1,480,501 4,521,501 3,039,000 1,389,280 4,428,280
2029 2,942,600 1,347,308 4,289,908 3,137,400 1,270,505 4,407,905
2030-2034 15,570,550 4,863,876 20,434,426 17,034,450 4,441,221 21,475,671
2035-2039 14,896,300 1,967,613 16,863,913 11,048,700 1,505,868 12,554,568
2040 3,828,750 209,460 4,038,210 2,586,250 151,640 2,737,890
Total 49,392,450$ 15,092,963$ 64,485,413$ 45,697,550$ 13,647,647$ 59,345,197$
Business-Type Activities
Certificates of Obligation
Governmental Activities
Fiscal Year Ending
September 30 Principal Interest Total Principal Interest Total
2025 1,485,391$ 279,098$ 1,764,489$ 1,729,609$ 169,803$ 1,899,412$
2026 1,540,196 222,474 1,762,670 1,784,804 113,976 1,898,780
2027 1,333,570 163,603 1,497,173 531,430 56,297 587,727
2028 701,094 110,253 811,347 228,906 35,997 264,903
2029 731,248 75,198 806,446 238,752 24,552 263,304
2030 772,711 38,636 811,347 252,289 12,614 264,903
Total 6,564,210$ 889,262$ 7,453,472$ 4,765,790$ 413,239$ 5,179,029$
General Obligation Bonds
Governmental Activities Business-Type Activities
Fiscal Year Ending
September 30 Principal Interest Total
2025 4,900,000$ 10,319,002$ 15,219,002$
2026 5,255,000 10,091,049 15,346,049
2027 5,620,000 9,842,166 15,462,166
2028 6,005,000 9,571,383 15,576,383
2029 6,425,000 9,276,897 15,701,897
2030-2034 38,220,000 40,878,004 79,098,004
2035-2039 43,390,000 29,517,228 72,907,228
2040-2044 52,405,000 14,344,873 66,749,873
2045-2047 28,600,000 2,894,433 31,494,433
Total 190,820,000$ 136,735,035$ 327,555,035$
Revenue Bonds
Component Units
193
49
City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Financed Purchases
During 2015, the City entered into a financed purchase agreement of $1,641,970 with principal and interest from 2.63% to
3.29% being paid through fiscal year 2024.
During 2023, the City entered into a financed purchase agreement of $6,969,000 with principal and interest of 1.0% being
paid through fiscal year 2032. The agreement requires annual payments of $728,517. The City entered into the agreement
to acquire land and building. The Capital Projects fund has typically been used to liquidate the liability.
The annual requirements to retire the financed purchase, including interest, as of September 30, 2024 are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2025 672,773$ 55,744$ 728,517$
2026 679,500 49,016 728,516
2027 686,295 42,221 728,516
2028 693,158 35,358 728,516
2029 700,090 28,426 728,516
2030-2032 2,142,556 42,994 2,185,550
Total 5,574,372$ 253,759$ 5,828,131$
Financed Purchase
Governmental Activities
Lease Liability
The annual requirements to retire lease obligations, including interest, as of September 30, 2024 are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2025 200,572$ 17,901$ 218,473$
2026 195,616 13,587 209,203
2027 198,152 9,197 207,349
2028 202,654 4,695 207,349
2029 31,242 83 31,325
Total 828,236$ 45,463$ 873,699$
Lease Liability
Governmental Activities
194
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
SBITA Liability
The annual requirements to retire SBITA obligations, including interest, as of September 30, 2024 are as follows:
Fiscal Year Ending
September 30 Principal Interest Total
2025 103,749$ 6,219$ 109,968$
2026 86,983 3,141 90,124
2027 18,836 540 19,376
Total 209,568$ 9,900$ 219,468$
SBITA Liability
Governmental Activities
Note 7 - Defined Benefit Pension Plan
Plan Description
The City participates as one of 936 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 annual comprehensive financial report (ACFR) that can be obtained at www.tmrs.com.
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51
City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
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 payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum
Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member’s deposits
and interest.
The plan provisions are adopted by the governing body of each city, within the options available in the state statutes
governing TMRS. The City has elected that members can retire at age 60 and above with 5 or more years of service or with
20 years of service regardless of age. Members may work for more than one TMRS city during their career. If a member is
vested in one TMRS city, he or she is immediately vested upon employment with another TMRS city. Similarly, once a
member has met the eligibility requirements for retirement in a TMRS city, he or she is eligible in other TMRS cities as well.
At the December 31, 2022 valuation and measurement date, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 252
Inactive employees entitled to but not yet receiving benefits 267
Active employees 412
Total 931
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 13.45% and 13.75% in calendar years 2023 and 2024, respectively. The City’s
contributions to TMRS for the year ended September 30, 2024, were $4,934,490, and were equal to the required
contributions.
Net Pension Liability
The City’s Net Pension Liability (NPL) was measured as of December 31, 2023, and the Total Pension Liability (TPL) used to
calculate the NPL was determined by an actuarial valuation as of that date.
Actuarial assumptions: The Total Pension Liability in the December 31, 2023 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.50%
Overall payroll growth 3.60% to 11.85% including inflation
Investment rate of return 6.75%
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Salary increases are based on a service-related table. Mortality rates for active members are based on the PUB(10)
mortality tables with the Public Safety table used for males and the General Employee table used for females. Mortality
rates for healthy retirees and beneficiaries are based on the Gender-distinct 2019 Municipal Retirees of Texas mortality
tables. The rates for actives, healthy retirees and beneficiaries are projected on a fully generational basis by Scale UMP to
account for future mortality improvements. For disabled annuitants, the same mortality tables for healthy retirees is used
with a 4-year set-forward for males and a 3-year set-forward for females. In addition, a 3.5% and 3.0% minimum mortality
rate is applied, for males and females respectively, to reflect the impairment for younger members who become disabled.
The rates are projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to
the floor.
The actuarial assumptions were developed primarily from the actuarial investigation of the experience of TMRS as of
December 31, 2022. The assumptions were adopted in 2023 and first used in the December 31, 2023 actuarial valuation.
Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of
income in order to satisfy the short-term and long-term funding needs of TMRS.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which
best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and
inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of
return by weighting the expected future real rates of return by the target asset allocation percentage and by adding
expected inflation. In determining their best estimate of a recommended investment return assumption under the various
alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an
adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The
target allocation and best estimates of real rates of return for each major asset class in fiscal year 2024 are summarized in
the following table:
Long-Term
Expected
Real Rate
Target of Return
Allocation (Arithmetic)
Global Public Equity 35.00% 6.70%
Core Fixed Income 6.00% 4.70%
Non-Core Fixed Income 20.00% 8.00%
Other Public and Private Markets 12.00% 8.00%
Real Estate 12.00% 7.60%
Hedge Funds 5.00% 6.40%
Private Equity 10.00% 11.60%
Total 100.00%
Asset Class
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 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.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Changes in the Net Pension Liability
Plan Net Pension
Total Pension Fiduciary Liability/
Liability Net Position (Asset)
Entity-Wide (a) (b) (a) - (b)
Balance at 12/31/2022 130,723,102$ 110,154,143$ 20,568,959$
Changes for the year:
Service cost 5,610,086 - 5,610,086
Interest 8,822,421 - 8,822,421
Change in benefit terms - - -
Difference between expected and actual experience 1,273,565 - 1,273,565
Change in assumptions (354,399) - (354,399)
Contributions - employer - 4,450,840 (4,450,840)
Contributions - employee - 2,315,788 (2,315,788)
Net investment income - 12,766,249 (12,766,249)
Benefit payments, including refunds of contributions (5,651,226) (5,651,226) -
Administrative expense - (81,107) 81,107
Other changes - (565) 565
Net changes 9,700,447 13,799,979 (4,099,532)
Balance at 12/31/2023 140,423,549$ 123,954,122$ 16,469,427$
Plan Net Pension
Total Pension Fiduciary Liability/
Liability Net Position (Asset)
Primary Government (a) (b) (a) - (b)
Balance at 12/31/2022 130,723,102$ 110,154,143$ 20,568,959$
Changes for the year:
Service cost 5,534,350 - 5,534,350
Interest 6,938,556 - 6,938,556
Change in benefit terms - - -
Difference between expected and actual experience 1,256,372 - 1,256,372
Change in assumptions (349,615) - (349,615)
Contributions - employer - 4,390,754 (4,390,754)
Contributions - employee - 2,284,525 (2,284,525)
Net investment income - 11,105,826 (11,105,826)
Benefit payments, including refunds of contributions (5,574,934) (5,574,934) -
Administrative expense - (80,012) 80,012
Other changes - (557) 557
Net changes 7,804,729 12,125,602 (4,320,873)
Balance at 12/31/2022 138,527,831$ 122,279,745$ 16,248,086$
Increase (Decrease)
Increase (Decrease)
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Plan Net Pension
Total Pension Fiduciary Liability/
Liability Net Position (Asset)
Component Units (a) (b) (a) - (b)
Balance at 12/31/2021 -$ -$ -$
Changes for the year:
Service cost 75,736 - 75,736
Interest 1,883,865 - 1,883,865
Change in benefit terms - - -
Difference between expected and actual experience 17,193 - 17,193
Change in assumptions (4,784) - (4,784)
Contributions - employer - 60,086 (60,086)
Contributions - employee - 31,263 (31,263)
Net investment income - 1,660,423 (1,660,423)
Benefit payments, including refunds of contributions (76,292) (76,292) -
Administrative expense - (1,095) 1,095
Other changes - (8) 8
Net changes 1,895,718 1,674,377 221,341
Balance at 12/31/2022 1,895,718$ 1,674,377$ 221,341$
Increase (Decrease)
Sensitivity of the net pension liability to changes in the discount rate: The following presents the net pension liability of the
City, calculated using the discount rate of 6.75% as well as what the City’s net pension liability would be if it were calculated
using a discount rate that is 1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than the current rate:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(5.75%) (6.75%) (7.75%)
City's net pension liability (asset) 36,358,636$ 16,469,427$ 98,082$
Reported by Governmental Activities 30,906,375 13,999,708 83,374
Reported by Business-Type Activities 4,963,619 2,248,378 13,390
Reported by Component Units 488,642 221,341 1,318
36,358,636$ 16,469,427$ 98,082$
Pension Plan Fiduciary Net Position: Detailed information about the pension plan’s Fiduciary Net Position is available in a
separately-issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
For the year ended September 30, 2024, the City recognized pension expense of $4,937,617.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
At September 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Differences between expected 1,388,514$ -$ 1,369,769$ -$ 18,745$ -$
and actual economic experience
Changes in actuarial assumptions - 278,347 - 274,606 - 3,741
Difference between projected 2,915,427 - 2,876,069 - 39,358 -
and actual investment earnings
Contributions subsequent to the 3,751,751 - 3,701,589 - 50,162 -
measurement date
Total 8,055,692$ 278,347$ 7,947,427$ 274,606$ 108,265$ 3,741$
Entity-Wide Primary Government Component Units
$3,751,751 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability for the year ending
September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Year Ended Component
September 30: Entity-Wide Primary Govt Units
2025 1,236,198$ 1,219,504$ 16,694$
2026 1,256,651 1,239,681 16,970
2027 2,468,731 2,435,393 33,338
2028 (935,986) (923,346) (12,640)
4,025,594$ 3,971,232$ 54,362$
Note 8 - Other Post Employment Benefits
Plan Description
The City also participates in a single employer, defined benefit group-term life insurance plan known as the Supplemental
Death Benefits Fund (SDBF). This is a voluntary program in which participating member cities may elect, by ordinance, to
provide group-term life insurance coverage (Supplemental Death Benefits) for their active members, including or not
including retirees.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Benefits Provided
The death benefit for active employees provides a lump-sum payment approximately equal to the employee’s annual salary
(calculated based on the employee’s actual earnings for the 12-month period preceding the month of death). The death
benefit for retirees is considered an other postemployment benefit (OPEB) and is a fixed amount of $7,500. As the SDBF
covers both active and retiree employees, with no segregation of assets, the SDBF is considered to be an unfunded OPEB
plan. Texas Local Government Code Section 177.001 assigns the authority to establish and amend benefit provisions to the
City Council. At the December 31, 2023 valuation and measurement date, the following employees were covered by the
benefit terms:
Inactive employees or beneficiaries currently receiving benefits 171
Inactive employees entitled to but not yet receiving benefits 43
Active employees 412
Total 626
Contributions
The City contributes to the SDBF program at a contractually required rate. An annual actuarial valuation is performed, and
the contractual rate is equal to the cost of providing one-year term life insurance. The premium rate is expressed as a
percentage of the covered payroll of members employed by the participating employer. There is a one-year delay between
the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes
into effect.
The SDBF program is voluntary and employers can cease participation by adopting an ordinance before November 1 of any
year to be effective the following January 1. Therefore, the funding policy of the program is to ensure that adequate
resources are available to meet all insurance benefit payments for the upcoming year. It is not the intent of the funding
policy to pre-fund retiree term life insurance during employees’ entire careers. The City’s contribution, which equaled the
required contribution, was as follows for the year ended September 30:
2024
Employer rate 0.24%
Employer contributions 26,463$
Actuarial Assumptions
The total OPEB liability in the December 31, 2023 actuarial valuation was determined using the following actuarial
assumptions:
Inflation 2.5%
Salary increases 3.60% to 11.85%, including inflation
Discount rate 3.77%
Mortality rates for service retirees were based on the 2019 Municipal Retirees of Texas Mortality Tables. The rates are
projected on a fully generational basis with scale UMP.
Mortality rates for disabled retirees were based on the 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set-
forward for males and a 3 year set-forward for females. In addition, a 3.5% and 3% minimum mortality rate will be applied
to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are
projected on a fully generational basis by Scale UMP to account for future mortality improvements subject to the floor.
Actuarial assumptions used in the December 31, 2023 valuation were based on the results of actuarial experience studies.
The experience study in TMRS was for the period ending December 31, 2022.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
The SDBF program is treated as an unfunded OPEB plan because the SDBF trust covers both actives and retirees and the
assets are not segregated for these groups. A discount rate of 3.77% was based on the Fidelity Index’s 20-Year Municipal
GO AA Index as of December 31, 2023.
OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At September 30, 2024, the City reported a total OPEB liability of $1,026,050 measured at December 31, 2023. For the year
ended September 30, 2024, the City recognized OPEB expense of $51,551.
As of December 31, 2023, the discount rate used in the development of the total OPEB liability was 3.77% compared to
4.05% as of December 31, 2022.
Changes in the total OPEB liability for the measurement year ended December 31, 2023 are as follows:
Primary Component
Changes in Total OPEB Liability Entity-Wide Government Units
Balance at December 31, 2022 918,528$ 918,528$ -$
Changes for the year:
Service cost 39,694 26,821 12,873
Interest on total OPEB liability 37,468 36,962 506
Changes of benefit terms - - -
Differences between expected and 6,021 5,940 81
actual experience
Effect of assumption changes or inputs 50,802 50,116 686
Benefit payments* (26,463) (26,106) (357)
Balance as of December 31, 2023 1,026,050$ 1,012,261$ 13,789$
Total OPEB Liability
*Due to the SDBF being considered an unfunded OPEB plan under GASB 75, benefit payments are treated as being equal to
the employer’s yearly contributions for retirees.
Discount Rate Sensitivity Analysis
The following presents the total OPEB liability of the City, calculated using the discount rate of 3.77%, 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 (2.77%) or 1
percentage point higher (4.77%) than the current rate.
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(2.77%) (3.77%) (4.77%)
City's total OPEB liability 1,225,813$ 1,026,050$ 868,285$
Reported by Governmental Activities 1,041,993 872,186 738,079
Reported by Business-Type Activities 167,346 140,075 118,537
Reported by Component Units 16,474 13,789 11,669
1,225,813$ 1,026,050$ 868,285$
202
58
City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
At December 31, 2023, the City reported its deferred outflows of resources and deferred inflows of resources related to
OPEB from the following sources:
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Differences between expected 5,139$ 68,631$ 5,070$ 67,704$ 69$ 927$
and actual economic experience
Changes in actuarial assumptions 180,894 341,005 178,453 336,427 2,441 4,578
Contributions subsequent to the 20,109 - 19,849 - 260 -
measurement date
Total 206,142$ 409,636$ 203,372$ 404,131$ 2,770$ 5,505$
Entity-Wide Primary Government Component Units
Deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be
recognized as a reduction of the total OPEB liability for the year ended September 30, 2025 in the amount of $20,109. The
other net amounts of the employer’s balances of deferred outflows and inflows of resources related to OPEB, excluding
contributions made subsequent to the measurement date, will be recognized in OPEB expense as follows:
Year Ended Primary Component
September 30: Entity-Wide Government Units
2025 (30,040)$ (29,815)$ (225)$
2026 (28,820) (28,567) (253)
2027 (50,378) (50,091) (287)
2028 (68,092) (67,735) (357)
2029 (53,170) (52,770) (400)
Thereafter 6,897 7,117 (220)
(223,603)$ (221,861)$ (1,742)$
Note 9 - Risk Management
The City is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets; errors and
omissions; injuries to employees; and natural disasters. During fiscal year 2024, the City purchased commercial insurance to
cover these liabilities. Additionally, the City purchases commercial insurance to cover employee health benefits. There were
no significant reductions in coverage in the past fiscal year and there were no settlements exceeding insurance coverage in
the past three years.
Note 10 - Commitments and Contingencies
The City participates in grant programs which are governed by various rules and regulations of the grantor agencies. Costs
charged to the respective grant programs are subject to audit and adjustment by the grantor agencies; therefore, to the
extent that the City has not complied with the rules and regulations governing the grants, refunds of any money received
may be required and the collectability of any related receivable may be impaired. In the opinion of the City, there are no
significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants;
therefore, no provision has been recorded in the accompanying basic financial statements for such contingencies.
Estimated costs to complete significant construction projects in progress at year-end totaled approximately $10,668,728.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Note 11 - Deferred Compensation Plan
The City participates in a deferred compensation plan, which falls under Internal Revenue Code Section 457. Virtually all
employees are eligible to participate in the plan. The deferred compensation plan allows the deferral of individual federal
income taxes until funds are withdrawn. Funds may be withdrawn at termination, retirement, death or unforeseeable
emergency. Employees may contribute a maximum of 100% of compensation included in gross income or $15,500
whichever is less. As a result of legislative changes, all amounts of compensation deferred, all property and rights
purchased, and all income, property or rights are (until paid or made available to the employee or other beneficiary) held in
trust for the exclusive benefit of the participants and their beneficiaries, whereas, prior to these legislative changes, these
amounts were solely the property and rights of the City subject only to the claims of the City’s general creditors. As a result,
at September 30, 2024, the deferred compensation plan is not reported in the City’s financial statements.
Note 12 - Tax Abatements
The City enters into economic development agreements authorized under Chapter 380 of the Texas Local Government
Code. These agreements are planning tools designed to stimulate economic activity, redevelopment, community
improvement, and provide a return on investment for the community. These programs abate or rebate property and/or
sales taxes and may include other incentive payments such as fee reductions or construction costs reimbursements.
Economic development agreements are considered on a case by case basis by the City Council and generally contain
recapture provisions, which may require repayment or termination if recipients do not meet the required provisions of the
economic incentives.
Chapter 380 of the Texas Local Government Code allows the City to provide grants for the purpose of promoting local
economic development. These grants are based on a percentage of property and/or sales tax received by the City. The City
had the following agreements for the fiscal year ending September 30, 2024:
Per the Grandscape, William Sonoma, and Top Golf TIF agreement for commercial development of 433
undeveloped acres, 100% of the property tax collections from the TIRZ projects and 90% of sales tax collections
from TIRZ businesses were to be abated.
There was an agreement for Tribute properties to develop a 1,200-acre residential and golf community within the
City under which 50% of property taxes was agreed to be abated.
Per the Tribute TIF agreement to fund water storage tank and construction of fire station, and improve roadways,
marina park and entertainment district, 55% of property taxes from development limited to total property taxes
less the agreement stated above was agreed to be abated.
During the year ended September 30, 2024, the City abated $13,998,530 in property taxes and $13,169,444 in sales taxes.
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
Note 13 - Correction of an Error in Previously Issued Financial Statements
During the year ended September 30, 2024, the City determined that there were certain errors in amounts
previously reported in the 2023 financial statements resulting in a restatement of the beginning net position and
fund balance. The corrections consist of the following:
(A) The City identified certain accounts payable that had been recorded for a number of years without clearing.
Accordingly, accounts payable was overstated by $136,798. The effect of this correction is shown in Column A
below.
(B) The City identified discrepancies between its fixed asset subledger and the financial statements. Additionally,
the City identified a financed purchase that had been entered into the 2023 fiscal year that was not recorded.
Accordingly, governmental activities capital assets was understated by $9,565,179, business-type activities capital
assets were understated by $22,983, and governmental activities long-term obligations were understated by
$6,240,484. The effect of this correction is shown in Column B below.
(C) The City identified that prepaid insurance recorded upon issuance of the 2013 revenue bonds at TCLDC had not
been amortized. Accordingly, prepaid assets was overstated by $926,361. The effect of this correction is shown in
Column C below.
In 2024, the City corrected the classification of amounts reported for net position of the discretely
presented component units. Amounts were misclassified between net investment in capital assets and
unrestricted net position and have been reclassified in the current year to correct the error. The periods
affected by the error would have begun in 2013.
Beginning net position and fund balance was restated as follows:
October 1, 2023,
As Previously Error Error Error October 1, 2023,
Reported Correction (A) Correction (B) Correction (C) As Restated
Governmental Funds
Capital Projects Fund 20,101,088$ 136,798$ -$ -$ 20,237,886$
Total Governmental Funds 75,023,013 136,798 - - 75,159,811
Proprietary Funds
Water and Sewer Enterprise Fund 117,965,862 - 22,983 - 117,988,845
Government-Wide
Governmental Activities 255,196,641 136,798 3,324,695 - 258,658,134
Business-Type Activities 117,965,862 - 22,983 - 117,988,845
Total Primary Government 373,162,503 136,798 3,347,678 - 376,646,979
Component Units
The Colony Local Development Corporation (94,712,055) - - (926,361) (95,638,416)
Total Component Units (102,753,599) - - (926,361) (103,679,960)
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City of The Colony, Texas
Notes to Financial Statements
September 30, 2024
If these amounts had been properly recorded in the prior year, the change in net position and change in fund
balance would have been adjusted as follows for the year ended September 30, 2023:
October 1, 2023,
As Previously Error Error Error October 1, 2023,
Reported Correction (A) Correction (B) Correction (C) As Restated
Governmental Funds
Capital Projects Fund (3,178,331)$ -$ -$ -$ (3,178,331)$
Total Governmental Funds 11,369,944 - - - 11,369,944
Proprietary Funds
Water and Sewer Enterprise Fund 2,968,230 - - - 2,968,230
Government-Wide
Governmental Activities 20,863,590 - 1,044,679 - 21,908,269
Business-Type Activities 2,968,230 - - - 2,968,230
Total Primary Government 23,831,820 - 1,044,679 - 24,876,499
Component Units
The Colony Local Development Corporation 3,138,800 - - (110,184) 3,028,616
Total Component Units 1,693,751 - - (110,184) 1,583,567
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REQUIRED SUPPLEMENTARY INFORMATION
207
63
City of The Colony, Texas
Budgetary Comparison Schedule – General Fund (Exhibit B-1)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Taxes
Property 29,536,214$ 29,536,214$ 26,525,113$ (3,011,101)$
Sales 12,000,000 12,000,000 9,990,559 (2,009,441)
Mixed beverage tax 750,000 750,000 925,917 175,917
Franchise 2,775,000 2,775,000 5,159,631 2,384,631
Licenses and permits 3,040,700 3,040,700 1,909,454 (1,131,246)
Fines and forfeitures 1,110,000 1,110,000 826,086 (283,914)
Charges for services 1,782,300 1,782,300 2,162,854 380,554
Intergovernmental 745,364 745,364 745,364 -
Grants 351,000 351,000 694,343 343,343
Investment income 26,000 26,000 3,725,189 3,699,189
Miscellaneous income - 616,500 1,931,515 1,315,015
Total revenues 52,116,578 52,733,078 54,596,025 1,862,947
Expenditures
Current
General government 11,064,535 11,405,318 11,053,749 351,569
Culture and recreation 6,059,607 6,241,534 5,142,564 1,098,970
Public works 4,254,861 4,281,296 4,347,408 (66,112)
Public safety 31,227,932 31,284,716 31,710,033 (425,317)
Capital outlay 160,590 160,590 780,639 (620,049)
Debt service
Principal - - 470,149 (470,149)
Interest - - 32,545 (32,545)
Total expenditures 52,767,525 53,373,454 53,537,087 (163,633)
Excess (Deficiency) of Revenues
over (under) Expenditures (650,947) (640,376) 1,058,938 1,699,314
Other Financing Sources (Uses)
Lease proceeds - - 205,487 205,487
Subscription IT proceeds - - 53,051 53,051
Transfers out (4,064,000) (4,064,000) (5,444,000) (1,380,000)
Transfers in 2,920,000 2,920,000 - (2,920,000)
Total other financing sources (uses)(1,144,000) (1,144,000) (5,185,462) (4,041,462)
Net Change in Fund Balance (1,794,947) (1,784,376) (4,126,524) (2,342,148)
Fund balance, beginning 41,316,364 41,316,364 41,316,364 -
Fund balance, ending 39,521,417$ 39,531,988$ 37,189,840$ (2,342,148)$
Budgeted Amounts
208
64 City of The Colony, Texas Schedule of Changes in Net Pension Liability and Related Ratios – Texas Municipal Retirement System (Exhibit B-2) Year Ended September 30, 2024 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedDecember 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31,2023 2022 2021 2020 2019 2018 2017 2016 2015 2014Total Pension LiabilityService cost 5,610,086$ 5,156,067$ 4,833,901$ 4,598,382$ 4,260,983$ 3,870,905$ 3,593,344$ 3,247,190$ 3,038,645$ 2,636,444$ Interest on total pension liability 8,822,421 8,260,909 7,705,205 7,143,318 6,525,581 6,090,550 5,640,026 5,246,784 4,956,953 4,717,021 Changes of benefit terms - - - - - - - - - - Differences between expected and actual experience 1,273,565 146,281 475,568 686,320 1,392,962 (201,099) 653,253 395,250 681,456 (1,078,676) Change of assumptions (354,399) - - - 469,452 - - - 1,451,967 - Benefit payments/refunds of contributions (5,651,226) (5,291,919) (4,594,279) (3,848,793) (3,483,246) (3,537,724) (3,164,226) (3,308,765) (3,324,791) (2,771,781) Net change in total pension liability 9,700,447 8,271,338 8,420,395 8,579,227 9,165,732 6,222,632 6,722,397 5,580,459 6,804,230 3,503,008 Total pension liability, beginning 130,723,102 122,451,764 114,031,369 105,452,142 96,286,410 90,063,778 83,341,381 77,760,922 70,956,692 67,453,684 Total pension liability, ending (a) 140,423,549$ 130,723,102$ 122,451,764$ 114,031,369$ 105,452,142$ 96,286,410$ 90,063,778$ 83,341,381$ 77,760,922$ 70,956,692$ Fiduciary Net PositionContributions - Employer 4,450,840$ 4,080,627$ 3,861,496$ 3,509,336$ 3,330,020$ 3,044,002$ 2,825,357$ 2,343,572$ 2,336,643$ 2,051,029$ Contributions - Employee 2,315,788 2,120,592 2,003,458 1,900,158 1,790,133 1,630,948 1,512,352 1,360,283 1,309,761 1,179,152 Net investment income 12,766,249 (8,610,826) 13,461,929 7,176,504 12,447,283 (2,451,824) 9,825,153 4,466,472 96,983 3,534,120 Benefit payments/refunds of contributions (5,651,226) (5,291,919) (4,594,279) (3,848,793) (3,483,246) (3,537,724) (3,164,226) (3,308,765) (3,324,791) (2,771,781) Administrative expenses (81,107) (74,437) (62,232) (46,406) (70,294) (47,376) (50,917) (50,436) (59,070) (36,893) Other (565) 88,824 426 (1,631) (2,113) (2,475) (2,581) (2,717) (2,918) (3,033) Net change in fiduciary net position 13,799,979 (7,687,139) 14,670,798 8,689,168 14,011,783 (1,364,449) 10,945,138 4,808,409 356,608 3,952,594 Fiduciary net position, beginning 110,154,143 117,841,282 103,170,484 94,481,316 80,469,533 81,833,982 70,888,844 66,080,435 65,723,827 61,771,233 Fiduciary net position, ending (b) 123,954,122$ 110,154,143$ 117,841,282$ 103,170,484$ 94,481,316$ 80,469,533$ 81,833,982$ 70,888,844$ 66,080,435$ 65,723,827$ Net pension liability (asset), ending = (a) - (b) 16,469,427 20,568,959 4,610,482 10,860,885 10,970,826 15,816,877 8,229,796 12,452,537 11,680,487 5,232,865 Fiduciary net position as a percentage of total pension liability 88.27% 84.27% 96.23% 90.48% 89.60% 83.57% 90.86% 85.06% 84.98% 92.63%Covered payroll 33,072,876$ 30,294,165$ 28,619,902$ 27,145,113$ 25,576,127$ 23,248,678$ 21,607,602$ 19,432,616$ 18,710,868$ 16,838,560$ Net pension liability as a percentage of covered payroll 49.80% 67.90% 16.11% 40.01% 42.89% 68.03% 38.09% 64.08% 62.43% 31.08%Note:The information from this schedule corresponds with the period covered as of the Plan's measurement dates of December 31. 209
65
City of The Colony, Texas
Schedule of Employer Contributions – Texas Municipal Retirement System (Exhibit B-3)
Year Ended September 30, 2024
Actual
Contribution as
Actuarially Actual Contribution a Percentage
Year Ending Determined Employer Deficiency Covered of Covered
September 30, Contribution Contribution (Excess) Payroll Payroll
2015 2,224,043$ 2,224,043$ -$ 19,145,821$ 11.62%
2016 2,399,108 2,399,108 - 19,236,056 12.47%
2017 2,723,827 2,723,827 - 19,440,612 14.01%
2018 2,998,437 2,998,437 - 22,698,203 13.21%
2019 3,247,835 3,247,835 - 24,667,551 13.17%
2020 3,477,782 3,477,782 - 26,570,811 13.09%
2021 3,770,299 3,770,299 - 28,244,747 13.35%
2022 3,861,496 3,861,496 - 30,774,816 12.55%
2023 4,080,627 4,080,627 - 32,146,158 12.69%
2024 4,934,490 4,934,490 - 35,912,284 13.74%
Note:The information from this schedule corresponds with the City's fiscal years ended
September 30.
210
66 City of The Colony, Texas Schedule of Changes in Total OPEB Liability and Related Ratios – Supplemental Death Benefits Plan (Exhibit B-4) Year Ended September 30, 2024 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year EndedDecember 31, December 31, December 31, December 31, December 31, December 31, December 31,2023 2022 2021 2020 2019 2018 2017Total OPEB LiabilityService cost 39,694$ 81,794$ 71,550$ 57,005$ 40,922$ 41,848$ 32,411$ Interest on total OPEB liability 37,468 25,390 26,044 29,359 30,875 28,018 27,153 Changes of benefit terms - - - - - - - Differences between expected and actual experience 6,021 (43,826) (46,639) (17,505) (11,620) (15,239) - Change of assumptions 50,802 (473,215) 42,215 171,209 172,459 (62,382) 69,501 Benefit payments (26,463) (21,206) (20,034) (5,429) (5,115) (6,975) (4,322) Net change in total OPEB liability 107,522 (431,063) 73,136 234,639 227,521 (14,730) 124,743 Total OPEB liability, beginning 918,528 1,349,591 1,276,455 1,041,816 814,295 829,025 704,282 Total OPEB liability, ending 1,026,050$ 918,528$ 1,349,591$ 1,276,455$ 1,041,816$ 814,295$ 829,025$ Covered payroll 33,072,876$ 30,294,165$ 28,619,902$ 27,145,113$ 25,576,127$ 23,248,678$ 21,607,602$ Total OPEB liability as a percentage of covered payroll 3.10% 3.03% 4.72% 4.70% 4.07% 3.50% 3.84%Note:The information from this schedule corresponds with the period covered as of the Plan's measurement dates of December 31. Plan information was unavailable prior to 2017. Ten years will ultimately be displayed. No assets are accumulated in a trust as defined by GASB 75. Benefits are on a pay as you go basis. 211
67
City of The Colony, Texas
Notes to Required Supplementary Information
Year Ended September 30, 2024
Note A: Net Pension Liability – Texas Municipal Retirement System
Assumptions
The following methods and assumptions were used to determine contribution rates:
Valuation date Actuarially determined contribution rates are calculated as of December 31
and become effective in January 13 months later.
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed
Remaining amortization period 22 years
Asset valuation method 10-year smoothed market; 12% soft corridor
Inflation 2.50%
Salary increases 3.60% to 11.85%, 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 2023 valuation pursuant to an experience
study of the period ending 2022.
Mortality Post-retirement: 2019 Municipal Retirees of Texas Mortality Tables. Male
rates are multiplied by 103% and female rates are multiplied by 105%.
The rates are projected on a fully generational basis by the most recent
Scale MP-2021 with immediate convergence.
Pre-retirement: PUB(10) mortality tables, with the Public Safety table
used for males and the 100% of the General Employee table used for
females. The rates are projected on a fully generational basis by the most
recent Scale MP-2021 with immediate convergence.
Notes: There were no benefit changes during the year.
212
68
City of The Colony, Texas
Notes to Required Supplementary Information
Year Ended September 30, 2024
Note B: Total OPEB Liability – Texas Municipal Retirement System
Summary of actuarial assumptions:
Actuarial cost method Entry age normal
Inflation 2.50%
Discount rate* 3.77%
Salary increases 3.60% to 11.85%, including inflation
Retirees’ share- benefit-related costs $0
Administrative expenses All administrative expenses are paid through the Pension Trust and accounted
for under reporting requirements under GASB Statement No. 68.
Mortality rate- service retirees 2019 Municipal Retirees of Texas Mortality Tables. Male rates are multiplied by
103% and female rates are multiplied by 105%. The rates are projected on a
fully generational basis by the most recent Scale MP-2021 with immediate
convergence.
Mortality rate- disabled retirees 2019 Municipal Retirees of Texas Mortality Tables with a 4 year set-forward for
males and a 3 year set-forward for females. In addition, a 3.5% and 3%
minimum mortality rate will be applied to reflect the impairment for younger
members who become disabled for males and females, respectively. The rates
are projected on a fully generational basis by the most recent Scale MP-2021
with immediate convergence to account for future mortality improvements
subject to the floor.
The actuarial assumptions used in the December 31 valuation were based on the results of an actuarial experience study for
the period ended December 31, 2022.
* The discount rate was based on the Fidelity Index’s “20-Year Municipal GO AA Index” as of December 31, 2023.
Note C: Budgetary Process
The City Council adheres to the following procedures in establishing the budgets reflected in the financial statements:
1. Prior to July 31, the City Manager submits to the City Council a proposed operating budget for the fiscal year
commencing the following October 1. The operating budget includes proposed expenditures and the means of
financing them.
2. The proposed budget is filed with the City Secretary not less than 30 days prior to the time the City Council
approves the tax levy for the fiscal year commencing the following October 1. Public hearings are conducted to
obtain taxpayers' comments.
3. Prior to October 1, the budget is legally enacted by the City Council through passage of an ordinance.
4. The City Manager has authority to transfer appropriation balances from one expenditure account to another
within a single department of the City. Only the City Council may transfer any unencumbered appropriation
balance or portion thereof from one department to another. Appropriations lapse at the end of the fiscal year.
213
69
City of The Colony, Texas
Notes to Required Supplementary Information
Year Ended September 30, 2024
An annual budget is legally adopted for the General Fund using accounting principles generally accepted in the United
States of America in all material respects.
Expenditures exceeded appropriations in the general fund as follows during the year ended September 30, 2024:
Public Works ($66,112)
Public Safety ($425,317)
Capital Outlay ($620,049)
Debt Service ($502,694)
214
70
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
215
71
City of The Colony, Texas
Budgetary Comparison Schedule – Debt Service Fund (Exhibit C-1)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Property taxes 7,494,325$ 7,494,325$ 8,053,759$ 559,434$
Investment income 40,000 40,000 635,302 595,302
Total revenues 7,534,325 7,534,325 8,689,061 1,154,736
Expenditures
Debt service
Principal 4,796,402 4,796,402 4,792,498 3,904
Interest 2,694,028 2,694,028 2,365,630 328,398
Total expenditures 7,490,430 7,490,430 7,158,128 332,302
Excess (Deficiency) of Revenues
over (under) Expenditures 43,895 43,895 1,530,933 1,487,038
Net Change in Fund Balance 43,895 43,895 1,530,933 1,487,038
Fund Balance -
October 1 (Beginning) 5,593,826 5,593,826 5,593,826 -
Fund Balance -
September 30 (Ending) 5,637,721$ 5,637,721$ 7,124,759$ 1,487,038$
Budgeted Amounts
216
72
City of The Colony, Texas
Non-Major Governmental Funds
Year Ended September 30, 2024
Special Revenue Funds
The Special Revenue Funds account for the proceeds of specific revenue sources (other than major capital projects) that are
legally restricted or committed to expenditures for specific purposes.
Lake Parks Fund – To account for revenue generated by fees and permits to enter and utilize the park area and facilities
located on the eastern shore of Lake Lewisville.
Special Events Fund – To account for various special events of the City including Christmas decorations, 4th of July
fireworks display, and other special events held by the City.
Hotel/Motel Taxes Fund – To account for the receipt and allocation of the City’s hotel/motel occupancy tax.
Police Forfeited Fund – To account for the funds granted to the police department that have been awarded by the court.
Federal Seized Fund – To account for funds granted to the police department in a revenue sharing agreement with the
federal government.
Child Safety Fund – To account for child safety fees collected according to state statute to fund the school crossing guard
program and other programs designed to enhance child safety, health or nutrition.
Storm Water Utility Fund – To account for the revenue and expenses associated with the drainage projects within the City.
Court Security Fund – To account for the revenue and expenditures associated with the portion of traffic tickets that have
been restricted for the security of the Municipal Court.
Court Technology Fund – To account for the revenue and expenditures associated with the portion of traffic tickets
restricted for upgrading the technology in the Municipal Court.
Keep The Colony Beautiful – To account for revenue and expenditures associated with the City supported community
volunteer program designed to help property owners who can’t maintain their properties due to financial or physical
limitations.
Citizens Donations Fund – To account for money received from the $1 Add-On Program and the Recycling Rebate Program.
This money is restricted for social and community services, public safety citizen programs and beautification projects.
Public Improvement District (PID) No.1 – To account for revenues and expenditures related to the City of The Colony Public
Improvement District No. 1.
Trinity North Medical – To account for revenues and expenditures related to the City of The Colony renting out space in
their building that is externally restricted.
Juvenile Case – To account for revenues and expenditures related to the City of The Colony’s juvenile court.
217
73 City of The Colony, Texas Combining Balance Sheet – Nonmajor Governmental Funds (Exhibit C-2) September 30, 2024 Hotel / Police Federal Child StormLake Special Motel Forfeited Seized Safety WaterParks Events Taxes Fund Fund Fund UtilityAssetsCash and cash equivalents 2,788,758$ 131,750$ 3,620,349$ 26,787$ 12,935$ 47,499$ 3,464,731$ Receivables (net of allowance)Hotel/motel taxes - - 263,000 - - - - Leases 1,476,339 - - - - - - Miscellaneous 30,060 - - - - 50,000 - Prepaid items - 816 - - - - - Total assets 4,295,157$ 132,566$ 3,883,349$ 26,787$ 12,935$ 97,499$ 3,464,731$ Liabilities Accounts payable 122,742$ 14,152$ 5,950$ -$ -$ -$ -$ Accrued salaries - 2,022 6,960 - - - - Other liabilities 14,436 2,033 1,478 - - - - Due to other funds - 13,102 - - - - - Total liabilities 137,178 31,309 14,388 - - - - Deferred Inflows of ResourcesLease related 1,398,689 - - - - - - Total deferred inflows of resources 1,398,689 - - - - - - Fund BalancesNonspendable - 816 - - - - - Restricted - - 3,868,961 26,787 12,935 97,499 3,464,731 Committed 2,759,290 100,441 - - - - - Total fund balances 2,759,290 101,257 3,868,961 26,787 12,935 97,499 3,464,731 Total liabilities, deferred inflows of resources and fund balances 4,295,157$ 132,566$ 3,883,349$ 26,787$ 12,935$ 97,499$ 3,464,731$ From C-24,295,157 132,566 3,883,349 26,787 12,935 97,499 3,464,731 218
74 City of The Colony, Texas Combining Balance Sheet – Nonmajor Governmental Funds (Exhibit C-2) - continued September 30, 2024 Total NonmajorKeepSpecial Court Court The Colony Citizens Trinity North Juvenile RevenueSecurity Technology Beautiful Donations PID No. 1 Medical Case Funds AssetsCash and cash equivalents 337,732$ 35,593$ 13,926$ 10,894$ 1,101,917$ 157,687$ 218,118$ 11,968,676$ Receivables (net of allowance)Hotel/motel taxes - - - - - - - 263,000 Leases - - - - - - - 1,476,339 Miscellaneous - - - - - - - 80,060 Prepaid items - - - - - - - 816 Total assets 337,732$ 35,593$ 13,926$ 10,894$ 1,101,917$ 157,687$ 218,118$ 13,788,891$ Liabilities Accounts payable -$ -$ -$ -$ 246,667$ 97$ -$ 389,608$ Accrued salaries - - - - - - - 8,982 Other liabilities - - - - - - - 17,947 Due to other funds - - - - - - - 13,102 Total liabilities - - - - 246,667 97 - 429,639 Deferred Inflows of ResourcesLease related - - - - - - - 1,398,689 Total deferred inflows of resources - - - - - - - 1,398,689 Fund BalancesNonspendable - - - - - - - 816 Restricted 337,732 35,593 - 10,894 855,250 157,590 218,118 9,086,090 Committed - - 13,926 - - - - 2,873,657 Total fund balances 337,732 35,593 13,926 10,894 855,250 157,590 218,118 11,960,563 Total liabilities, deferred inflows of resources and fund balances 337,732$ 35,593$ 13,926$ 10,894$ 1,101,917$ 157,687$ 218,118$ 13,788,891$ From C-2337,732 35,593 13,926 10,894 1,101,917 157,687 218,118 13,788,891 219
75 City of The Colony, Texas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds (Exhibit C-3) Year Ended September 30, 2024 Hotel / Police Federal Child StormLake Special Motel Forfeited Seized Safety WaterParks Events Taxes Fund Fund Fund UtilityRevenuesTaxes Hotel occupancy tax -$ -$ 2,538,159$ -$ -$ -$ -$ Licenses and permits 443,974 - - - - - 1,315,076 Fines & forfeitures - - - 8,171 - - - Charges for services 1,841 - - - - - - Gifts and contributions - - - - - - - Grants - - - - - 52,988 - Investment income 70,171 - - - - - - Miscellaneous income 536,100 73,954 5,173 7,852 - - 24,848 Total revenues 1,052,086 73,954 2,543,332 16,023 - 52,988 1,339,924 ExpendituresCurrentGeneral government - - - - - - - Culture and recreation 380,076 660,285 1,280,186 - - - - Public works - - - - - - - Public safety - - - 48,124 - 65,607 - Capital outlay 14,985 - - 33,713 - - - Debt servicePrincipal - - 16,177- - - - Interest - - 565 - - - - Total expenditures 395,061 660,285 1,296,928 81,837 - 65,607 - Excess (Deficiency) of Revenues over (under) Expenditures 657,025 (586,331) 1,246,404 (65,814) - (12,619) 1,339,924 Other Financing Sources (Uses)Transfers out (50,000) - (200,000) - - (10,000) (150,000) Transfers in - 644,000 800,000 - - - - Total Other Financing Sources (Uses) (50,000) 644,000 600,000 - - (10,000) (150,000) Net Change in Fund Balance 607,025 57,669 1,846,404 (65,814) - (22,619) 1,189,924 Fund Balance - October 1 (Beginning) 2,152,265 43,588 2,022,557 92,601 12,935 120,118 2,274,807 Fund Balance - September 30 (Ending) 2,759,290$ 101,257$ 3,868,961$ 26,787$ 12,935$ 97,499$ 3,464,731$ 220
76 City of The Colony, Texas Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds (Exhibit C-3) - continued Year Ended September 30, 2024 TotalNonmajorKeepSpecial Court Court The Colony Citizens Trinity North Juvenile RevenueSecurity Technology Beautiful Donations PID No. 1 Medical CaseFunds RevenuesTaxesHotel occupancy tax -$ -$ -$ -$ -$ -$ -$ 2,538,159$ Licenses and permits - - - - - - - 1,759,050 Fines & forfeitures 21,563 17,689 - - - - 35,142 82,565 Charges for services - - - - 1,335,580 - - 1,337,421 Gifts and contributions - - - 247 - - - 247 Grants - - - - - - - 52,988 Investment income - - - - 74,335 - - 144,506 Miscellaneous income - - - - - - - 647,927 Total revenues 21,563 17,689 - 247 1,409,915 - 35,142 6,562,863 ExpendituresCurrentGeneral government - - - - 1,135,080 - - 1,135,080 Culture and recreation - - - - - - - 2,320,547 Public works - - 8,923 - - - - 8,923 Public safety 3,320 10,738 - - - - 184 127,973 Capital outlay - - - - - - - 48,698 Debt servicePrincipal - - - - - - - 16,177 Interest - - - - - - - 565 Total expenditures 3,320 10,738 8,923 - 1,135,080 - 184 3,657,963 Excess (Deficiency) of Revenues over (under) Expenditures 18,243 6,951 (8,923) 247 274,835 - 34,958 2,904,900 Other Financing Sources (Uses)Transfers out - - - - - - - (410,000) Transfers in - - 10,000 - - - - 1,454,000 Total Other Financing Sources (Uses) - - 10,000 - - - - 1,044,000 Net Change in Fund Balance 18,243 6,951 1,077 247 274,835 - 34,958 3,948,900 Fund Balance - October 1 (Beginning) 319,489 28,642 12,849 10,647 580,415 157,590 183,160 8,011,663 Fund Balance - September 30 (Ending) 337,732$ 35,593$ 13,926$ 10,894$ 855,250$ 157,590$ 218,118$ 11,960,563$ 221
77
City of The Colony, Texas
Budgetary Comparison Schedule – Lake Parks Fund (Exhibit C-4)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Licenses and permits 299,000$ 299,000$ 443,974$ 144,974$
Charges for services 1,000 1,000 1,841 841
Investment income - - 70,171 70,171
Miscellaneous income 322,000 322,000 536,100 214,100
Total revenues 622,000 622,000 1,052,086 430,086
Expenditures
Current
Culture and recreation - - 380,076 (380,076)
Capital outlay - - 14,985 (14,985)
Total expenditures - - 395,061 (395,061)
Excess (Deficiency) of Revenues
over (under) Expenditures 622,000 622,000 657,025 35,025
Other Financing Sources (Uses)
Transfers out - - (50,000) (50,000)
Total Other Financing Sources (Uses) - - (50,000) (50,000)
Net Change in Fund Balance 622,000 622,000 607,025 (14,975)
Fund Balance -
October 1 (Beginning) 2,152,265 2,152,265 2,152,265 -
Fund Balance -
September 30 (Ending) 2,774,265$ 2,774,265$ 2,759,290$ (14,975)$
Budgeted Amounts
222
78
City of The Colony, Texas
Budgetary Comparison Schedule – Special Events Fund (Exhibit C-5)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Miscellanous income 30,000$ 30,000$ 73,954$ 43,954$
Total revenues 30,000 30,000 73,954 43,954
Expenditures
Current
Culture and recreation 669,399 669,399 660,285 9,114
Total expenditures 669,399 669,399 660,285 9,114
Excess (Deficiency) of Revenues
over Expenditures (639,399) (639,399) (586,331) 53,068
Other Financing Sources (Uses)
Transfers in 644,000 644,000 644,000 -
Total Other Financing
Sources (Uses) 644,000 644,000 644,000 -
Net Change in Fund Balance 4,601 4,601 57,669 53,068
Fund Balance -
October 1 (Beginning) 43,588 43,588 43,588 -
Fund Balance -
September 30 (Ending) 48,189$ 48,189$ 101,257$ 53,068$
Budgeted Amounts
223
79
City of The Colony, Texas
Budgetary Comparison Schedule – Hotel/Motel Taxes Fund (Exhibit C-6)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Taxes
Hotel occupancy tax 12,000,000$ 1,200,000$ 2,538,159$ 1,338,159$
Miscellaneous income - - 5,173 5,173
Total revenues 12,000,000 1,200,000 2,543,332 1,343,332
Expenditures
Current
Culture and recreation 1,588,462 1,588,462 1,280,186 308,276
Debt service
Principal - - 16,177 (16,177)
Interest - - 565 (565)
Total expenditures 1,588,462 1,588,462 1,296,928 291,534
Excess (Deficiency) of Revenues
over Expenditures 10,411,538 (388,462) 1,246,404 1,634,866
Other Financing Sources (Uses)
Transfers out (200,000) (200,000) (200,000) -
Transfers in 800,000 800,000 800,000 -
Total Other Financing
Sources (Uses) 600,000 600,000 600,000 -
Net Change in Fund Balance 11,011,538 211,538 1,846,404 1,634,866
Fund Balance -
October 1 (Beginning) 2,022,557 2,022,557 2,022,557 -
Fund Balance -
September 30 (Ending) 13,034,095$ 2,234,095$ 3,868,961$ 1,634,866$
Budgeted Amounts
224
80
City of The Colony, Texas
Budgetary Comparison Schedule – Child Safety Fund (Exhibit C-7)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Grants 50,700$ 50,700$ 52,988$ 2,288$
Total revenues 50,700 50,700 52,988 2,288
Expenditures
Current
Public safety 65,608 65,068 65,607 (539)
Total expenditures 65,608 65,068 65,607 (539)
Excess (Deficiency) of Revenues
over Expenditures (14,908) (14,368) (12,619) 1,749
Other Financing Sources (Uses)
Transfers out (10,000) (10,000) (10,000) -
Total Other Financing
Sources (Uses) (10,000) (10,000) (10,000) -
Net Change in Fund Balance (24,908) (24,368) (22,619) 1,749
Fund Balance -
October 1 (Beginning) 120,118 120,118 120,118 -
Fund Balance -
September 30 (Ending) 95,210$ 95,750$ 97,499$ 1,749$
Budgeted Amounts
225
81
City of The Colony, Texas
Budgetary Comparison Schedule – Storm Water Utility Fund (Exhibit C-8)
Year Ended September 30, 2024
Variance
with Final
Original Final
Actual Budget
Revenues
Licenses and permits 1,000,000$ 1,000,000$ 1,315,076$ 315,076$
Miscellaneous income - - 24,848 24,848
Total revenues 1,000,000 1,000,000 1,339,924 339,924
Expenditures
Current
Public works - - - -
Total expenditures - - - -
Excess (Deficiency) of Revenues
over Expenditures 1,000,000 1,000,000 1,339,924 339,924
Other Financing Sources (Uses)
Transfers out (150,000) (150,000) (150,000) -
Total Other Financing
Sources (Uses) (150,000) (150,000) (150,000) -
Net Change in Fund Balance 850,000 850,000 1,189,924 339,924
Fund Balance -
October 1 (Beginning) 2,274,807 2,274,807 2,274,807 -
Fund Balance -
September 30 (Ending) 3,124,807$ 3,124,807$ 3,464,731$ 339,924$
Budgeted Amounts
226
82
City of The Colony, Texas
Discretely Presented Component Units
September 30, 2024
The Colony Economic Development Corporation (TCEDC)– TCEDC is a legally separate entity from the City and was
organized exclusively for the public purposes of the promotion and development of new and expanded business
enterprises to provide and encourage employment in the furtherance of public welfare.
The Colony Community Development Corporation (TCCDC) – TCCDC is a legally separate entity from the City and was
organized for the purpose of the promotion of economic development by developing, implementing, and
financing projects under the Development Corporation Act of 1979.
The Colony Local Development Corporation (TCLDC) – The TCLDC is a legally separate entity from the City and was
organized exclusively for the purpose of serving as the primary governing body for the funding of the Tax
Increment Reinvestment Zone Number One public infrastructure between the City and NFM Services.
227
83
City of The Colony, Texas
Combining Balance Sheet – Component Units (Exhibit F-1)
September 30, 2024
Total
The Colony The Colony The Colony Discretely
Economic Community Local Presented
Development Development Development Component
Corporation Foundation Corporation Units
Assets
Cash and cash equivalents 21,792,414$ 9,261,083$ 7,290,432$ 38,343,929$
Receivables (net of allowance)
Sales taxes 1,976,557 1,976,557 - 3,953,114
Restricted assets 8,560,464 8,560,290 11,737,018 28,857,772
Total assets 32,329,435$ 19,797,930$ 19,027,450$ 71,154,815$
Liabilities
Accounts payable 29,005$ 16,641$ -$ 45,646$
Accrued liabilities 1,210,478 1,197,839 10,000 2,418,317
Total liabilities 1,239,483 1,214,480 10,000 2,463,963
Fund Balances
Restricted for construction 2,631,385 - - 2,631,385
Unassigned 28,458,567 18,583,450 19,017,450 66,059,467
Total fund balances 31,089,952 18,583,450 19,017,450 68,690,852
Total liabilities and fund balances 32,329,435$ 19,797,930$ 19,027,450$ 71,154,815$
228
84
City of The Colony, Texas
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position – Component Units
(Exhibit F-2)
Year Ended September 30, 2024
The Colony The Colony The Colony
Economic Community Local
Development Development Development
Corporation Foundation Corporation
Total Fund Balances - Component Units (CU) 31,089,952$ 18,583,450$ 19,017,450$
Amounts reported for CU in the statement of net position are different because:
Capital assets used in CU are not current financial resources and
therefore are not reported in the balance sheet. 7,241,796 - 22,321,911
Prepaid insurance costs associated with the issuance of bonds are recorded
as expenditures at the time of issuance in the CU financial statements. In
the statement of net position, these costs are recorded as an asset and
amortized into expense over the life of the debt. - - 2,534,231
Included in liabilities is the recognition of the CU's net pension liability, total
OPEB liability and the related deferred inflows and outflows of resources:
Net pension liability (166,604) (54,737) -
Total OPEB liability (10,379) (3,410) -
Deferred outflows of resources - pension 81,491 26,774 -
Deferred outflows of resources - OPEB 2,085 685 -
Deferred inflows of resources - pension (2,816) (925) -
Deferred inflows of resources - OPEB (4,144) (1,361) -
Some liabilities, including bonds payable and compensated absences, are
not due and payable in the current year and therefore are not reported
in the CU's financial stateents:
Bonds payable (31,315,000) (27,070,000) (132,435,000)
Unamortized discount on bonds payable 1,273,880 1,273,880 22,776
Compensated absences (52,210) - -
Deferred charge on refunding - - 304,308
Accrued interest is not due and payable in the current year and therefore
is not reported as a liability in the CU's financial statements. (996,222) (977,138) (3,184,928)
Net Position of Component Units 7,141,829$ (8,222,782)$ (91,419,252)$
229
85
City of The Colony, Texas
Statement of Revenues, Expenditures, and Changes in Fund Balance – Component Units (Exhibit F-3)
Year Ended September 30, 2024
Total
The Colony The Colony The Colony Discretely
Economic Community Local Presented
Development Development Development Component
Corporation Foundation Corporation Units
Revenues
Taxes
Sales 10,221,064$ 10,221,065$ 8,841,724$ 29,283,853$
Intergovernmental - - 1,522,060 1,522,060
Investment income 1,190,620 919,453 386,634 2,496,707
Miscellaneous income 1,760 - - 1,760
Total revenues 11,413,444 11,140,518 10,750,418 33,304,380
Expenditures
Current
Economic development 4,389,910 6,774,097 - 11,164,007
Capital outlay 445,959 - - 445,959
Debt service
Principal retirement 925,000 475,000 3,175,000 4,575,000
Interest and fiscal charges 2,135,079 2,037,946 6,438,787 10,611,812
Total expenditures 7,895,948 9,287,043 9,613,787 26,796,778
Excess (Deficiency) of Revenues
over (under) Expenditures 3,517,496 1,853,475 1,136,631 6,507,602
Net Change in Fund Balance 3,517,496 1,853,475 1,136,631 6,507,602
Fund Balance - October 1 (Beginning) 27,572,456 16,729,975 17,880,819 62,183,250
Fund Balance - September 30 (Ending) 31,089,952$ 18,583,450$ 19,017,450$ 68,690,852$
230
86
City of The Colony, Texas
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balance of Governmental
Funds to the Statement of Activities – Component Units (Exhibit F-4)
Year Ended September 30, 2024
The Colony The Colony The Colony
Economic Community Local
Development Development Development
Corporation Foundation Corporation
Net Change in Fund Balances - Component Units (CU) 3,517,496$ 1,853,475$ 1,136,631$
Amounts reported for CU in the statement of activities are different because:
The CU report capital outlays as expenditures. However, in the statement
of activities, the cost of those assets is capitalized and depreciated over the
estimated useful lives:
Capital outlay 445,959 - -
Depreciation expense (31,179) - -
The issuance of long-term debt (e.g. bonds) provides current financial
resources of funds, while the repayment of the principal of long-term debt
consumes the current financial resources. The amount is the net effect of
these differences in the treatment of long-term debt and related items:
Bond principal 925,000 475,000 3,175,000
Current year amortization of the costs of discounts on debt issuance and
deferred charges on refundings do not require the use of current financial
resources; and therefore, not reported as expenditures in governmental
funds:
Amortization of discounts on debt issuance (67,046) (67,045) (2,000)
Amortization of deferred charges on refundings - - (27,664)
Amortization of prepaid insurance - - (110,184)
The payment of compensated absences payable is an expenditure in the
governmental funds when paid, but the net change in the accrued liability
is recorded to the statement of activities. 8,001 - -
Current year changes in accrued interest payable do not require the use of
current financial resources; therefore, are not reported as expenditures in the
CU financial statements. 17,646 16,625 47,381
Changes in the deferred outflows of resources, deferred inflows of resources,
net pension liability, and total OPEB liability must be recorded as expenses:
Net pension liability (166,604) (54,737) -
Total OPEB liability (10,379) (3,410) -
Deferred outflows of resources - pension 81,491 26,774 -
Deferred outflows of resources - OPEB 2,085 685 -
Deferred inflows of resources - pension (2,816) (925) -
Deferred inflows of resources - OPEB (4,144) (1,361) -
Change in Net Position of Component Units 4,715,510$ 2,245,081$ 4,219,164$
231
87
STATISTICAL SECTION
232
88
STATISTICAL SECTION
(Unaudited)
The City of the Colony’s annual comprehensive financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary
information says about the City’s overall financial health.
Tables
Financial Trends These schedules contain trend information to help the
reader understand how the City’s financial performance and
well-being have changed over time.
1-4
Revenue Capacity These schedules present information to help the reader
assess the City’s most significant local revenue source, the
property tax.
5-8
Debt Capacity These schedules 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.
9-13
Demographic and
Economic Indicators
These schedules offer demographic and economic
indicators to help the reader understand the environment
within which the City’s financial activities take place.
14-16
Operating
Information
These schedules contain service and infrastructure data to
help the reader understand how the information in the
City’s financial report relate to the services the City provides
and the activities it performs.
17-18
233
89 City of The Colony, Texas Net Position by Component (Accrual Basis of Accounting) Last Ten Fiscal Years (Unaudited) TABLE 12015 2016 2017 2018 2019 2020 2021 2022 2023 2024(as restated)Governmental activitiesNet investment in capital assets 192,477,376$ 216,941,085$ 204,138,146$ 193,724,440$ 197,783,498$ 198,340,131$ 200,374,394$ 204,399,731$ 206,025,047$ 211,834,115$ Restricted for:Debt service 1,257,148 1,826,579 1,027,528 902,127 863,999 1,802,592 3,183,352 5,124,388 5,296,697 6,878,981Construction 367,397 367,397 367,397 - - - - - - - Capital Projects 578,825 791,860 1,729,804 4,716,830 4,538,583 6,866,640 4,130,506 242,568 9,287,925 809,584Specific Programs 1,014,418 1,264,226 1,684,065 2,313,497 3,694,856 3,659,079 5,405,009 9,302,645 9,096,902 10,006,842Unrestricted 10,388,094 17,693,194 8,666,844 8,704,028 5,535,911 8,170,872 10,102,289 15,263,719 28,951,563 30,480,680Total governmental activities net position206,083,258$ 238,884,341$ 217,613,784$ 210,360,922$ 212,416,847$ 218,839,314$ 223,195,550$ 234,333,051$ 258,658,134$ 260,010,202$ Business-type activitiesInvested in capital assetsNet investment in capital assets 40,490,252$ 25,654,373$ 97,282,865$ 103,990,659$ 103,881,697$ 105,088,143$ 105,104,266$ 105,648,298$ 105,513,597$ 108,929,168$ Restricted for:Capital Projects 1,333,988 1,413,437 2,323,551 2,482,944 2,039,020 1,704,315 1,074,088 1,358,869 952,104 2,565,461Unrestricted 3,890,445 17,934,272 2,128,657 4,887,549 7,666,343 6,525,997 6,542,891 7,990,465 11,523,144 19,054,511Total business-type activities net position45,714,685$ 45,002,082$ 101,735,073$ 111,361,152$ 113,587,060$ 113,318,455$ 112,721,245$ 114,997,632$ 117,988,845$ 130,549,140$ Primary governmentInvested in capital assetsNet investment in capital assets 232,967,628$ 242,595,458$ 301,421,011$ 297,715,099$ 301,665,195$ 303,428,274$ 305,478,660$ 310,048,029$ 311,538,644$ 320,763,283$ Restricted for:Debt service 1,257,148 1,826,579 1,027,528 902,127 863,999 1,802,592 3,183,352 5,124,388 5,296,697 6,878,981 Construction 367,397 367,397 367,397 - - - - - - - Capital Projects 1,912,813 2,205,297 4,053,355 7,199,774 6,577,603 8,570,955 5,204,594 1,601,437 10,240,029 3,375,045 Specific Programs 1,014,418 1,264,226 1,684,065 2,313,497 3,694,856 3,659,079 5,405,009 9,302,645 9,096,902 10,006,842 Unrestricted 14,278,539 35,627,466 10,795,501 13,591,577 13,202,254 14,696,869 16,645,180 23,254,184 40,474,707 49,535,191 Total primary governmental net position251,797,943$ 283,886,423$ 319,348,857$ 321,722,074$ 326,003,907$ 332,157,769$ 335,916,795$ 349,330,683$ 376,646,979$ 390,559,342$ Source: Comprehensive Annual Financial Report- Exhibit A-1Note: 2023 restated for correction of an error.Fiscal YearCITY OF THE COLONY, TEXASNET ASSETS BY COMPONENTACCRUAL BASIS OF ACCOUNTINGLAST TEN FISCAL YEARS (UNAUDITED)234
90 City of The Colony, Texas Changes in Net Position (Accrual Basis of Accounting) Last Ten Fiscal Years (Unaudited) TABLE 22015 2016 2017 2018 2019 2020 2021 2022 2023 2024(as restated)ExpensesGovernmental activities:General government 8,498,744$ 11,225,704$ 13,083,945$ 17,442,292$ 15,928,203$ 14,646,729$ 15,835,564$ 15,353,052$ 14,176,393$ 18,523,136$ Public safety 13,702,805 17,950,628 19,078,137 19,917,944 24,524,067 24,600,147 25,340,611 26,743,262 31,659,259 33,148,673Public works 6,634,461 6,601,440 33,589,099 15,129,445 9,100,156 8,179,035 10,425,482 11,016,099 11,679,662 14,521,855Culture and recreation 4,945,616 5,171,748 5,504,249 6,011,423 6,377,301 5,979,977 7,818,786 7,391,239 7,786,848 8,504,034Interest on Long-term Debt 1,552,854 1,390,574 1,731,842 1,729,008 2,254,447 1,717,586 1,825,404 3,087,504 1,733,621 1,447,788Total governmental activities expenses35,334,480 42,340,094 72,987,272 60,230,112 58,184,174 55,123,474 61,245,847 63,591,156 67,035,783 76,145,486 Business-type activities:Water and sewer 15,332,384$ 16,750,973$ 19,040,918$ 19,670,658$ 20,447,636$ 23,452,375$ 27,240,190$ 26,625,071$ 27,072,765$ 29,933,931$ Total business-type activities expenses15,332,384 16,750,973 19,040,918 19,670,658 20,447,636 23,452,375 27,240,190 26,625,071 27,072,765 29,933,931 Total primary government expenses50,666,864$ 59,091,067$ 92,028,190$ 79,900,770$ 78,631,810$ 78,575,849$ 88,486,037$ 90,216,227$ 94,108,548$ 106,079,417$ Program RevenuesGovernmental activities:Charges for Services:General government 677,339 3,608,782 1,927,505 2,389,337 2,655,534 2,354,343 3,273,887 2,469,376 3,170,909 3,558,535 Public safety 1,621,361 1,546,836 1,643,454 1,966,757 1,906,360 1,785,388 2,062,419 2,199,583 2,153,663 866,841Public works 3,308,308 2,213,005 2,292,974 2,245,868 2,045,067 1,790,935 1,558,430 2,819,164 2,030,194 3,350,243Culture and recreation 758,969 764,819 813,238 821,582 859,582 450,878 888,746 1,097,542 1,119,758 443,974Operating grants and contributions 5,712,865 3,268,620 2,641,513 103,553 1,846,995 2,779,572 352,792 723,463 894,411 745,364Capital grants and contributions 11,365,061 25,670,242 10,303,953 10,158,807 5,869,468 5,086,196 6,233,192 4,821,561 14,545,732 11,841,212Total governmental activities program revenues23,443,903 37,072,304 19,622,637 17,685,904 15,183,006 14,247,312 14,369,466 14,130,689 23,914,667 20,806,169 Business-type activities:Charges for Services:Water and sewer 15,210,296 15,959,047 17,724,046 20,009,706 18,885,913 20,656,614 22,386,290 25,610,329 27,426,435 29,399,479Operating grants and contributions 306,999 307,161 306,545 - - - - - - - Capital grants and contributions 5,055,328 6,426,313 53,449,568 3,622,560 2,663,115 2,283,690 3,836,581 2,929,119 1,025,239 6,954,214 Total business-type activities program revenues20,572,623 22,692,521 71,480,159 23,632,266 21,549,028 22,940,304 26,222,871 28,539,448 28,451,674 36,353,693 Total primary government program revenues44,016,526$ 59,764,825$ 91,102,796$ 41,318,170$ 36,732,034$ 37,187,616$ 40,592,337$ 42,670,137$ 52,366,341$ 57,159,862$ Net (Expenses) RevenuesGovernmental activities (11,890,577) (5,267,790) (53,364,635) (42,544,208) (43,001,168) (40,876,162) (46,876,381) (49,460,467) (43,121,116) (55,339,317) Business-type activities 5,240,239 5,941,548 52,439,241 3,961,608 1,101,392 (512,071) (1,017,319) 1,914,377 1,378,909 6,419,762 Total primary government net expenses(6,650,338)$ 673,758$ (925,394)$ (38,582,600)$ (41,899,776)$ (41,388,233)$ (47,893,700)$ (47,546,090)$ (41,742,207)$ (48,919,555)$ Source: Comprehensive Annual Financial ReportNote: 2023 restated for correction of an error.CITY OF THE COLONY, TEXASCHANGES IN NET POSITIONACCRUAL BASIS OF ACCOUNTINGLAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year235
91 City of The Colony, Texas Changes in Net Position (Accrual Basis of Accounting) - continued Last Ten Fiscal Years (Unaudited) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024(as restated)General Revenuesand Other Changes in Net PositionGovernmental activities:Taxes:Property taxes 17,277,344$ 21,204,646$ 24,719,070$ 27,584,526$ 31,092,818$ 34,456,249$ 36,510,300$ 38,701,240$ 38,027,152$ 34,615,211$ Sales taxes 5,294,228 5,736,997 6,357,581 7,100,104 8,090,511 7,442,947 9,721,676 11,426,569 11,812,142 9,990,559Franchise taxes 2,672,475 2,527,792 2,609,706 2,705,950 2,737,190 2,765,433 2,517,283 2,873,419 2,911,718 5,159,631Hotel motel taxes 525,449 668,011 1,275,280 1,525,722 1,532,041 849,664 1,044,987 1,937,274 2,356,975 2,538,159Vehicle Tax - - - - - - - - - 925,917Penalties and interest 130,513 294,798 125,543 133,895 108,472 114,898 96,423 106,926 152,526 - Interest on investments 19,660 102,126 256,672 729,690 1,075,171 429,498 26,889 456,215 4,202,359 4,504,997Miscellaneous 763,871 792,311 838,429 1,521,033 895,376 1,236,307 1,715,059 5,196,325 5,666,513 3,356,911Transfers 2,004,806 6,742,192 (4,088,203) (5,397,569) (474,486) 3,633 (400,000) (100,000) (100,000) (4,400,000)Total governmental activities28,688,346 38,068,873 32,094,078 35,903,351 45,057,093 47,298,629 51,232,617 60,597,968 65,029,385 56,691,385 Business-type activities:Interest on investments 14,125 88,041 205,547 356,102 650,030 247,099 20,069 262,050 1,183,203 1,740,533 Miscellaneous - - - - - - - - 306,118 - Transfers (2,004,806) (6,742,192) 4,088,203 5,397,569 474,486 (3,633) 400,000 100,000 100,000 4,400,000 Total business-type activities(1,990,681) (6,654,151) 4,293,750 5,753,671 1,124,516 243,466 420,069 362,050 1,589,321 6,140,533 Total primary government26,697,665 31,414,722 36,387,828 41,657,022 46,181,609 47,542,095 51,652,686 60,960,018 66,618,706 62,831,918 Change in Net PositionGovernmental activities 23,420,556 32,801,083 (10,450,130) (7,097,817) (1,109,507) 6,422,467 12,583,862 11,137,501 21,908,269 1,352,068 Business-type activities 3,950,867 (712,603) 8,255,358 6,855,063 107,197 (268,605) (597,250) 2,276,427 2,968,230 12,560,295 Total primary government 27,371,423$ 32,088,480$ (2,194,772)$ (242,754)$ (1,002,310)$ 6,153,862$ 11,986,612$ 13,413,928$ 24,876,499$ 13,912,363$ Source: Comprehensive Annual Financial Report - Exhibit A-2Note: 2023 restated for correction of an error. Fiscal YearCITY OF THE COLONY, TEXASCHANGES IN NET POSITIONACCRUAL BASIS OF ACCOUNTINGLAST TEN FISCAL YEARS (UNAUDITED)236
92 City of The Colony, Texas Fund Balances, Governmental Funds (Modified Accrual Basis of Accounting) Last Ten Fiscal Years (Unaudited) TABLE 32015 2016 2017 2018 2019 2020 2021 2022 2023 2024(as restated)General FundReserved for:Restricted for tourism -$ -$ -$ -$ -$ -$ 2,385,220$ 6,099,958$ -$ -$ Restricted for other - - - - - - - - 3,238,248 920,680 Restricted for capital projects 367,397 367,397 367,397 - - - - - - - Nonspendable 109,169 284,122 313,070 110,389 295,737 527,373 705,043 184,128 184,129 338,248 Unassigned 12,622,396 13,275,540 13,503,540 14,396,285 15,213,908 18,686,206 19,835,324 23,834,380 37,893,987 35,930,912 Total general fund13,098,962$ 13,927,059$ 14,184,007$ 14,506,674$ 15,509,645$ 19,213,579$ 22,925,587$ 30,118,466$ 41,316,364$ 37,189,840$ All Other Governmental FundsRestricted for:Capital Projects 3,284,839$ 790,306$ 1,729,804$ 20,717,454$ 18,082,244$ 19,229,949$ 20,344,096$ 23,279,419$ 20,237,886$ 809,584$ Debt Service 1,390,478 1,922,262 1,133,536 1,159,562 1,183,290 2,159,398 3,442,104 5,416,036 5,593,826 7,124,759 Other 801,546 1,261,149 1,681,336 2,313,497 3,694,856 3,659,079 3,019,789 3,202,687 5,858,654 9,086,162 Committed 5,566,517 10,688,119 11,099,306 1,386,721 963,305 1,051,469 1,277,449 1,658,047 2,152,265 2,873,657 Nonspendable - 5,565 5,294 931 13,532 1,032 1,032 816 816 816 Unassigned (1,230,851) - - - (20,716) - - (22,402) - - Total all other governmental funds9,812,529$ 14,667,401$ 15,649,276$ 25,578,165$ 23,916,511$ 26,100,927$ 28,084,470$ 33,534,603$ 33,843,447$ 19,894,978$ Source: Comprehensive Annual Financial Report -Exhibit A-3Note: The City implemented GASB Statement No. 54, which impacted both the classifications of funds and classifications of balances within the funds, in 2011.Note: 2023 restated for correction of an error.CITY OF THE COLONY, TEXASFUND BALANCES, GOVERNMENTAL FUNDS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)LAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year 237
93 City of The Colony, Texas Changes in Fund Balances, Governmental Funds (Modified Accrual Basis of Accounting) Last Ten Fiscal Years (Unaudited) TABLE 42015 2016 2017 2018 2019 2020 2021 2022 2023 2024REVENUESAd valorem taxes, penalties and interest 17,708,151$ 21,257,383$ $ 24,665,737 $ 28,073,387 $ 31,208,682 $ 34,517,810 $ 36,550,929 $ 38,792,035 $ 43,999,806 $ 34,578,872Franchise taxes 2,672,475 2,527,792 2,609,706 2,705,950 2,737,190 2,765,433 2,517,283 2,873,419 2,911,718 5,159,631Municipal sales tax 5,294,228 5,736,997 6,357,581 7,100,104 8,090,511 7,442,947 9,721,676 11,426,569 11,812,142 10,916,476Licenses and permits 4,076,413 3,113,013 3,150,756 3,183,516 3,328,364 3,203,525 3,259,282 4,515,248 3,721,083 3,731,469Charges for services 1,248,868 4,150,248 2,672,368 3,245,584 3,267,327 2,478,974 3,687,233 2,900,182 3,445,900 3,500,275Fines and forfeitures 1,040,696 870,181 854,047 984,744 891,132 704,360 836,303 1,164,987 994,113 908,651Grants 326,685 316,672 412,631 102,554 339,562 2,779,166 352,504 458,246 894,159 2,042,307Gifts and contributions 5,881,783 3,252,323 2,445,113 4,712,701 3,686,808 3,889,559 1,242,904 1,618,088 702,620 58,260Hotel / motel taxes 525,449 668,011 1,275,280 1,525,722 1,532,041 849,664 1,044,987 1,937,274 2,356,975 2,538,159Recreation fees - - - - - - - - - - Capital recovery fees 1,090,071 2,518,123 1,495,213 905,300 856,880 - - 5,906 12,616,477 5,256,187Interest earned 19,660 102,126 256,672 729,690 1,075,171 429,498 26,889 456,215 4,202,359 4,504,997Miscellaneous 770,156 792,311 838,429 1,521,033 2,982,496 1,236,607 1,715,059 5,196,325 5,666,513 3,356,911Total revenues40,654,635 45,305,180 47,033,533 54,790,285 59,996,164 60,297,543 60,955,049 71,344,494 93,323,865 76,552,195 EXPENDITURESCurrent General government 4,738,905 7,739,892 9,005,102 12,787,913 12,251,044 10,433,755 11,611,036 11,204,338 13,705,399 12,188,829 Public safety 13,950,864 15,162,864 16,904,990 18,538,271 22,225,377 22,666,732 24,497,318 26,857,472 29,700,280 31,838,006 Public works 3,204,557 3,480,223 4,119,371 3,955,801 5,312,936 4,599,940 6,243,114 7,408,957 8,111,867 12,524,746 Cultural and recreation 4,435,393 4,473,519 4,803,444 5,370,608 5,621,488 5,105,872 7,035,533 6,763,364 6,839,325 7,463,111 Fleet replacement Economic developmentCapital Outlay 20,723,176 9,801,947 12,722,830 8,985,109 19,677,151 7,750,112 6,059,106 12,467,022 15,849,955 18,064,954 Debt Service: Principal retirement 4,255,146 3,985,693 3,945,295 4,485,630 6,785,263 5,675,101 5,377,101 5,622,134 5,304,137 5,944,935 Interest and fiscal charges1,638,941 1,485,036 1,885,328 2,044,983 2,355,272 1,993,814 2,259,386 2,244,482 2,703,877 2,461,145 Other debt service costs55,015 272,250 269,732 194,643 148,434 186,184 147,333 246,198Total expenditures53,001,997 46,401,424 53,656,092 56,362,958 74,376,965 58,411,510 63,229,927 72,813,967 82,214,840 90,485,726 Excess (deficiency) of revenues over (under) expenditures (12,347,362) (1,096,244) (6,622,559) (1,572,673) (14,380,801) 1,886,033 (2,274,878) (1,469,473) 11,109,025 (13,933,531) OTHER FINANCING SOURCES (USES) Issuance of debt 3,040,800 - 9,204,000 12,726,000 13,242,170 9,652,460 7,587,000 13,394,495 - - Issuance of refunding debt - 9,023,150 - - - 9,652,460 - - - - Payment of escrow for refunding debt - (9,623,402) - - - 1,708,838 - - - - Premium on issuance of debt 250,945 637,273 - 533,188 954,434 (7,326,614) 783,429 817,990 - - Proceeds from sale of capital assets 935,000 - 731,402 - - - - - 360,919 - Transfers from other funds 5,277,829 14,488,155 3,332,936 13,769,908 890,075 3,172,092 797,271 832,584 2,511,617 1,454,000 Lease Proceeds - - - - - - - - - 205,487.00 Subscription IT proceeds - - - - - - - - - 53,051 Transfers to other funds (3,273,023) (7,745,963) (5,406,936) (15,204,867) (1,364,561) (3,168,459) (1,197,271) (932,584) (2,611,617) (5,854,000) Total other financing sources (uses)6,231,551 6,779,213 7,861,402 11,824,229 13,722,118 13,690,777 7,970,429 14,112,485 260,919 (4,141,462) NET CHANGE IN FUND BALANCES(6,115,811)$ 5,682,969$ 1,238,843$ 10,251,556$ (658,683)$ 15,576,810$ 5,695,551$ 12,643,012$ 11,369,944$ (18,074,993)$ Debt service as a percentage of noncapital expenditures 18.3% 14.9% 14.2% 13.8% 16.7% 15.1% 13.4% 13.0% 12.1% 11.6%Source: Comprehensive Annual Financial Report - Exhibit A-5CITY OF THE COLONY, TEXASCHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS(MODIFIED ACCRUAL BASIS OF ACCOUNTING)LAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year238
94 City of The Colony, Texas Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (Unaudited) TABLE 5AssessedLots, Land Less: Total Taxable Total EstimatedValue b as aFiscal Residential Commercial and Farm Tax ExemptAssessed Direct Tax Actual Taxable Percentage ofYear Property Property Property PropertyValue aRate Value Actual Value2015 1,825,181,743$ 1,096,166,239$ 99,116,629$ 395,343,379$ 2,625,121,232$ 0.67250$ 2,625,121,232$ 100.00%2016 2,049,580,033 1,366,491,362 80,496,674 396,069,625 3,100,498,444 0.67000 3,100,498,444 100.00%2017 2,402,844,301 1,657,374,018 79,968,769 522,157,525 3,618,029,563 0.66750 3,618,029,563 100.00%2018 2,759,088,028 1,754,755,888 73,977,449 513,136,124 4,074,685,241 0.66500 4,074,685,241 100.00%2019 3,163,815,052 1,818,858,009 67,568,663 524,193,007 4,526,048,717 0.66250 4,526,048,717 100.00%2020 3,457,125,117 2,203,156,158 57,600,863 550,243,309 5,167,638,829 0.66000 5,167,638,829 100.00%2021 3,701,008,231 2,496,989,390 57,945,301 530,447,361 5,725,495,561 0.65000 5,725,495,561 100.00%2022 4,085,351,290 2,445,254,616 61,456,182 624,848,874 5,967,213,214 0.65000 5,967,213,214 100.00%2023 5,035,625,474 2,797,303,701 46,814,123 1,065,136,128 6,814,607,170 0.64500 6,814,607,170 100.00%2024 6,116,247,893 3,063,762,408 49,262,359 1,431,867,611 7,797,405,049 0.63500 7,797,405,049 100.00%Source: City of The Colony Budget Document - Ad Valorem Tax Assessment Summary Denton Central Appraisal DistrictNote: The County assesses property at 100% of its market value. Tax rates are per $100 of assessed value. a Includes adjustments to certified rolls. b Includes tax exempt property.CITY OF THE COLONY, TEXASASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYLAST TEN FISCAL YEARS (UNAUDITED)239
95
City of The Colony, Texas
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years (Unaudited)
TABLE 6
Operating/ Obligation Lewisville
Fiscal General Debt Total Independent Denton
Year Rate Service Direct School District County
2015 0.4763$ 0.1962$ 0.6725$ 1.4770$ 0.2722$
2016 0.5104 0.1596 0.6700 1.4200 0.2620
2017 0.5642 0.1033 0.6675 1.4200 0.2484
2018 0.5150 0.1500 0.6650 1.4080 0.2378
2019 0.5025 0.1600 0.6625 1.3380 0.2256
2020 0.4955 0.1645 0.6600 1.3470 0.2250
2021 0.4950 0.1600 0.6550 1.3090 0.2331
2022 0.4900 0.1600 0.6500 1.2368 0.2175
2023 0.5400 0.1050 0.6450 1.1301 0.2175
2024 0.4812 0.1538 0.6350 1.1178 0.1895
Source: Lewisville ISD and Denton County Tax Analysis
The Colony Budget Book : Property Tax Distribution Calculation page
General
CITY OF THE COLONY, TEXAS
DIRECT AND OVERLAPPING PROPERTY TAX RATES
(PER $100 OF ASSESSED VALUE)
LAST TEN FISCAL YEARS (UNAUDITED)
City Direct Rates Overlapping Rates
240
96 City of The Colony, Texas Principal Tax Payers Current Year and Nine Years Ago (Unaudited) TABLE 7Assessed Taxable Assessed Assessed Taxable AssessedTaxpayer Value RankValue aValue RankValue aLMG Ventures LLC 125,170,957$ 1 1.61%TXFM Inc 121,275,000 2 1.56%Austin Ranch Phase VI Investors LLC 98,000,000 3 1.26%Icon The Colony Land Owner Pool 2 LLC 96,931,330 4 1.24%Hudson MF LLC 94,900,000 5 1.22%LMG Ventures LLC 93,381,012 6 1.20%The Residences of Lake District No 1 LTD 91,185,043 7 1.17%AR Phase 1 LLC 85,000,000 8 1.09%AR NO.5 LLC 81,847,893 9 1.05%AR Phase 2 LLC 77,000,000 10 0.99%TXFM Inc - 0.00% 121,602,740$ 1 4.63%Nebraska Furniture Mart - 0.00% 60,136,419 2 2.29%Austin Ranch Phase VI Investors LLC - - 57,000,000 3 2.17%AR NO.5 LLC - - 54,994,587 4 2.09%The Residences of Austin Ranch #4 M LLC - - 48,000,000 5 1.83%AR Phase 1 LLC - - 47,000,000 6 1.79%The Residences of Austin Ranch #3 M LLC - - 41,500,000 7 1.58%AR Phase 2 LLC - - 41,500,000 8 1.58%Somerset Land LTD - - 30,164,664 9 1.15%GS Sonoma Grand LP - - 27,503,843 10 1.05%964,691,235$ 12.37% 529,402,253$ 20.17%Source: Denton Central Appraisal District. - https://www.dentoncad.com/certified-totals/Note: a Taxpayers are assessed on January 1, 2023 (2023 tax year) for the 2024 fiscal year.CITY OF THE COLONY, TEXASPRINCIPAL TAX PAYERSCURRENT YEAR AND NINE YEARS AGO (UNAUDITED)2024 a2015 241
97 City of The Colony, Texas Ad Valorem Tax Levies and Collections Last Ten Fiscal Years (Unaudited) TABLE 8Taxes Levied DelinquentFiscal for the Fiscal Percentage Tax PercentageYear Year Amount of Levy Collections Amount of Levy2015 17,809,441$ 17,649,319$ 99.10% 88,356$ 17,737,675$ 99.60%2016 21,051,346 20,697,081 98.32% 293,538 20,990,619 99.71%2017 24,599,951 24,136,260 98.12% 379,006 24,515,266 99.66%2018 28,111,210 27,611,357 98.22% 340,693 27,952,050 99.43%2019 31,414,540 30,872,909 98.28% 122,502 30,995,410 98.67%2020 34,891,826 34,299,463 98.30% 170,693 34,470,156 98.79%2021 36,720,735 36,419,012 99.18% 21,602 36,440,614 99.24%2022 39,049,061 38,680,354 99.06% (16,525) 38,663,828 99.01%2023 43,942,382 43,485,132 98.96% 329,220 43,814,352 99.71%2024 a49,169,659 48,549,479 98.74% (102,671) 48,446,808 98.53%Source: Denton County Tax Assessor and CollectorNote: a Taxpayers are assessed on January 1, 2023 (2023 tax year) for the 2024 fiscal year.CITY OF THE COLONY, TEXASAD VALOREM TAX LEVIES AND COLLECTIONSLAST TEN FISCAL YEARS (UNAUDITED)Collected within the FiscalYear of the Levy Total Collections
242
98 City of The Colony, Texas Ratio of Outstanding Debt by Type Last Ten Fiscal Years (Unaudited) TABLE 9Water andFiscal Obligation Certificates Other Premiums/ Revenue Other Premiums/ Total Primary of Personal PerYear Bonds of Obligation Obligations Discounts Bonds Obligations Discounts GovernmentIncome aCapita a2015 18,087,560$ 19,947,850$ 849,154$ 1,847,216$ - 52,177,845$ 4,012,577$ 96,922,202$ 5.88% 2,154$ 2016 19,344,210 14,765,000 767,611.00 2,106,044 - 59,333,395 4,130,875 100,447,135 6.09% 2,271 2017 16,580,250 22,872,150 683,127.00 2,592,781 - 63,537,195 4,434,849 110,700,352 6.93% 2,621 2018 15,711,300 37,356,650 595,597.00 3,260,811 - 56,917,050 3,724,154 117,565,562 7.23% 2,793 2019 11,518,300 46,861,850 1,740,304 3,808,516 - 59,489,850 3,889,886 127,308,706 7.21% 2,854 2020 12,988,300 39,038,100 1,227,460 5,449,889 - 66,366,846 5,398,212 130,468,807 7.39% 2,925 2021 16,406,504 47,832,600 698,539 4,917,141 - 67,209,796 4,878,969 141,943,549 5.67% 2,568 2022 10,288,768 55,142,250 1,526,949 6,025,409 - 62,133,982 4,895,372 140,012,730 6.14% 3,032 2023 8,349,797 52,291,100 240,193 5,438,485 - 56,399,103 4,360,388 127,079,066 5.57% 2,752 2024 6,564,210 49,392,450 6,612,176 4,434,924 - 50,463,340 3,990,604 121,457,704 5.38% 2,657 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a See Table 14 for personal income and population data.CITY OF THE COLONY, TEXASRATIO OF OUTSTANDING DEBT BY TYPELAST TEN FISCAL YEARS (UNAUDITED)Governmental Activities Business-Type Activities
243
99 City of The Colony, Texas Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years (Unaudited) TABLE 10PercentageGeneralLess: TaxableFiscal Obligation Certificates of Other Premium/ Debt Value of PerYear Bonds Obligation Obligations Discount Service TotalProperty aCapita b2015 18,087,560$ 19,947,850$ -$ 1,847,216$ 1,257,148$ 38,625,478$ 1.50% 877 2016 19,344,210 14,765,000 - 2,106,044 1,826,579 34,388,675 1.13% 795 2017 16,580,250 22,872,150 - 2,592,781 1,027,528 41,017,653 1.15% 988 2018 15,711,300 37,356,650 - 3,260,811 902,127 55,426,634 1.37% 1,331 2019 11,518,300 46,861,850 - 3,808,516 863,999 61,324,667 1.39% 1,414 2020 15,406,504 40,245,600 - 4,463,515 2,159,398 57,956,221 1.15% 1,327 2021 12,823,723 45,567,200 - 4,695,639 3,183,352 59,903,210 1.12% 1,168 2022 10,288,768 55,142,250 - 6,025,409 5,124,388 66,332,039 1.11% 1,437 2023 8,349,797 52,291,100 - 5,438,485 5,296,697 60,782,685 0.89% 1,316 2024 6,564,210 49,392,450 - 4,434,924 6,878,981 53,512,603 0.69% 1,171 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a See Table 5 for property value data. b See Table 14 for population data.CITY OF THE COLONY, TEXASRATIO OF GENERAL BONDED DEBT OUTSTANDINGLAST TEN FISCAL YEARS (UNAUDITED)Governmental Activities 244
100 City of The Colony, Texas Legal Debt Margin Information Last Ten Fiscal Years (Unaudited) TABLE 112015 2016 2017 2018 2019 2020 2021 2022 2023 2024Tax Rate Limit 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ 2.50$ Current Tax Rate 0.673 0.670 0.668 0.665 0.663 0.660 0.655 0.650 0.645 0.635 Available Tax Rate 1.83$ 1.83$ 1.83$ 1.84$ 1.84$ 1.84$ 1.84$ 1.85$ 1.86$ 1.87$ Note: The City Charter of the City of The Colony, Texas does not provide for a debt limit. Under provisions of state law, the maximum tax rate is limited to $2.50 per $100 assessed valuation. No direct bond debtCITY OF THE COLONY, TEXASLEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year245
101
City of The Colony, Texas
Direct and Overlapping Governmental Activities Debt
September 30, 2024 (Unaudited)
TABLE 12
The Colony
Estimated Share of
Gross Bonded Percentage Overlapping
Governmental Unit Debt
Applicable a Debt
Lewisville I.S.D. 1,553,970,978$ 10.89% 169,253,434$
Little Elm I.S.D. 593,525,874 19.25% 114,225,311
Denton County 688,505,000 4.33% 29,809,987
2,836,001,852 313,288,731
City of The Colony (direct debt) 100,060,855 100.00% 100,060,855
Total direct and overlapping debt 2,936,062,707$ 413,349,586$
Source: Assessed value data used to estimate applicable percentages provided by
Denton Central Appraisal District. Debt outstanding data provided by each
governmental unit.
a The percentage of overlapping debt applicable is estimated using taxable
assessed property values. Applicable percentages were estimated by
determining the portion of another governmental unit's taxable assessed value
that is within the city's boundaries and dividing it by each unit's total taxable
assessed value.
CITY OF THE COLONY, TEXAS
DIRECT AND OVERLAPPING GOVERNMENTAL
ACTIVITIES DEBT
SEPTEMBER 30, 2024 (UNAUDITED)
246
102
City of The Colony, Texas
Pledged Revenue Coverage
Last Ten Fiscal Years (Unaudited)
TABLE 13
Less:
Fiscal Total Operating Net Available Annual Times
Year Revenuesa Expensesb Revenue Requirementc Coverage
2015 16,676,674$ 10,358,961$ 6,317,713 1,865,816$ 3.39
2016 16,354,249 11,636,866 4,717,383 2,840,353 1.66
2017 18,236,138 12,543,069 5,693,069 3,263,180 1.74
2018 20,365,808 12,730,553 7,635,255 3,088,754 2.47
2019 19,535,943 13,386,788 6,149,155 2,158,400 2.85
2020 20,903,713 15,514,368 5,389,345 2,159,669 2.50
2021 22,406,359 19,219,467 3,186,892 4,377,433 0.73
2022 25,872,379 18,706,641 7,165,738 4,414,115 1.62
2023 28,609,638 19,197,584 9,412,054 4,751,681 1.98
2024 31,140,012 20,901,248 10,238,764 4,730,053 2.16
Note: a Includes operating and non-operating revenues.
b Includes operating expenses minus depreciation.
c Includes Principal and Interest.
CITY OF THE COLONY, TEXAS
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS (UNAUDITED)
Water and Sewer System Revenue Bonds
247
103
City of The Colony, Texas
Demographic and Economic Statistics
Last Ten Calendar Years (Unaudited)
TABLE 14
Per Capita Median
Estimated Personal Personal Median Household School Unemployment
Year Populationa Income Incomeb Ageb Incomeb Enrollmentc Rate d
2015 45,000 1,652,040,000$ 36,712$ 35 74,162$ 6,739 3.2%
2016 44,228 1,648,067,964 37,263 35.5 93,076 6,718 3.5%
2017 42,228 1,597,147,416 37,822 35.5 103,677 6,656 3.4%
2018 42,228 1,630,676,448 38,616 34.9 103,677 6,451 3.3%
2019 44,610 1,766,065,290 39,589 35.5 107,620 6,250 3.1%
2020 44,610 1,766,065,290 39,589 35.5 107,620 6,031 3.3%
2021 44,534 2,015,475,238 45,257 35.7 87,748 5,712 3.9%
2022 46,176 2,280,032,352 49,377 34.9 110,760 6,755 3.4%
2023 45,717 2,257,368,309 49,377 36 118,686 6,310 3.9%
2024 45,705 2,256,775,785 49,377 37.2 134,764 6,058 4.1%
Sources: a Estimated Population - City of The Colony - Demographic & Economic Statistics from Budget Book
b Per Capital Income, Median Age & Median Household Income - City
of The Colony Economic Development Corporation
c School enrollment - Texas Education Agency - https://rptsvr1.tea.texas.gov/adhocrpt/adste.html
d Unemployment - Texas Workforce Commission
Note: Personal income is calculated by multiplying estimated population by per
capita personal income. And Per Capita is Personal income divided by estimated population.
CITY OF THE COLONY, TEXAS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS (UNAUDITED)
248
104
City of The Colony, Texas
Principal Employers
Current Year and Nine Years Ago(Unaudited)
TABLE 15
Percentage of Percentage of
Total City Total City
Employer Employees Rank Employment Employees Rank Employment
Nebraska Furniture Mart 1,750 1 6.42% 2,200 1 4.60%
Lewisville ISD 687 2 2.52% 690 2 3.17%
Scheels 510 3 1.87%
City of The Colony 469 4 1.72% 387 4 1.78%
Wal-Mart 355 5 1.30% 353 5 1.62%
Top Golf 320 6 0.81% 450 3 2.07%
Hawaiian Falls 208 7 0.76% 230 6 0.92%
Quest Resource Mgmt 149 8 0.71% 120 8
Home Depot 146 9 0.51% 112 9 0.51%
Andretti's 133 10 0.44%
Williams Sonoma 170 7 0.78%
Edward Don 100 10 0.48%
4,727 17.06% 4,812 15.93%
Source: Finance Direct Calls to Employers
2024 2015
CITY OF THE COLONY, TEXAS
PRINCIPAL EMPLOYERS
CURRENT AND NINE YEARS AGO (UNAUDITED)
249
105 City of The Colony, Texas Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years (Unaudited) TABLE 16Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024General government 30 31 34 34 38 32 34 34 35 37Public safety 142 151 165 174 187 198 204 219 215 216Public works 42 4547495952 53 60 61 62Culture and recreation 38 38 35 35 37 41 41 42 59 61Water/wastewater/ Utilities 37 37 40 40 38 47 49 51 52 56Total 289 302 321 332 359 370 381 406 422 432Sources: City of The Colony Budget Document- Authorized Funded PositionsCITY OF THE COLONY, TEXASFULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS (UNAUDITED) 250
106 City of The Colony, Texas Operating Indicators by Function/Program Last Ten Fiscal Years (Unaudited) TABLE 17Function/Program 2015 2016 201720182019 2020 2021 2022 2023 2024Police Number of police officers 586060 6727479798686 Number of violations (citations) 5,932 13,935 13,986 15,232 11,718 5,742 5,080 14,105 5,555 4,713 Municipal Court Number of traffic cases 6,979 5,298 9,480 11,264 11,264 2,888 4,519 5,174 4,082 4,325 Number of city ordinance cases 404 226 805 860 860 132 141 272 266 181 Fire Number of fire fighters 58 58 64 78 66 64 71 72 77 79 Number of paramedics - - - - 16 18 14 18 18 18 Number of emergency fire responses 864 864 860 909 894 867 1,358 1,588 1,306 1,558 Number of medical emergencies 2,127 2,127 2,365 2,370 2,425 2,443 2,773 3,102 3,214 3,114 Development Services Total number of building permitsa272 277 2,556 4,127 4,216 2,394 3,219 3,219 2,058 2,107 Estimated valuationa173,859,498$ 127,234,464$ 213,756,755$ 271,621,030$ 394,232,000$ 47,041,844$ 68,718,187$ 68,718,187$ 108,669,341$ 109,563,107$ Parks and Recreation Number of acres $983 $983 $983 $983 $983 $983 $984 $984 1,004 1,020 Number of recreation center participants 50,654 52,424 41,595 44,789 44,789 26,843 43,350 42,850 31,771 50,965 Library Volumes in collectionb115,256 117,538 111,150 121,926 93,919 97,716 92,918 115,560 104,839 94,202 Number of library cardholders 18,498 18,042 17,291 16,725 19,101 20,534 21,770 23,127 25,742 26,716 Water and wastewater Number of water accounts 12,532 12,893 13,285 13,626 13,864 14,161 14,335 14,660 14,716 15,045 Average daily water consumption (millions of gallons) 5 5 5 5 5 5 5 8 6 7 Average daily effluent (millions of gallons) 3 3 1,070 1 1 1 1 3 3 4 Sources: City DepartmentsNotes: a Includes residential and commercial permits b Includes books and media.CITY OF THE COLONY, TEXASOPERATING INDICATORS BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year251
107 City of The Colony, Texas Capital Asset Statistics by Function/Program Last Ten Fiscal Years (Unaudited) TABLE 18Function/Program 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Public Safety Fire Stations 3 3 3 3 4 4 4 4 5 5 Police Stations 1 1 1 1 1 1 1 1 1 1 Culture and Recreation Parks and Recreation Number of parks 27 27 27 27 27 27 27 27 27 27 Number of baseball diamonds 11 11 11 11 11 15 15 15 15 15 Number of soccer/football fields 16 16 16 16 16 15 15 15 15 15 Public swimming pools 2 2 2 2 2 2 2 2 3 3 Community centers 1 1 1 1 1 1 1 1 2 2 Library 1 1 1 1 1 1 1 1 1 1 Water and wastewater Water mains (miles) 212 216 194 195 199 201 203 203 196 203 Sanitary sewer mains (miles) 210 213 206 207 210 212 214 214 151 155 Fire hydrants 1,637 1,680 1,795 1,824 1,850 1,925 1,955 1,955 1,934 2,044 Sources: City DepartmentsCITY OF THE COLONY, TEXASCAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMLAST TEN FISCAL YEARS (UNAUDITED)Fiscal Year 252
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Financial Statements
September 30, 2024
The Colony Local Development
Corporation
A Component Unit of the City of the Colony, Texas
253
The Colony Local Development Corporation
Table of Contents
September 30, 2024
Independent Auditor’s Report ................................................................................................................................... 1
Management’s Discussion and Analysis ................................................................................................................ 4
Financial Statements
Statement of Net Position ..................................................................................................................................... 9
Statement of Activities ......................................................................................................................................... 10
Governmental Funds Balance Sheet .................................................................................................................... 11
Adjustments to the Governmental Funds Balance Sheet .................................................................................... 12
Statement of Governmental Funds Revenues, Expenditures, and Changes in Fund Balance ............................. 13
Adjustments to Statement of Governmental Funds Revenues, Expenditures, and Changes in Fund Balance ... 14
Notes to Financial Statements ............................................................................................................................. 15
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 ................................................................................................................................................................. 21
Schedule of Findings and Responses ................................................................................................................... 23
254
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1
Independent Auditor’s Report
To the Board of Directors
The Colony Local Development Corporation
The Colony, Texas
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities and the major fund of The
Colony Local Development Corporation (the Corporation), a component unit of the City of the Colony,
Texas, as of and for the year ended September 30, 2024, and the related notes to the financial
statements, which collectively comprise the Corporation’s basic financial statements as listed in the
table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material
respects, the respective financial position of the governmental activities and the major fund of the
Colony Local Development Corporation, as of September 30, 2024, and the respective changes in
financial position for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States
of America (GAAS) and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are required to be independent of the
Corporation and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinions.
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2
Correction of Error
As discussed in Note 8 to the financial statements, certain errors resulting in an overstatement of
amounts previously reported for prepaid assets as of September 30, 2023 were discovered by
management of the Corporation during the current year. Accordingly, a restatement has been made to
governmental activities net position as of October 1, 2023 to correct the error. Our opinions are not
modified with respect to that matter.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and for the
design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is required to evaluate whether there are conditions
or events, considered in the aggregate, that raise substantial doubt about the Corporation’s ability to
continue as a going concern for twelve months beyond the financial statement date, including any
currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on
the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures
in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Corporation’s internal control. Accordingly, no such opinion
is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.
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Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about the Corporation’s ability to continue as a going concern for a
reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit, significant audit findings, and certain internal control–related
matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis be presented to supplement the basic financial statements. Such information is
the responsibility of management and, 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 GAAS, 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 Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 12,
2025 on our consideration of the Corporation’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 Corporation’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.
Abilene, Texas
March 12, 2025
257
4
The Colony Local Development Corporation
Management’s Discussion and Analysis
September 30, 2024
MANAGEMENT'S DISCUSSION AND ANALYSIS
As management of The Colony Local Development Corporation (the "LDC"), we offer readers of the
LDC's financial statements this narrative overview and analysis of the financial activities of the LDC for
the fiscal year ended September 30, 2024. The LDC was formed to finance projects located within The
Colony Tax Increment Reinvestment Zone Number One, under the Tax Increment Financing Act.
FINANCIAL HIGHLIGHTS
• The liabilities of the LDC exceeded the sum of its assets and deferred outflows of resources at
the close of the fiscal year ended September 30, 2024, by $91,419,252 (net deficit).
• At the end of the current fiscal year, the governmental funds reported an ending fund balance
of $19,017,450, an increase of $1,136,631 from the previous year.
• During the current fiscal year, the Corporation identified that prepaid insurance recorded upon
issuance of the 2013 revenue bonds had not been amortized. Accordingly, prepaid assets was
overstated by $926,361. For additional information, see Note 8 of the notes to the financial
statements for further information.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis serves as an introduction to the LDC's basic financial statements. The LDC's
basic financial statements are comprised of three components: government-wide financial statements,
fund financial statements, and notes to the financial statements.
Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of
the LDC's finances in a manner similar to private-sector business.
The Statement of Net Position presents information on all of the LDC's assets and deferred outflows of
resources and liabilities, with the difference reported as net position. Over time, increases or decreases
in net position may serve as a useful indicator of whether the financial position of the LDC is improving
or deteriorating.
The Statement of Activities presents information showing how the LDC's net position changed during the
fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported
in this statement for some items that will only result in cash flows in future fiscal periods (e.g.,
uncollected taxes).
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The Colony Local Development Corporation
Management’s Discussion and Analysis
September 30, 2024
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The LDC uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. The fund financial statements include one fund, the
General Fund, which is used to account for principal and interest payments, economic development
activities, and the cost of public improvements.
Governmental funds - Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on current
sources and uses of spendable resources, as well as on balances of spendable resources available at the
end of the fiscal year. Such information may be useful in evaluating a government's near-term financing
requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government's near-term financing
decisions. Both the governmental funds balance sheet and the governmental funds statement of
revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this
comparison between governmental funds and governmental activities. The LDC does not have any
proprietary or fiduciary funds.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in
the government-wide and fund financial statements. The notes to the financial statements can be found
beginning on page 15 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. As of September 30, 2024, the LDC's net position was $91,419,252 (net deficit), an increase of
$4,219,164 from the previous year, as restated. There was a decrease in current year sales tax revenues
of $305,374. Current year expenses decreased by $910,940 that was primarily due to a decrease in debt
service expenses. The following table reflects the condensed Statement of Net Position:
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6
The Colony Local Development Corporation
Management’s Discussion and Analysis
September 30, 2024
The Colony Local Development Corporation’s Net Position
2024 2023
(as restated)
Current and other assets 21,561,681$ 20,535,234$
Capital assets 22,321,911 22,321,911
Total assets 43,883,592 42,857,145
Deferred charge on refundings304,308 331,972
Total deferred outflows of resources 304,308 331,972
Current liabilities 6,564,928 3,242,309
Long-term liabilities 129,042,224 135,585,224
Total liabilities 135,607,152 138,827,533
Net position(deficit)
Investment in capital assets 22,321,911 (113,263,313)
Unrestricted (113,741,163) 17,624,897
Total net position(deficit)(91,419,252)$ (95,638,416)$
Governmental Activities
Analysis of the LDC's Operations
The Colony Tax Increment Reinvestment Zone Number One was established in November 2011. LDC
was established shortly thereafter as the primary governing body for funding Tax Increment
Reinvestment Zone Number One public infrastructure. Performance agreements between the Local
Development Corporation and the developer, NFM Services, commenced also in November 2011 and
will terminate on the 75th anniversary of the date in which the City collects its first sales tax dollar from
the Facility.
Tax Increment Contract Bonds were issued in February 2013 by the City of The Colony, The Colony
Economic Development Corporation, The Colony Community Development Corporation, and LDC
totaling $201,400,000. The LDC's debt issuances in fiscal year 2013 totaled $142,080,000. The remaining
debt was issued by The Colony Economic Development Corporation and Community Development
Corporation. These bonds were issued to fund the Tax Increment Reinvestment Zone Number One
public infrastructure projects and financing until the Tax Increment Reinvestment Zone Number One can
generate sufficient sales and property tax revenues for debt service payments.
$8,841,724 of this tax revenue was allocated to The Colony Local Development Corporation. In addition,
the LDC received $1,522,060 of incremental property taxes under the tax increment participation
agreement.
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The Colony Local Development Corporation
Management’s Discussion and Analysis
September 30, 2024
The Colony Local Development Corporation’s Change in Net Position
2024 2023
(as restated)
Revenues
General revenues
Sales taxes 8,841,724$ 9,147,098$
Investment earnings386,634 225,735
Program revenue:
Operating grants and contributions 1,522,060 281,800
Total revenues 10,750,418 9,654,633
Expenses:
Interest and fiscal charges 6,531,254 7,442,194
Total expenses 6,531,254 7,442,194
Change in net position 4,219,164 2,212,439
Net position(deficit), beginning, as restated (95,638,416) (97,850,855)
Net position(deficit), ending (91,419,252)$ (95,638,416)$
Governmental Activities
FINANCIAL ANALYSIS OF THE LDC'S FUNDS
Governmental Funds
The focus on the LDC's governmental funds i:s to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the LDC's financing
requirements.
At the end of the current fiscal year, the LDC's governmental fund reported ending fund balances of
$19,017,450, an increase of $1,136,631 from the prior year. This increase is primarily due to $1,240,260
more municipal sales tax revenue recognized than in the prior year.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Long-term Debt. At year-end, the LDC had total [bonded debt outstanding of $132,435,000, which is
backed by the full faith and credit of the LDC. The debt will be paid from real property and sales and use
taxes attributable to the Tax Increment Reinvestment Zone Number One. There was no new debt issued
in fiscal year 2024. Refer to Note 4 of the financial statements for additional information on long-term
debt.
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The Colony Local Development Corporation
Management’s Discussion and Analysis
September 30, 2024
THE COLONY LOCAL DEVELOPMENT CORPORATION OUTSTANDING DEBT
Tax Increment Contract Revenue Bonds 132,435,000$ 135,610,000$
Less: Discount on bonds (22,776) (24,776)
Total Long-term Liabilities 132,412,224$ 135,585,224$
Capital Assets. The LDC's investment in capital assets as of September 30, 2024, amounts to
$22,321,911 and consists solely of land. Refer to Note 3 of the financial statements for additional
information on capital assets.
THE COLONY LOCAL DEVELOPMENT CORPORATION CAPITAL ASSETS
2024 2023
Land 22,321,911$ 22,321,911$
Total Land 22,321,911$ 22,321,911$
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, investors and creditors with a general overview
of the LDC's finances. If you have questions about this report or need additional financial information,
contact the Finance Department, City of The Colony, 6053 Main Street, The Colony, Texas 75056.
262
See Notes to Financial Statements 9
The Colony Local Development Corporation
Statement of Net Position
September 30, 2024
Assets
Current Assets
Cash and cash equivalents 7,290,432$
Restricted cash and cash equivalents 11,737,018
Prepaid items 2,534,231
Total current assets 21,561,681
Noncurrent Assets
Nondepreciable capital assets 22,321,911
Total capital assets, net 22,321,911
Total noncurrent assets 22,321,911
Total assets 43,883,592
Deferred Outflows of Resources
Deferred charge on refunding 304,308
Total deferred outflows 304,308
Liabilities
Current Liabilities
Accrued liabilities 10,000
Accrued interest payable 3,184,928
Bond payable, current portion 3,370,000
Total current liabilities 6,564,928
Noncurrent Liabilities
Bond payable, net of current portion 129,042,224
Total noncurrent liabilities 129,042,224
Total liabilities 135,607,152
Net Position
Investment in capital assets 22,321,911
Unrestricted (113,741,163)
Total net position (91,419,252)$
263
See Notes to Financial Statements 10
The Colony Local Development Corporation
Statement of Activities
Year Ended September 30, 2024
Net (Expense)
Revenue and
Changes in
Net Position
Program Governmental
Function/Program Expenses Revenues Activities
Governmental Activities
Economic Development
Interest expense 6,531,254 - (6,531,254)
Total governmental activities 6,531,254$ -$ (6,531,254)
General Revenues
Sales taxes 8,841,724
Intergovernmental 1,522,060
Interest income 386,634
Total general revenues 10,750,418
Change in net position 4,219,164
Net position, beginning, as previously reported (94,712,055)
Prior period adjustment (Note 8) (926,361)
Net position, beginning, as restated (95,638,416)
Net position, end of year (91,419,252)$
264
See Notes to Financial Statements 11
The Colony Local Development Corporation
Governmental Funds Balance Sheet
September 30, 2024
General
Fund
Cash and cash equivalents 7,290,432$
Restricted cash and cash equivalents 11,737,018
Total assets 19,027,450$
Liabilities and Fund Balance
Liabilities
Accrued liabilities 10,000
Total liabilities 10,000
Fund Balance
Unassigned 19,017,450
Total fund balance 19,017,450
Total liabilities and fund balance 19,027,450$
Assets
265
See Notes to Financial Statements 12
The Colony Local Development Corporation
Adjustments to the Governmental Funds Balance Sheet
September 30, 2024
Total Fund Balance - Governmental Funds 19,017,450$
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 governmental funds. 22,321,911
Prepaid insurance related to long-term liabilities are not financial resources and , therefore,
are not reported in governmental funds. 2,534,231
Long-term liabilities are not due and payable in the current period and therefore, are not
reported as liabilities in the governmental funds.
Bond payable (132,412,224)
Deferred charge on refunding 304,308
Accrued interest payable (3,184,928)
Net Position of Governmental Activities (91,419,252)$
266
See Notes to Financial Statements 13
The Colony Local Development Corporation
Statement of Governmental Funds Revenues, Expenditures, and Changes in Fund Balance
Year Ended September 30, 2024
General
Fund
Revenues
Sales tax 8,841,724$
Intergovernmental 1,522,060
Interest income 386,634
Total revenues 10,750,418
Expenditures
Debt service
Principal 3,175,000
Interest 6,438,787
Total expenditures 9,613,787
Change in fund balance 1,136,631
Fund balance at beginning of year 17,880,819
Fund balance at end of year 19,017,450$
267
See Notes to Financial Statements 14
The Colony Local Development Corporation
Adjustments to Statement of Governmental Funds Revenues, Expenditures, and Changes in Fund Balance
Year Ended September 30, 2024
Net Change in Fund Balance - Governmental Funds 1,136,631$
Amounts reported for governmental activities in the statement of activities are
different because:
Current year changes in accrued interest payable do not require the use of current
financial resources; therefore, are not reported as expenditures in the financial statements 47,381
The repayment of principal of long-term debt consumes the current financial resources
of governmental funds.
Bond principal repayments 3,175,000
Amortization of discounts on debt issuance (2,000)
Amortization of deferred charges on refundings (27,664)
Amortization of prepaid insurance (110,184)
Change in net position of governmental activities 4,219,164$
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15
The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Note 1 - Summary of Significant Accounting Policies
A summary of The Colony Local Development Corporation’s significant accounting policies consistently applied
in the preparation of the accompanying statements follows:
Organization and Nature of Activities
The City of The Colony (the City) created The Colony Local Development Corporation (LDC) on November 8,
2011. The LDC was formed to finance projects located within the Tax Increment Reinvestment Zone Number
One, under the authority of the Tax Increment Financing Act. The LDC is governed by a nine-member board of
directors; all nine were appointed by the City Council.
Measurement Focus and Basis of Accounting
The government-wide financial statements (i.e. the statement of net position and the statement of activities)
report information on all of the activities of the primary government.
The government-wide financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability
is incurred, regardless of timing of related cash flow.
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable
and available. Revenues are considered to be available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period. For this purpose, the Corporation considers
revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures
generally are recorded when a liability is incurred, as under accrual basis of accounting.
Sales taxes are susceptible to accrual. As a result, sales taxes collected and held by the state on behalf of the
Corporation are recognized as revenues. The Corporation utilizes the general fund, a governmental fund type,
to account for its activities.
When an expense is incurred for purposes for which both restricted and unrestricted net position is available for
use, it is the Corporation’s policy to use restricted resources first, then unrestricted resources as they are
needed.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets, deferred outflows of resources, liabilities and deferred inflows of resources and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from these estimates.
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The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Cash and Cash Equivalents
The Corporation maintains its cash deposits at financial institutions. The Corporation considers all short-term
highly liquid investments that are readily convertible into cash within ninety (90) days of date of purchase to be
cash equivalents.
Custodial credit risk – deposits. The Corporation’s cash deposits at September 30, 2024 were fully secured by
federal deposit insurance and by pledged securities held by the Corporation’s agent in the Corporation’s name.
Restricted Cash and Cash Equivalents
Restricted cash in the General Fund includes amounts restricted for debt service.
Prepaid Items
Prepaid insurance represents costs associated with the issuance of Sales Tax Increment Contract Revenue
Bonds, Series 2013A, incurred by the LDC for which benefits extend beyond September 30, 2024. The cost of the
insurance is recorded as an expenditure when incurred in the fund level financial statements; however, it is
recorded as an asset and amortized into expense over the life of the related debt in the government-wide
financial statements.
Capital Assets
Capital assets are recorded at cost less accumulated depreciation. Expenses for maintenance and repairs, which
do not extend the life of the applicable assets, are charged to expense as incurred. When assets are retired or
otherwise disposed of, their costs and related accumulated depreciation are removed from the accounts and
resulting gains and losses are included in income.
Fair Value Measurements
Fair value accounting requires characterization of the inputs used to measure fair value into three-level fair
value hierarchy as follows:
Level 1 inputs are based on unadjusted quoted market prices for identical assets or liabilities in an active market
the entity has the ability to access.
Level 2 inputs are observable inputs that reflect the assumptions market participants would use in pricing the
asset or liability developed based on market data obtained from sources independent from the entity.
Level 3 inputs are observable inputs that reflect the entity’s own assumptions about the assumptions market
participants would use in pricing the asset or liability developed based on the best information available.
The Corporation has no investments subject to fair value inputs as the Corporation only invests in high-yield
savings which is reported at amortized cost.
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The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Fund Balance
The Corporation classifies governmental fund balance in the following categories:
Nonspendable fund balance includes fund balance that cannot be spent either because it is not in spendable
form or because of legal or contractual constraints. At September 30, 2024, the Corporation had no
nonspendable fund balance.
Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by
constitution, external resource providers, or through enabling legislation. At September 30, 2024, the
Corporation had no restricted fund balance.
Committed fund balance is established and modified by a resolution from the Corporation’s Board, the
Corporation’s highest level of decision-making authority, and can be used only for the specific purposes
determined by the Board’s resolution. At September 30, 2024, the Corporation had no committed fund balance.
Assigned fund balance is intended to be used by the Corporation for specific purposes but does not meet the
criteria to be classified as restricted or committed. The Corporation’s Board has the authority to assign fund
balance. At September 30, 2024, the Corporation had no assigned fund balances.
Unassigned fund balance is the residual classification for the Corporation’s general fund and includes all
spendable amounts not contained in the other classifications.
The Corporation uses restricted amounts first when both restricted and unrestricted fund balances are available.
Additionally, the Corporation would first use restricted, committed, then assigned, and lastly unassigned
amounts of unrestricted fund balance when expenditures are made.
Note 2 - Investments
State statutes authorize the Corporation to invest in 1) obligations of the U.S. or its agencies and
instrumentalities; 2) obligations of the State of Texas or its agencies; 3) other obligations guaranteed by the U.S.
or the State of Texas or their agencies and instrumentalities; 4) obligations of states, agencies, counties, cities,
and other political subdivisions of any state having been rated as to investment quality by a nationally
recognized investment rating firm and having received a rating of not less than “A” or its equivalent; 5)
guaranteed or secured certificates of deposit issued by state or national banks domiciled in Texas; and 6) fully
collateralized repurchase agreements. The Corporation has not adopted an investment policy.
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The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Note 3 - Capital Assets
A summary of the Corporation’s capital assets as of September 30, 2024, follows.
Beginning Ending
Balance Additions Retirements Balance
Capital assets, not being depreciated
Land 22,321,911$ -$ -$ 22,321,911$
Total capital assets,
not being depreciated 22,321,911 - - 22,321,911
Capital assets, net 22,321,911$ -$ -$ 22,321,911$
Note 4 - Long-Term Obligations
The following is a summary of activity of long-term obligations of the Corporation for the fiscal year ended
September 30, 2024:
Balance at Balance at
October 1, September 30, Due Within
2023 Additions Retirements 2024 One Year
Sales tax increment contract
revenue bonds, Series 2013 14,960,000$ -$ (255,000)$ 14,705,000$ 285,000$
Sales tax increment contract
revenue bonds, Series 2013A 102,450,000 - (1,685,000) 100,765,000 1,805,000
Sales tax increment contract
revenue bonds, Series 2021 18,200,000 - (1,235,000) 16,965,000 1,280,000
Discount on revenue bonds (24,776) 2,000 (22,776) -
Total long-term debt 135,585,224$ -$ (3,173,000)$ 132,412,224$ 3,370,000$
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The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Debt service requirements on the bond payable are as follows:
Principal Interest Total
2025 3,370,000$ 6,306,400$ 9,676,400$
2026 3,580,000 6,174,005 9,754,005
2027 3,800,000 6,030,306 9,830,306
2028 4,025,000 5,874,777 9,899,777
2029 4,275,000 5,544,089 9,819,089
2030-2034 25,640,000 25,386,442 51,026,442
2035-2039 26,440,000 18,093,539 44,533,539
2040-2044 32,705,000 11,294,191 43,999,191
2045-2048 28,600,000 3,053,798 31,653,798
132,435,000$ 87,757,547$ 220,192,547$
Fiscal Year Ending
Bond Payable
In February 2013, the LDC issued Sales Tax Increment Contract Revenue Bonds, Series 2013, due in annual
installments from October 1, 2018, through October 1, 2042, at interest rates from 5% to 7.625%, in the amount
of $15,875,000, with a remaining balance as of September 30, 2024, of $14,705,000.
In February 2013, the LDC issued Sales Tax Increment Contract Revenue Bonds, Series 2013A, due in annual
installments from October 1, 2020, through October 1, 2047, at interest rates from 2.594% to 4.881 %, in the
amount of $106,850,000, with a remaining balance as of September 30, 2024, of $100,765,000.
In February 2021, the LDC issued Sales Tax Increment Contract Revenue Bonds, Series 2021, due in annual
installments from October 1, 2021, through October 1, 2034, at an interest rate of 3.58%, in the amount of
$20,545,000, with a remaining balance as of September 30, 2024, of $16,965,000.
Note 5 - Contingencies
The Corporation is not a party to any legal actions that are believed by management to have a material effect on
the financial condition of the Corporation. Accordingly, no provision for losses has been recorded in the
accompanying financial statements for such contingencies.
Note 6 - Risk Management
The Corporation is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets; errors and omissions; injuries to employees; and natural disasters. During fiscal year 2024, the
Corporation purchased commercial insurance to cover these liabilities. There were no significant reductions in
coverage in the past fiscal year and there were no settlements exceeding insurance coverage in the past three
years.
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The Colony Local Development Corporation
Notes to Financial Statements
September 30, 2024
Note 7 - Pledged Revenue
The Colony LDC Board of Directors officially met on February 7, 2013. The Board approved the issuance of Sales
Tax Increment Contract Revenue Bonds, Series 2013; Sales Tax Increment Contract Revenue Bond, Series 2013A;
and Ad Valorem Tax Increment Contract Revenue Bonds, Series 2013 to fund the purchase and development of
warehouse/distribution/retail facilities, a 433-acre tract of land, public infrastructure, and public improvements
within the Tax Increment Reinvestment Zone Number One (the Zone). The developer has also issued (private)
debt to fund the development. The City of The Colony's sales and use tax (1%), 100% of the City's real property
taxes, and 90% of the Denton County real property taxes attributable to the Zone are pledged and will be used
to pay the principal and interest obligations of the LDC and the developer for as long as the debt obligations
remain unpaid.
Note 8 - Correction of an Error in Previously Issued Financial Statements
During the year ended September 30, 2024, the Corporation determined that there were certain errors in
amounts previously reported in the 2023 financial statements resulting in a restatement of the beginning net
position. The corrections consist of the following:
The Corporation identified that prepaid insurance recorded upon issuance of the 2013 revenue bonds at TCLDC
had not been amortized. Accordingly, prepaid assets were overstated by $926,361. The effect of this correction
is shown below. In 2024, the Corporation corrected the classification of amounts reported for net position.
Amounts were misclassified between investment in capital assets and unrestricted net position and have been
reclassified in the current year to correct this error. The periods affected by the error would have begun in 2013.
Beginning net position was restated as follows:
October 1, 2023,
As Previously Error October 1, 2023,
Reported Correction As Restated
The Colony Local Development Corporation (94,712,055)$ (926,361)$ (95,638,416)$
If these amounts had been properly recorded in the prior year, the change in net position would have been
adjusted as follows for the year ended September 30, 2023:
October 1, 2023,
As Previously Error October 1, 2023,
Reported Correction As Restated
The Colony Local Development Corporation 3,138,800$ (110,184)$ 3,028,616$
274
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Compliance Section
September 30, 2024
The Colony Local Development
Corporation
A Component Unit of the City of the Colony, Texas
275
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21
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
To the Board of Directors
The Colony Local Development Corporation
The Colony, Texas
We have audited, in accordance with the auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States (Government Auditing Standards), the financial
statements of the governmental activities and the major fund of The Colony Local Development
Corporation (the Corporation), a component unit of the City of the Colony, as of and for the year ended
September 30, 2024, and the related notes to the financial statements, which collectively comprise the
Corporation’s basic financial statements, and have issued our report thereon dated March 12, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Corporation’s
internal control over financial reporting (internal control) as a basis for designing 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 Corporation’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the Corporation’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 Corporation’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 was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may
exist that have not been identified. We identified a certain deficiency in internal control, described in
the accompanying schedule of findings and responses as item 2024-001 that we consider to be a
material weakness.
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Corporation’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 financial statements. 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.
Corporation’s Response to Finding
Government Auditing Standards requires the auditor to perform limited procedures on the
Corporation’s response to the findings identified in our audit and described in the accompanying
Schedule of Findings and Responses. The Corporation’s response was not subjected to the other
auditing procedures applied in the audit of the financial statements and, accordingly, we express no
opinion on the response.
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
Corporation’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 Corporation’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Abilene, Texas
March 12, 2025
277
23
The Colony Local Development Corporation
Schedule of Findings and Responses
September 30, 2024
Section I – Summary of Auditor’s Results
FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified Yes
Significant deficiencies identified not considered
to be material weaknesses None Reported
Noncompliance material to financial statements noted? No
Section II – Financial Statement Findings
Finding 2024-001: Preparation of Financial Statements, Restatement, and Material Audit
Adjustments
Type of Finding: Material Weakness
Criteria: Management of the Corporation is responsible for the preparation and
fair presentation of the financial statements in accordance with generally
accepted accounting principles (GAAP). This includes the design,
implementation, and maintenance of internal controls relevant to the fair
presentation of the financial statements that are free from material
misstatement in a timely manner.
Condition: The internal control structure of the Corporation has focused primarily on
the objective of effectiveness and efficiency of operations (i.e.,
performance and safeguarding of resources). However, the system of
internal control over the objectives of reliability of financial reporting
contains deficiencies which resulted in certain material entries recorded
to prepaid assets that were detected as a result of audit procedures.
Additionally, the Corporation recorded adjustments to restate beginning
net position of the Corporation’s financial statements in accordance with
generally accepted accounting principles.
Cause: The Corporation does not prepare and has not developed an internal
control system to provide for the timely preparation of the financial
statements and related disclosures in a timely manner.
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24
The Colony Local Development Corporation
Schedule of Findings and Responses
September 30, 2024
Effect: The preparation of financial statements may result in financial statements
and related information included in financial statement disclosures not
being available or accurate for management purposes as timely and
accurate as it would be if the financial statements were prepared by the
Corporation.
Recommendations: Auditing standards require that auditors communicate this deficiency;
however, the Corporation prepares budgetary and other financial reports
for Board review on a routine basis, similar to many smaller governmental
entities. It is the responsibility of management and those charged with
governance to determine whether to accept the risk associated with this
condition because of cost or other considerations.
View of Responsible
Officials: Refer to the Corrective Action Plan
279
Management’s Response to Auditor’s Findings:
Summary Schedule of Prior Audit Findings
September 30, 2024
Prepared by Management of
The Colony Local Development
Corporation, a Component Unit of the
City of The Colony, Texas
280
The Colony Local Development Corporation - Summary Schedule of Prior Audit Findings
No prior audit findings noted.
281
The Colony Local Development Corporation – Corrective Action Plan
Finding 2024-001
Finding Summary: The internal control structure of the Corporation failed to identify certain
material entries related to prepaid assets that were detected as a result of audit
procedures during the current fiscal year. Additionally, the Corporation
recorded adjustments to restate beginning net position, which if not recorded,
would have resulted in a misstatement of the Corporation’s financial
statements.
Responsible Individuals: Tim Miller, Assistant City Manager
Corrective Action Plan: The Corporation implemented review and reconciliation measures to avert
future oversights and ensure that transactions are timely recorded to prevent
future misstatements.
Anticipated Completion Date: October 2024
282
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Federal Awards Reports in Accordance with
the Uniform Guidance
September 30, 2024
City of The Colony, Texas
283
City of The Colony, Texas
Table of Contents
September 30, 2024
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 ................................................................................................................................................................... 1
Independent Auditor’s Report on Compliance for the Major Federal Program; Report on Internal Control Over
Compliance Required by the Uniform Guidance ....................................................................................................... 3
Schedule of Expenditures of Federal Awards ............................................................................................................ 6
Notes to the Schedule of Expenditures of Federal Awards ....................................................................................... 7
Schedule of Findings and Questioned Costs .............................................................................................................. 8
284
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1
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
To the Mayor and
Members of the City Council
City of The Colony, 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 (Government Auditing Standards), the financial statements of the
governmental activities, the business-type activities, the aggregated discretely presented component units, each
major fund, and the aggregate remaining fund information of the City of The Colony, Texas (the City), as of and
for the year ended September 30, 2024, and the related notes to the financial statements, which collectively
comprise the City’s basic financial statements and have issued our report thereon dated March 12, 2025.
Report on 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) as a basis for designing 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 entity’s financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section
and was not designed to identify all deficiencies in internal control that might be material weaknesses or
significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not
been identified. We identified certain deficiencies in internal control, described in the accompanying schedule of
findings and questioned costs as items 2024-001 and 2024-002 that we consider to be material weaknesses.
285
2
Report on 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 financial
statements. 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.
City’s Response to Finding
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to
the findings identified in our audit and described in the accompanying Schedule of Findings and Questioned
Costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the
financial statements and, accordingly, we express no opinion on the response.
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.
Abilene, Texas
March 12, 2025
286
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3
Independent Auditor’s Report on Compliance for the Major Federal Program; Report on Internal Control Over
Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform
Guidance
To the Mayor and
Members of the City Council
City of The Colony, Texas
Report on Compliance for the Major Federal Program
Opinion on the Major Federal Program
We have audited City of The Colony, Texas’s (the City) compliance with the types of compliance requirements
identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on
the City’s major federal program for the year ended September 30, 2024. The City’s major federal program is
identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned
costs.
In our opinion, the City complied, in all material respects, with the compliance requirements referred to above
that could have a direct and material effect on the major federal program for the year ended September 30,
2024.
Basis for Opinion on the Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United
States of America (GAAS); the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the
audit 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). Our responsibilities under those
standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of
Compliance section of our report.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with
relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion on compliance for the major federal program. Our
audit does not provide a legal determination of the City’s compliance with the compliance requirements
referred to above.
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4
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design,
implementation, and maintenance of effective internal control over compliance with the requirements of laws,
statutes, regulations, rules and provisions of contracts or grant agreements applicable to the City‘s federal
program.
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance
requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s
compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance
and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing
Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not
detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material, if there is a
substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a
reasonable user of the report on compliance about the City’s compliance with the requirements of the major
federal program as a whole.
In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance,
we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the City’s compliance with the compliance requirements referred to above and
performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to
design audit procedures that are appropriate in the circumstances and to test and report on internal
control over compliance in accordance with the Uniform Guidance, but not for the purpose of
expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly,
no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal
control over compliance that we identified during the audit.
Report on 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 program on a
timely basis. A material weakness in internal control over compliance is a deficiency, or a 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 program will not be prevented, or detected
and corrected, on a timely basis.
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5
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 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 Auditor’s
Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in
internal control over compliance that might be material weaknesses or significant deficiencies in internal control
over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control
over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses
or significant deficiencies in internal control over compliance may exist that were not identified.
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control
over compliance. Accordingly, no such opinion is expressed.
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 that testing based on the requirements of the Uniform
Guidance. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited 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 as of and for the year ended September 30, 2024, and the related notes to the financial
statements, which collectively comprise the City’s basic financial statements. We issued our report thereon
dated March 12, 2025, which contained unmodified opinions on those financial statements. Our audit was
conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic
financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by the Uniform Guidance and is not a required part of the basic financial
statements. Such information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. The 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 statements
themselves, and other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all
material respects in relation to the basic financial statements as a whole.
Abilene, Texas
March 12, 2025
289
See Notes to Schedule of Expenditures of Federal Awards 6
City of The Colony, Texas
Schedule of Expenditures of Federal Awards
Year Ended September 30, 2024
Federal Financial Pass-Through
Assistance Entity Identifying
Listing Number Expenditures
Federal Awards
Department of Justice
Direct Program
Bulletproof Vests Partnership Program 16.607 N/A 25,575$
Passed through the City of Denton
Edward Byrne Memorial Justice Assistance Grant 16.738 O-BJA-2023-171790 12,876
Total Department of Justice 38,451
Department of Treasury
Direct Program
COVID-19 Coronavirus State and Local Fiscal
Recovery Funds Program 21.027 N/A 894,976
Total Department of Treasury 894,976
Total Federal Financial Assistance 933,427$
Federal Grantor/Pass-Through Grantor/
Program or Cluster Title
290
7
City of The Colony, Texas
Notes to the Schedule of Expenditures of Federal Awards
Year Ended September 30, 2024
Note A - Basis of Presentation
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity
of the City of The Colony, Texas, under programs of the federal government for the year ended September 30,
2024. The information 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 fund balance, or
cash flows of the City.
Note B – Summary of Significant Accounting Principles
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. The
Governmental Fund types are accounted for using a current financial resources measurement focus. All federal
expenditures were accounted for in the General Fund and Special Revenue Funds, components of the
Governmental Fund type, using the modified accrual basis of accounting. Such expenditures are recognized
following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not
allowed or are limited as to reimbursement.
Federal grants are considered to be earned to the extent of expenditures made under the provisions of the
grant. No federal awards have been provided to a subrecipient.
Note C – Indirect Cost Rate
The City is not eligible to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance
because the City has previously received a negotiated indirect cost rate for its federal awards.
291
8
City of The Colony, Texas
Schedule of Findings and Questioned Costs
Year Ended September 30, 2024
Section I – Summary of Auditor’s Results
FINANCIAL STATEMENTS
Type of auditor's report issued Unmodified
Internal control over financial reporting:
Material weaknesses identified Yes
Significant deficiencies identified not
considered to be material weaknesses None Reported
Noncompliance material to financial statements noted? No
FEDERAL AWARDS
Internal control over major programs:
Material weaknesses identified No
Significant deficiencies identified not
considered to be material weaknesses None Reported
Type of auditor's report issued on compliance for major programs: Unmodified
Any audit findings disclosed that are required to be reported in
accordance with Uniform Guidance 2 CFR 200.516 (a): No
Identification of major programs:
Federal Financial
Assistance Listing
COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Program 21.027
Dollar threshold used to distinguish between type A
and type B programs for federal awards:$750,000
Auditee qualified as low-risk auditee? No
Name of Federal Program
292
9
City of The Colony, Texas
Schedule of Findings and Questioned Costs
Year Ended September 30, 2024
Section II – Financial Statement Findings
Finding 2024-001: Preparation of Financial Statements, Restatement, and Material Audit
Adjustments
Type of Finding: Material Weakness
Criteria: Management of the City is responsible for the preparation and fair presentation
of the financial statements in accordance with generally accepted accounting
principles (GAAP). This includes the design, implementation, and maintenance
of internal controls relevant to the fair presentation of the financial statements
that are free from material misstatement in a timely manner.
Condition: The internal control structure of the City has focused primarily on the objective
of effectiveness and efficiency of operations (i.e., performance and safeguarding
of resources). However, the system of internal control over the objectives of
reliability of financial reporting contains deficiencies which resulted in certain
material entries recorded to capital assets, receivables, unearned revenue,
payables, revenue, and prepaid assets that were detected as a result of audit
procedures. Additionally, the District recorded adjustments to restate beginning
fund balance and net position, which if not recorded, would have resulted in
misstatement of the District’s financial statements in accordance with generally
accepted accounting principles.
Cause: The City does not prepare and has not developed an internal control system to
provide for the timely preparation of the financial statements and related
disclosures in a timely manner. Additionally, the City’s fixed asset subledger did
not reconcile to the 2023 ACFR.
Effect: The preparation of financial statements may result in financial statements and
related information included in financial statement disclosures not being
available or accurate for management purposes as timely and accurate as it
would be if the financial statements were prepared by the City.
Recommendations: Auditing standards require that auditors communicate this deficiency; however,
the City prepares budgetary and other financial reports for Board review on a
routine basis, similar to many smaller governmental entities. It is the
responsibility of management and those charged with governance to determine
whether to accept the risk associated with this condition because of cost or
other considerations.
View of Responsible
Officials: Refer to the Corrective Action Plan
293
10
City of The Colony, Texas
Schedule of Findings and Questioned Costs
Year Ended September 30, 2024
Finding 2024-002: Reconciliations and Monthly Close Process
Type of Finding: Material Weakness
Criteria: Management of the City is responsible for preparing monthly reconciliations for
all accounts on a timely basis as part of its monthly close process.
Condition: The City did not prepare monthly reconciliations for all accounts during the
period under audit.
Cause: The City had not prepared an internal control system that included a monthly
reconciliation for all accounts.
Effect: The lack of monthly reconciliations for all accounts increases the risk that a
material misstatement of the financial statements could occur.
Recommendations: Management should implement a monthly reconciliation process for all
accounts.
View of Responsible
Officials: Refer to the Corrective Action Plan
Section III – Federal Award Findings and Questioned Costs
The audit disclosed no findings or questioned costs required to be reported.
294
Management’s Response to Auditor’s Findings:
Summary Schedule of Prior Audit Findings
September 30, 2024
Prepared by Management of
City of The Colony, Texas
295
City of The Colony, Texas - Summary Schedule of Prior Audit Findings
No prior audit findings noted.
296
City of The Colony, Texas – Corrective Action Plan
Finding 2024-001
Finding Summary: The internal control structure of the City failed to identify certain material
entries related to capital assets, receivables, unearned revenue, payables,
revenue and prepaid assets that were detected as a result of audit procedures
during the current fiscal year. Additionally, the City recorded adjustments to
restate beginning fund balance and net position, which if not recorded, would
have resulted in a misstatement of the City’s financial statements.
Responsible Individuals: Tim Miller, Assistant City Manager
Corrective Action Plan: The City implemented review and reconciliation measures to avert future
oversights and ensure that transactions are timely recorded to prevent future
misstatements. The City has also added additional staff to assist specifically with
fixed assets and capital items.
Anticipated Completion Date: October 2024
Finding 2024-002
Finding Summary: The internal control structure of the City did not include procedures to prepare
monthly reconciliations for all accounts on a timely basis as part of its monthly
close process.
Responsible Individuals: Tim Miller, Assistant City Manager
Corrective Action Plan: City management has implemented procedures to require monthly
reconciliations for all accounts.
Anticipated Completion Date: October 2024
297
Agenda Item No:6.1
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Discussion
Agenda Section:
Subject:
Council shall convene into a closed executive session pursuant to Sections 551.072 and 551.087 of the Texas
Government Code to deliberate regarding purchase, exchange, lease or value of real property and commercial
or financial information the city has received from a business prospect(s), and to deliberate the offer of a
financial or other incentive to a business prospect(s).
Suggested Action:
Attachments:
298
Agenda Item No:6.2
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Chris Cuellar
Submitting Department: Information Technology
Item Type: Resolution
Agenda Section:
Subject:
Council shall convene into a closed executive session pursuant to Section 551.089 of the Texas Government
Code to deliberate regarding security devices or security audits.
Suggested Action:
Consider approving a resolution authorizing the City Manager to issue a purchase order to Solid Border, Inc. in
the amount of $101,798.26 for the purchase of a Managed Detection and Response solution using budgeted
funds.
Attachments:
299
Agenda Item No:7.1
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Tina Stewart
Submitting Department: City Secretary
Item Type: Discussion
Agenda Section:
Subject:
Any action as a result of executive session regarding purchase, exchange, lease or value of real property and
commercial or financial information the city has received from a business prospect(s), and the offer of a
financial or other incentive to a business prospect(s).
Suggested Action:
Attachments:
300
Agenda Item No:7.2
CITY COUNCIL Agenda Item Report
Meeting Date: March 18, 2025
Submitted by: Chris Cuellar
Submitting Department: Information Technology
Item Type: Resolution
Agenda Section:
Subject:
Any action as a result of executive session regarding security devices or security audits.
Suggested Action:
Attachments:
301