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Home My WebLink AboutPR 24415: Annual Comprehensive Financial Report 2024 CITY OF PORT ARTHUR, TEXAS ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2024 Issued by: The Finance Department CITY OF PORT ARTHUR, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2024 TABLE OF CONTENTS Page Number INTRODUCTORY SECTION Letter of Transmittal ................................................................................................... i - vi City Officials .............................................................................................................. vii Organizational Chart ................................................................................................... viii FINANCIAL SECTION Independent Auditor’s Report ....................................................................................... 1 – 3 Management Discussion and Analysis ............................................................................ 4 – 9 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position ....................................................................................... 10 Statement of Activities ........................................................................................... 11 – 12 Fund Financial Statements: Governmental Funds Balance Sheet .................................................................................................... 13 – 14 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position .............................................................. 15 Statement of Revenues, Expenditures, and Changes in Fund Balances ............................................................................... 16 – 17 Reconciliation of Revenues, Expenditures and Changes In Fund Balances – Governmental Funds to the Statement of Activities .................................................................................... 18 Proprietary Funds Statement of Net Position .................................................................................... 19 – 20 Statement of Revenues, Expenses, and Changes in Fund Net Position ........................................................................... 21 Statement of Cash Flows ..................................................................................... 22 – 23 Fiduciary Funds Statement of Fiduciary Net Position ....................................................................... 24 Statement of Changes in Fiduciary Net Position ................................................................................................... 25 Notes to the Financial Statements ........................................................................... 26 – 60 Required Supplementary Information Schedule of Revenues, Expenditures, and Changes in Fund Balance – General Fund – Budget and Actual ..................................................... 61 Notes to Budgetary Schedules ................................................................................... 62 Schedule of Changes in Net Pension Liability and Related Ratios - TMRS .......................................................................... 63 – 64 Schedule of Changes in Net Pension Liability and Related Ratios - FRRF ........................................................................... 65 – 66 Schedule of Employer Contributions - TMRS ................................................................. 67 – 68 Schedule of Employer Contributions - FRRF ................................................................. 69 – 70 Schedule of Changes in Total Other Post-Employment Benefit Liability and Related Ratios – Supplemental Death Benefits Fund ................................. 71 – 72 Schedule of Changes in City Retiree Health Other Post-Employment Benefit Liability and Related Ratios .......................................................................... 73 – 75 Combining and Individual Fund Statements and Schedules Combining Balance Sheet – Nonmajor Governmental Funds ........................................... 76 – 83 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds ..................................... 84 – 91 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Debt Service Fund ........................................ 92 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Library Special Fund ..................................... 93 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Golf Course Fund ......................................... 94 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - Municipal Court Technology Fund .................... 95 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - Police Special Fund ....................................... 96 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Hotel Occupancy Tax Fund ............................. 97 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Street Maintenance Fund ............................... 98 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - Gaming Fund ............................................... 99 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual - TIRZ Fund ................................................... 100 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Transit Fund – Budget and Actual ................................................... 101 Combining Statement of Net Position – Internal Service Funds ....................................... 102 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position – Internal Service Funds ............................................ 103 Combining Statement of Cash Flows – Internal Service Funds ........................................ 104 Discretely Presented Component Unit: Port Arthur Section 4A Economic Development Corporation: Balance Sheet – Governmental Funds .................................................................... 105 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds .............................................................. 106 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund ........................................... 107 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Debt Service Fund .................................... 108 STATISTICAL SECTION Net Position by Component ............................................................................ 1 109 - 110 Changes in Net Position ................................................................................. 2 111 - 114 Fund Balances of Governmental Funds ............................................................. 3 115 - 116 Changes in Fund Balances of Governmental Funds ............................................. 4 117 - 118 Assessed Value and Estimated Actual Value of Taxable Property .......................... 5 119 Direct and Overlapping Property Tax Rates ....................................................... 6 120 - 121 Principal Property Taxpayers .......................................................................... 7 122 Principal Industry Districts ............................................................................. 8 123 Property Tax Levies and Collections ................................................................. 9 124 Ratios of Outstanding Debt by Type ................................................................ 10 125 Ratios of General Bonded Debt Outstanding ..................................................... 11 126 Direct and Overlapping Governmental Activities Debt ......................................... 12 127 Demographic and Economic Statistics .............................................................. 13 128 Principal Employers ....................................................................................... 14 129 Full-Time Equivalent City Government Employees by Function/Program ................ 15 130 - 131 Operating Indicators by Function .................................................................... 16 132 - 133 Capital Asset Statistics by Function ................................................................. 17 134 - 135 THIS PAGE LEFT BLANK INTENTIONALLY INTRODUCTORY SECTION THIS PAGE LEFT BLANK INTENTIONALLY i CHARLOTTE M. MOSES, MAYOR RONALD BURTON, CPM HAROLD L. DOUCET, SR., CITY MANAGER MAYOR PRO TEM SHERRI BELLARD, TRMC COUNCIL MEMBERS: CITY SECRETARY WILLIE BAE LEWIS, JR. TIFFANY L. HAMILTON EVERFIELD ROXANN PAIS COTRONEO DONEANE BECKCOM CITY ATTORNEY THOMAS KINLAW, III DONALD FRANK, SR. June 30, 2025 Honorable Mayor and City Council Citizens of the City of Port Arthur We are pleased to submit the Annual Comprehensive Financial Report (ACFR) of the City of Port Arthur (the "City") for the fiscal year ended September 30, 2024. Responsibility for both the accuracy of the data and the completeness of presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported to present fairly the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities are included. This annual report consists of management's representations concerning the finances of the City of Port Arthur. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Port Arthur has established a comprehensive and robust internal control framework that is designed both to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Port Arthur's financial statements in conformity with Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefit, the City of Port Arthur's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The City of Port Arthur's financial statements have been audited by Pattillo, Brown and Hill, LLP, a licensed certified public accounting firm. The goal of the independent audit was to provide reasonable and objective assurance that the financial statements of the City of Port Arthur for the fiscal year ended September 30, 2024, are free of material misstatement. The independent audit involved examining on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Port Arthur's financial statements for the fiscal year ended September 30, 2024, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of the report. ii The independent audit of the financial statements of the City of Port Arthur was part of a broader, federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City of Port Arthur's separately issued Single Audit Report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Port Arthur's MD&A can be found immediately following the report of the independent auditors. History and Population The City of Port Arthur (City), incorporated May 30, 1898, is located in Southeastern Texas, on the Gulf Coast. Bordered by Lake Sabine, an inland bay, the city has access to the Gulf of Mexico through Sabine Pass. Port Arthur is spread over 76.9 square miles and has a population of approximately 56,039. The City has all the powers granted to a home-ruled city by Texas law including: the power to levy tax on real and personal property within its boundaries, the right to extend its boundaries by annexation, and the power to block annexation or incorporation in areas considered within its extra-territorial jurisdiction (ETJ). Governmental Structure The City has operated under the Council-Manager form of government since March 8, 1932. Policy making and legislative authority rests with the City Council, which consists of a mayor and a six-member council. Two council members and the mayor are elected at large, and four council members are elected from their respective districts. All terms are three years. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees and hiring the City Manager, City Attorney, Municipal Court Judge, and City Secretary. The City Manager is responsible for carrying out the policies and ordinances of the City Council, overseeing the day-to-day operations of the City, and appointing the heads of the City's departments. The City provides a full range of municipal services including police and fire protection, solid waste removal and disposal, water and sanitary sewer, the construction of streets, drainage and other infrastructure, recreational activities, library and other cultural activities. Component units are legally separate entities for which the City is financially accountable. The financial data of the Port Arthur Economic Development Corporation (PAEDC) has been included with that of the City. This organization, although a legally separate entity, is in substance part of the City's operations. Additional information on this entity may be found in Note I.A. in the notes to the financial statements. iii Budgetary Information The annual budget serves as the foundation for the City's financial planning and control. The City Manager presents his proposed budget to the City Council for review on or before August 31st of each year. The Council holds a public hearing, and a final budget is adopted by September 30th. The City maintains extensive budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by City Council. Activities of the general fund, certain special revenue funds and the proprietary funds, are included in the annual appropriated budget. Project- length budgets are prepared for the capital projects fund. The level of budgetary control (i.e. the level at which expenditures cannot legally exceed the appropriated amount) is the fund level within each fund. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the General Fund, this comparison is presented in this report as part of the basic financial statements for the governmental funds. For governmental funds, other than the General Fund, with appropriated annual budgets, this comparison is presented in the non-major governmental fund subsection of this report. Factors Affecting Financial Condition The information presented in the financial statements is perhaps best understood when it is considered from the broader perspective of the specific environment within which the City operates. Local Economic Condition and Outlook Port Arthur is a socio-economically diverse community whose economy, while heavily connected to the petrochemical industry, continues to diversify with not only strong growth in agriculture, seafood related (e.g. shrimping, fishing, etc.) business, but also small business growth. The City was fortunate to show population growth in the 2020 Census. The combination of the foregoing dynamics provides for a strong local economy. Adding to the robustness of the city's local economy is the continued number of industrial, Port of Port Arthur, Port of Sabine Pass, Lamar State College-Port Arthur and utility expansion projects. These projects not only inject funding directly into the local economy via purchases, but also by providing short- term (several months to 5 years) and long-term (permanent) employment. Current examples of local expansions and developments are: Lamar State College-Port Arthur ($ l 9M), Port of Sabine Pass ($5.3M), Valero ($2.4B), Port Arthur LNG ($13B), Golden Pass LNG ($9.6B), Sempra ($13B), TOTAL ($2.7B), EDC Downtown Development Projects ($50.2M), Motiva Downtown Building Renovation ($95M), TxDot [Hwy 69/Hwy 73 Interchange] ($75M), and Exxon-Mobil BLADE Project ($2B). iv It should also be noted that the Port of Port Arthur has an economic value of $22.9 billion dollars. Overall, our economic agencies such as the PAEDC, Greater Port Arthur Chamber of Commerce, etc. indicate that at this time the construction and related projects in various stages (i.e. a phase of a multi-phase project, in full construction, near completion, etc.) in, or impacting Port Arthur, total over $86 billion dollars. The projects included in the referenced total, and the related growth, are deemed stable over the next 5 to l0-year horizon with additional growth expected. Further, the population growth in the city, and in this area, provides further stability to the local economy. The City would anticipate, at a minimum, stability in the Industrial District Agreements (IDA) values it has with industry; with the strong possibility of value growth due to the LNG and other expansions. Property and Sales Taxes Industrial agreement payments were the City's single largest source of revenue and increased $1.7 million (or 6.2%) from the previous year due to the assessed value of some contracts. Taxable property values in FY23-24 grew by $253 thousand (1.7%) from the previous year. Sales tax reflected a 5.1% increase over the previous year. Long-term Financial Planning A five-year Capital Improvement Plan (CIP) was adopted as part of the City's FY2024 Budget. The CIP plan is a multi-year planning tool used to prioritize major new capital investments made by the City and will be updated annually focusing primarily on infrastructure and facility needs. The CIP identifies a variety of funding sources including: the operating budgets, state and federal grants, and bond programs. Only the first year of each CIP cycle is adopted as part of the fiscal year's budget process; the subsequent years are planning years. The FY2024 budget was developed with a focus on minimal increases in operations and a continued commitment to funding capital projects while responding to an ongoing public health emergency. Various strategies were used to ensure balanced budgets including cost cutting and productivity improvements, a strong commitment to an affordable CIP and strict management of employee benefits. A key initiative for a stronger financial future for the City of Port Arthur is to continue to develop a structurally balanced operating budget every fiscal year. A structurally balanced budget is achieved when recurring revenues match recurring expenditures. v Relevant Financial Policies Financial policies guide the development and implementation of the budget and are a framework for fiscal decision making and ensures financial resources are available to meet the current and future needs of the City. The policy statements address the areas of reporting and auditing, budgeting, revenues, capital improvements, debt, and grants. The City's fiscal policies provide for a General Fund reserve which requires a minimum of 60 days of working capital plus $1,500,000. This fiscal policy ensures financial stability in the event of unforeseen economic downturns or natural disasters as we can experience here along the Gulf Coast. The City makes allocation decisions based on economic efficiency and its strong fiscal management has resulted in high bond ratings and reduced interest costs. Cash Management Policies and Practices Cash temporarily idle during the year was invested in accordance with the public funds investment Act (PFIA) and the City's approved investment policy. At year end, funds were invested in approved local government investment pools (TexPool, TexasClass and TexSTAR). It is the City's policy to restrict its direct investments to obligations of the United States of America, its agencies, and instrumentalities, fully FDIC insured certificates of deposit, fully collateralized repurchase agreements, money market mutual funds and local government investment pools. Investment income includes appreciation in the fair value of investments. Increases in fair value during the current year do not necessarily represent trends that will continue, nor is it always possible to realize such amounts, especially in the case of temporary changes in the fair value of investments that the government intends to hold to maturity. Risk Management The City maintains a limited risk retention program for worker's compensation and employee health benefits. As part of this program, resources are transferred to the employee benefit fund to meet potential losses. Additional information on the City's risk management activity can be found in this report for the notes to the financial statements. Pension and Other Post-employment Benefits The City of Port Arthur provides pension benefits for all permanent employees, except for firefighters, through a nontraditional, joint contributory, hybrid defined benefit plan in the statewide Texas Municipal Retirement System (TMRS), an agent multi-employer public employee retirement system. The City sponsors a single-employer defined benefit pension plan for all firefighters. The Board of Trustees of the Port Arthur Firemen's Relief and Retirement Fund (the Fund) is the administrator of the plan. The Board is composed of the Mayor (or his designee) and the Finance Officer as ex-officio Trustees, three firefighters elected by a majority vote of the firefighters, and two citizens who must be appointed unanimously by the first five trustees, is subject to administrative supervision by the State Firemen's Pension Commissioner. The City does not hold title to any of the Fund's assets, have right to any surpluses, or have responsibility for any deficits. Accordingly, the financial statements of the fund are not included in this report. The City of Port Arthur also provides post-retirement health care benefits for retirees and their dependents. As of the end of the current fiscal year, there were 116 retirees in the City's group health program. Additional information on the City's pension arrangements and post-employment benefits can be found in this report of the notes to the financial statements. vi Major Initiatives For FY 2024, the budget was developed with a focus on capital projects and continued to address the Coronavirus disaster with limited increases in operations. The fifth year of the City's five-year capital improvement plan included a total of $40+ million in additional projects. The improvements included $10.7 million for Streets, $9.6 million for General Improvements, $2.7 million for a fire engines, $8 million for Water and Sewer infrastructure improvements, $2 million for solid waste and $439 thousand for Pleasure Island improvements. These were funded through operating revenues, bonds, grants and other sources. The City has been restoring its service delivery to pre-Covid levels. Revenues were up from FY2023, and with expenses and transfers, provided an overall net gain of $19.6 million in total governmental activities. ln FY 2024, the five-year capital improvement plan was updated to include a total of $345 million in projects representing a 13.3% increase to include all of the previous years’ projects that had yet to be completed and planned for future implementation. Overall, the operating budgets were “status quo”' as the City continued to recover fully from the Coronavirus disaster, natural disasters, and preserve operating funds for much needed capital projects. The City Council has also adopted Downtown Revitalization and Comprehensive Plans. Additionally, the City is moving forward to adopt a Master Drainage Plan, a Parks, Recreation and Open Space Master Plan, and a Five-Year Strategic Plans. Acknowledgements The preparation of this report could not have been accomplished without the efficient and dedicated services of the entire staff of the Department of Finance (specifically Mesdames Amy Landry and Latoya Lucas) and the staff of the City’s audit firm, Pattillo, Brown & Hill, LLP. The professional expertise and commitment of all of the accounting staff made this presentation possible. Appreciation is also expressed to the staff of the operating departments for their cooperation and contributions as well as to City Council for their interest and support of prudent financial operations. Ron Burton, CPM Lynda Boswell, M.A., ICMA-CM City Manager Director of Finance vii City of Port Arthur, Texas City Officials (As of September 30, 2024) City Council Thurman Bill Bartie Mayor Willie Bae Lewis, Jr. Councilmember District 1 Tiffany L. Hamilton Everfield Doneane Beckcom Councilmember District 2 Councilmember District 3 Mayor Pro Tem Harold L. Doucet, Sr. Councilmember District 4 Thomas Kinlaw, III Councilmember At Large, Position 5 Donald Frank, Sr. Councilmember At Large, Position 6 Appointed Officials Ron Burton City Manager Sherri Bellard City Secretary Roxann Pais Cotroneo City Attorney Antoine Freeman Municipal Court Judge CITY OF PORT ARTHUR ORGANIZATIONAL CHART Water & Sewer Fire Citizens/Residents City Council City Secretary City Manager City Attorney Economic Development Corporation (Component Unit) Municipal Court Elections Police Pleasure Island Finance Transit Information Technology Development Services Library Human Resources Parks & Recreation Civic Center Public Works Health Solid Waste viii FINANCIAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY INDEPENDENT AUDITOR’S REPORT Honorable Mayor and Members of the City Council City of Port Arthur, Texas Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business- type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of City of Port Arthur, Texas, as of and for the year ended September 30, 2024, and the related notes to the financial statements, which collectively comprise the City of Port Arthur, Texas’ basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Port Arthur, 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Port Arthur, Texas and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter - Change of Accounting Principle As discussed in the notes to the financial statements, in the year ending September 30, 2024, the City adopted new accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 100, Accounting Changes and Error Corrections-an amendment of GASB Statement No. 62. Our opinions are not modified with respect to this 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 City of Port Arthur, Texas’ 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. 1 2 Auditor’s Responsibility 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 of Port Arthur, Texas’ 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 of Port Arthur, Texas’ 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 information, and pension and OPEB information 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 auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 3 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 fund financial statements and schedules 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 were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Included in the Annual Comprehensive Financial Report Management is responsible for the other information included in the annual comprehensive financial report (ACFR). The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the 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 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 June 30, 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 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. Waco, Texas June 30, 2025 THIS PAGE LEFT BLANK INTENTIONALLY MANAGEMENT’S DISCUSSION AND ANALYSIS THIS PAGE LEFT BLANK INTENTIONALLY 4 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Port Arthur, Texas (City), we offer readers of the City’s financial statement this narrative overview and analysis of the financial activities of the City for the year ended September 30, 2024. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal as noted in the table of contents of this report. FINANCIAL HIGHLIGHTS • The assets and deferred outflows of resources of the City of Port Arthur exceeded its liabilities and deferred inflows at the close of the fiscal year by $267,313,113. • The City’s total net position increased by $14,672,631 from operations during the current fiscal year, driven by $170,979,056 in total revenues offset by expenses of $156,306,425 and $1,584,160 transferred to the EDC. • As of the close of the fiscal year, the City of Port Arthur’s governmental funds reported combined ending fund balance of $120,001,111. 3.8% of this total amount or $4,596,852 is unassigned and available for use within the City’s policies. • At the end of the current fiscal year, the unassigned fund balance in the general fund represented 122 days of the total general fund expenditures, which is $10,579,486 in excess of the City’s general fund balance policy requirement of 60 days plus $1.5M for extraordinary events. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City's basic financial statements are comprised three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the financial statements themselves. 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 private-sector business. The Statement of Net Position presents information on all of the City’s assets, deferred outflows, liabilities and deferred inflows with the difference between the four 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 City is improving or deteriorating. That being said, the net position of the City increased $14,672,631. The Statement of Activities presents information showing how the City’s net position changed during the fiscal year. All changes in net position are reported when the underlying event giving rise to the change occurs, regardless of the timing of the 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 and earned but unused compensated absences). Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, community development, public works, health and welfare, public transportation and culture and recreation. The business-type activities include the water and sewer, solid waste and Pleasure Island operations. The government-wide financial statements are found in the table of contents of this report. 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 and 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 are divided into three categories – governmental, proprietary and fiduciary funds. 5 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, the 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 on 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 fund statements of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains several individual governmental funds during the year. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general, American rescue plan, capital projects, and transit system funds which are considered to be major funds. Data from the other governmental funds are combined into a single, aggregated presentation titled total nonmajor funds. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements immediately following the notes to the financial statements and required supplementary information in the City’s Annual Comprehensive Financial Report. Proprietary funds – The City maintains two types of proprietary funds (Enterprise and Internal Service 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 water and sewer, solid waste and Pleasure Island operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for general liability insurance, employee benefits, and equipment replacement activities. All internal service funds are combined into a single aggregated presentation on the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements elsewhere in this report. The basic proprietary fund financial statements are noted in the table of contents of this report. Fiduciary fund – The City maintains a fiduciary fund to account for assets held by the City in a trustee capacity for the City’s Other Postemployment Benefit (Health Insurance) Plan. The fiduciary fund financial statements are noted in the table of contents of this report. 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 basic financial statements are noted in the table of contents of this report. Other information – In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension and other postemployment benefits to its employees. Required supplementary information can be found beginning immediately after the notes to the financial statements. See the notes to the financial statements for additional information concerning the City’s retirement systems and other postemployment benefits. The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on pensions, other postemployment benefits, and budgetary comparisons. Such information is noted in the table of contents of this report. GOVERNMENT – WIDE FINANCIAL ANALYSIS As noted earlier, net position may serve, over time, as a useful indicator of the government’s financial position. In the case of the City of Port Arthur, Texas, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $267,313,113 as of September 30, 2024. 6 Statement of Net Position - 2024 2023 2024 2023 2024 2023 Current and other assets 171,105,762$ 157,867,109$ 40,516,273$ 59,415,048$ 211,622,035$ 217,282,157$ Capital assets 137,364,304 124,361,056 183,976,489 172,007,199 321,340,793 296,368,255 Total assets 308,470,066 282,228,165 224,492,762 231,422,247 532,962,828 513,650,412 Deferred outflows of resources 21,029,367 31,955,204 3,795,291 5,703,705 24,824,658 37,658,909 Current liabilities 28,174,891 29,063,141 10,602,951 9,332,736 38,777,842 38,395,877 Long-term liabilities 149,274,854 153,567,776 89,606,799 94,795,512 238,881,653 248,363,288 Total liabilities 177,449,745 182,630,917 100,209,750 104,128,248 277,659,495 286,759,165 Deferred inflows of resources 6,385,639 4,076,143 6,429,239 6,418,561 12,814,878 10,494,704 Net position: Net investment in capital assets 133,718,412 121,338,454 132,554,356 140,854,750 266,272,768 262,193,204 Restricted 32,638,516 27,649,931 - - 32,638,516 27,649,931 Unrestricted (20,692,879) (21,512,076) (10,905,292) (14,275,607) (31,598,171) (35,787,683) Total net position 145,664,049$ 127,476,309$ 121,649,064$ 126,579,143$ 267,313,113$ 254,055,452$ Government-Wide City of Port Arthur's Net Position Activities Activities Total Governmental Business-Type The largest portion of the City’s net position reflects investment in capital assets (e.g. land, building, equipment, improvements, and construction in progress), less any debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide service to citizens; consequently, these assets are not available for future spending. Although the City’s investment in 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 be used to liquidate these liabilities. As of September 30, 2024, the City reports positive balances in the net investment in capital assets and restricted categories of net position, while the unrestricted category is negative for the government as a whole. The same was true for fiscal year 2023. Net position of $32,638,516 is restricted for future debt service, community development programs, culture and recreation and public safety expenses. The City’s total unrestricted net position deficit increased by ($4,189,512) in fiscal year 2024 as compared to the unrestricted net position deficit for the prior year. The City’s total net position increased by $14,672,631 from operations during the current fiscal year. 7 Statement of Activities - The following table provides a summary of the City’s operations for the year ended September 30, 2024. 2024 2023 2024 2023 2024 2023Revenues:Program revenues: Charges for services 2,339,019$ 1,373,350$ 50,363,044$ 49,029,163$ 52,702,063$ 50,402,513$ Operating grants & contributions 11,521,254 6,938,014 - - 11,521,254 6,938,014 Capital grants & contributions 13,780,610 12,206,842 - - 13,780,610 12,206,842 General revenues: Property taxes 24,201,068 25,651,375 - - 24,201,068 25,651,375 Industrial district payments 30,604,396 28,827,547 - - 30,604,396 28,827,547 Sales taxes 18,008,352 17,110,189 - - 18,008,352 17,110,189 Franchise taxes 11,461,218 10,171,363 - - 11,461,218 10,171,363 Investment earnings 4,635,323 6,287,481 1,013,597 2,807,562 5,648,920 9,095,043 Miscellaneous 2,121,042 1,319,685 137,459 344,582 2,258,501 1,664,267 Gain on sale of assets 792,674 1,246,520 - - 792,674 1,246,520 Total revenues 119,464,956 111,132,366 51,514,100 52,181,307 170,979,056 163,313,673 Expenses:General government 20,936,668 20,810,975 - - 20,936,668 20,810,975 Culture and recreation 8,957,108 9,789,671 - - 8,957,108 9,789,671 Public safety 38,789,326 46,012,264 - - 38,789,326 46,012,264 Community development 3,815,450 16,175,876 - - 3,815,450 16,175,876 Health and welfare 6,081,187 5,994,823 - - 6,081,187 5,994,823 Public transportation 3,053,362 3,464,996 - - 3,053,362 3,464,996 Public works 22,364,247 10,615,687 - - 22,364,247 10,615,687 Interest and other fees 2,514,433 2,190,510 - - 2,514,433 2,190,510 Water and sewer - - 39,513,032 41,665,536 39,513,032 41,665,536 Solice waste - - 8,513,580 8,241,569 8,513,580 8,241,569 Pleasure Island - - 1,768,032 2,186,968 1,768,032 2,186,968 Total expenses 106,511,781 115,054,802 49,794,644 52,094,073 156,306,425 167,148,875 Increase in net position before transfers 12,953,175 (3,922,436) 1,719,456 87,234 14,672,631 (3,835,202) Transfers 6,649,535 8,834,753 (6,649,535) (8,834,753) - - Change in net position 19,602,710 4,912,317 (4,930,079) (8,747,519) 14,672,631 (3,835,202) Net position - beginning of year, 127,476,309 122,563,992 126,579,143 135,326,662 254,055,452 257,890,654 as previously reportedAdjustments - error corrections (1,414,970) - - - (1,414,970) - Net position - end of year 145,664,049$ 127,476,309$ 121,649,064$ 126,579,143$ 267,313,113$ 254,055,452$ Government-WideCity of Port Arthur's Changes in Net Position Activities Activities Total Business-TypeGovernmental For the year ended September 30, 2024, total revenues from governmental activities were $119,464,956, compared with $111,132,366 in the prior year. This $8,332,590 increase is due to an increase in grants and contributions, industrial district payments, sales taxes and gain on disposal of assets. Governmental expenses decreased $8,543,021. This decrease is primarily due to decreased costs in community development of $12,360,426 from Hurricane Laura and COVID-19, offset by an increase of $125,693 related to general government expenses. Business-type revenues decreased $667,207 from the prior period due to decreases in charges for services and investment earnings. FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental Funds – The focus of the City of Port Arthur’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 the government’s net resources available for spending at the end of the fiscal year. At the end of the 2024 fiscal year, the City of Port Arthur’s governmental funds reported combined ending fund balances of $120,001,111. Approximately 3.8% of this total amount or $4,596,852 consists of unassigned fund balances. The remainder of the balance is to indicate that it is not available for new spending. The most significant amount is a $85,032,621 restricted for capital improvements. The City’s total fund balance increased by $7,571,131 from operations during the current fiscal year. The general fund is the primary operating fund of the City. At year end, unassigned fund balance of the general fund was $23,837,654, while total fund balance was $25,662,689. Fund balance of the general fund decreased $4,604,952 during the year from operations. 8 The American Rescue Plan fund had revenue and expenditures of $6,837,361. As the American rescue funds are expended on applicable projects the funding received in advance will be earned by the City. The Capital Projects fund ended the year with a total fund balance of $82,432,504, all of which is restricted for capital improvements. The capital projects fund balance increased $13,644,727 during the year due to issuance of new debt. The Debt Service fund ended the year with a total fund balance of $18,686,789. The debt service fund balance increased $513,723 during the year due to increased property tax and intergovernmental revenue and the issuance of a premium on new debt. The Hazard Mitigation fund ended the year with a total fund balance deficit of ($15,459,625). The hazard mitigation fund balance decreased $10,795,931 during the year due to grant revenues not received within the availability period and therefore, deferred on the governmental funds balance sheet. Governmental funds financial statements may be found by referring to the table of contents. GENERAL FUND BUDGETARY HIGHLIGHTS The City Council approved budget amendments to the original appropriations. This change resulted in a decrease of 0.9% of the original operating appropriation. Total expenditures were under the amended budget by $5,996,408. This positive variance from the amended budget was primarily the result of savings within the personnel expenses. Proprietary Funds – The City’s proprietary fund statements provide the same type of information found on the government-wide statements, but in more detail. CAPITAL ASSETS The City of Port Arthur’s investment in capital assets for its governmental and business-type activities as of September 30, 2024, amounts to $321,340,793 (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, buildings, equipment, improvements and infrastructure net of accumulated depreciation. Major capital assets during the current year included the following: 2024 2023 2024 2023 2024 2023 Land and improvements 8,877,178$ 4,054,431$ 863,971$ 863,971$ 9,741,149$ 4,918,402$ Construction in progress 41,970,221 32,463,467 42,656,254 31,827,479 84,626,475 64,290,946 Buildings and improvements 45,882,178 47,554,138 43,976,956 43,902,960 89,859,134 91,457,098 Machinery and equipment 77,841,328 79,431,610 30,404,270 30,265,019 108,245,598 109,696,629 Right to use vehicles 2,573,227 - - - 2,573,227 - Infrastructure 322,783,486 314,262,613 228,877,798 220,218,306 551,661,284 534,480,919 Accumulated depreciation 362,563,314)( 353,405,203)( 162,802,760)( 155,070,536)( 525,366,074)( 508,475,739)( TOTALS 137,364,304$ 124,361,056$ 183,976,489$ 172,007,199$ 321,340,793$ 296,368,255$ Activities Activities Total Governmental Business-Type More detailed information about the City’s capital assets can be found in the notes to the financial statements. 9 DEBT ADMINISTRATION At the end of the current fiscal year, the City of Port Arthur had total bonds and certificates of obligation outstanding of $143,092,340. Of this amount, $9,119,999 was general obligation debt and $133,972,341 was certificate of obligation. Current Standard and Poor’s underlying ratings of the City's obligations as of September 2024 was ‘A+’. Long-term debt obligations of the City for fiscal years 2024 and 2023 follows: 2024 2023 2024 2023 2024 2023 General obligation bonds 9,119,999$ 10,945,000$ -$ -$ 9,119,999$ 10,945,000$ Certificates of obligation 62,185,000 48,155,000 71,787,341 74,414,470 133,972,341 122,569,470 Unamortized premium 7,960,353 6,752,444 1,628,012 1,628,012 9,588,365 8,380,456 Capital lease payable 4,994,566 6,020,075 2,556,097 2,556,097 7,550,663 8,576,172 TOTALS 84,259,918$ 71,872,519$ 75,971,450$ 78,598,579$ 160,231,368$ 150,471,098$ Activities Activities Total Governmental Business-Type More detailed information on long-term debt activity can be found in the Notes to the Basic Financial Statements. ECONOMIC FACTORS AND THE NEXT YEAR'S BUDGETS AND RATES Taxable property values for FY2024 grew 22.68% from the previous year. The property tax rate reflects a tax rate of $0.649 per $100 valuation which is a $0.09 or 12% decrease from the previous year. Property tax revenue is estimated to be $761 thousand above the previous year’s budget due to the increase in values. Industrial district revenue increased by $1.7 million from FY2024, primarily due to the increase in taxable value. Sales tax revenue remains strong and is expected to increase 5% over the previous year. CONTACTING THE CITY'S FINANCIAL DEPARTMENT This financial report is designed to provide a general overview of the City of Port Arthur’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report, or requests for additional financial information should be addressed to the Office of the Director of Finance, P.O. Box 1089, Port Arthur, Texas 77641-1089. BASIC FINANCIAL STATEMENTS THIS PAGE LEFT BLANK INTENTIONALLY Component Unit Port Arthur Section 4A Economic Governmental Business-Type Development Activities Activities Total Corporation ASSETS Cash and cash equivalents 133,965,660$ 4,487,740$ 138,453,400$ 11,691,938$ Account receivable, net of allowances 29,213,908 7,372,894 36,586,802 1,334,487 Lease receivable - 5,382,271 5,382,271 - Due from other governments 9,276,684 - 9,276,684 728,261 Internal balances (1,990,689) 1,990,689 - - Due from primary government - - - 855,638 Inventories 362,767 1,298,230 1,660,997 - Prepaids 201,464 23,849 225,313 - Restricted cash and cash equivalents 75,968 19,960,600 20,036,568 - Capital assets: Non-depreciable 50,847,399 43,520,225 94,367,624 22,193,775 Depreciable 86,516,905 140,456,264 226,973,169 695,434 Total Assets 308,470,066 224,492,762 532,962,828 37,499,533 DEFERRED OUTFLOWS OF RESOURCES Related to OPEB 3,060,554 953,597 4,014,151 - Related to pension 17,968,813 2,841,694 20,810,507 113,299 Total Deferred Outflows of Resources 21,029,367 3,795,291 24,824,658 113,299 LIABILITIES Accounts payable 14,833,906 7,697,182 22,531,088 262,764 Accrued liabilities 3,499,546 685,292 4,184,838 38,235 Accrued interest 442,001 94,301 536,302 - Customer deposits - 2,126,176 2,126,176 - Due to component unit 855,638 - 855,638 - Unearned revenue 8,543,800 - 8,543,800 - Noncurrent liabilities: Due within one year 9,909,300 3,872,303 13,781,603 14,043 Due in more than one year 86,861,599 76,868,433 163,730,032 56,172 Net OPEB liability 8,561,925 2,602,066 11,163,991 - Net pension liability 43,942,030 6,263,997 50,206,027 249,747 Total Liabilities 177,449,745 100,209,750 277,659,495 620,961 DEFERRED INFLOWS OF RESOURCES Related to leases - 5,382,271 5,382,271 - Related to OPEB 1,827,155 543,427 2,370,582 - Related to pension 4,558,484 503,541 5,062,025 20,076 Total Deferred Inflows of Resources 6,385,639 6,429,239 12,814,878 20,076 NET POSITION Net investment in capital assets 133,718,412 132,554,356 266,272,768 23,041,629 Restricted for: Debt service 19,511,780 - 19,511,780 359,052 Community development programs 5,880,284 - 5,880,284 - Culture and recreation 334,139 - 334,139 - Public safety 6,912,313 - 6,912,313 - Unrestricted (20,692,879) (10,905,292) (31,598,171) 13,571,114 Total Net Position 145,664,049$ 121,649,064$ 267,313,113$ 36,971,795$ Primary Government CITY OF PORT ARTHUR, TEXAS STATEMENT OF NET POSITION SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.10 Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities: General government 20,936,668$ 898,494$ 49,057$ 5,842,651$ Culture and recreation 8,957,108 205,756 279,871 - Public safety 38,789,326 123,533 221,461 25,257 Community development 3,815,450 770,142 5,155,808 6,912,702 Health and welfare 6,081,187 185,523 3,043,100 - Public transportation 3,053,362 155,571 2,771,957 1,000,000 Public works 22,364,247 - - - Interest 2,514,433 - - - Total Governmental Activities 106,511,781 2,339,019 11,521,254 13,780,610 Business-type activities: Water and sewer 39,513,032 38,345,144 - - Solid waste 8,513,580 11,055,518 - - Pleasure Island 1,768,032 962,382 - - Total Business-Type Activities 49,794,644 50,363,044 - - Total Primary Government 156,306,425 52,702,063 11,521,254 13,780,610 Component unit: Port Arthur Section 4A Economic Development Corporation 5,325,316$ -$ -$ 1,584,160$ General revenues: Taxes: Property taxes Industrial district payments Sales Franchise fees Investment earnings Miscellaneous Gain on disposal of assets Transfers Total General Revenues and Transfers Change in Net Position Net position - beginning, as previously reported Adjustments Net position - beginning, as restated Net Position - Ending Program Revenues CITY OF PORT ARTHUR, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.11 Component Unit Port Arthur Section 4A Economic Governmental Business-Type Development Activities Activities Total Corporation (14,146,466)$ -$ (14,146,466)$ -$ (8,471,481) - (8,471,481) - (38,419,075) - (38,419,075) - 9,023,202 - 9,023,202 - (2,852,564) - (2,852,564) - 874,166 - 874,166 - (22,364,247) - (22,364,247) - (2,514,433) - (2,514,433) - (78,870,898) - (78,870,898) - - (1,167,888) (1,167,888) - - 2,541,938 2,541,938 - - (805,650) (805,650) - - 568,400 568,400 - (78,870,898) 568,400 (78,302,498) - (3,741,156) 24,201,068 - 24,201,068 - 30,604,396 - 30,604,396 - 18,008,352 - 18,008,352 7,818,973 11,461,218 - 11,461,218 - 4,635,323 1,013,597 5,648,920 533,570 2,121,042 137,459 2,258,501 829,382 792,674 - 792,674 - 6,649,535 (6,649,535) - - 98,473,608 (5,498,479) 92,975,129 9,181,925 19,602,710 (4,930,079) 14,672,631 5,440,769 127,476,309 126,579,143 254,055,452 31,531,026 (1,414,970) - (1,414,970) - 126,061,339 126,579,143 252,640,482 31,531,026 145,664,049$ 121,649,064$ 267,313,113$ 36,971,795$ Primary Government Net (Expense) Revenue and Changes in Net Position 12 General American Capital Projects Fund Rescue Plan Fund ASSETS Cash and cash equivalents 7,568,801$ 12,603,565$ 66,165,070$ Receivables (net of allowances) Taxes 4,751,204 - - Accounts and other 2,810,920 - 19,700,000 Due from other governments - - - Due from other funds 17,946,501 - - Inventory 301,865 - - Prepaid items 201,464 - - Restricted cash and cash equivalents - - 75,968 Long-term interfund loan 1,321,706 - - Total Assets 34,902,461 12,603,565 85,941,038 LIABILITIES Accounts payable 3,231,976 1,900,931 3,485,948 Accrued liabilities 3,011,464 2,927 22,586 Unearned revenues - 8,543,800 - Due to other funds 122,668 - - Due to component unit 855,638 - - Total Liabilities 7,221,746 10,447,658 3,508,534 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - property taxes 2,018,026 - - Unavailable revenues - other - - - Total Deferred Inflows of Resources 2,018,026 - - FUND BALANCES Nonspendable for: Inventory 301,865 - - Prepaid items 201,464 - - Long-term interfund loan 1,321,706 - - Committed for: Capital improvements - 2,155,907 - Restricted for: Debt service - - - Capital improvements - - 82,432,504 Community development - - - Culture and recreation - - - Public safety - - - Unassigned 23,837,654 - - Total Fund Balances 25,662,689 2,155,907 82,432,504 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 34,902,461$ 12,603,565$ 85,941,038$ SEPTEMBER 30, 2024 GOVERNMENTAL FUNDS BALANCE SHEET CITY OF PORT ARTHUR, TEXAS The accompanying notes are an integral part of these financial statements.13 Hazard Nonmajor Total Debt Service Mitigation Governmental Governmental Fund Fund Funds Funds 18,675,991$ -$ 10,414,513$ 115,427,940$ 1,277,790 - - 6,028,994 - - 341,464 22,852,384 - 7,571,394 1,705,290 9,276,684 - - 122,668 18,069,169 - - 60,902 362,767 - - - 201,464 - - - 75,968 - - - 1,321,706 19,953,781 7,571,394 12,644,837 173,617,076 - 4,855,562 465,548 13,939,965 - - 462,569 3,499,546 - - - 8,543,800 - 13,854,798 4,091,703 18,069,169 - - - 855,638 - 18,710,360 5,019,820 44,908,118 1,266,992 - - 3,285,018 - 4,320,659 1,102,170 5,422,829 1,266,992 4,320,659 1,102,170 8,707,847 - - - 301,865 - - - 201,464 - - - 1,321,706 - - - 2,155,907 18,686,789 - - 18,686,789 - - 2,600,117 85,032,621 - - 5,880,284 5,880,284 - - 334,139 334,139 - - 1,489,484 1,489,484 - (15,459,625) (3,781,177) 4,596,852 18,686,789 (15,459,625) 6,522,847 120,001,111 19,953,781$ 7,571,394$ 12,644,837$ 173,617,076$ 14 THIS PAGE LEFT BLANK INTENTIONALLY Total Fund Balances - Governmental Funds 120,001,111$ 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.123,684,096 Bonds payable and accrued compensated absences will not be liquidated with current financial resources and,therefore,have not been included in the fund financial statements.(82,319,513) 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.(442,001) Premiums on bond issuances and deferred losses on bond refunding are recorded as other financing sources and uses when paid in the fund financial statements but are capitalized and amortized in the government-wide financial statements over the life of the bonds.Premiums (7,960,353) Receivables from grants,property taxes and fines and fees are not available soon enough to pay for the current period's expenditures and are,therefore, deferred in the fund financial statements.8,707,847 Included in the items related to debt is the recognition of the City's net pension liability,total OPEB liability,and related deferred outflows and inflows of resources.Net pension liability (43,942,030) Deferred outflows related to pensions 17,968,813 Deferred inflows related to pensions (4,558,484) Net OPEB liability (8,561,925) Deferred outflows related to OPEB 3,060,554 Deferred inflows related to OPEB (1,827,155) The City uses an internal service fund to charge the costs of its group health insurance to appropriate departments in other funds.The assets and liabilities of the internal service fund are included in the governmental activities in the statement of net position.21,853,089 Net Position of Governmental Activities 145,664,049$ CITY OF PORT ARTHUR, TEXAS RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.15 General American Capital Projects Fund Rescue Plan Fund REVENUES Property taxes 16,119,284$ -$ -$ Industrial district payments 30,604,396 - - Franchise fees 11,461,218 - - Sales taxes 15,895,046 - - Licenses and permits 629,889 - - Charges for services 1,300,972 - - Fines and forfeitures 90 - - Intergovernmental 124,011 5,842,651 1,000,000 Investment earnings 1,344,304 994,710 1,774,164 Miscellaneous 1,787,824 - - Total Revenues 79,267,034 6,837,361 2,774,164 EXPENDITURES Current: General government 17,661,782 420,748 - Culture and recreation 5,616,860 - - Public safety 36,615,733 - - Community development - - - Health and welfare 1,957,266 - - Public transportation - - - Public works 8,202,615 - 64,954 Capital outlay 1,474,601 5,421,903 12,670,483 Debt service: Principal - - - Interest and other - - - Bond issue costs - - - Total Expenditures 71,528,857 5,842,651 12,735,437 Excess (Deficiency) of Revenues Over Expenditures 7,738,177 994,710 (9,961,273) OTHER FINANCING SOURCES (USES) Bonds issued - - 18,245,000 Premium on issuance of debt - - 1,455,000 Proceeds from disposal of capital assets 791,050 - - Insurance recoveries 163,427 - - Transfers in 2,970,872 - 3,906,000 Transfers out (16,268,478) - - Total Other Financing Sources (Uses)(12,343,129) - 23,606,000 NET CHANGE IN FUND BALANCE (4,604,952) 994,710 13,644,727 FUND BALANCES - BEGINNING, AS PREVIOUSLY PRESENTED 30,267,641 1,161,197 68,787,777 ADJUSTMENTS Formerly a nonmajor fund - - - Formerly a major fund - - - FUND BALANCES - BEGINNING, AS RESTATED 30,267,641 1,161,197 68,787,777 FUND BALANCES - ENDING 25,662,689$ 2,155,907$ 82,432,504$ CITY OF PORT ARTHUR, TEXAS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.16 Debt Hazard Nonmajor Total Transit System Service Mitigation Governmental Governmental Fund Fund Fund Funds Funds 9,707,298$ -$ -$ 25,826,582$ - - - 30,604,396 - - - 11,461,218 - - 2,113,306 18,008,352 - - 237,235 867,124 - - 174,152 1,475,124 - - 25,257 25,347 217,748 3,418,785 9,479,874 20,083,069 - - 249,420 4,362,598 - - 333,218 2,121,042 9,925,046 3,418,785 12,612,462 114,834,852 - - 497,622 18,580,152 - - 2,032,689 7,649,549 - - 193,745 36,809,478 - 449 1,929,013 1,929,462 - - 3,459,633 5,416,899 - - 2,410,670 2,410,670 - - - 8,267,569 - 14,214,267 698,518 34,479,772 6,347,320 - - 6,347,320 2,439,384 - - 2,439,384 296,452 - - 296,452 9,083,156 14,214,716 11,221,890 124,626,707 841,890 (10,795,931) 1,390,572 (9,791,855) - - - 18,245,000 294,302 - - 1,749,302 - - 1,624 792,674 - - 13,748 177,175 4,000 - 7,078,778 13,959,650 (626,469) - (665,868) (17,560,815) (328,167) - 6,428,282 17,362,986 513,723 (10,795,931) 7,818,854 7,571,131 (2,845,715) - - 15,059,080 112,429,980 18,173,066 (4,663,694) (13,509,372) - 2,845,715 - - (2,845,715) - - 18,173,066 (4,663,694) (1,296,007) 112,429,980 -$ 18,686,789$ (15,459,625)$ 6,522,847$ 120,001,111$ 17 THIS PAGE LEFT BLANK INTENTIONALLY Net Changes in Fund Balances - Governmental Funds 7,571,131$ Amounts reported for governmental activities in the statement of activities aredifferent because: Governmental funds report capital outlays as expenditures.However,in the governmental activities statement of activities,that cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay 18,227,302 Depreciation expense (5,669,150) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. Grants 5,178,219 Property taxes (1,625,514) The issuance of long-term debt (e.g.bonds)provides current financial resources to governmental funds,while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.Neither transaction,however,has any effect on net position.Also,governmental funds report the effect of premiums,discounts,and similar items when debt is first issued, whereas the amounts are deferred and amortized in the Statement of Activities. Issuance of long-term debt (19,994,302) Repayment of principal of long-term debt 6,347,320 Amortization of loss on refunding 541,393 Current year changes in certain long-term liabilities do not require the use of current financial resources and,therefore,are not reported as expenditures in governmental funds. Compensated absences 4,359,519 Net pension liability 146,695 Total OPEB liability 458,662 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.(125,435) The City uses an internal service fund to charge the costs of group health insurance to the appropriate departments in other funds.The change in net position of the internal service fund is reported with governmental activities.4,186,870 Change in Net Position of Governmental Activities 19,602,710$ CITY OF PORT ARTHUR, TEXAS RECONCILIATION OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.18 Governmental Activities Nonmajor Total Water and Solid Waste Pleasure Enterprise Internal Sewer Fund Fund Island Fund Fund Service Fund ASSETS Current assets: Cash and cash equivalents -$ 2,032,620$ 2,455,120$ 4,487,740$ 18,537,720$ Accounts receivable, net of allowance 5,577,631 1,770,293 24,970 7,372,894 332,530 Lease receivable - - 5,382,271 5,382,271 - Inventory 1,298,230 - - 1,298,230 - Prepaids 12,410 - 11,439 23,849 - Restricted cash and cash equivalents 19,960,600 - - 19,960,600 - Total Current Assets 26,848,871 3,802,913 7,873,800 38,525,584 18,870,250 Noncurrent assets: Capital assets: Land and improvements 362,844 501,127 - 863,971 - Construction in progress 42,656,254 - - 42,656,254 - Infrastructure 220,663,185 - 8,214,613 228,877,798 - Buildings 35,444,203 88,650 8,444,103 43,976,956 - Machinery and equipment 22,654,496 7,181,982 567,792 30,404,270 41,569,311 Right to use vehicles - - - - 2,573,227 Less: accumulated depreciation (147,532,141) (6,781,577) (8,489,042) (162,802,760) (30,462,330) Total Noncurrent Assets 174,248,841 990,182 8,737,466 183,976,489 13,680,208 Total Assets 201,097,712 4,793,095 16,611,266 222,502,073 32,550,458 DEFERRED OUTFLOWS OF RESOURCES Deferred OPEB related outflows 695,598 257,999 - 953,597 - Deferred pension related outflows 2,161,900 570,447 109,347 2,841,694 - Total Deferred Outflows of Resources 2,857,498 828,446 109,347 3,795,291 - Business-Type Activities Enterprise Funds CITY OF PORT ARTHUR, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.19 Governmental Activities Nonmajor Total Water and Solid Waste Pleasure Enterprise Internal Sewer Fund Fund Island Fund Fund Service Fund Business-Type Activities Enterprise Funds CITY OF PORT ARTHUR, TEXAS STATEMENT OF NET POSITION PROPRIETARY FUNDS SEPTEMBER 30, 2024 LIABILITIES Current liabilities: Accounts payable 7,139,346$ 414,695$ 143,141$ 7,697,182$ 893,941$ Accrued liabilities 508,775 152,311 24,206 685,292 - Accrued interest 77,624 9,073 7,604 94,301 - Customer deposits 2,087,941 38,235 - 2,126,176 - Current portion of long-term liabilities: Compensated absences 263,641 72,410 21,252 357,303 - Bonds payable 3,380,000 75,000 60,000 3,515,000 - Financed purchases - - - - 765,252 Leases - - - - 614,603 Total Current Liabilities 13,457,327 761,724 256,203 14,475,254 2,273,796 Noncurrent liabilities: Compensated absences 1,054,564 289,639 85,007 1,429,210 - Total OPEB liability 1,908,340 693,726 - 2,602,066 - Net pension liability 4,765,516 1,257,446 241,035 6,263,997 - Financed purchases - - - - 3,268,471 Accrued landfill closure costs - 5,538,870 - 5,538,870 - Claims and judgements - - - - 638,832 Bonds payable 65,625,099 2,319,642 1,955,612 69,900,353 - Leases - - - - 1,203,875 Interfund loan payable - - 1,321,707 1,321,707 - Total Noncurrent Liabilities 73,353,519 10,099,323 3,603,361 87,056,203 5,111,178 Total Liabilities 86,810,846 10,861,047 3,859,564 101,531,457 7,384,974 DEFERRED INFLOWS OF RESOURCES Deferred lease related inflows - - 5,382,271 5,382,271 - Deferred OPEB related inflows 400,450 142,977 - 543,427 - Deferred pension related inflows 383,083 101,082 19,376 503,541 - Total Deferred Inflows of Resources 783,533 244,059 5,401,647 6,429,239 - NET POSITION Net investment in capital assets 125,204,342 628,160 6,721,854 132,554,356 7,828,007 Unrestricted (8,843,511) (6,111,725) 737,548 (14,217,688) 17,337,477 Total Net Position 116,360,831$ (5,483,565)$ 7,459,402$ 118,336,668 25,165,484$ Reconciliation to the government-wide statement of activities: Adjustment for the net effect of the cumulative activity between the internal service funds and the enterprise funds 3,312,396 Change in net position for business-type activities 121,649,064$ The accompanying notes are an integral part of these financial statements.20 THIS PAGE LEFT BLANK INTENTIONALLY Governmental Activities Nonmajor Total Water and Solid Waste Pleasure Enterprise Internal Sewer Fund Fund Island Fund Fund Service Fund OPERATING REVENUES Charges for services 38,345,144$ 11,055,518$ 962,382$ 50,363,044$ 12,016,998$ Total Operating Revenues 38,345,144 11,055,518 962,382 50,363,044 12,016,998 OPERATING EXPENSES Personnel services 11,957,203 3,292,040 760,434 16,009,677 - Supplies and materials 12,391,962 730,842 35,250 13,158,054 - Contractual services 2,565,887 1,232,473 186,287 3,984,647 15,315,821 Repairs and maintenance 2,352,164 867,327 242,938 3,462,429 178,790 Other expenses 1,442,935 319,742 - 1,762,677 1,767,212 Depreciation 6,508,041 839,462 384,721 7,732,224 3,629,980 Total Operating Expenses 37,218,192 7,281,886 1,609,630 46,109,708 20,891,803 Operating Income (Loss)1,126,952 3,773,632 (647,248) 4,253,336 (8,874,805) NON-OPERATING REVENUES (EXPENSES) Intergovernmental revenue - - - - 12,000 Earnings on investments 673,249 73,071 267,277 1,013,597 272,725 Miscellaneous revenue (expense)26,315 8,793 102,351 137,459 - Insurance proceeds (expense)346 193 162 701 - Interest expense (816,228) (75,839) (72,765) (964,832) (194,555) Total Non-Operating Revenues (Expenses)(116,318) 6,218 297,025 186,925 90,170 Gain (loss) before transfers 1,010,634 3,779,850 (350,223) 4,440,261 (8,784,635) Transfers in 609,138 - - 609,138 10,250,700 Transfers out (3,889,006) (2,850,736) (518,931) (7,258,673) - CHANGE IN NET POSITION (2,269,234) 929,114 (869,154) (2,209,274) 1,466,065 NET POSITION - BEGINNING, AS PREVIOUSLY REPORTED 118,630,065 (6,412,679) 8,328,556 25,114,389 ADJUSTMENTS: Error corrections - - - (1,414,970) Total Adjustments - - - (1,414,970) NET POSITION - BEGINNING, AS RESTATED 118,630,065 (6,412,679) 8,328,556 23,699,419 NET POSITION - END OF YEAR 116,360,831$ (5,483,565)$ 7,459,402$ 25,165,484$ Reconciliation to the government-wide statement of activities: Adjustment for the net effect of the current year activity between the internal service funds and the enterprise funds (2,720,805) Change in net position for business-type activities (4,930,079)$ Business-Type Activities Enterprise Funds CITY OF PORT ARTHUR, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 The accompanying notes are an integral part of these financial statements.21 Governmental Activities Nonmajor Total Water and Solid Waste Pleasure Enterprise Internal Sewer Fund Fund Island Fund Fund Service Fund CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers and users 36,035,280$ 11,651,268$ 954,490$ 48,641,038$ -$ Cash received from interfund charges for services - - - - 11,874,344 Cash paid to employees for services (12,457,720) (3,422,917) (666,894) (16,547,531) - Cash paid to suppliers for goods and services (17,946,624) (2,757,536) (362,893) (21,067,053) (17,603,581) Net Cash Provided By Operating Activities 5,630,936 5,470,815 (75,297) 11,026,454 (5,729,237) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfers from other funds 609,138 - - 609,138 10,250,700 Transfers to other funds (3,889,006) (2,850,736) (518,931) (7,258,673) - Payments on interfund loan payable (2,887,421) (2,752,793) - (5,640,214) - Other receipts 26,315 - 102,351 128,666 12,000 Net Cash Used in Non-Capital Financing Activities (6,140,974) (5,603,529) (416,580) (12,161,083) 10,262,700 CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES Insurance reimbursements - 81,864 - 81,864 - Acquisition and construction of capital assets (19,487,906) (73,807) (139,100) (19,700,813) (3,126,104) Proceeds from new debt - - - - - Interest paid on long-term debt (911,596) (100,865) (84,500) (1,096,961) (194,555) Principal paid on long-term debt (2,365,000) (70,000) (60,000) (2,495,000) (1,263,654) Net Cash Used in Capital and Related Financing Activities (22,764,502) (162,808) (283,600) (23,210,910) (4,584,313) CASH FLOWS FROM INVESTING ACTIVITIES Interest and investment earnings 673,249 - 267,277 940,526 272,725 Net Cash Provided By (Used in) Investing Activities 673,249 - 267,277 940,526 272,725 Net (Decrease) Increase in Cash and Cash Equivalents (22,601,291) (295,522) (508,200) (23,405,013) 221,875 Cash and cash equivalents at beginning of year: Cash and cash equivalents - 2,328,142 2,963,320 5,291,462 18,315,845 Restricted cash and cash equivalents 42,561,891 - - 42,561,891 - 42,561,891 2,328,142 2,963,320 47,853,353 18,315,845 Cash and cash equivalents at end of year Cash and cash equivalents - 2,032,620 2,455,120 4,487,740 18,537,720 Restricted cash and cash equivalents 19,960,600 - - 19,960,600 - 19,960,600$ 2,032,620$ 2,455,120$ 24,448,340$ 18,537,720$ Enterprise Funds CITY OF PORT ARTHUR, TEXAS STATEMENT OF CASH FLOWSPROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 Business-Type Activities The accompanying notes are an integral part of these financial statements.22 Governmental Activities Nonmajor Total Water and Solid Waste Pleasure Enterprise Internal Sewer Fund Fund Island Fund Fund Service Fund RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss)1,126,952$ 3,773,632$ (647,248)$ 4,253,336$ (8,874,805)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 6,508,041 839,462 384,721 7,732,224 3,629,980 Decrease (increase) in accounts receivable (2,327,049) 598,250 344,881 (1,383,918) (144,729) Decrease (increase) in inventory (202,911) - - (202,911) - Decrease (increase) in deferred pension outflows 1,684,046 447,597 3,769 2,135,412 - Decrease (increase) in deferred OPEB outflows (164,203) (62,795) - (226,998) - Increase (decrease) in accounts payable 1,009,235 73,106 101,582 1,183,923 (41,093) Increase (decrease) in accrued liabilities 43,797 32,233 (4,423) 71,607 - Increase (decrease) in claims and judgements - - - - (298,590) Increase (decrease) in customer deposits 17,185 (2,500) - 14,685 - Increase (decrease) in compensated absences (116,112) (35,622) 44,237 (107,497) - Increase (decrease) in accrued landfill closure costs - 319,742 - 319,742 - Increase (decrease) in net pension liability (2,389,934) (636,644) 30,581 (2,995,997) - Increase (decrease) in total OPEB liability 162,684 59,484 - 222,168 - Increase (decrease) in deferred lease inflows - - (352,773) (352,773) - Increase (decrease) in deferred OPEB inflows (103,878) (36,212) - (140,090) - Increase (decrease) in deferred pension inflows 383,083 101,082 19,376 503,541 - Net cash provided by operating activities 5,630,936$ 5,470,815$ (75,297)$ 11,026,454$ (5,729,237)$ Activities Enterprise Funds FOR THE YEAR ENDED SEPTEMBER 30, 2024 Business-Type CITY OF PORT ARTHUR, TEXAS STATEMENT OF CASH FLOWSPROPRIETARY FUNDS 23 Retiree Health OPEB Trust Fund ASSETS Investments 4,609,322$ Total assets 4,609,322 NET POSITION Restricted for other postemployment benefits 4,609,322 Total net position 4,609,322$ CITY OF PORT ARTHUR, TEXAS STATEMENT OF FIDUCIARY NET POSITION DECEMBER 31, 2023 The accompanying notes are an integral part of these financial statements.24 Retiree Health OPEB Trust Fund ADDITIONS Contibutions: Employer 131,023$ Investment earnings: Interest, dividends, and other 583,565 Total additions 714,588 DEDUCTIONS Benefit payments 131,023 Administrative expenses 24,730 Total deductions 155,753 NET INCREASE (DECREASE) IN FIDUCIARY NET POSITION 558,835 NET POSITION, BEGINNING 4,050,487 NET POSITION, ENDING 4,609,322$ CITY OF PORT ARTHUR, TEXAS STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED DECEMBER 31, 2023 The accompanying notes are an integral part of these financial statements.25 THIS PAGE LEFT BLANK INTENTIONALLY 26 CITY OF PORT ARTHUR, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2024 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity The City of Port Arthur, Texas (City) was incorporated under the laws of the State of Texas, May 30, 1898, and has operated under a Council-Manager form of government since March 8, 1932. As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Port Arthur (the primary government) and its component unit. The component unit discussed below is included in the City’s reporting entity because of the significance of its operational or financial relationships with the City. The discretely presented component unit is reported in a separate column in the government- wide financial statements (see note below for description) to emphasize that it is legally separate from the government. Discretely Presented Component Unit - The Port Arthur Section 4A Economic Development Corporation (EDC), an entity legally separate from the City, is governed by a seven-member board of directors appointed by the City Council. The EDC is funded by a one-half cent additional sales tax dedicated to economic development activities, which was approved by voters November 7, 1995 and implemented April 1, 1996. The budget, financial reports, and bonds of the EDC must be approved by the City Council. The notes to the financial statements include disclosures pertaining to the City as the primary government and also, the EDC as a component unit. There is not a separately issued financial statement. A. Government-Wide Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. B. Basis of Presentation – Government-wide Financial Statements While government-wide and fund financial statements are presented separately, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business-type activities incorporate data from the City’s enterprise funds. Separate financial statements are provided for governmental funds and proprietary funds. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are charges between the City's business-type and governmental funds and interfund loans. Goods and services provided by the City’s internal service funds are charged as direct costs to the enterprise funds that received those goods and services. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. C. Basis of Presentation – Fund Financial Statements The fund financial statements provide information about the City’s funds. Separate statements for each fund category - governmental and proprietary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. 27 The City reports the following major governmental funds: The General Fund is used to account for and report all financial resources not accounted for and reported in other funds. The general fund is always considered a major fund for reporting purposes. The American Rescue Plan Fund is used to account for the resources related to the coronavirus state and local fiscal recovery funds program authorized by the American Rescue Plan Act. The Capital Projects Fund is used to account for proceeds from long-term debt used to make various infrastructure improvements throughout the City that are not related to the Water and Sewer enterprise fund. The Debt Service Fund is used to account for the resources accumulated and payments made for principal and interest on long-term general obligation debt of governmental funds, including certificates of obligation. The primary source of revenue for debt service is property taxes. The Hazard Mitigation Fund is used to account for funds received to assist local communities in implementing long-term hazard mitigation measures following a major disaster (Hurricane Harvey). To date, the City has the following drainage projects: El Vista Subdivision, Port Acres Drainage, Lake Arthur Detention and Babe Zaharias Golf Course. The City reports the following major proprietary funds: The Water and Sewer Fund is used to account for the activities of the water and sewer utility of the City. This fund operates the water treatment and distribution functions, along with the wastewater collection and treatment. The Solid Waste Fund is used to account for the activities of the solid waste function of the City. This fund operates the municipal landfill, along with the collection of residential and commercial garbage, trash and green waste. The Enterprise Funds are used to account for the operations that provide water and wastewater utility services to the public, solid waste disposal operations, and Pleasure Island operations. The services are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis will be financed or recovered primarily through user charges. Additionally, the City maintains internal service funds used to account for general liability insurance, equipment replacement and employee benefit costs. These costs are reimbursed, on a user cost basis, by departments. The internal service funds predominantly serve the governmental funds and are reported accordingly. These funds are presented, in a summary form, as part of the proprietary fund financial statements. Since the principal users of the internal services are the City’s governmental activities, financial activities of the internal service funds are presented in the governmental activities column when presented at the government-wide level. The costs of these services are allocated to the appropriate function/program (general government, public safety, public works, etc.) in the statement of activities. Goods and services provided by the internal service funds include employee health benefits, fleet replacement and high technology replacement. The City maintains a fiduciary fund to account for assets held by the City in a trustee capacity for the City’s Other Postemployment Benefit (Health Insurance) Plan. The City utilizes a trust to hold required contributions for OPEBs. Plan trustees must act in accordance with the specific purposes and terms of the OPEB plan. The accompanying statement of fiduciary net position and statement of changes in fiduciary net position are presented as of and for the year ended December 31, 2023, the Plan’s year-end, in accordance with GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans (GASB 74). During the course of operations, the City has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column. 28 Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. D. Measurement Focus and Basis of Accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide, proprietary and fiduciary fund 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 the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. The 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. Measurable means that the amount of the transaction can be determined and available means collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City 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 accounting. However, debt service expenditures are recorded only when payment is due. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under financed purchases are reported as other financing sources. E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position/Fund Balance 1. Cash and Cash Equivalents The City's cash and cash equivalents are considered to be cash on hand, demand deposits, money market mutual funds, balances in privately managed public funds investment pools and short-term investments with original maturities of three months or less from the date of acquisition. For the purpose of the statement of cash flows, the Proprietary Fund Types consider temporary investments with maturity of three months or less when purchased to be cash equivalents. The City pools cash resources of its various funds to facilitate the management of cash. Cash applicable to a particular fund is readily identifiable. The balance in the pooled cash accounts is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing securities and disclosed as part of the City's investments. The City pools excess cash of the various individual funds to purchase these investments. These pooled investments are reported in the combined balance sheet as investments in each fund based on each fund's share of the pooled investments. Interest income is allocated to each respective individual fund, monthly, based on their respective share of investments in the pooled investments. The City’s local government investment pools are recorded at net asset value which approximates fair value. 2. Investments Investments consist of United States (U.S.) Government and Agency securities, certificates of deposits, and repurchase agreements. The City reports all investments at fair value based on quoted market prices at year-end date. 29 The City categorizes fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: level 1 inputs are quoted prices in active markets for identical assets; level 2 inputs are significant other observable inputs; level 3 inputs are significant unobservable inputs. The City did not hold any investments at September 30, 2024. 3. Receivables All receivables are reported at their gross value and, where appropriate, are reduced by the estimated portion that is expected to be uncollectible. Estimated unbilled revenues from the water and sewer and solid waste funds are recognized at the end of each fiscal year on a pro rata basis. The estimated amount is based on billings during the month following the close of the fiscal year. 4. Inventories and Prepaid Items Inventories are valued at cost using the weighted average cost method. Payments made to vendors for services that will benefit future periods are recorded as prepaid items. The cost of such inventories and prepaid items are recorded as expenditures/expenses when consumed rather than when purchased. 5. Restricted Assets The Enterprise Funds have restricted certain cash and cash equivalents for customer deposits, reserve and emergency expenditures, cash restricted for other purposes, and revenue bond debt service. Because of certain bond covenants, the Enterprise Fund is required to maintain prescribed amounts of resources that can be used only to service outstanding debt. The proceeds from debt are restricted for use on capital projects. 6. Capital Assets Capital assets, which include land and improvements, construction in progress, buildings and improvements, machinery and equipment, and infrastructure (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. 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 two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not capitalized. Land and improvements and construction in progress are not depreciated. Buildings and improvements, machinery and equipment, and infrastructure of the primary government are depreciated using the straight-line method over the following estimated useful lives: Use Lives Assets (Years) Infrastructure 20 - 75 Buildings and improvements 15 - 75 Machinery and equipment 3 - 15 Right-to-use - vehicles 5 30 7. Compensated Absences The City’s employees earn vacation, compensatory time, holiday, and sick leave, which may be accumulated, subject to certain restrictions, until paid on termination. Employees may accumulate vacation, in excess of that earned in the current year, only with the approval of the City Manager. Upon termination, employees are paid for all unused vacation and compensatory time that has been accumulated. Accumulated vacation and compensatory time is expected to be liquidated with expendable available financial resources, and is reported as expenditure and a liability in the governmental or proprietary fund that will pay for it only when those absences have matured (i.e., unused reimbursable leave still outstanding following an employee’s resignation or retirement). Civil service employees (police officers and firefighters) are paid for all accrued holiday time at the time of termination. The limits for sick leave accumulation vary by hire date and position classification. Civil service employees (police officers and firefighters) may accumulate sick leave without limit. For fire employees hired on or before March 7, 1990, the limit is 140 days. Remaining sick leave is paid at 50% of total value. For fire employees hired after March 7, 1990, the limit is 90 days. Remaining sick leave is paid at 50% of total value. For police employees hired on or before May 31, 1989, the limit is 1,500 hours. Remaining sick leave is paid at 50% of total value. For police employees hired on or after June 1, 1989, the limit is 1,120 hours. Remaining sick leave is paid at 50% of total value. For police employees hired on or after October 1, 2011, the limit is 720 hours. Non-civil service employees accumulate sick leave up to their limit, which is based upon their hire date. For employees hired on or before May 31, 1989, and completed 5 years of service, the limit is 1,120 hours. For employees hired on or after June 1, 1989, and completed 5 years of service, the limit is 720 hours. For employees hired on or after January 1, 1996, and completed 5 years of service, the accumulated sick leave will be paid at 50% of their unused, accumulated balance. After ten (10) years of service, these employees will be paid 100% of their unused, accumulated balance, up to a maximum of 480 hours. Accumulated sick leave, attributable to governmental funds, that is not expected to be liquidated with available financial resources are reported as long-term liabilities on the statement of net position. No expenditure is reported in the fund financial statements for these amounts. Those amounts attributable to proprietary funds are recorded as expenses and liabilities in those funds as the benefits accrue to the employee. 8. Deferred Inflows/Outflows of Resources In addition to assets, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has the following items that qualify for reporting in this category. • Deferred charges on refunding – 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. • Pension and OPEB contributions after measurement date – These contributions are deferred and recognized in the following fiscal year. • Difference in expected and actual pension and OPEB experience - This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. • Changes in actuarial assumptions and other inputs – This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. 31 In addition to liabilities, the statement of financial position and/or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has the following types of items that qualify for reporting in this category. • Unavailable revenue is reported only in the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. • Difference in projected and actual investment earnings on pension and OPEB assets – This difference is deferred and amortized over a closed five-year period. • Difference in expected and actual pension and OPEB experience - This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. • Changes in actuarial assumptions and other inputs – This difference is deferred and recognized over the estimated average remaining lives of all members determined as of the measurement date. 9. 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 statement of net position. Bond premiums and discounts are amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Bonds consist of general obligation and certificates of obligation bonds. These transactions are reported within the Governmental and Business-Type Activities columns of the government-wide statement of net position. Bond issuance costs are reported as expenditures/expenses. 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 financial 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, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 10. Leases The City has entered into lease agreements as both lessee and lessor. Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The City uses the interest rate charged by the lessor as the discount rate, if available. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. • The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability or lease asset. 32 Lessee The City is a lessee for noncancellable leases of equipment and vehicles. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the government-wide financial statements. At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life. Lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position. Lessor The City is a lessor in an arrangement allowing the use of the dock. In both the government-wide financial statements and the governmental fund financial statements, the County initially measures a lease receivable and a deferred inflow of resources for the present value of payments expected to be made during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments made. The deferred inflow of resources is recognized as revenue on a systematic basis over the life of the lease. 11. Pensions The net pension liability, deferred inflows, and outflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Texas Municipal Retirement System (TMRS), and additions to and deductions from TMRS’s fiduciary net position have been determined on the same basis as they are reported by TMRS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. 12. Other Post-Employment Benefits (OPEB) Supplemental Death Benefits Fund. For purposes of measuring the total Texas Municipal Retirement System Supplemental Death Benefit Fund (TMRS SDBF) OPEB liability, related deferred outflows and inflows of resources, and expense, City specific information about its total TMRS SDBF liability and additions to/deductions from the City’s total TMRS SDBF liability have been determined on the same basis as they are reported by TMRS. The TMRS SDBF expense and deferred (inflows)/outflows of resources related to TMRS SDBF, primarily result from changes in the components of the total TMRS SDBF liability. Most changes in the total TMRS SDBF liability will be included in TMRS SDBF expense in the period of the change. For example, changes in the total TMRS SDBF liability resulting from current-period service cost, interest on the TOL, and changes of benefit terms are required to be included in TMRS SDBF expense immediately. Changes in the total TMRS SDBF liability that have not been included in TMRS SDBF expense are required to be reported as deferred outflows of resources or deferred inflows of resources related to TMRS SDBF. Retiree Health Insurance. For purposes of measuring the total OPEB liability, OPEB related deferred outflows and inflows of resources, and OPEB expense, benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Contributions are not required but are measured as payments by the City for benefits due and payable that are not reimbursed by plan assets. Information regarding the City’s total OPEB liability is obtained from a report prepared by a consulting actuary, Gabriel Roeder Smith & Company. 13. Net Position Flow Assumption Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted -net position and unrestricted - net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted - net position to have been depleted before unrestricted - net position is applied. 33 14. Fund Balance Flow Assumptions Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. The City will typically use restricted fund balances first, followed by committed resources, and then assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds. 15. Fund Balance Policies Fund balance of governmental funds is reported in various categories based on the nature of any limitations requiring the use of resources for specific purposes. The City itself can establish limitations on the use of resources through either a commitment (committed fund balance) or an assignment (assigned fund balance). The City reports the following classifications of fund balance:  Nonspendable fund balance - includes amounts that are not in spendable form or are legally or contractually required to be maintained intact.  Restricted fund balance - includes amounts that have external constraints imposed upon the use of the resources by creditors, grantors, contributors, laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation.  Committed fund balance - includes amounts that can be used only for the specific purposes pursuant to constraints imposed by a formal action of the City’s highest level of decision- making authority. The City Council is the highest level of decision-making authority for the City that can, by approval of a resolution prior to the end of the fiscal year, commit fund balance. Once approved, the limitation imposed by the resolution remains in place until a similar action is taken (the approval of another resolution) to remove or revise the limitation.  Assigned fund balance - includes amounts that are intended to be used by the City for specific purposes but do not meet the criteria to be classified as committed. This includes the remaining positive fund balances of all governmental funds except for the General Fund. Balances for encumbrances, other than those committed by City Council, fall into this category. Intent can be established by City Council or delegated to the City Manager. The City Council has authorized the City Manager to assign fund balance. Unlike commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have to be taken for the removal of an assignment. Conversely, as discussed above, an additional action is essential to either remove or revise a commitment.  Unassigned fund balance - includes amounts that are available for any purpose. Positive amounts are reported only in the General Fund. It is the City's policy to maintain the General Fund unassigned fund balance equivalent to no less than two months of normal recurring costs, based on current year budgeted expenditures plus $1.5 million for extraordinary events. The City’s unassigned fund balance at year end was approximately four months plus $1.5 million. 16. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and deferred outflows and inflows of resources, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates. 34 17. Change in Accounting Principle GASB Statement No. 100, Accounting Changes and Error Corrections, - an amendment of GASB Statement No. 62 – was adopted for the fiscal year ended September 30, 2024. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. As a result of this new accounting standard, the City was required to report changes within the financial reporting entity in more detail; see note disclosure on page 60 for additional information. F. Revenues and Expenditures/Expenses 1. Program Revenues Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. All taxes, including those dedicated for specific purposes, and other internally dedicated resources are reported as general revenues rather than as program revenues. 2. Property Taxes The City’s property taxes are levied annually, October 1, on the basis of assessed values as of January 1 of that calendar year, which are certified by the Jefferson County Appraisal District. Taxes are applicable to the fiscal year in which they are levied. They become delinquent on February 1 of the subsequent calendar year at which time the applicable property is subject to lien, and penalties and interest are assessed. 3. Proprietary Funds Operating and Nonoperating Revenues and Expenses 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 enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for the enterprise funds and internal service funds include the operating cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. II. DETAILED NOTES ON ALL FUNDS AND ACTIVITIES A. Cash, Cash Equivalents and Investments The Texas Public Funds Investment Act (PFIA), as prescribed in Chapter 2256 of the Texas Government Code, regulates deposits and investment transactions of the City. In accordance with applicable statutes, the City has a depository contract with an area bank (depository) providing for interest rates to be earned on deposited funds and for banking charges the City incurs for banking services received. The City may place funds with the depository in interest and non-interest bearing accounts. State law provides that collateral pledged as security for bank deposits must have a market value of not less than the amount of the deposits and must consist of: (1) obligations of the United States or its agencies and instrumentalities; (2) direct obligations of the State of Texas or its agencies; (3) other obligations, the principal and interest on which are unconditionally guaranteed or insured by the State of Texas; and/or (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. City policy requires the collateralization level to be at least 102% of market value of principal and accrued interest. 35 The Council has adopted a written investment policy regarding the investment of City funds as required by the PFIA. The investments of the City are in compliance with the City’s investment policy. The City’s investment policy is more restrictive than the PFIA requires. It is the City’s policy to restrict its direct investments in obligations of the United States of America, its agencies and instrumentalities, fully FDIC insured certificates of deposit, fully collateralized repurchase agreements, money market mutual funds and local government investment pools. The maximum maturity allowed is three years from date of purchase. The City's cash and investments are classified as: Cash and cash equivalents, and restricted cash and cash equivalents. The cash and cash equivalents include cash on hand, deposits with financial institutions, money market mutual funds, and short-term investments in privately managed public funds investment pool accounts (TexPool, TexasClass and TexSTAR). The restricted cash and cash equivalents are assets restricted for specific use. The restricted cash and cash equivalents include cash with financial institutions, money market mutual funds, TexPool, TexSTAR, and TexasClass. However, each fund's balance of cash and investments is maintained in the books of the City. For the purposes of managing cash and investments, the funds of the discretely presented component unit are pooled with those of the City. At year end, 100% of the bank balance was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name at September 30, 2024. At year end, the City’s cash and cash equivalent balances, including funds of the discretely presented component unit, were as follows: Primary Government Investment pools: TexSTAR 25,148,168$ TexPool 54,701,845 Texas CLASS 59,137,387 Total 138,987,400$ TexSTAR TexSTAR is duly chartered by the State of Texas Interlocal Cooperation Act, is administered by Hilltop Securities, Inc. and J.P. Morgan Investment Management, Inc. (JPMIM), and managed by JPMIM, who provides custody and investment management. The primary objectives of TexSTAR are, in order of priority, preservation and protection of principal, maintenance of sufficient liquidity to meet Participants’ needs, and yield. The portfolio will maintain a dollar-weighted average maturity that does not exceed 60 days and seeks to maintain a net asset value of $1.00 per share. TexSTAR may invest in securities including: obligations of the United States or its agencies and instrumentalities, including the Federal Home Loan Banks; other obligations which are unconditionally guaranteed or insured by the U.S.; fully collateralized repurchase agreements with a defined termination date and unconditionally guaranteed or insured by the U.S. or its agencies and instrumentalities; and SEC-registered no-load money-market fund which meet the requirements of the Public Funds Investment Act. The investment pool has a redemption notice period of one day and no maximum transaction amounts. The investment pools’ authorities may only impose restrictions on redemptions in the event of a general suspension of trading on major securities market, general banking moratorium or national or state emergency that affects the pools’ liquidity. TexPool TexPool is duly chartered and overseen by the State Comptroller’s Office, administered and managed by Federated Hermes, Inc. State Street Bank serves as the custodial bank. The portfolio consists of U.S. Government securities; collateralized repurchase and reverse repurchase agreements; and AAA rated money market mutual funds. The investment pool transacts at a net asset value of $1.00 per share, has a weighted average maturity of 60 days or less and weighted average life of 120 days or less, investments held are highly rated by a nationally recognized statistical rating organization, have no more than 5% of portfolio with one issuer (excluding US government securities), and can meet reasonably foreseeable redemptions. The investment pool has a redemption notice period of one day and no maximum transaction amounts. The investment pools’ authorities may only impose restrictions on redemptions in the event of a general suspension of trading on major securities market, general banking moratorium or national or state emergency that affects the pools’ liquidity. 36 Texas CLASS Texas CLASS was created in accordance with the requirements contained in section 2256.016 of the Public Funds Investment Act (PFIA). The Texas CLASS Trust Agreement is an agreement of indefinite term regarding the investment, reinvestment, and withdrawal of local government funds. The parties to the Trust Agreement are Texas local government entities that choose to participate in the Trust (the Participants), Public Trust Advisors, LLC (Public Trust) as Program Administrator, and UMB Bank, N.A. as Custodian. Texas CLASS Government is an external investment pool measured at fair value, i.e. net asset value. The investment pool’s strategy is to seek preservation of principal, liquidity and current income through investment in a diversified portfolio of short-term marketable securities. There are no unfunded commitments related to the investment pool. Texas CLASS has a redemption notice period of one day and may redeem daily. The investment pool’s authorities may only impose restrictions on redemptions in the event of a general suspension of trading on major securities market, general banking moratorium or national or state emergency that affects the pool’s liquidity. The Texas CLASS Government portfolio consists of U.S. Government securities; collateralized repurchase and reverse repurchase agreements; and AAA rated money market mutual funds. Interest Rate Risk At year-end, the City had the following cash equivalents subject to interest rate risk disclosure, under U.S. generally accepted accounting principles: Weighted Reported Average Value Maturity (days) Investment pools: TexSTAR 25,148,168$ 24 TexPool 54,701,845 26 Texas CLASS 59,137,387 101 Total 138,987,400$ The City measures interest rate risk using the weighted average maturity method for the portfolio. The City’s investment policy specifies a targeted maximum weighted average maturity allowed, based on the stated maturity date, for the portfolio is 365 days. To the extent possible, the City attempts to match investments with anticipated cash flow requirements. The settlement date is considered the date of purchase. Custodial credit risk - deposits In the case of deposits, this is the risk that in the event of a bank failure, the City's deposits may not be returned. The City's investment policy requires funds on deposit at the depository bank to be collateralized by securities, to the extent the deposits exceed FDIC coverage. Uninsured financial institution deposits and repurchase agreement investments marketable security collateral must be maintained at a minimum 102% of deposit or investment value, plus any accrued interest. As of September 30, 2024, the combined values of pledged securities and FDIC coverage exceeded bank balances for the City. Custodial credit risk - investments For an investment, this is the risk that, in the event of the failure of counterparty, the government will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City limits this risk by contracting with a third party custodian for securities. This bank holds the securities in the City’s name which are evidenced by safekeeping receipts of the institution. 37 Concentration of credit risk The risk is the risk of loss attributed to the magnitude of a City’s investment in a single issuer. The City’s investment policy limits investments from a specific issuer, and by investing in instruments of varying maturities. The City’s investment policy allows investments by type based on the following diversification requirements: Investment Type Maximum Investment % U.S. treasury securities 90% Agencies and instrumentalities 70% (30% in any 1 agency) Certificates of deposit 50% (25% in any 1 institution) Repurchase agreements 50% Money market mutual funds 50% (not to exceed 10% of fund assets) Authorized pools 100% (80% in any 1 pool) At September 30, 2024, the City’s entire portfolio comprised of balances in authorized investment pools meeting the maximum investment proportion of 100% outlined in the City investment policy. Percentage of Total Reported Value Portfolio Investment pools: TexSTAR 25,148,168$ 18% TexPool 54,701,845 39% Texas CLASS 59,137,387 43% Total 138,987,400$ 100% Restricted Cash and Cash Equivalents The funds below report restricted cash and cash equivalents for the following purposes: Water and Capital Restricted Purpose Sewer Fund Projects Water and wastewater improvement projects 31,193,485$ -$ Information technology ERP project - 75,968 31,193,485$ 75,968$ B. Receivables Amounts are aggregated into a single accounts receivable (net of allowances for doubtful accounts) line for various funds and aggregated columns. Below is the detail of receivables at September 30, 2024: General Nonmajor Internal Fund Funds Service Fund Receivables: Property taxes 3,381,582$ 2,115,491$ -$ Customers 518,576 - - Sales and other taxes 2,703,887 - - Other 2,810,920 341,464 332,530 Gross receivables 9,414,965 2,456,955 332,530 Less: allowance for uncollectible accounts (1,852,841) (837,701) - Net receivables 7,562,124$ 1,619,254$ 332,530$ Governmental Activities Discretely PresentedWater and Solid Waste Component Sewer Fund Fund Unit Receivables: Customers 17,669,457$ 5,180,818$ -$ Sales and other taxes - - 1,334,487 Gross receivables 17,669,457 5,180,818 1,334,487 Less: allowance for uncollectible accounts (12,091,826) (3,410,525) - Net receivables 5,577,631$ 1,770,293$ 1,334,487$ Business-type Activities 38 C. Capital Assets Capital asset activity of the primary government for the year ended September 30, 2024 was as follows: Beginning Reclassifications/Ending Balance Additions Retirements Balance Governmental activities: Capital assets not being depreciated:Land and improvements 8,877,178$ -$ -$ 8,877,178$ Construction in progress 32,463,467 18,140,096 (8,633,342) 41,970,221 Total capital assets not being depreciated 41,340,645 18,140,096 (8,633,342) 50,847,399 Capital assets being depreciated:Infrastructure 314,105,110 8,678,376 - 322,783,486 Buildings and improvements 45,882,178 - - 45,882,178 Machinery and equipment 74,814,118 3,168,229 (141,019) 77,841,328 Right to use vehicles 1,624,208 949,019 - 2,573,227 Total assets being depreciated 436,425,614 12,795,624 (141,019) 449,080,219 Less accumulated depreciation for: Infrastructure (272,601,581) (2,245,835) - (274,847,416) Buildings and improvements (28,566,228) (1,464,328) - (30,030,556) Machinery and equipment (51,985,432) (4,952,963) 141,019 (56,797,376) Right to use vehicles (251,962) (636,004) - (887,966) Total accumulated depreciation (353,405,203) (9,299,130) 141,019 (362,563,314) Total capital assets being depreciated, net 83,020,411 3,496,494 - 86,516,905 Governmental activities capital assets, net 124,361,056$ 21,636,590$ (8,633,342)$ 137,364,304$ Beginning Reclassifications/Ending Balance Additions Retirements BalanceBusiness-type activities: Capital assets, not being depreciated: Land and improvements 863,971$ -$ -$ 863,971$ Construction in progress 31,827,479 19,192,039 (8,363,264) 42,656,254 Total capital assets, not being depreciated 32,691,450 19,192,039 (8,363,264) 43,520,225 Capital assets being depreciated:Infrastructure 220,218,306 8,659,492 - 228,877,798 Buildings and improvements 43,902,960 74,011 (16) 43,976,955 Machinery and equipment 30,256,019 148,251 - 30,404,270 Total assets being depreciated 294,377,285 8,881,754 (16) 303,259,023 Less accumulated depreciation for: Infrastructure (106,444,163) (5,302,916) - (111,747,079) Buildings and improvements (34,250,790) (1,131,500) - (35,382,290) Machinery and equipment (14,375,582) (1,297,808) - (15,673,390) Total accumulated depreciation (155,070,535) (7,732,224) - (162,802,759) Total capital assets being depreciated, net 139,306,750 1,149,530 (16) 140,456,264 Business-type activities capital assets, net 171,998,200$ 20,341,569$ (8,363,280)$ 183,976,489$ The following is a summary of changes in capital assets for the Discretely Presented Component Unit for the year ended September 30, 2024: Beginning Reclassifications/Ending Balance Additions Retirements BalanceDiscretely presented component unit: Capital assets, not being depreciated:Land and improvements 5,611,865$ -$ -$ 5,611,865$ Construction in progress 14,997,750 1,584,160 - 16,581,910 Total capital assets, not being depreciated 20,609,615 1,584,160 - 22,193,775 Capital assets being depreciated:Infrastructure 24,725 - - 24,725 Buildings and improvements 810,098 - - 810,098 Machinery and equipment 675,552 5,190 - 680,742 Total assets being depreciated 1,510,375 5,190 - 1,515,565 Less accumulated depreciation for: Infrastructure (2,266) (21,097) - (23,363) Buildings and improvements (408,410) (36,758) - (445,168) Machinery and equipment (257,035) (94,565) - (351,600) Total accumulated depreciation (667,711) (152,420) - (820,131) Total capital assets being depreciated, net 842,664 (147,230) - 695,434 Discretely presented component unit capital assets, net 21,452,279$ 1,436,930$ -$ 22,889,209$ 39 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government 986,385$ Public safety 531,315 Public works 2,593,418 Community services 172,990 Culture and recreation 453,096 Health and welfare 187,126 Public transportation 744,820 Depreciation charged in internal service funds 3,629,980 Total 9,299,130$ Business-type activities: Water and sewer 6,508,041$ Solid waste 839,462 Pleasure island commission 384,721 Total 7,732,224$ Total Depreciation 17,031,354$ Construction Commitments The primary government has active construction projects as of September 30, 2024. Remaining commitments under related construction contracts at year end were as follows: Total In Remaining Project Description Contract Progress Commitment Streets projects 29,647,761$ 19,675,568$ 9,972,193$ Water and sewer improvements 49,679,493 40,353,552 9,325,941 City facilities, including dept. club 59,049,091 40,862,145 18,186,946 Downtown revitalization projects 1,729,951 1,456,471 273,480 Drainage projects 37,567,409 36,349,908 1,217,501 177,673,705$ 138,697,644$ 38,976,061$ The remaining commitments above will be primarily financed through completion of construction with the resources of the water and sewer fund, the capital projects funds, supplemented by the general fund and issuance of debt, as needed. D. Long-Term Liabilities Changes in long-term liabilities for the year ending September 30, 2024 are as follows: Beginning Refunded/Ending Amount Due Balance Issued Retired Balance Within One YearGovernmental activities:General obligation bonds 7,545,000$ -$ (1,180,000)$ 6,365,000$ 1,240,000$ Certificates of obligation 48,155,000 18,245,000 (4,215,000) 62,185,000 4,305,000 General obligation bonds-private placement 3,400,000 - (645,001) 2,754,999 660,000 Unamortized premiums 6,752,444 1,749,302 (541,393) 7,960,353 - Financed purchases 6,020,075 - (1,025,509) 4,994,566 1,078,963 Leases 1,414,923 949,019 (545,464) 1,818,478 614,603 Compensated absences 14,413,190 6,702,538 (11,062,057) 10,053,671 2,010,734 Long-term risk liablity 937,422 3,776,820 (4,075,410) 638,832 - Total governmental 88,638,054$ 31,422,679$ (23,289,834)$ 96,770,899$ 9,909,300$ Business-type activities: Certificates of obligation 8,520,000$ -$ (270,000)$ 8,250,000$ 265,000$ Certificates of obligation- private placement 65,550,000 - (2,225,000) 63,325,000 3,250,000 Unamortized premiums 1,972,482 - (132,129) 1,840,353 - Compensated absences 1,894,010 1,954,304 (2,061,801) 1,786,513 357,303 Landfill post-closure liability 5,219,128 319,742 - 5,538,870 - Total business-type 83,155,620$ 2,274,046$ (4,688,930)$ 80,740,736$ 3,872,303$ Discretely Presented Component Unit:Sales tax revenue refunding bonds-private placement 540,000$ -$ (540,000)$ -$ -$ Compensated absences 56,257 139,649 (125,691) 70,215 14,043 Total Discretely Presented Component Unit 596,257$ 139,649$ (665,691)$ 70,215$ 14,043$ 40 Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and, accordingly, are not reported as fund liabilities in the governmental funds. Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due. Long-term debt at year end was comprised of the following debt issues: Original Interest Issue Maturity Rates Balance Governmental Activities General Obligation Bonds 2019 Series, Refunding 9,120,000$ 2030 3.0% - 5.0%5,500,000$ 2021 Series, Refunding 1,530,000 2041 4.0% - 5.0%865,000 Certificates of Obligation 2020A, Combination Tax & Revenue 8,900,000 2037 3.0% - 5.0%6,835,000 2021, Combination Tax & Revenue 19,685,000 2041 4.0% - 5.0%16,130,000 2022, Combination Tax & Revenue 9,565,000 2042 4.0% - 5.0%7,980,000 2023, Combination Tax & Revenue 15,955,000 2043 4.0% - 5.0%12,995,000 2024, Combination Tax & Revenue 18,245,000 2044 4.0% - 5.0%18,245,000 Private Placement Obligations 2017 Series GO Refunding 9,645,000 2028 2.75%2,754,999 Total Governmental Long-Term Obligations 71,304,999$ Original InterestIssueMaturity Rates Balance Business-type Activities Certificates of Obligation 2023, Combination Tax & Revenue 8,520,000$ 2043 4.0% - 5.0%8,250,000$ Private Placement Obligations 2015A Combination Tax & Revenue CO 2,740,000 2026 0.26% - 1.50%215,000 2015B Combination Tax & Revenue CO 4,965,000 2033 0.21% - 1.45%730,000 2020B Combination Tax & Revenue CO 56,310,000 2022 0.03% - 1.09%54,755,000 2021 Combination Tax & Revenue CO 8,395,000 2041 4.0% - 5.0%7,625,000 Total Business-Type Long-Term Obligations 71,575,000$ The City issues general obligation bonds and certificates of obligation to provide funds for the acquisition and construction of major capital facilities for both the governmental and business-type activities. General obligation bonds are direct obligation and pledge the full faith and credit of the City. The City issues sales tax revenue bonds to fund economic development activity out of the EDC. This debt is payable by economic sales tax collections. The City has bonded debt of $142,879,999 outstanding for the primary government. During the fiscal year, the city issued Combination Tax and Revenue Certificates of Obligation, Series 2024 in the amount of $18,245,000 which were recorded entirely in Governmental Activities. Proceeds from the sale of the certificates will be used for the construction of public works projects related to streets, a fire station, and a variety of other municipal projects. The certificates carry an interest rate between 4% - 5% and will mature in fiscal year 2044. 41 The annual requirements to amortize debt outstanding at year end for Governmental Activities were as follows: Governmental Activities: Year Ended September 30, Principal Interest Total Principal Interest Total 2025 1,240,000$ 275,650$ 1,515,650$ 4,305,000$ 2,026,439$ 6,331,439$ 2026 1,360,000 210,650 1,570,650 2,345,000 1,935,750 4,280,750 2027 1,420,000 141,150 1,561,150 2,465,000 1,846,125 4,311,125 2028 1,185,000 76,025 1,261,025 2,595,000 1,752,000 4,347,000 2029 565,000 35,100 600,100 2,710,000 1,655,200 4,365,200 2030-2034 595,000 11,900 606,900 15,680,000 6,750,250 22,430,250 2035-2039 - - - 18,265,000 3,797,775 22,062,775 2040-2044 - - - 13,820,000 977,775 14,797,775 Total 6,365,000$ 750,475$ 7,115,475$ 62,185,000$ 20,741,314$ 82,926,314$ Year Ended September 30, Principal Interest Total 2025 660,000$ 66,688$ 726,688$ 2026 680,000 48,263 728,263 2027 700,000 29,288 729,288 2028 714,999 9,831 724,830 Total 2,754,999$ 154,070$ 2,909,069$ General Obligation Bonds General Obligation Bonds Certificates of Obligation Private Placement Debt Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the above totals for governmental activities. The annual requirements to amortize debt outstanding at year end for Business-Type Activities were as follows: Business-Type Activities: Year Ended September 30, Principal Interest Total Principal Interest Total 2025 265,000$ 394,025$ 659,025$ 3,250,000$ 737,588$ 3,987,588$ 2026 285,000 380,275 665,275 3,270,000 709,330 3,979,330 2027 295,000 365,775 660,775 3,295,000 682,629 3,977,629 2028 310,000 350,650 660,650 3,325,000 653,369 3,978,369 2029 325,000 334,775 659,775 3,360,000 621,684 3,981,684 2030-2034 1,905,000 1,403,875 3,308,875 17,345,000 2,556,506 19,901,506 2035-2039 2,440,000 864,750 3,304,750 18,425,000 1,475,787 19,900,787 2040-2044 2,425,000 231,300 2,656,300 11,055,000 260,081 11,315,081 Total 8,250,000$ 4,325,425$ 12,575,425$ 63,325,000$ 7,696,974$ 71,021,974$ Certificates of Obligation Private Placement Debt Certificates of Obligation Defeased Bonds The City has defeased certain outstanding bonds by placing proceeds of new bonds in irrevocable escrow accounts to provide for all future debt service payments on the old bonds. Accordingly, the escrow account assets and the defeased liabilities are not included in the City’s financial statements. At September 30, 2024, the City had no outstanding bonds considered defeased. 42 Federal Arbitrage The Tax Reform Act of 1986 instituted certain arbitrage restrictions consisting of complex regulations with respect to issuance of tax-exempt bonds after August 31, 1986. Arbitrage regulations deal with the investment of tax-exempt bond proceeds at an interest yield greater than the interest yield paid to bondholders. Generally, all interest paid to bondholders can be retroactively rendered taxable if applicable rebates are not reported and paid to the Internal Revenue Service (IRS) at least every five years for applicable bond issues. Accordingly, there is the risk that if such calculations are not performed, or not performed correctly, a substantial liability to the City could result. As of September 30, 2024, there is no arbitrage liability. Financed Purchases The City has entered into financing agreements for the acquisition of vehicles and equipment. Interest rates range from 1% to 3% and will mature between fiscal years 2027 and 2029. The annual requirements to amortize debt outstanding at year end for Governmental Activities were as follows: Year Ended September 30, Principal Interest Total 2025 1,078,963$ 132,794$ 1,211,757$ 2026 1,123,847 102,631 1,226,478 2027 1,127,722 71,513 1,199,235 2028 807,367 40,895 848,262 2029 856,667 16,123 872,790 Total 4,994,566$ 363,956$ 5,358,522$ Leases The City has entered into 61 lease agreements for the acquisition of Enterprise Fleet Management vehicles. Interest rates range from 1% to 3% and the agreements will mature between fiscal years 2027 and 2028. The annual requirements to amortize debt outstanding at year end for Governmental Activities were as follows: Year Ended September 30, Principal Interest Total 2025 614,603$ 27,368$ 641,971$ 2026 620,128 10,004 630,132 2027 531,311 2,167 533,478 2028 52,436 377 52,813 Total 1,818,478$ 39,916$ 1,858,394$ E. Interfund Receivables and Payables Interfund receivables and payables of the various funds at September 30, 2024 were as follows: Due From Due To Amount Purpose Current receivables General Fund Nonmajor Governmental 14,680,668$ Short term loan grant program Nonmajor Governmental General Fund 122,668$ Short term loan grant program General Fund Transit Fund 3,265,833 Short term loan grant program 18,069,169 Long-term interfund loan General Fund Nonmajor Proprietary Fund 1,321,706 Operating loan 19,390,875$ 43 F. Interfund Transfers Transfers between funds during the year were as follows: Transfer From Transfer To Amount Purpose General Fund Capital Projects 3,467,000$ Capital improvements General Fund Transit 673,350 Grant matching funds General Fund Nonmajor Governmental 6,405,428 Grant matching funds, capital improvements, and City portion of TIRZ taxesGeneral Fund Internal Service Fund 5,722,700 Capital equipment, user fees and general liability insurance payment Transit Internal Service Fund 159,000 General liability insurance payment Nonmajor Governmental General Fund 174,568 Civic center operation costs, reimbursement of prior year costs Nonmajor Governmental Internal Service Fund 332,300 Insurance and debt service Water and Sewer Fund General Fund 2,504,637 Administrative and collection costs Water and Sewer Fund Internal Service Fund 1,384,369 Capital equipment, user fees and general liability insurance payment Solid Waste Fund General Fund 291,667 Debt service payments Solid Waste Fund Internal Service Fund 2,148,000 Capital equipment, user fees and general liability insurance payment Solid Waste Fund Debt Service Fund 1,069 Debt service payments Solid Waste Fund Water and Sewer Fund 410,000 Billing services for garbageNonmajor Proprietary Fund Capital Projects 439,000 Capital improvementsNonmajor Proprietary Fund Debt Service Fund 2,931 Debt service payments Nonmajor Proprietary Fund Internal Service Fund 77,000 General liability insurance payment Debt Service Fund Internal Service Fund 427,331 Debt service payments Debt Service Fund Water and Sewer Fund 199,138 Debt service payments 24,819,488$ III. OTHER INFORMATION A. Employee Retirement Systems Plan Descriptions and Provisions. TMRS The City participates as one of 888 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. All eligible employees of the City not covered by the FRRF are required to participate in TMRS. FRRF The Port Arthur Firemen's Relief and Retirement Fund (FRRF) is established effective October 28, 1941, under the authority of the Texas Local Fire Fighter's Retirement Act (TLFFRA). The fund is administered by a Board of Trustees. The Board is made up of three members elected from and by fund members, two representatives of the City of Port Arthur, Texas, and two citizen members. All fire fighters of the City of Port Arthur, Texas, are members of the FRRF. Detailed information about the pension plan’s fiduciary net position is available in a separately issued financial report. That report can be obtained by contacting the Port Arthur Fireman’s and Relief Fund Board of Trustees, P.O. Box 9759, Longview, Texas 75608. 44 The following table summarizes the participants in each plan: Texas Port Arthur Municipal Firemen's Retirement Retirement System and Relief (TMRS)Fund (FRRF) Inactive employees or beneficiaries currently receiving benefits 560 95 Inactive employees entitled to but not yet receiving benefits 226 0 Active employees 567 106 Total 1353 201 Benefits Provided. TMRS 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 actuarially equivalent payments options. Members may also choose to receive apportion 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. On the date the plan began, the City granted monetary credits for service rendered before the plan began of theoretical amount equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began are 200% of the employee's accumulated contributions. A summary of plan provisions for the City are as follows: 2024 2023 Employee deposit rate 5.00%5.00% Matching ratio (city to employee)2 to 1 2 to 1 Years required for vesting 10 10 Service requirement eligibility (expressed as age/years of service)60/10, 0/20 60/10, 0/20 Updated service credit 100% repeating, transfers100% repeating, transfers Annuity increase (to retirees)70% of CPI repeating 70% of CPI repeating FRRF The FRRF provides retirement, death, disability, and termination benefits. A member is eligible for service retirement upon completion of 20 years of service and attainment of age 50. A member who retires under the service retirement provisions of the fund will receive a monthly benefit equal to the sum of 2.70% of the member's average monthly salary multiplied by the number of years of service not in excess of 20 years, and $125.00 per month for each year of service in excess of 20. Service retirement benefits are payable for the member's lifetime. In the event the member's death precedes that of his spouse, two-thirds of the member's pension will be continued to the spouse for her lifetime. In lieu of the monthly service retirement benefit described above, a member who has both attained age 53 and completed 20 years of service may elect to receive his benefits under the DROP program (described below). Early Retirement Benefits A member is eligible for early retirement upon completion of 20 years of service. The member who retires under the early retirement provisions of the fund will receive a monthly benefit equal to the product of (a) and (b), where: a) Equals the service retirement benefit that the member has accrued as of his early retirement date, and; 45 b) Equals the factor from the table, below, based on the member’s age at date of early retirement. Early Reduction Retirement Age Factors Percentage 38 36.92% 39 40.01% 40 43.38% 41 47.04% 42 51.04% 43 55.39% 44 60.15% 45 65.36% 46 71.06% 47 77.30% 48 84.16% 49 91.70% Early retirement benefits are payable for the member’s lifetime. In the event the member’s death precedes that of his spouse, two-thirds of the member’s pension will be continued to the member’s spouse for such spouse’s lifetime. Disability Benefits An active member who becomes disabled as defined in the plan will receive a monthly disability benefit. However, if the member is eligible for a service retirement benefit, he will receive the service retirement benefit to which heist entitled instead of a disability benefit. Disability benefits are payable in the same form as service retirement benefits. However, disability benefits stop if a member recovers to the point he no longer meets the definition of disability under the fund. Amount of Disability Benefit The benefit payable to members who retire with non-job related injuries or illnesses, who have less than one year of service will equal the minimum disability benefit required under the Texas Local Fire Fighters' Retirement Act. The amount of disability benefit payable to all other members who retire under the disability provisions of the fund will equal the greatest of (a), (b), or (c) below, based on the member's average monthly salary on the date he terminated service due to disability: a) Equals 54 percent of his average monthly salary; b) Equals the member's early retirement benefit, provided the member is otherwise entitled to such benefit; and c) Equals the member’s normal service retirement benefit, provided the member is otherwise entitled to such benefit. A member's disability benefit will commence 60 days following the date on which his regular salary, including vacation, sick leave, and any extended sick leave benefits have lapsed. Upon commencement of disability benefits, a member will receive a lump sum payment equal to the two disability checks that were missed during the 60- day waiting period. Death Benefits If a member dies while in active service, the member's spouse will receive an immediate monthly benefit, payable for as long as she is living and does not remarry. In order for a member's spouse to be eligible for the fund's death benefit, such spouse must have been married to the member prior to the earlier of the member's date of retirement or his date of termination of service and must be married to the member at the time of the member's death. Amount of the Spouse's Death Benefit The amount of monthly benefit payable to the deceased member's spouse will equal the sum of (a) two thirds of the standard retirement benefit, based on the member's average monthly salary as of the date of his death, plus (b) two thirds of any additional service benefit to which the deceased member was entitled as of the date of his death. 46 Amount of the Spouse's Death Benefit upon Remarriage The benefit payable upon remarriage to the widow of a deceased member depends on the number of years of service the member had completed as of his date of death. If the member had not completed 10 years of service as of his date of death, no further payments will be made to the member's spouse if she remarries. If the member had completed at least 10 years of service but had not completed 20 years of service as of his date of death and the member’s widow remarries prior to the date that the member would have reached his normal retirement date, the monthly widow's benefit will stop. A monthly benefit equal to two-thirds of the member's vested termination benefit as of his date of death will resume on the date the member would have reached his normal retirement date. If the member had completed at least 20 years of service as of his date of death but not reached normal retirement date, the benefit payable to his widow after her remarriage will equal two-thirds of the early retirement benefit to which the member was entitled at his date of death. If the member had reached his normal retirement date as of the date of his death, the benefit payable to his widow will continue unchanged if his widow remarries. Orphan's Benefit In addition to the above spouse's benefit, each unmarried child of the member will receive a monthly benefit of $227. Orphan benefits continue until the child reaches age 18. However, benefits are continued until age 22 for a child who is a full-time student. Orphan benefits are continued for life to disabled children. Maximum Family Benefit The total of all benefits paid as a result of the death of an active fund member may not exceed the disability or retirement benefit such member had earned as of the date of his death. The total of all benefits paid as a result of the death of a retired member may not exceed the retirement benefit the member was receiving as of the date of his death. Benefits are reduced pro rata, if necessary, in order to satisfy these limitations. Termination Benefits Members with at Least Ten Years of Service A fund member who terminates employment after completing at least 10 years of service, but prior to the date he becomes eligible for service retirement, will be entitled to receive a monthly benefit starting on the date he would have both attained age 50 and completed 20 years of service had he remained in active service with the fire department. Such member's monthly benefit will equal the monthly service retirement benefit he had accrued on the date he separated from service with the fire department. A fund member who terminates employment prior to completing ten years of service will be entitled to the return of the excess of his contributions to the fund over the amount of any benefits he has received from the fund. Such refund will not include any interest on the member's contributions. Cash out Benefit A fund member who retires or whose service is terminated may elect, at the time of his retirement, to receive the return of the excess of the sum of (a) his contributions to the fund plus (b) the contributions made by the City of Port Arthur on his behalf on or before May 10, 1992, over the amount of any benefits he has received from the fund. Such refund will be in lieu of the retirement, disability, or termination benefit that the member would otherwise be entitled to receive under the fund. Such refund will not include any interest on the member's or the City’s contributions. The Deferred Retirement Option Plan (DROP) A member is eligible to elect the DROP benefit if he retires after both completing 20 years of service and attaining age 53. The monthly retirement benefit of a member who elects the DROP will be calculated as if the member had retired on the later of (i) the date he was first eligible to elect the DROP or (ii) the date which is 36 months prior this actual retirement date. This date is referred to as the member's DROP eligibility date. 47 Amount of Monthly Retirement Income to DROP Participants The amount of monthly retirement income that is payable to a member who retires after electing the DROP will equal the monthly service retirement benefit that the member had earned under the fund as of his DROP eligibility date. The benefit formula used, however, will be the service retirement formula in effect on the member's date of retirement. Upon retirement, the member will receive—in addition to his monthly retirement benefit—a DROP payment equal to the sum of: a) the amount of monthly contributions that the member has made to the fund since his DROP eligibility date, plus b) the total of the monthly retirement benefits the member would have received between the time he entered the DROP and the time he retired under the plan. The spouse of an active member who dies while eligible for the DROP benefit may elect to receive the DROP benefit to which the deceased member was entitled and two-thirds of the reduced monthly retirement benefit which the deceased member would have received had such member retired under the DROP on his date of death. Contributions. TMRS 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 consulting 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 5% of their annual gross earnings during the fiscal year. The required contribution rate for the City was 14.32% in calendar year 2023 and 15.12% in calendar year 2024. The City’s contributions to TMRS for the year ended September 30, 2024, were $6,916,990.00, and were equal to the required contributions. FRRF Firefighters contribute to the fund at a rate of 13.5% of pay. The City made contributions of 13.96% and 14.32% in calendar years 2022 and 2023 respectively. Long-Term Expected Rate of Return. TMRS The long-term expected rate of return on pension plan investments is 6.75%. The pension plan’s policy in regard tithe allocation of invested assets is established and may be amended by the TMRS Board of Trustees. 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. 48 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 arithmetic real rates of return for each major asset class are summarized in the following table: TMRS Asset Class Target Allocation Long-Term Expected Real Rate of Return (Arithmetic) Global equity 35.00%6.70% Core fixed income 6.00%4.70% Non-core fixed income 20.00%8.00% Real return 12.00%8.00% Real estate 12.00%7.60% Absolute return 5.00%6.40% Private equity 10.00%11.60% Total 100.0% FRRF Asset Class Target Allocation Long-Term Expected Real Rate of Return (Arithmetic) Equities Large cap domestic 15.90%6.04% Mid cap domestic 13.80%6.08% Small cap domestic 13.90%6.06% International developed 12.00%6.48% Emerging markets 4.00%7.24% Real estate 5.00%4.06% Fixed income 33.80%2.13% Cash 1.60%0.00% Total 100.0% Weighted average 4.76% Discount Rate. TMRS The discount rate used to measure the Total Pension Liability for TMRS 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 the 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 plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. 49 Actuarial Assumptions. The City’s Net Pension Liability (NPL) was measured as of December 31, 2023, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. TMRS FRRF Actuarial cost method Entry age normal Entry age normal Amortization method Level percentage of payroll, closed Level percentage of payroll, open Remaining amortization period 22 years (longest amortization ladder) Asset valuation method 10 year smoothed market; 12% soft corridor Inflation 2.50%2.75% Salary increases 3.50% to 11.85% including inflation 2.75%plus promotion,step and longevity increases that vary by service Investment rate of return 6.75%7.25%,net of investment-related expenses, including inflation 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 2022. Experience-based table of rates that are specific to the FRRF. Mortality Post-retirement:2019 Municipal Retirees of Texas Mortality Tables.Male rates are multiplied by 103%and female rates aremultipliedby105%.The rates are projected on a fully generational basis by the most recent Scale MP-2021 (with immediate convergence).Pre-retirement: PUB(1)mortality tables,with 110%of 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). PubS-2010 (public safety)total dataset tables for employees and for retirees (sex distinct),projected for mortalityimprovementgenerationallyusingthe projection scale MP-2019 Other information There were no benefit changes during the year. There were no benefit changes during the year. Changes in the Net Pension Liability. Total Total Pension Plan Fiduciary Net Pension Total Pension Plan Fiduciary Net Pension Liability Net Position Liability Liability Net Position Liability Net Pension (a)(b)(a)-(b) (a)(b)(a)-(b) Liability Balance at 12/31/2022 243,258,510$ 201,167,623$ 42,090,887$ 74,756,101$ 48,657,512$ 26,098,589$ 68,189,476$ Changes for the year: Service cost 5,581,508 - 5,581,508 1,544,222 - 1,544,222 7,125,730 Interest 16,137,230 - 16,137,230 5,379,013 - 5,379,013 21,516,243 Difference between expected and actual experience (1,157,838) - (1,157,838) (1,499,979) - (1,499,979) (2,657,817) Change in assumptions (1,942,005) - (1,942,005) - 1,535,519 (1,535,519) (3,477,524) Contributions - employer - 6,299,637 (6,299,637) - 1,554,821 (1,554,821) (7,854,458) Contributions - employee - 2,272,601 (2,272,601) - - - (2,272,601) Net investment income - 23,246,381 (23,246,381) - 7,198,471 (7,198,471) (30,444,852) Benefit payments, including refunds - of employee contributions (13,958,393) (13,958,393) - (4,214,092) (4,214,092) - - Administrative expense - (148,120) 148,120 - (108,480) 108,480 256,600 Other changes - (1,035) 1,035 73,942 - 73,942 74,977 Net changes 4,660,502 17,711,071 (13,050,569) 1,283,106 5,966,239 (4,683,133) (17,733,702) Balance at 12/31/2023 247,919,012$ 218,878,694$ 29,040,318$ 76,039,207$ 54,623,751$ 21,415,456$ 50,455,774$ Increase (Decease)Increase (Decease) TMRS FRRF 50 Sensitivity of the Net Pension Liability. The following presents the net pension liability of the City, calculated using the current single rate assumption for each plan 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 or 1-percentage-point higher than the current rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate TMRS 59,302,701$ 28,790,571$ 3,784,921$ FRRF 30,102,433$ 21,415,456$ 14,110,604$ Pension Plan Fiduciary Net Position. Detailed information about the TMRS 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. Detailed information about the FRRF pension plan fiduciary net position is available in a separately issued financial reports that can be obtained by contacting the Plan administrator at PO Box 1089, Port Arthur, TX 77641, www.portarthurfirepension.com or (409) 983-8734. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions. For the year ended September 30, 2024, the City recognized pension expense of $5,439,371 for TMRS and $2,404,936 for FRRF. At September 30, 2024, the City reported deferred outflows and inflows of resources related to pensions from the following sources: Deferred Outflows Deferred Inflows Deferred Outflows Deferred Inflows of Resources of Resources of Resources of Resources Differences between expected and actual economic experience 2,582,493$ 864,453$ 22,402$ 7,499$ Changes in actuarial assumptions - 1,449,919 - 12,577 Difference between projected and actual investment earnings 5,548,740 - 48,133 - Contributions subsequent to the measurement date 4,929,753 - 42,764 - Total 13,060,986$ 2,314,372$ 113,299$ 20,076$ TMRS TMRS Primary Government Component Unit Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience 4,327,431$ -$ Changes in actuarial assumptions 1,780,692 599,001 Difference between projected and actual investment earnings 393,416 2,148,652 Contributions subsequent to the measurement date 1,247,982 - Total 7,749,521$ 2,747,653$ FRRF 51 Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience 6,932,326$ 871,952$ Changes in actuarial assumptions 1,780,692 2,061,497 Difference between projected and actual investment earnings 5,990,289 2,148,652 Contributions subsequent to the measurement date 6,220,499 - Total 20,923,806$ 5,082,101$ Totals $6,220,499 is reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the fiscal year ending September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: TMRS For the Year Ended September 30, Primary Government TMRS Component Unit FRRF 2025 2,159,901$ 18,736$ 1,419,096$ 2026 1,968,084 17,072 1,690,222 2027 3,643,700 31,608 1,825,984 2028 (1,954,824) (16,957) (1,017,158) 2029 - - 37,356 Thereafter - - (201,614) B. Other Post-Employment Benefits TMRS Supplemental Death Benefits Fund Plan Description. The City voluntarily participates in a single-employer other postemployment benefit (OPEB) plan administered by TMRS. The Plan is a group-term life insurance plan known as the Supplemental Death Benefits Fund (SDBF). The Plan is established and administered in accordance with the TMRS Act identically to the City’s pension plan. SDBF includes coverage for both active and retired members, and assets are commingled for the payment of such benefits. Therefore, the Plan does not qualify as an OPEB Trust in accordance with paragraph 4 of GASB Statement No. 75. Benefits Provided. The SDBF provides group-term life insurance to City employees who are active members in TMRS, including or not including retirees. The City Council opted into this program via an ordinance, and may terminate coverage under, and discontinue participation in, the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. Payments from this fund are similar to group-term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. 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 employment benefit and is a fixed amount of $7,500. Membership in the plan at December 31, 2023, the valuation and measurement date, consisted of: Inactive employees or beneficiaries currently receiving benefits 405 Inactive employees entitled to but not yet receiving benefits 26 Active employees 567 Total 998 52 Contributions. The City contributes to the SDBF at a contractually required rate as determined by an annual actuarial valuation, which was 0.45% for 2024 and 0.46% for 2023, of which 0.19% and 0.21%, respectively, represented the retiree-only portion for each year, as a percentage of annual covered payroll. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term life insurance during employees’ entire careers. The City’s contributions to the SDBF for the year ended September 30, 2024 were $90,681 representing contributions for both active and retiree coverage, which equaled the required contributions each year. Total OPEB Liability. The Total OPEB Liability in the December 31, 2023 actuarial valuation was determined using the following actuarial assumptions and inputs: Measurement year ended December 31,2023 Inflation rate 2.50% Discount rate 3.77% Retirees' share of 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 Rates - 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 Rates - 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. Changes in assumptions reflect the annual change in the municipal bond rate. The actuarial assumptions used in the December 31, 2023 valuation were based on the results of an actuarial experience study for the period ending December 31, 2023. Discount Rate. 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. As such, a single discount rate of 3.77% was used to measure the total OPEB liability. Because the plan is essentially a “pay-as-you-go” plan, the single discount rate is equal to the prevailing municipal bond rate. The source of the municipal bond rate was fixed-income municipal bonds with 20 years to maturity that include only federally tax- exempt municipal bonds as reported in Fidelity Index’s “20-year Municipal GO AA Index” as of December 31, 2023. Discount Rate Sensitivity Analysis. The following schedule shows the impact of the total OPEB liability if the discount rate used was 1% less than and 1% greater than the discount rate that was used (3.77%) in measuring the total OPEB liability. 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (2.77%)(3.77%)(4.77%) Total SDB OPEB Liability 2,772,484$ 2,364,422$ 2,040,273$ 53 Changes in the Total OPEB Liability. Total City’s Total OPEB Liability (TOL), based on the above actuarial factors, as of December 31, 2023, the measurement and actuarial valuation date, was calculated as follows: Total OPEB Liability Balance at 12/31/2022 2,194,404$ Changes for the year: Service cost 59,088 Interest 88,137 Difference between expected and actual experience (3,600) Changes of assumptions or other inputs 121,842 Benefit payments, including refunds of employee contributions (95,449) Net changes 170,018 Balance at 12/31/2023 2,364,422$ Changes in assumptions and other inputs reflect a change in the discount rate from 4.05% to 3.77%. OPEB Expense and Deferred Inflows and Outflows of Resources Related to OPEB. For the year ended September 30, 2024, the City recognized OPEB expense of $70,678. Also, as of September 30, 2024, the City reported deferred outflows and inflows of resources related to the TMRS OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience 71,980$ 113,393$ Changes in actuarial assumptions 255,950 620,248 Contributions subsequent to the measurement date 64,402 - Total 392,332$ 733,641$ $64,402 reported as deferred outflows of resources related to OPEB resulting from contributions subsequent to the measurement date will be recognized as a reduction of the Total OPEB liability for the year ending September 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to the TMRS OPEB will be recognized in OPEB expense in future periods as follows: For the Year Ended September 30, 2025 (92,873)$ 2026 (132,998) 2027 (144,842) 2028 (42,318) 2029 7,320 Retiree Health Other Post-Employment Benefit Plan Program Description . In addition to pension benefits, the City makes available healthcare benefits to all employees who retire from the City and who are eligible to receive benefits from a City sponsored retirement program (Texas Municipal Retirement System or the Port Arthur Firemen’s Relief and Retirement Fund) through a single-employer defined benefit healthcare plan. This Program provides lifetime health insurance for eligible retirees, their spouses and dependents through the City's group health insurance plan, which covers both active and retired participants. Benefit provisions are established by management. 54 Employees retiring on or before December 31, 2010 are allowed to remain in the health insurance plan at approximately 30% of the expected under age 65 cost or approximately 75% of the expected over age 65 and over costs. These costs (a.k.a. retiree contribution rates) are calculated separately for retirees not eligible for Medicare (under age 65) and retirees eligible for Medicare (age 65 and over). Employees retiring on or after January 1, 2011 contribute a tiered percentage of the retiree contribution rates based upon their years of City service at retirement. The percentage ranges from 50% for retirees with at least 30 years of City service to 100% for retirees with less than 20 years of City service. Employees hired on or after November 1, 2010 are required to contribute 100% of the retiree contribution rates upon retirement. The City’s group health insurance plan does not issue a stand-alone financial report. Funding Policy. The gross premium rates effective November 1, 2014 were $956 per month for retirees under the age of 65 and $491 per month for those 65 and older. Current retirees age 65 and older contribute $188 per month effective November 1, 2014 or approximately 75% of the expected cost. Current retirees under the age of 65 contribute $238 per month effective November 1, 2014 or approximately 30% of their expected cost. Those who retire on or after January 1, 2011 contribute a percentage ranging approximately from 50% to 100% of their expected costs. Effective November 1, 2014, the expected cost was $260 per month for retirees age 65 and over and ranged from $439 to $875 per month for retirees under age 65. Retirees hired on or after November 1, 2010 contribute $875 per month. Costs for retiree spouses and dependents are also similarly subsidized, in part, by the City. For fiscal year 2014, the City financed this program on a pay-as-you-go basis. As of September 30, 2024 the City had 224 retirees participating in this plan. General funds have been used in prior years to liquidate the net other postemployment benefit obligation. Actuarial valuations on an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. At December 31, 2023, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 116 Active employees 224 Total 340 Net OPEB Liability. The net OPEB liability of $8,799,569 was measured as of December 31, 2023, and the Total OPEB liability used to calculate net OPEB liability was determined by an actuarial valuation as of December 31, 2023. 55 Actuarial assumptions and methods. The net OPEB liability in the December 31, 2023 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Valuation date December 31, 2023 Actuarial cost method Individual entry age normal Discount rate 6.50% as of December 31, 2023 Inflation 2.50% Salary increases TMRS: 3.60% to 11.85%, including inflation FRRF: 2.75% to 7.89%, including inflation Demographic assumptions TMRS:Based on the experience study covering the four-year period ending December 31,2022 as conducted for the Texas Municipal Retirement System (TMRS) FRRF:Based on the December 31,2023 pension actuarial valuation report. Mortality TMRS:For healthy retirees,the gender-distinct 2019 Municipal Retirees of Texas mortality tables are used.The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP tables published through 2019 to account for future mortality improvements. FRRF:The PubS-2010 for employees and retirees, projected for mortality improvement generationally using the projection scale MP-2019, with separate Healthcare trend rates Pre-65:Initial rates of 7.10%declining to ultimate rates of 4.25% after 14 years. Post-65:Initial rates of 5.00%declining to ultimate rates of 4.25% after 8 years. Participation rates In addition to the rates below,90%of members retiring after the age of 65 (regardless of service) are assumed to participate in the City's Medicare Advantage plan.For members retiring with coverage prior to age 65,10%are assumed to discontinue coverage at age 65. Years of Participation Spousal Service Assumption Coverage <20 0%0% 20 - 24 30%0% 25 -29 45%10% 30+60%35% Single Discount Rate. Projected benefit payments are required to be discounted to their actuarial present values using a Single Discount Rate that reflects (1) a long-term expected rate of return on OPEB plan investments (to the extent that the plan’s fiduciary net position is projected to be sufficient to pay benefits), and (2) tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met). For the purpose of this valuation, the expected rate of return on OPEB plan investments is 6.50%; the municipal bond rate is 2.00% (based on the daily rate closest to but not later than the measurement date of the Fidelity “20-Year Municipal GO AA Index”); and the resulting Single Discount Rate is 6.50%. 56 Changes in the Net OPEB Liability. Total OPEB Plan Fiduciary Net OPEB Liability Net Position Liability (a)(b)(a)-(b) Balance at 12/31/2022 12,072,055$ 4,050,487$ 8,021,568$ Changes for the year: Service cost 184,084 - 184,084 Interest 794,925 - 794,925 Difference between expected and actual experience (534,847) - (534,847) Change in assumptions 761,651 - 761,651 Contributions - employer - (131,023) 131,023 Net investment income - 583,565 (583,565) Benefit payments 131,023 131,023 - Administrative expense - (24,730) 24,730 Net changes 1,336,836 558,835 778,001 Balance at 12/31/2023 13,408,891$ 4,609,322$ 8,799,569$ Increase (Decease) Sensitivity of the net OPEB liability to changes in discount rates. The following presents the plan’s net OPEB liability, calculated using a discount rate of 6.50%, as well as what the plan’s net OPEB liability would be if it were calculated using a discount rate that is one percent lower or one percent higher: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate (5.50%)(6.50%)(7.50%) Total OPEB liability - retiree health 10,116,934$ 8,799,569$ 7,660,727$ Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the plan’s net OPEB liability, calculated using the assumed trend rates as well as what the plan’s net OPEB liability would be if it were calculated using a trend rate that is one percent lower or one percent higher: Current Healthcare Cost 1% Decrease Trend Rate Assumption 1% Increase Total OPEB liability - retiree health 7,636,373$ 8,799,569$ 10,166,354$ OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB. For the year ended September 30, 2024, the City recognized OPEB expense of $450,931. At September 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows Deferred Inflows of Resources of Resources Differences between expected and actual economic experience 589,018$ 1,636,941$ Changes in actuarial assumptions 722,398 - Difference between projected and actual investment earnings 210,215 - Contributions subsequent to the measurement date 2,100,188 - Total 3,621,819$ 1,636,941$ The $2,100,188 reported as deferred outflows of resources related to OPEB resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ending September 30, 2025. 57 Amounts currently reported as deferred outflows of resources and deferred inflows of resources related to OPEB, excluding contributions subsequent to the measurement date, will be recognized in OPEB expense as follows: For the Year Ended September 30, 2025 (205,799)$ 2026 (63,263) 2027 184,415 2028 (30,663) C. 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; and natural disasters for which the City maintains a limited risk management program. Claims in excess of the self-insured retention amounts are covered through third-party limited- coverage insurance policies. The City also maintains a limited risk management program for workers’ compensation. Premiums are paid into the Employee Benefit Fund and the General Liability Fund by all other funds and are available to pay claims, claim reserves and administrative costs, and insurance premiums. These inter-fund premiums are recorded as revenue in the Employee Benefit Fund and the General Liability Fund as they are Internal Service Funds. Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. General Workers' Liability Compensation Total Estimated liability at 9/30/2023 313,653$ 623,769$ 937,422$ Fiscal year 2024 claims incurred 3,400,001 376,819 3,776,820 Fiscal year 2024 claims paid (3,484,425) (590,985) (4,075,410) Estimated liability at 9/30/2024 229,229$ 409,603$ 638,832$ Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly claims are reevaluated periodically to consider the effects of inflation, recent claims trends (including frequency and amount of pay-outs), and other economic and social factors. The estimate of claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. An excess coverage insurance policy covers claims in excess of $300,000. Settlements have not exceeded coverages for each of the past three fiscal years. D. Contingent Liabilities The City is defendant in various lawsuits arising in the ordinary course of its municipal and enterprise activities. In the opinion of City management, the outcome of all pending litigation will not materially affect the financial position of the City. Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. 58 E. Tax Abatements The City enters into economic development agreements to provide financial incentives for the purposes of stimulating the local economic development and business and commercial activity in the City. These agreements are authorized under Chapter 380 of the Texas Local Government Code. The City has entered into one (1) Chapter 380 agreement that calls for rebates of all increases in property taxes on the improvement of the assessed values for 8 years. Also, The City has entered into two (2) Chapter 380 agreements that call for reimbursement of 100% of the City sales tax over a ten year period. The City abated a total of $8,061 under these agreements during fiscal year 2024. The City enters into industrial agreements to collect payments in lieu of taxes with companies located outside the city limits in our Extra Territorial Jurisdiction or ETJ. These agreements are made under the authority of Section 42.044 of the Texas Local Government Code. The agreements range from 2 - 14 years whereby they make payments based on a range of the appraised value. In return, the companies provide economic benefits for the City’s ETJ per the terms of the agreement. For fiscal year 2024, the City abated property taxes of $4.99 million. F. Landfill Closure and Post-closure Care Costs State and federal laws and regulations require that the City place a final cover on its landfill when closed and perform certain maintenance and monitoring functions at the landfill site for thirty years after closure. In addition to operating expenses related to current activities of the landfill, an expense provision and related liability are being recognized based on the future closure and post-closure care costs that will be incurred near or after the date the landfill no longer accepts waste. The recognition of these landfill closure and post- closure care costs is based on the amount of the landfill used during the year. The estimated liability for landfill closure and post-closure care cost has a balance of $5,538,870 as of September 30, 2024, which is based on 36.58% usage (filled) of the landfill. It is estimated that an additional $9,634,600 will be recognized as closure and post-closure care expenses between the date of the balance sheet and the date the landfill is expected to be filled to capacity (2035). The estimated total cost of the landfill closure and post-closure care is $15,191,326 based on the amount that would be paid if all equipment, facilities, and services required to close, monitor, and maintain the landfill were acquired as of September 30, 2024. However, the actual cost of closure and post-closure care may be higher due to inflation, changes in technology, or changes in landfill laws and regulations. The City was required by state and federal laws and regulations to meet financial assurance regulations by April 9, 1997, with updates annually. The City met these requirements and is in full compliance with the financial assurance requirement. G. Deficit Fund Balance/Net Position The Transit System, FEMA, and Hazard Mitigation Grant special revenue funds had deficit fund balances of $3,257,604, $523,573, and $15,459,625 respectively. The City will eliminate these deficits through federal grant receipts in the next fiscal year. If there are not sufficient grant receipts to reimburse expenses incurred in these funds, then the General Fund will be responsible for them. The Solid Waste proprietary fund had a deficit net position of $5,483,565. The City will focus on addressing the current deficit through income adjustments and best management practices which will help improve overall operations and performance outcomes. There are plans to increase revenues through changes to the existing rate structure for residential and commercial garbage/debris collection, as well as changes to the fee structure method at the Landfill from charging customers on a scale rate versus a volume rate. Increased revenues along with conservative spending will eliminate the deficit net position over time. 59 H. Accounting Changes and Error Corrections In accordance with GASB 100, accounting changes and error corrections for the year are reported as follows: Error Corrections. For Fiscal Year 2024, the City reported one error correction: 1) Leases previously not adopted and recognized per the GASB 87 guidance in prior periods were corrected as part of an adjustment to beginning net position in the Equipment Replacement Internal Service Fund. A beginning lease liability balance of $1,414,923 for fiscal year 2024 was recognized as part of this error correction. Changes within the Financial Reporting Entity. For Fiscal Year 2024, the City reported changes in its financial reporting entity: 2) The Transit System fund was previously reported as a major governmental fund and is now reported as a non-major fund. The change is classification is required based on quantitative factors. 3) The Debt Service fund and the Hazard Mitigation special revenue fund were previously reported as non-major governmental funds and are now reported as major funds. The change is classification is required based on quantitative factors. 4) The CDBG Disaster Recovery Program was previously a non-major governmental fund and combined with the Hazard Mitigation special revenue fund for qualitative reasons as expenditures for both grant programs are part of the same capital projects. The effect of the restatements of net position and fund balance due to the changes described above is shown below: Government-Wide Governmental Activities CDBG Disaster Recovery Fund Debt Service Fund Transit System Fund Hazard Mitigation Fund Nonmajor Governmental Beginning Fund Balance or Net Position, as previously reported 127,476,309$ -$ -$ (2,845,715)$ -$ 15,059,080$ Change from major to nonmajor fund - - - 2,845,715 - (2,845,715) Change from nonmajor to major fund - (765,760) 18,173,066 (3,897,934) (13,509,372) Error correction (1)(1,414,923) - - - - - Beginning Fund Balance or Net Position, as restated 126,061,386$ (765,760)$ 18,173,066$ -$ (3,897,934)$ (1,296,007)$ Reporting Units Affected by Restatements of Beginning Balances Governmental Funds I. New Accounting Standards Significant new accounting standards issued by the Governmental Accounting Standards Board (GASB) not yet implemented by the City include the following: GASB Statement No. 101, Compensated Absences – The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. This Statement will become effective for reporting periods beginning after December 15, 2023, and the impact has not yet been determined. GASB Statement No. 102, Certain Risk Disclosures – The objective of this Statement is to provide users of government financial statements with information about risks related to a government’s vulnerabilities due to certain concentrations or constraints that is essential to their analyses for making decisions or assessing accountability. This Statement will become effective for reporting periods beginning after June 15, 2024, and the impact has not yet been determined. 60 GASB Statement No. 103, Financial Reporting Model Improvements – The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues. This Statement will become effective for reporting periods beginning after June 15, 2025, and the impact has not yet been determined. GASB Statement No. 104, Disclosure of Certain Capital Assets – The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. This Statement requires certain types of capital assets to be presented separately in the note disclosures, including right-to-use assets related to leases, Subscription-Based Information Technology Arrangements, and public-private or public-public partnerships. Other intangible assets are also required to be presented separately by major class. Additional disclosures have also been required for capital assets held for sale. This Statement will become effective for reporting periods beginning after June 15, 2025, and the impact has not yet been determined. THIS PAGE LEFT BLANK INTENTIONALLY REQUIRED SUPPLEMENTARY INFORMATION Variance With Final Budget Positive Original Final Actual (Negative) REVENUES Property taxes 16,326,500$ 16,326,500$ 16,119,284$ (207,216)$ Industrial district payments 30,000,000 30,000,000 30,604,396 604,396 Franchise fees 10,680,000 10,680,000 11,461,218 781,218 Sales taxes 15,063,000 15,063,000 15,895,046 832,046 Licenses and permits 837,950 837,950 629,889 (208,061) Charges for services 541,850 541,850 1,300,972 759,122 Fines and forfeitures 516,100 516,100 90 (516,010) Intergovernmental 19,313 (59,695) 124,011 183,706 Investment earnings 2,237,600 2,237,600 1,344,304 (893,296) Miscellaneous 317,000 389,000 1,787,824 1,398,824 Total Revenues 76,539,313 76,532,305 79,267,034 2,734,729 EXPENDITURES General government: Administration 2,531,854 2,726,854 2,352,396 374,458 City attorney 1,600,699 1,600,699 1,511,005 89,694 City secretary 1,677,437 1,677,437 1,694,550 (17,113) Development services 7,412,246 7,412,247 6,498,635 913,612 Finance 2,997,907 3,117,907 2,787,561 330,346 Human resources 938,747 938,747 733,967 204,780 Information technology 2,637,812 2,637,812 2,083,668 554,144 Total General Government 19,796,702 20,111,703 17,661,782 2,449,921 Culture and recreation: Library 1,460,854 1,460,854 1,389,429 71,425 Parks and recreation 3,755,365 3,770,365 3,097,213 673,152 Civic center 1,486,677 1,424,722 1,130,218 294,504 Total Culture and Recreation 6,702,896 6,655,941 5,616,860 1,039,081 Public safety: Fire 15,847,587 16,165,627 16,572,102 (406,475) Police 21,146,069 21,157,599 20,043,631 1,113,968 Total Public Safety 36,993,656 37,323,226 36,615,733 707,493 Health and welfare:Health and welfare 1,879,486 1,900,759 1,957,266 (56,507) Total Health and Welfare 1,879,486 1,900,759 1,957,266 (56,507) Public works:Public works 9,611,372 9,632,877 8,202,615 1,430,262 Total Public Works 9,611,372 9,632,877 8,202,615 1,430,262 Capital outlay 1,879,486 1,900,759 1,474,601 426,158 Total Expenditures 76,863,598 77,525,265 71,528,857 5,996,408 Excess of revenues over expenditures (324,285) (992,960) 7,738,177 8,731,137 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets 106,000 106,000 791,050 685,050 Insurance proceeds - 13,152 163,427 150,275 Transfers in 2,916,304 2,916,304 2,970,872 54,568 Transfers out (10,497,750) (10,439,709) (16,268,478) (5,828,769) Total Other Financing Sources (Uses)(7,475,446) (7,404,253) (12,343,129) (4,938,876) NET CHANGE IN FUND BALANCE (7,799,731) (8,397,213) (4,604,952) 3,792,261 FUND BALANCE - BEGINNING 30,267,641 30,267,641 30,267,641 - FUND BALANCE - ENDING 22,467,910$ 21,870,428$ 25,662,689$ 3,792,261$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 61 62 CITY OF PORT ARTHUR, TEXAS NOTES TO BUDGETARY SCHEDULES SEPTEMBER 30, 2024 Budgetary Information - Annual budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for the following governmental fund types of the primary government: the General Fund, the Transit System Fund, the Debt Service Fund, the Library Special Fund, the Golf Course Fund, Municipal Court Technology Fund, the Police Special Fund, the Disaster Recovery Housing Fund, the Hotel Occupancy Tax Fund, Street Maintenance Fund, Gaming Fund, and Tax Increment Reinvestments Zone. The Capital Projects Fund is budgeted on a project basis, rather than an annual basis. The remaining governmental type funds are not budgeted. Budgets for the Enterprise Funds and the Internal Service Funds are adopted on a basis not consistent with GAAP because the budget presents capital outlays as expenditures and there is no provision for depreciation expense. All operating funds of Port Arthur Section 4A Economic Development Corporation have annual budgets adopted on a basis consistent with GAAP. On or before August 31 of each year the City Manager presents the City Council with a proposed budget for the ensuing fiscal year. The Council holds public hearings and a final budget must be prepared and adopted by September 30. Budgets are appropriated by fund and department. The legal level of control is the department level. The City Council made no significant supplemental budgetary appropriations during the 2024 fiscal year. The City’s department heads may make transfers of appropriations within department line items with the City Manager’s approval. Transfers between departments require the approval of the City Council. Measurement Date December 31,2023 2022 2021 2020 Total pension liability Service cost 5,581,508$ 5,241,604$ 4,949,812$ 5,075,984$ Interest on total pension liability 16,137,230 15,375,920 14,683,422 14,111,349 Difference between expected and actual experience (1,157,838) 3,566,144 2,491,207 476,840 Change of assumptions (1,942,005) - - - Benefit payments/refunds of contributions (13,958,393) (12,191,524) (11,830,682) (10,421,203) Net Change in Total Pension Liability 4,660,502 11,992,144 10,293,759 9,242,970 Total Pension Liability, Beginning 243,258,510 231,266,366 220,972,607 211,729,637 Total Pension Liability, Ending (a)247,919,012$ 243,258,510$ 231,266,366$ 220,972,607$ Plan fiduciary net position Contributions - employer 6,299,637$ 5,836,292$ 5,619,988$ 5,709,509$ Contributions - employee 2,272,601 2,137,685 2,018,683 2,077,684 Net investment income 23,246,381 (16,151,353) 26,027,846 14,278,074 Benefit payments/refunds of contributions (13,958,393) (12,191,524) (11,830,682) (10,421,203) Administrative expenses (148,120) (139,920) (120,514) (92,460) Other (1,037) 166,968 826 (3,608) Net Change in Fiduciary Position 17,711,069 (20,341,852) 21,716,147 11,547,996 Fiduciary Net Position, Beginning 201,167,625 221,509,477 199,793,330 188,245,334 Fiduciary Net Position, Ending (b)218,878,694 201,167,625 221,509,477 199,793,330 Net pension liability = (a)-(b)29,040,318$ 42,090,885$ 9,756,889$ 21,179,277$ Fiduciary Net Position as a Percentage of Total Pension Liability 88.29%82.70%95.78%90.42% Covered Payroll 45,452,023$ 42,753,707$ 40,373,669$ 41,538,329$ Net Pension Liability as a Percentage of Covered Payroll 63.89%98.45%24.17%50.99% CITY OF PORT ARTHUR, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2024 TEXAS MUNICIPAL RETIREMENT SYSTEM SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS 63 2019 2018 2017 2016 2015 2014 4,475,825$ 4,203,779$ 4,140,755$ 3,832,803$ 3,639,841$ 3,333,511$ 13,508,310 12,975,268 12,496,121 12,094,723 12,183,981 11,730,055 638,239 392,483 465,297 490,657 (1,521,771) (893,480) 246,869 - - - 185,596 - (10,049,617) (9,571,648) (10,498,757) (10,752,313) (8,167,518) (7,509,671) 8,819,626 7,999,882 6,603,416 5,665,870 6,320,129 6,660,415 202,910,011 194,910,129 188,306,713 182,640,843 176,320,714 169,660,299 211,729,637$ 202,910,011$ 194,910,129$ 188,306,713$ 182,640,843$ 176,320,714$ 5,151,463$ 4,923,938$ 4,715,154$ 4,376,189$ 4,505,501$ 4,490,591$ 1,866,483 1,750,116 1,729,867 1,607,719 1,586,679 1,526,337 25,619,140 (5,210,673) 21,687,979 10,216,426 226,017 8,373,560 (10,049,617) (9,571,648) (10,498,757) (10,752,313) (8,167,518) (7,509,671) (144,841) (100,745) (112,412) (121,605) (144,466) (87,430) (4,352) (5,264) (5,697) - - (7,188) 22,438,276 (8,214,276) 17,516,134 5,326,416 (1,993,787) 6,786,199 165,807,058 174,021,334 156,505,200 151,178,784 153,172,571 146,386,372 188,245,334 165,807,058 174,021,334 156,505,200 151,178,784 153,172,571 23,484,303$ 37,102,953$ 20,888,795$ 31,801,513$ 31,462,059$ 23,148,143$ 88.91%81.71%89.28%83.11%82.77%86.87% 37,329,653$ 35,002,325$ 34,592,775$ 32,154,219$ 31,733,576$ 30,517,749$ 62.91%106.00%60.38%98.90%99.14%75.85% 64 Measurement Date December 31,2023 2022 2021 2020 Total pension liability Service cost 1,544,222$ 1,502,892$ 1,358,902$ 1,319,322$ Interest on total pension liability 5,379,013 5,190,339 5,025,963 4,927,332 Difference between expected and actual experience (1,499,979) - 418,613 - Change of assumptions - - 1,797,510 - Benefit payments/refunds of contributions (4,140,150) (4,050,255) (4,438,973) (5,347,971) Net Change in Total Pension Liability 1,283,106 2,642,976 4,162,015 898,683 Total Pension Liability, Beginning 74,756,101 72,113,125 67,951,110 67,052,427 Total Pension Liability, Ending (a)76,039,207$ 74,756,101$ 72,113,125$ 67,951,110$ Plan fiduciary net position Contributions - employer 1,535,519$ 1,430,034$ 1,427,262$ 1,598,510$ Contributions - employee 1,554,821 1,418,115 1,353,092 1,542,522 Net investment income 7,198,471 (9,922,915) 6,056,575 6,054,747 Benefit payments/refunds of contributions (4,214,092) (4,050,255) (4,594,351) (5,347,971) Administrative expenses (108,480) (59,160) (103,775) (56,747) Net Change in Fiduciary Position 5,966,239 (11,184,181) 4,138,803 3,791,061 Fiduciary Net Position, Beginning 48,657,512 59,841,693 55,702,890 51,911,829 Fiduciary Net Position, Ending (b)54,623,751 48,657,512 59,841,693 55,702,890 Net pension liability = (a)-(b)21,415,456$ 26,098,589$ 12,271,432$ 12,248,220$ Fiduciary Net Position as a Percentage of Total Pension Liability 71.84%65.09%82.98%81.97% Covered Payroll 10,722,898$ 10,243,797$ 10,002,400$ 11,426,089$ Net Pension Liability as a Percentage of Covered Payroll 199.72%254.77%122.68%107.20% CITY OF PORT ARTHUR, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2024 FIREMAN'S RETIREMENT AND RELIEF FUND SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS 65 2019 2018 2017 2016 2015 2014 1,604,333$ 1,550,080$ 1,328,109$ 1,277,028$ 1,227,912$ 1,135,274$ 5,040,983 4,880,344 4,726,407 4,570,090 4,538,278 4,361,915 (1,819,353) - 608,357 - (1,688,498) - (1,329,486) - 3,106,451 - 319,715 - (4,105,648) (4,579,981) (3,420,300) (4,468,162) (3,629,578) (3,141,024) (609,171) 1,850,443 6,349,024 1,378,956 767,829 2,356,165 67,661,598 65,811,155 59,462,131 58,083,175 57,315,346 54,959,181 67,052,427$ 67,661,598$ 65,811,155$ 59,462,131$ 58,083,175$ 57,315,346$ 1,337,739$ 1,312,042$ 1,305,185$ 1,144,440$ 1,191,115$ 1,196,979$ 1,285,373 1,216,925 1,220,809 1,129,526 1,071,786 1,040,193 8,708,854 (3,027,141) 6,708,286 2,891,821 (189,839) 3,101,018 (4,105,648) (4,579,981) (3,420,300) (4,468,162) (3,629,578) (3,141,024) (81,634) (45,303) (59,039) (31,893) (59,741) (45,014) 7,144,684 (5,123,458) 5,754,941 665,732 (1,616,257) 2,152,152 44,767,145 49,890,603 44,135,662 43,469,930 45,086,187 42,934,035 51,911,829 44,767,145 49,890,603 44,135,662 43,469,930 45,086,187 15,140,598$ 22,894,453$ 15,920,552$ 15,326,469$ 14,613,245$ 12,229,159$ 77.42%66.16%75.81%74.22%74.84%78.66% 9,521,281$ 9,194,408$ 9,410,130$ 8,257,143$ 8,243,010$ 8,006,548$ 159.02%249.00%169.19%185.61%177.28%152.74% 66 Fiscal Year Ended September 30,2024 2023 2022 2021 Actuarially determined contribution 6,764,458$ 6,223,880$ 5,723,340$ 5,573,847$ Contributions in relation to the actuarially determined contribution 6,764,458 6,223,880 5,723,340 5,573,847 Contribution deficiency (excess)- - - - Covered payroll 46,409,378 45,089,411 41,709,619 40,183,472 Contributions as a percentage of covered payroll 14.58%13.80%13.72%13.87% Valuation Date: Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Entry age normal Amortization method Level percentage of payroll, closed Remaining amortization period 22 years (longest amortization ladder)Asset valuation method 10 years smoothed market; 12% soft corridor Inflation 2.50% Salary increases 3.50% to 11.85% including inflation Investment rate of return 6.75% Retirement age Mortality Other information There were no benefit changes during the year. TEXAS MUNICIPAL RETIREMENT SYSTEM SCHEDULE OF EMPLOYER CONTRIBUTIONS CITY OF PORT ARTHUR, TEXAS 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 2019-2022. Post-retirement:2019 Municpal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. Pre-retirement: PUB(10) mortality tables, with the Public Safety table used for males and the General Employee table used for females. The rates are projected on a fully generational basis with scale UMP. NOTES TO SCHEDULE OF CONTRIBUTIONS Actuarially determined contribution rates are calculated as of December 31st and become effective on January 1st, 13 months and a day later. FOR THE YEAR ENDED SEPTEMBER 30, 2024 67 2020 2019 2018 2017 2016 2015 5,411,236$ 5,213,199$ 4,823,114$ 4,643,439$ 4,599,064$ 4,481,542$ 5,411,236 5,213,199 4,823,114 4,643,439 4,599,064 4,481,542 - - - - - - 39,343,928 36,971,985 34,558,338 34,078,521 33,419,760 31,264,119 13.75%14.10%13.96%13.63%13.76%14.33% NOTES TO SCHEDULE OF CONTRIBUTIONS 68 Fiscal Year Ended September 30,2024 2023 2022 2021 Actuarially determined contribution 1,679,632$ 1,500,959$ 1,416,371$ 1,441,868$ Contributions in relation to the actuarially determined contribution 1,679,632 1,500,959 1,416,371 1,441,868 Contribution deficiency (excess)- - - - Covered payroll 10,722,898 10,243,797 10,002,400 10,175,424 Contributions as a percentage of covered payroll 15.66%14.65%14.16%14.17% Valuation Date: Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Retirement age Mortality Other information There were no benefit changes during the year. 5 year smoothed market; 20% fair value corridor 2.75% plus promotion, step and longevity increases that vary by service 7.25%, net of investment-related expenses, including inflation Experience-based table of rates that are specific to the FRRF PubS-2010 (public safety) total dataset tables for employees and for retirees (sex distinct), projected for mortality improvement generationally using the projection scale MP- 2019 CITY OF PORT ARTHUR, TEXAS 19 years 2.75% FOR THE YEAR ENDED SEPTEMBER 30, 2024 FIREMAN'S RETIREMENT AND RELIEF FUND SCHEDULE OF EMPLOYER CONTRIBUTIONS Actuarially determined contribution rates are calculated as of December 31st and become effective on January 1st, 13 months and a day later. NOTES TO SCHEDULE OF CONTRIBUTIONS Entry age normal Level percentage of payroll, closed 69 2020 2019 2018 2017 2016 2015 1,510,658$ 1,326,889$ 1,301,784$ 1,283,320$ 1,159,491$ 1,144,180$ 1,510,658 1,326,889 1,301,784 1,283,320 1,159,491 1,144,180 - - - - - - 10,752,013 9,444,050 9,392,383 9,248,611 8,273,696 7,847,599 14.05%14.05%13.86%13.88%14.01%14.58% 70 Measurement Date December 31,2023 2022 2021 2020 Total OPEB liability Service cost 59,088$ 123,986$ 109,009$ 87,230$ Interest on total OPEB liability 88,137 54,955 59,389 71,411 Differences in actuarial experience (3,600) 114,321 (157,546) (108,570) Change of assumptions 121,842 (985,097) 77,777 366,622 Benefit payments (95,449) (76,957) (80,747) (29,077) Net change in total OPEB liability 170,018 (768,792) 7,882 387,616 Total OPEB liability, beginning 2,194,404 2,963,196 2,955,314 2,567,698 Total OPEB liability, ending (a)2,364,422$ 2,194,404$ 2,963,196$ 2,955,314$ Covered-employee payroll 45,452,023$ 42,753,707$ 40,373,669$ 41,538,329$ Total OPEB liability as a percentage of covered-employee payroll 5.20%5.13%7.34%7.11% Valuation Date: Methods and Assumptions Used to Determine Contribution Rates: Inflation Salary increases Discount rate Administrative expenses Mortality rates - service retirees Mortality rates - disabled retirees Other information 3.50% to 11.85% including inflation 2.50% FOR THE YEAR ENDED SEPTEMBER 30, 2024 Note: 10 years of data is required to be provided in this schedule. As of year-end, all years are not available. Additional years will be added in the future as the information becomes available. Actuarially determined contribution rates are calculated as of December 31st and become effective on January 1st, 13 months and a day later. NOTES TO SCHEDULE CITY OF PORT ARTHUR, TEXAS SCHEDULE OF CHANGES IN TOTAL OTHER POST-EMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS SUPPLEMENTAL DEATH BENEFITS FUND 3.77% 2019 Municipal Retirees of Texas Mortality Tables. The rates are projected on a fully generational basis with scale UMP. All administrative expenses are paid through the Pension Trust and accounted for under reporting requirements under GASB Statement No. 68. The actuarial assumptions used in the December 31, 2023 valuation were based on the results of an actuarial experience study for the period December 31, 2019 to December 31, 2022. 2019 Municipal Retirees of Texas Mortality Tables with a 4 year setforward 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. 71 2019 2018 2017 59,727$ 59,504$ 51,889$ 84,031 75,670 76,133 (176,781) 15,111 - 378,674 (144,444) 167,992 (26,131) (28,002) (27,674) 319,520 (22,161) 268,340 2,248,178 2,270,339 2,001,999 2,567,698$ 2,248,178$ 2,270,339$ 37,329,653$ 35,002,325$ 34,592,775$ 6.88%6.42%6.56% 3.50% to 11.85% including inflation 72 Measurement Date December 31,2023 2022 2021 2020 Total OPEB liability Service cost 184,084$ 129,127$ 144,667$ 246,403$ Interest on total OPEB liability 794,925 719,313 964,959 928,396 Change of benefit terms - - - - Difference in actuarial experience (534,847) 1,218,662 (3,572,789) 304,837 Change of assumptions 761,651 - 6,072 - Benefit payments 131,023 (1,993,671) (634,940) (1,097,600) Net change in total OPEB liability 1,336,836 73,431 (3,092,031) 382,036 Total OPEB liability, beginning 12,072,055 11,998,624 15,090,655 14,708,619 Total OPEB liability, ending (a)13,408,891$ 12,072,055$ 11,998,624$ 15,090,655$ Plan fiduciary net position Contributions - employer (131,023)$ 1,993,671$ 634,940$ 1,097,600$ Net investment income 583,565 (707,946) 539,641 442,495 Administrative expenses (24,730) (25,127) (26,859) (22,174) Benefit payments 131,023 (1,993,671) (634,940) (1,097,600) Other - - - - Net change in total OPEB liability 558,835 (733,073) 512,782 420,321 Fiduciary Net Position, Beginning 4,050,487 4,783,560 4,270,778 3,850,457 Fiduciary Net Position, Ending (b)4,609,322 4,050,487 4,783,560 4,270,778 Net OPEB liability = (a)-(b)8,799,569$ 8,021,568$ 7,215,064$ 10,819,877$ Covered payroll 18,492,312$ 17,391,509$ 17,171,791$ 20,800,061$ Fiduciary net position as a percentage of total OPEB liability 34.38%33.55%39.87%28.30% Net OPEB liability as a percentage of covered payroll 47.59%46.12%42.02%52.02% SCHEDULE OF CHANGES IN CITY RETIREE HEALTH OTHER POST-EMPLOYMENT BENEFIT CITY OF PORT ARTHUR, TEXAS Note:10 years of data is required to be provided in this schedule.As of year-end,all years are not available. Additional years will be added in the future as the information becomes available. FOR THE YEAR ENDED SEPTEMBER 30, 2024 LIABILITY AND RELATED RATIOS 73 2019 2018 2017 178,983$ 151,894$ 151,894$ 585,138 494,056 503,247 4,275,922 - - 792,683 1,737,800 - 528,643 - - (1,130,775) (861,283) (731,801) 5,230,594 1,522,467 (76,660) 9,478,025 7,955,558 8,032,218 14,708,619$ 9,478,025$ 7,955,558$ 1,130,775$ 861,283$ 1,331,801$ 632,494 (164,971) 404,639 (20,837) (19,989) (18,594) (1,130,775) (861,283) (731,801) - (600,000) - 611,657 (784,960) 986,045 3,238,800 4,023,760 3,037,715 3,850,457 3,238,800 4,023,760 10,858,162$ 6,239,225$ 3,931,798$ 26,822,207$ 23,151,876$ 23,182,377$ 26.18%34.17%50.58% 40.48%26.95%16.96% 74 Valuation Date:December 31, 2021 Methods and Assumptions Used to Determine Contribution Rates: Actuarial cost method Method Individual Entry Age Normal Discount rate 6.50% as of December 31, 2022 Inflation 2.50% Salary increases TMRS: 3.50% to 11.50%, including inflation FRRF: 2.75% to 7.89%, including inflation Demographic assumptions Mortality Participation rates Years of Years of Participation Participation Spousal Service Service Assumption Assumption Coverage < 20 < 20 0%0%0% 20 - 24 20 - 24 30%30%0% 25 - 29 25 - 29 45%45%10% 30 +30 +60%60%355 Health care trend rates TMRS: For healthy retirees,the gender-distinct 2019 Municipal Retirees of Texas mortality tables are used. The rates are projected on a fully generational basis using the ultimate mortality improvement rates in the MP tables published through 2019 to account for future mortality improvements. FRRF:The PubS-2010 for employees and retirees, projected for mortality improvement generationally using the projection scale MP-2019, with separate rates for males and females. In addition to the rates below,90%of members retiring after the age of 65 (regardless of service) are assumed to participate in the City's Medicare Advantage plan. For members retiring with coverage prior to age 65, 10%are assumed to discontinue coverage at age 65. Pre-65: Initial rates of 7.00% declining to ultimate rates of 4.15% after 13 years. Post-65: Initial rates of 5.50% declining to ultimate rates of 4.15% after 12 years. CITY OF PORT ARTHUR, TEXAS SCHEDULE OF CHANGES IN CITY RETIREE HEALTH OTHER POST-EMPLOYMENT BENEFIT LIABILITY AND RELATED RATIOS FOR THE YEAR ENDED SEPTEMBER 30, 2024 NOTES TO SCHEDULE TMRS: Based on the experience study covering the four-year period ending December 31, 2018 as conducted for the Texas Municipal Retirement System (TMRS) FRRF: Based on the December 31, 2021 pension actuarial valuation report. 75 SUPPLEMENTARY INFORMATION Combining Statements and Individual Fund Schedules - Nonmajor Governmental Funds Health Grants Fund – Accounts for grants received from the State of Texas to provide health care services. Library Special Fund -Accounts for donations received by the City's public library. These revenues are set aside for the library's use. Library Grant Fund - Accounts for various State and local grants received by the Public Library. Golf Course Fund - Accounts for funds derived from the operation of the Babe Zaharias public golf course. These funds are designated for improvements to this golf course, and for operations at the Palms on Pleasure Island Course. Municipal Court Technology Fund - Accounts for funds received from a portion of municipal court fines dedicated, by State law, to technology acquisition for the court. CDBG Fund - Accounts for revenues received from the Federal Community Development Block Grant program. CDBG – GLO Fund - Accounts for funds received to cover infrastructure projects for Hurricane Ike disaster recovery. HOME Grant Fund - Accounts for grants received from the federal government, passed through the State of Texas, under the HOME program. TCEQ SEP Fund - Accounts for funds received from industry for Supplemental Environmental Projects (SEP) through the Texas Commission of Environmental Quality (TCEQ). Brown Field Grant Fund - Accounts for funds received for Brown Field inventories, planning, environmental assessments, and community outreach. Job Training Fund - Accounts for funds received from the National Institute of Environmental Health, Katrina and Rita Brown Field Minority Worker Training Program. Revolving Loan Fund - Accounts for the proceeds from repayments of loans made from Community Development Block Grant Funds and City Revolving Loan Fund contributions. These funds are restricted for additional loans to stimulate job development by the small business sector of the City’s economy. FEMA Fund - Accounts for disaster recovery grants received from the Federal Emergency Management Administration (FEMA) for City incurred costs relating to Hurricanes Ike and Harvey. Literacy Support Fund - Accounts for donations received by the Port Arthur Literacy Support Program. Police Special Fund - Accounts for assets seized by the City's police department as the result of drug enforcement arrests. These assets are forfeited to the City to be used to fund specific types of expenditures for the police department. Law Enforcement Grants Fund - Accounts for federal funds received under the Local Law Enforcement Block Grant. THIS PAGE LEFT BLANK INTENTIONALLY Housing Programs Fund - Accounts for funds designated by the City of Port Arthur and the Port Arthur Housing Finance Corporation. These funds are used to finance programs providing affordable housing in the City. Disaster Recovery Housing Fund - Accounts for funds designed to administer resources so that citizens may apply for funding and are provided technical assistance guiding them through the housing process. Social Services Block Grant Fund - Accounts for the funds received under the Social Services Block Grant program for Hurricane Rita recovery projects. Neighborhood Stabilization Fund - Accounts for funds received from the Department of Housing and Urban Development through the Texas Department of Housing and Rural Affairs for community stabilization efforts. Weed and Seed Fund - Accounts for funds received through the United States Department of Justice Weed and Seed program. Hotel Occupancy Tax Fund - will account for proceeds of hotel occupancy taxes to be used strictly for those kinds of programs that promote the tourism industry. Downtown Renaissance Board Fund - Accounts for funds dedicated to downtown redevelopment activities. Assessment Projects Fund - Accounts for special assessments levied on property owners. Library Trust Fund - Accounts for trust revenues received and related interest income. Street Maintenance Fund - Accounts for sales tax revenues restricted for street maintenance activities. Gaming Fund - Used to account for permitting, investigation, regulation, and law enforcement of gaming activities in the City. Homeowner Buyer REH Assistance Fund - Accounts for funds received to administer resources to citizens that apply for funding and provide technical assistance, guiding them through the home buying process. TIRZ Fund - The TIRZ were created to attract new business to the area and help finance costs of redevelopment and promote growth. Taxes attributable to new improvements (increments) are set aside to finance public improvements within the boundaries of the zone. Texas Parks and Wildlife Grant Fund - Accounts for funds received for the purpose of building parks, conserving natural resources, preserving historical sites, or providing access to water bodies. COVID-19 Fund - Used to account for authorized federal disaster support and activities which enabled the City to support the public health response and lay the foundation for an economic recovery during and after the Covid-19 pandemic. Hurricane Laura Fund - Used to account for authorized federal disaster support and activities such as those that provided emergency protection, debris removal, and the repair and restoration of qualified disaster- damaged public infrastructure as a result of Hurricane Laura. Hurricane Delta Fund - Used to account for authorized federal disaster support and activities such as those that provided emergency protection, debris removal, and the repair and restoration of qualified disaster- damaged public infrastructure as a result of Hurricane Delta. Winter Storm Fund - Used to account for authorized federal disaster support and activities such as those that provided emergency protection, debris removal, and the repair and restoration of qualified disaster- damaged public infrastructure as a result of the Texas Winter Storm. CDBG Buy Out Fund - Accounts for revenues received from the Federal Community Development Block Grant – Buy Out program. TxDot - is used to account for the resources and payments made for the Texas Department of Transportation state grant. THIS PAGE LEFT BLANK INTENTIONALLY Opioid Settlement - is used to account for the resources and payments made due to settlement agreements with different companies with the state of Texas to resolve legal claims against them for their role in the opioid crisis. Transit System Fund - is used to account for revenues and expenditures relating to the City’s bus system. Health Grants Library Library Grants Golf Course Fund Special Fund Fund Fund ASSETS Cash and cash equivalents -$ 159,324$ 34,365$ 105,760$ Accounts receivable, net of allowance Accounts and other - - - - Due from other governments 626,970 - - - Due from other funds - - - - Inventory - - - - Total Assets 626,970 159,324 34,365 105,760 LIABILITIES Accounts payable 51,348 - - 4,050 Accrued liabilities 118,080 - - - Due to other funds 272,582 - - - Total Liabilities 442,010 - - 4,050 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - other 184,960 - - - Total Deferred Inflows of Resources 184,960 - - - FUND BALANCES Restricted for: Capital improvements - - - - Community development - - - - Culture and recreation - 159,324 34,365 101,710 Public safety - - - - Unassigned - - - - Total Fund Balances - 159,324 34,365 101,710 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 626,970$ 159,324$ 34,365$ 105,760$ Special Revenue Funds CITY OF PORT ARTHUR, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2024 76 Municipal Court Technology CDBG-GLO Home Grant TCEQ SEP Brown Field Job Training Fund CDBG Fund Fund Fund Fund Grant Fund Fund 310,068$ 89,660$ 1,041,365$ -$ 1,941$ -$ 53,007$ - - - - - - - - - - - - - - - - - 91,868 - - - - - - - - - - 310,068 89,660 1,041,365 91,868 1,941 - 53,007 9,000 64,240 - 91,868 - - - - 13,408 - - - - - - 12,012 - - - - - 9,000 89,660 - 91,868 - - - - - - - - - - - - - - - - - - - - - - - - - - 1,041,365 - 1,941 - 53,007 - - - - - - - 301,068 - - - - - - - - - - - - - 301,068 - 1,041,365 - 1,941 - 53,007 310,068$ 89,660$ 1,041,365$ 91,868$ 1,941$ -$ 53,007$ Special Revenue Funds 77 Revolving Literacy Police Special Loan Fund FEMA Support Fund Fund ASSETS Cash and cash equivalents 329,866$ -$ 7,971$ 600,339$ Accounts receivable, net of allowance Accounts and other - - - - Due from other governments - - - - Due from other funds - - - - Inventory - - - - Total Assets 329,866 - 7,971 600,339 LIABILITIES Accounts payable - 3,488 - - Accrued liabilities - 1,962 - 232,170 Due to other funds - 518,123 - - Total Liabilities - 523,573 - 232,170 DEFERRED INFLOWS OF RESOURCES Unavailable revenues - other - - - - Total Deferred Inflows of Resources - - - - FUND BALANCES Restricted for: Capital improvements - - - - Community development 329,866 - - - Culture and recreation - - 7,971 - Public safety - - - 368,169 Unassigned - (523,573) - - Total Fund Balances 329,866 (523,573) 7,971 368,169 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 329,866$ -$ 7,971$ 600,339$ Special Revenue Funds SEPTEMBER 30, 2024 NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET CITY OF PORT ARTHUR, TEXAS 78 Law Disaster Social Neighborhood Hotel Enforcement Housing Recovery Services Block Stabilization Weed and Occupancy Grants Fund Programs Fund Housing Fund Grant Fund Fund Seed Fund Tax Fund -$ 303,204$ 66,890$ 320,539$ -$ 1,514$ 3,220,856$ - 3,781 - - - - 337,683 - - - 4,548 - - - 30,800 - - - - - - - - - - - - - 30,800 306,985 66,890 325,087 - 1,514 3,558,539 30,800 563 - - - - 90,209 - - - - - - - - - - - - - - 30,800 563 - - - - 90,209 - - - - - - - - - - - - - - - - - - - - - - 306,422 66,890 325,087 - 1,514 3,468,330 - - - - - - - - - - - - - - - - - - - - - - 306,422 66,890 325,087 - 1,514 3,468,330 30,800$ 306,985$ 66,890$ 325,087$ -$ 1,514$ 3,558,539$ Special Revenue Funds 79 Downtown Street Renaissance Assessment Library Trust Maintenance Board Fund Projects Fund Fund Fund ASSETS Cash and cash equivalents 202,222$ 22,918$ 30,769$ 182,465$ Accounts receivable, net of allowance Accounts and other - - - - Due from other governments - - - - Due from other funds - - - - Inventory - - - - Total Assets 202,222 22,918 30,769 182,465 LIABILITIES Accounts payable - - - - Accrued liabilities - - - - Due to other funds - - - - Total Liabilities - - - - DEFERRED INFLOWS OF RESOURCES Unavailable revenues - other - - - - Total Deferred Inflows of Resources - - - - FUND BALANCES Restricted for: Capital improvements - 22,918 - 182,465 Community development 202,222 - - - Culture and recreation - - 30,769 - Public safety - - - - Unassigned - - - - Total Fund Balances 202,222 22,918 30,769 182,465 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 202,222$ 22,918$ 30,769$ 182,465$ CITY OF PORT ARTHUR, TEXAS Special Revenue Funds SEPTEMBER 30, 2024 NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET 80 Homeowner Texas Parks COVID-19 Buyer REH and Wildlife Pandemic Hurricane Hurricane Gaming Fund Asst Fund TIRZ Fund Grant Fund Fund Laura Fund Delta Fund 825,944$ -$ 87,382$ 20,810$ -$ -$ -$ - - - - - - - - - - - - 19,520 - - - - - - - - - - - - - - - 825,944 - 87,382 20,810 - 19,520 - - - - 1,399 - - - 5,697 - - - - - - - - 3,742 19,411 - - - 5,697 - 3,742 20,810 - - - - - - - - 19,520 - - - - - - 19,520 - - - - - - - - - - 83,640 - - - - - - - - - - - 820,247 - - - - - - - - - - - - - 820,247 - 83,640 - - - - 825,944$ -$ 87,382$ 20,810$ -$ 19,520$ -$ Special Revenue Funds 81 Winter CDBG Buy Opioid Storm Out Fund TxDOT Settlement ASSETS Cash and cash equivalents -$ -$ 2,256,757$ 137,977$ Accounts receivable, net of allowance Accounts and other - - - - Due from other governments - - - - Due from other funds - - - - Inventory - - - - Total Assets - - 2,256,757 137,977 LIABILITIES Accounts payable - - - - Accrued liabilities - - - - Due to other funds - - - - Total Liabilities - - - - DEFERRED INFLOWS OF RESOURCES Unavailable revenues - other - - - - Total Deferred Inflows of Resources - - - - FUND BALANCES Restricted for: Capital improvements - - 2,256,757 137,977 Community development - - - - Culture and recreation - - - - Public safety - - - - Unassigned - - - - Total Fund Balances - - 2,256,757 137,977 Total Liabilities, Deferred Inflows of Resources, and Fund Balances -$ -$ 2,256,757$ 137,977$ Special Revenue Funds SEPTEMBER 30, 2024 NONMAJOR GOVERNMENTAL FUNDS COMBINING BALANCE SHEET CITY OF PORT ARTHUR, TEXAS 82 Special Revenue Funds Total Nonmajor Transit Governmental System Funds 600$ 10,414,513$ - 341,464 1,054,252 1,705,290 - 122,668 60,902 60,902 1,115,754 12,644,837 118,583 465,548 91,252 462,569 3,265,833 4,091,703 3,475,668 5,019,820 897,690 1,102,170 897,690 1,102,170 - 2,600,117 - 5,880,284 - 334,139 - 1,489,484 (3,257,604) (3,781,177) (3,257,604) 6,522,847 1,115,754$ 12,644,837$ 83 Health Grants Library Library Grants Golf Course Fund Special Fund Fund Fund REVENUES Property taxes -$ -$ -$ -$ Sales taxes - - - - Licenses and permits - - - - Charges for services - - 3,319 15,262 Fines and forfeitures - - - - Intergovernmental 3,070,510 - - - Investment earnings - 9,843 - 7,560 Miscellaneous 20,540 2,567 - - Total Revenues 3,091,050 12,410 3,319 22,822 EXPENDITURES Current: General government - - - - Culture and recreation - - - - Public safety - - - - Community development - - - - Health and welfare 3,459,633 - - - Public transportation - - - - Capital outlay - - - 81,081 Total Expenditures 3,459,633 - - 81,081 Excess (Deficiency) of Revenue Over Expenditures (368,583) 12,410 3,319 (58,259) OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - - - Insurance proceeds - - - - Transfer in 821,183 - - 50,000 Transfers out - - - - Total Other Financing Sources (Uses)821,183 - - 50,000 NET CHANGE IN FUND BALANCES 452,600 12,410 3,319 (8,259) FUND BALANCES - BEGINNING, AS PREVIOUSLY PRESENTED (452,600) 146,914 31,046 109,969 ADJUSTMENTS Formerly a nonmajor fund - - - - Formerly a major fund - - - - FUND BALANCES - BEGINNING, AS RESTATED (452,600) 146,914 31,046 109,969 FUND BALANCES - ENDING -$ 159,324$ 34,365$ 101,710$ Special Revenue Funds CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 84 Municipal CDBG- Court Disaster Technology CDBG-GLO Recovery Home Grant TCEQ SEP Brown Field Fund CDBG Fund Fund Program Fund Fund Fund Grant Fund -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - - - - - 881,305 - 471,809 - - 10,999 - - - 71 - - - - 188,417 - - 10,999 881,305 - 660,226 71 - 9,000 - - - - - - - - - - - - - - - - - - 1,063,263 - 856,637 - - - - - - - - - - - - - - - - - - - - 9,000 1,063,263 - 856,637 - - 1,999 (181,958) - (196,411) 71 - - - - - - - - - - - - - - 1,315,166 - 266,340 - - - - - - - - - 1,315,166 - 266,340 - - 1,999 1,133,208 - 69,929 71 - 299,069 (1,133,208) 1,041,365 (765,760) (69,929) 1,870 - - - - 765,760 - - - - - - - - - - 299,069 (1,133,208) 1,041,365 - (69,929) 1,870 - 301,068$ -$ 1,041,365$ -$ -$ 1,941$ -$ Special Revenue Funds 85 Job Training Revolving Literacy Fund Loan Fund FEMA Support Fund REVENUES Property taxes -$ -$ -$ -$ Sales taxes - - - - Licenses and permits - - - - Charges for services - - - - Fines and forfeitures - - - - Intergovernmental - - 799,712 - Investment earnings - 428 - - Miscellaneous - 5,653 - - Total Revenues - 6,081 799,712 - EXPENDITURES Current: General government - - - - Culture and recreation - - - - Public safety - - - - Community development - - 9,113 - Health and welfare - - - - Public transportation - - - - Capital outlay - - - - Total Expenditures - - 9,113 - Excess (Deficiency) of Revenue Over Expenditures - 6,081 790,599 - OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - - - Insurance proceeds - - - - Transfer in - - - - Transfers out - - - - Total Other Financing Sources (Uses)- - - - NET CHANGE IN FUND BALANCES - 6,081 790,599 - FUND BALANCES - BEGINNING, AS PREVIOUSLY PRESENTED 53,007 323,785 (1,314,172) 7,971 ADJUSTMENTS Formerly a nonmajor fund - - - - Formerly a major fund - - - - FUND BALANCES - BEGINNING, AS RESTATED 53,007 323,785 (1,314,172) 7,971 FUND BALANCES - ENDING 53,007$ 329,866$ (523,573)$ 7,971$ Special Revenue Funds CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 86 Law Disaster Social Neighborhood Hotel Police Special Enforcement Housing Recovery Services Block Stabilization Weed and Fund Grants Fund Programs Fund Housing Fund Grant Fund Fund Seed Fund -$ -$ -$ -$ -$ -$ -$ - - - - - - - - - - - - - - - - - - - - - 25,257 - - - - - - - 148,541 - - - - - 28,540 - - - - - - - 71,894 430 - - - - 53,797 220,435 430 - - - - - - - - - - - - - - - - - - 1,226 192,519 - - - - - - - - - - - - - - - - - - - - - - - - - - - 39,000 - - - - - 1,226 231,519 - - - - - 52,571 (11,084) 430 - - - - - - - - - - - - - - - - - - - 53,846 - - - - - - - - - - (54,568) - - 53,846 - - - (54,568) - 52,571 42,762 430 - - (54,568) - 315,598 (42,762) 305,992 66,890 325,087 54,568 1,514 - - - - - - - - - - - - - - 315,598 (42,762) 305,992 66,890 325,087 54,568 1,514 368,169$ -$ 306,422$ 66,890$ 325,087$ -$ 1,514$ Special Revenue Funds 87 Downtown Occupancy Renaissance Assessment Library Trust Tax Fund Board Fund Projects Fund Fund REVENUES Property taxes -$ -$ -$ -$ Sales taxes 2,113,306 - - - Licenses and permits - - - - Charges for services - - - - Fines and forfeitures - - - - Intergovernmental - - - - Investment earnings 190,058 - - 1,921 Miscellaneous - - - - Total Revenues 2,303,364 - - 1,921 EXPENDITURES Current: General government - - - - Culture and recreation 2,032,689 - - - Public safety - - - - Community development - - - - Health and welfare - - - - Public transportation - - - - Capital outlay - - - - Total Expenditures 2,032,689 - - - Excess (Deficiency) of Revenue Over Expenditures 270,675 - - 1,921 OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - - - Insurance proceeds - - - - Transfer in - - - - Transfers out (120,000) - - - Total Other Financing Sources (Uses)(120,000) - - - NET CHANGE IN FUND BALANCES 150,675 - - 1,921 FUND BALANCES - BEGINNING, AS PREVIOUSLY PRESENTED 3,317,655 202,222 22,918 28,848 ADJUSTMENTS Formerly a nonmajor fund - - - - Formerly a major fund - - - - FUND BALANCES - BEGINNING, AS RESTATED 3,317,655 202,222 22,918 28,848 FUND BALANCES - ENDING 3,468,330$ 202,222$ 22,918$ 30,769$ Special Revenue Funds CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 88 Street Homeowner Texas Parks Hazard COVID-19 Maintenance Buyer REH and Wildlife Mitigation Pandemic Fund Gaming Fund Asst Fund TIRZ Fund Grant Fund Grant Fund Fund -$ -$ -$ -$ -$ -$ - - - - - - - 237,235 - - - - - - - - - - - - - - - - - - - - 276,552 82,711 - - - - - - - - - 43,350 - - - 237,235 - 43,350 276,552 82,711 - 488,622 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 17,291 - - 488,622 - - 17,291 - - (251,387) - 43,350 259,261 82,711 - - - - - - - - - - - - - - 259,302 44,600 579,003 308,441 - (332,300) - - - - - (332,300) 259,302 44,600 579,003 308,441 - (583,687) 259,302 87,950 838,264 391,152 182,465 1,403,934 (259,302) (4,310) (838,264) (3,897,934) (391,152) - - - - - 3,897,934 - - - - - - - - 182,465 1,403,934 (259,302) (4,310) (838,264) - (391,152) 182,465$ 820,247$ -$ 83,640$ -$ -$ -$ Special Revenue Funds 89 Hurricane Hurricane Winter CDBG Buy Laura Fund Delta Fund Storm Out Fund REVENUES Property taxes -$ -$ -$ -$ Sales taxes - - - - Licenses and permits - - - - Charges for services - - - - Fines and forfeitures - - - - Intergovernmental 46,520 - - - Investment earnings - - - - Miscellaneous - - - - Total Revenues 46,520 - - - EXPENDITURES Current: General government - - - - Culture and recreation - - - - Public safety - - - - Community development - - - - Health and welfare - - - - Public transportation - - - - Capital outlay - - - - Total Expenditures - - - - Excess (Deficiency) of Revenue Over Expenditures 46,520 - - - OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - - - Insurance proceeds - - - - Transfer in 1,326,302 919,455 461,700 90 Transfers out - - - - Total Other Financing Sources (Uses)1,326,302 919,455 461,700 90 NET CHANGE IN FUND BALANCES 1,372,822 919,455 461,700 90 FUND BALANCES - BEGINNING, AS PREVIOUSLY PRESENTED (1,372,822) (919,455) (461,700) (90) ADJUSTMENTS Formerly a nonmajor fund - - - - Formerly a major fund - - - - FUND BALANCES - BEGINNING, AS RESTATED (1,372,822) (919,455) (461,700) (90) FUND BALANCES - ENDING -$ -$ -$ -$ Special Revenue Funds CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 90 Total Nonmajor Opioid Transit Debt Service Governmental TxDOT Settlement System Fund Funds -$ -$ -$ -$ - - - 2,113,306 - - - 237,235 - - 155,571 174,152 - - - 25,257 1,805,476 22,471 1,874,267 9,479,874 - - - 249,420 - - 367 333,218 1,805,476 22,471 2,030,205 12,612,462 - - - 497,622 - - - 2,032,689 - - - 193,745 - - - 1,929,013 - - - 3,459,633 - - 2,410,670 2,410,670 - - 561,146 698,518 - - 2,971,816 11,221,890 1,805,476 22,471 (941,611) 1,390,572 - - 1,624 1,624 - - 13,748 13,748 - - 673,350 7,078,778 - - (159,000) (665,868) - - 529,722 6,428,282 1,805,476 22,471 (411,889) 7,818,854 451,281 115,506 - 18,173,066 15,059,080 - - - (18,173,066) (13,509,372) - - (2,845,715) - (2,845,715) 451,281 115,506 (2,845,715) - (1,296,007) 2,256,757$ 137,977$ (3,257,604)$ -$ 6,522,847$ Special Revenue Funds 91 Variance With Final Budget Positive Original Final Actual (Negative) REVENUES Property taxes 10,227,454$ 10,227,454$ 9,707,298$ (520,156)$ Intergovernmental 217,748 217,748 217,748 - Investment earnings 5,000 5,000 - (5,000) Total Revenues 10,450,202 10,450,202 9,925,046 (525,156) EXPENDITURES Debt service: Principal 9,740,526 9,595,005 6,347,320 3,247,685 Interest and fiscal charges 3,578,918 3,697,839 2,439,384 1,258,455 Bond issue costs - 26,600 296,452 (269,852) Total Expenditures 13,319,444 13,319,444 9,083,156 4,236,288 Excess of Revenues Over Expenditures (2,869,242) (2,869,242) 841,890 3,711,132 OTHER FINANCING SOURCES (USES) Premium on issuance of debt - - 294,302 294,302 Transfers in 3,444,242 3,444,242 4,000 (3,440,242) Transfers out - - (626,469) (626,469) Total Other Financing Sources (Uses)3,444,242 3,444,242 (328,167) (3,772,409) NET CHANGE IN FUND BALANCE 575,000 575,000 513,723 (61,277) FUND BALANCE - BEGINNING 18,173,066 18,173,066 18,173,066 - FUND BALANCE - ENDING 18,748,066$ 18,748,066$ 18,686,789$ (61,277)$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 92 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Investment earnings 6,000$ 6,000$ 9,843$ 3,843$ Miscellaneous 1,000 1,000 2,567 1,567 Total Revenues 7,000 7,000 12,410 5,410 NET CHANGE IN FUND BALANCE 7,000 7,000 12,410 5,410 FUND BALANCE - BEGINNING 146,914 146,914 146,914 - FUND BALANCE - ENDING 153,914$ 153,914$ 159,324$ 5,410$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL LIBRARY SPECIAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 93 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Charges for services 10,000$ 10,000$ 15,262$ 5,262$ Investment earnings 8,000 8,000 7,560 (440) Total Revenues 18,000 18,000 22,822 4,822 EXPENDITURESCapital outlay 100,000 100,000 81,081 18,919 Total Expenditures 100,000 100,000 81,081 18,919 Excess of Revenues Over Expenditures (82,000) (82,000) (58,259) 23,741 OTHER FINANCING SOURCES (USES) Transfers in 50,000 50,000 50,000 - Total Other Financing Sources (Uses)50,000 50,000 50,000 - NET CHANGE IN FUND BALANCE (32,000) (32,000) (8,259) 23,741 FUND BALANCE - BEGINNING 109,969 109,969 109,969 - FUND BALANCE - ENDING 77,969$ 77,969$ 101,710$ 23,741$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GOLF COURSE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 94 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Fines and forfeitures 3,000$ 3,000$ -$ (3,000)$ Investment earnings 13,000 13,000 10,999 (2,001) Total Revenues 16,000 16,000 10,999 (5,001) EXPENDITURES Current:General government 19,000 19,000 9,000 10,000 Total Expenditures 19,000 19,000 9,000 10,000 NET CHANGE IN FUND BALANCE (3,000) (3,000) 1,999 4,999 FUND BALANCE - BEGINNING 299,069 299,069 299,069 - FUND BALANCE - ENDING 296,069$ 296,069$ 301,068$ 4,999$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPEDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL MUNICIPAL COURT TECHNOLOGY FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 95 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Fines and forfeitures 6,000$ 6,000$ 25,257$ 19,257$ Investment earnings 16,500 16,500 28,540 12,040 Miscellaneous - - - - Total Revenues 22,500 22,500 53,797 31,297 EXPENDITURESCurrent: Public safety 157,500 157,500 1,226 156,274 Total Expenditures 157,500 157,500 1,226 156,274 NET CHANGE IN FUND BALANCE (135,000) (135,000) 52,571 187,571 FUND BALANCE - BEGINNING 315,598 315,598 315,598 - FUND BALANCE - ENDING 180,598$ 180,598$ 368,169$ 187,571$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL POLICE SPECIAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 96 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Sales taxes 1,900,200$ 1,900,200$ 2,113,306$ 213,106$ Investment earnings 125,000 125,000 190,058 65,058 Total Revenues 2,025,200 2,025,200 2,303,364 278,164 EXPENDITURES Current:Culture and recreation 2,083,777 2,083,777 2,032,689 51,088 Total Expenditures 2,083,777 2,083,777 2,032,689 51,088 Excess of Revenues Over Expenditures (58,577) (58,577) 270,675 329,252 OTHER FINANCING SOURCES (USES) Transfers out (120,000) (120,000) (120,000) - Total Other Financing Sources (Uses)(120,000) (120,000) (120,000) - NET CHANGE IN FUND BALANCE (178,577) (178,577) 150,675 329,252 FUND BALANCE - BEGINNING 3,317,655 3,317,655 3,317,655 - FUND BALANCE - ENDING 3,139,078$ 3,139,078$ 3,468,330$ 329,252$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL HOTEL OCCUPANCY TAX FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 97 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Sales taxes -$ -$ -$ -$ Total Revenues - - - - OTHER FINANCING SOURCES (USES) Transfers out - - - - Total Other Financing Sources (Uses)- - - - NET CHANGE IN FUND BALANCE - - - - FUND BALANCE - BEGINNING 182,465 182,465 182,465 - FUND BALANCE - ENDING 182,465$ 182,465$ 182,465$ -$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL STREET MAINTENANCE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 98 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Licenses and permits 350,000$ 350,000$ 237,235$ (112,765)$ Total Revenues 350,000 350,000 237,235 (112,765) EXPENDITURES Current:General government 437,405 437,405 488,622 (51,217) Total Expenditures 437,405 437,405 488,622 (51,217) Excess of Revenues Over Expenditures (87,405) (87,405) (251,387) (163,982) NET CHANGE IN FUND BALANCE (419,705) (419,705) (583,687) (163,982) FUND BALANCE - BEGINNING 1,403,934 1,403,934 1,403,934 - FUND BALANCE - ENDING 984,229$ 984,229$ 820,247$ (163,982)$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL GAMING FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 99 Variance With Final Budget PositiveOriginalFinalActual(Negative) REVENUES Miscellaneous 10,100$ 10,100$ 43,350$ 33,250$ Total Revenues 10,100 10,100 43,350 33,250 EXPENDITURES Current:Community development - - - - Total Expenditures - - - - Excess of Revenues Over Expenditures 10,100 10,100 43,350 33,250 OTHER FINANCING SOURCES (USES)Transfers in 44,600 44,600 44,600 - Transfers out (50,000) (50,000) - 50,000 Total Other Financing Sources (Uses)(5,400) (5,400) 44,600 50,000 NET CHANGE IN FUND BALANCE 4,700 4,700 87,950 83,250 FUND BALANCE - BEGINNING (4,310) (4,310) (4,310) - FUND BALANCE - ENDING 390$ 390$ 83,640$ 83,250$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL TIRZ FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 100 Variance With Final Budget Positive Original Final Actual (Negative) REVENUES Charges for services 114,500$ 114,500$ 155,571$ 41,071$ Intergovernmental 2,347,141 2,347,141 1,874,267 (472,874) Miscellaneous - - 367 367 Total Revenues 2,461,641 2,461,641 2,030,205 (431,436) EXPENDITURES Current: Public transportation 2,992,489 2,975,991 2,410,670 565,321 Capital outlay - - 561,146 (561,146) Total Expenditures 2,992,489 2,975,991 2,971,816 4,175 Excess of Revenues Over Expenditures (530,848) (514,350) (941,611) (427,261) OTHER FINANCING SOURCES (USES) Proceeds from sale of capital assets - - 1,624 1,624 Insurance proceeds - 7,611 13,748 6,137 Transfers in 673,350 673,350 673,350 - Transfers out (159,000) (159,000) (159,000) - Total Other Financing Sources (Uses)514,350 521,961 529,722 7,761 NET CHANGE IN FUND BALANCE (16,498) 7,611 (411,889) (419,500) FUND BALANCE - BEGINNING (2,845,715) (2,845,715) (2,845,715) - FUND BALANCE - ENDING (2,862,213)$ (2,838,104)$ (3,257,604)$ (419,500)$ Budgeted Amounts CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL TRANSIT FUND FOR THE YEAR ENDED SEPTEMBER 30, 2024 101 General Liability Equipment Insurance Employee Replacement Fund Benefits Fund Fund Total ASSETS Current assets: Cash and cash equivalents 1,020,882$ 12,817,567$ 4,699,271$ 18,537,720$ Accounts receivable, net of allowance 2,075 330,455 - 332,530 Total Current Assets 1,022,957 13,148,022 4,699,271 18,870,250 Noncurrent assets: Capital assets: Machinery and equipment - - 41,569,311 41,569,311 Right to use vehicles - - 2,573,227 2,573,227 Less: accumulated depreciation - - (30,462,330) (30,462,330) Total Noncurrent Assets - - 13,680,208 13,680,208 Total Assets 1,022,957 13,148,022 18,379,479 32,550,458 LIABILITIES Current liabilities: Accounts payable - 882,354 11,587 893,941 Current portion of long-term liabilities: Financed purchases - - 765,252 765,252 Leases - - 614,603 614,603 Total Current Liabilities - 882,354 1,391,442 2,273,796 Noncurrent liabilities: Financed purchases - - 3,268,471 3,268,471 Leases - - 1,203,875 1,203,875 Claims and judgements 229,229 409,603 - 638,832 Total Noncurrent Liabilities 229,229 409,603 4,472,346 5,111,178 Total Liabilities 229,229 1,291,957 5,863,788 7,384,974 NET POSITION Net investment in capital assets - - 7,828,007 7,828,007 Unrestricted 793,728 11,856,065 4,687,684 17,337,477 Total Net Position 793,728$ 11,856,065$ 12,515,691$ 25,165,484$ CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS SEPTEMBER 30, 2024 102 General Liability Equipment Insurance Employee Replacement Fund Benefits Fund Fund Total OPERATING REVENUES Charges for services -$ 12,016,998$ -$ 12,016,998$ Total Operating Revenues - 12,016,998 - 12,016,998 OPERATING EXPENSES Contractual services 3,615,475 11,700,346 - 15,315,821 Repairs and maintenance - - 178,790 178,790 Other expenses - 1,767,212 - 1,767,212 Depreciation and amortization - - 3,629,980 3,629,980 Total Operating Costs 3,615,475 13,467,558 3,808,770 20,891,803 - Operating Income (Loss)(3,615,475) (1,450,560) (3,808,770) (8,874,805) NON-OPERATING REVENUES (EXPENSES) Intergovernmental revenue 12,000 - - 12,000 Earnings on investments - - 272,725 272,725 Interest expense - - (194,555) (194,555) Total Non-Operating Revenues (Expenses)12,000 - 78,170 90,170 Gain (loss) before transfers (3,603,475) (1,450,560) (3,730,600) (8,784,635) Transfers in 3,674,000 - 6,576,700 10,250,700 CHANGE IN NET POSITION 70,525 (1,450,560) 2,846,100 1,466,065 NET POSITION - BEGINNING, AS PREVIOUSLY REPORTED 723,203 13,306,625 11,084,561 25,114,389 ADJUSTMENTS: Error corrections - - (1,414,970) (1,414,970) Total Adjustments - - (1,414,970) (1,414,970) NET POSITION - BEGINNING, AS RESTATED 723,203 13,306,625 9,669,591 23,699,419 NET POSITION - END OF YEAR 793,728$ 11,856,065$ 12,515,691$ 25,165,484$ CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 103 General Liability Equipment Insurance Employee Replacement Fund Benefits Fund Fund Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from interfund charges for services -$ 11,874,344$ -$ 11,874,344$ Cash paid to suppliers for goods and services (3,724,334) (13,712,044) (167,203) (17,603,581) Net Cash Provided By Operating Activities (3,724,334) (1,837,700) (167,203) (5,729,237) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Operating grants 12,000 - - 12,000 Transfers from other funds 3,674,000 - 6,576,700 10,250,700 Net Cash Used in Non-Capital Financing Activities 3,686,000 - 6,576,700 10,262,700 CASH FLOWS FROM CAPITAL & RELATED FINANCING ACTIVITIES Acquisition and construction of capital assets - - (3,126,104) (3,126,104) Interest paid on long-term debt - - (194,555) (194,555) Principal paid on long-term debt - - (1,263,654) (1,263,654) Net Cash Used in Capital and Related Financing Activities - - (4,584,313) (4,584,313) CASH FLOWS FROM INVESTING ACTIVITIES Interest and investment earnings - - 272,725 272,725 Net Cash Provided By (Used in) Investing Activities - - 272,725 272,725 Net (Decrease) Increase in Cash and Cash Equivalents (38,334) (1,837,700) 2,097,909 221,875 Cash and cash equivalents at beginning of year:1,059,216 14,655,267 2,601,362 18,315,845 Cash and cash equivalents at end of year 1,020,882$ 12,817,567$ 4,699,271$ 18,537,720$ RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss)(3,615,475)$ (1,450,560)$ (3,808,770)$ (8,874,805)$ Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation - - 3,629,980 3,629,980 Decrease (increase) in accounts receivable (2,075) (142,654) - (144,729) Increase (decrease) in accounts payable (22,360) (30,320) 11,587 (41,093) Increase (decrease) in claims and judgements (84,424) (214,166) - (298,590) Net cash provided by operating activities (3,724,334)$ (1,837,700)$ (167,203)$ (5,729,237)$ CITY OF PORT ARTHUR, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2024 104 Total EDC General EDC Debt EDC Grant Governmental Fund Service Fund FundsASSETS Cash and cash equivalents 9,923,472$ 829,456$ 939,010$ 11,691,938$ Receivables, net of allowances Taxes 1,334,487 - - 1,334,487 Due from other governments 728,261 - - 728,261 Due from other funds 470,404 - - 470,404 Due from primary government 855,638 - - 855,638 Total Assets 13,312,262 829,456 939,010 15,080,728 LIABILITIES Accounts payable 262,764 - - 262,764 Accrued liabilities 38,235 - - 38,235 Due to other funds - 470,404 - 470,404 Total Liabilities 300,999 470,404 - 771,403 FUND BALANCES Restricted for: Debt service - 359,052 - 359,052 Unassigned 13,011,263 - 939,010 13,950,273 Total Fund Balances 13,011,263 359,052 939,010 14,309,325 Total Liabilities, Deferred Inflows of Resources, and Fund Balances 13,312,262$ 829,456$ 939,010$ 15,080,728$ Reconciliation from fund balance to net position 14,309,325 Add:Capital assets 22,889,209$ Deferred outflows - pension 113,299 Less: Net pension liability (249,747) Deferred inflows - pension (20,076) Accrued compensated absences (70,215) NET POSITION 36,971,795$ CITY OF PORT ARTHUR, TEXAS BALANCE SHEET - GOVERNMENTAL FUNDS DISCRETELY PRESENTED COMPONENT UNIT PORT ARTHUR 4A ECONOMIC DEVELOPMENT CORPORATION SEPTEMBER 30, 2024 105 Total EDC General EDC Debt EDC Grant Governmental Fund Service Fund Funds REVENUES Sales taxes 7,818,973$ -$ -$ 7,818,973$ Intergovernmental - - - - Investment earnings 533,570 - - 533,570 Miscellaneous 829,382 - - 829,382 Total Revenues 9,181,925 - - 9,181,925 EXPENDITURES Current: Economic development 4,863,108 - - 4,863,108 Capital outlay 5,190 - 318,415 323,605 Debt service: Principal - 540,000 - 540,000 Interest and fiscal charges - 9,977 - 9,977 Total Expenditures 4,868,298 549,977 318,415 5,736,690 Excess (Deficiency) of Revenues Over Expenditures 4,313,627 (549,977) (318,415) 3,445,235 OTHER FINANCING SOURCES (USES) Transfers in - 553,662 - 553,662 Transfers out (553,662) - - (553,662) Total Other Financing Sources (Uses)(553,662) 553,662 - - NET CHANGE IN FUND BALANCE 3,759,965 3,685 (318,415) 3,445,235 FUND BALANCES - BEGINNING 9,251,298 355,367 1,257,425 10,864,090 FUND BALANCES - ENDING 13,011,263$ 359,052$ 939,010$ 14,309,325$ Reconciliation from changes in fund balance to changes in net position Change in fund balance 3,445,235$ Add capital outlay 1,589,350 Less depreciation (152,420) Add principal payments 540,000 Less amortization of deferred charge on refunding (7,299) Change in accrued interest payable 1,708 Change in compensated absences (13,958) Change in net pension liability 171,162 Change in deferred outflows - pension (112,933) Change in deferred inflows - pension (20,076) CHANGES IN NET POSITION 5,440,769$ CITY OF PORT ARTHUR, TEXAS FOR THE YEAR ENDED SEPTEMBER 30, 2024 PORT ARTHUR 4A ECONOMIC DEVELOPMENT CORPORATIONDISCRETELY PRESENTED COMPONENT UNIT AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES 106 Variance With Final Budget Positive Original Final Actual (Negative) REVENUES Sales taxes 7,490,000$ 7,490,000$ 7,818,973$ 328,973$ Investment earnings 325,000 325,000 533,570 208,570 Miscellaneous 265,030 265,030 829,382 564,352 Total Revenues 8,080,030 8,080,030 9,181,925 1,101,895 EXPENDITURES Current: Economic development 8,113,230 8,107,861 4,863,108 3,244,753 Capital outlay - 5,369 5,190 179 Total Expenditures 8,113,230 8,113,230 4,868,298 3,244,932 Excess of Revenues Over Expenditures (33,200) (33,200) 4,313,627 4,346,827 OTHER FINANCING SOURCES (USES) Transfers out (553,662) (553,662) (553,662) - Total Other Financing Sources (Uses)(553,662) (553,662) (553,662) - NET CHANGE IN FUND BALANCE (586,862) (586,862) 3,759,965 4,346,827 FUND BALANCE - BEGINNING 9,251,298 9,251,298 9,251,298 - FUND BALANCE - ENDING 8,664,436$ 8,664,436$ 13,011,263$ 4,346,827$ Budgeted Amounts PORT ARTHUR 4A ECONOMIC DEVELOPMENT CORPORATION - GENERAL FUND CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DISCRETELY PRESENTED COMPONENT UNIT FOR THE YEAR ENDED SEPTEMBER 30, 2024 107 Variance WithFinal Budget Positive Original Final Actual (Negative) REVENUESInvestment earnings -$ -$ -$ -$ Total Revenues - - - - EXPENDITURESDebt service: Principal 540,000 540,000 540,000 - Interest and fiscal charges (1,338) (1,338) 9,977 (11,315) Total Expenditures 538,662 538,662 549,977 (11,315) Excess of Revenues Over Expenditures (538,662) (538,662) (549,977) (11,315) OTHER FINANCING SOURCES (USES) Transfers in 553,662 553,662 553,662 - Total Other Financing Sources (Uses)553,662 553,662 553,662 - NET CHANGE IN FUND BALANCE 15,000 15,000 3,685 (11,315) FUND BALANCE - BEGINNING 355,367 355,367 355,367 - FUND BALANCE - ENDING 370,367$ 370,367$ 359,052$ (11,315)$ Budgeted Amounts PORT ARTHUR 4A ECONOMIC DEVELOPMENT CORPORATION - DEBT SERVICE FUND CITY OF PORT ARTHUR, TEXAS SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL DISCRETELY PRESENTED COMPONENT UNIT FOR THE YEAR ENDED SEPTEMBER 30, 2024 108 STATISTICAL SECTION THIS PAGE LEFT BLANK INTENTIONALLY STATISTICAL SECTION (Unaudited) This part of the City of Port Arthur, Texas 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. Contents Page Financial Trends Net Position by Component 109 - 110 Changes in Net Position 111 - 114 Fund Balances of Governmental Funds 115 - 116 Changes in Fund Balances of Governmental Funds 117 - 118 Revenue Capacity Assessed Value and Estimated Actual Value of Taxable Property 119 Direct and Overlapping Property Tax Rates 120 - 121 Principal Property Taxpayers 122 Principal Industrial Districts 123 Property Tax Levies and Collections 124 Debt Capacity Ratios of Outstanding Debt by Type 125 Ratios of General Bonded Debt Outstanding 126 Direct and Overlapping Governmental Activities Debt 127 Demographic and Economic Information Demographic and Economic Statistics 128 Principal Employers 129 Operating Information Full-Time Equivalent City Government Employees by Function/Program 130 - 131 Operating Indicators by Function 132 - 133 Capital Asset Statistics by Function 134 - 135 2015 2016 2017 2018 Governmental activities Net investment in capital assets 20,370,442$ 19,439,544$ 28,301,317$ 50,591,739$ Restricted 5,408,143 7,742,064 10,095,182 10,763,957 Unrestricted 28,314,276 39,266,172 38,685,287 (18,038,944) Total Governmental Activities Net Position 54,092,861$ 66,447,780$ 77,081,786$ 43,316,752$ Business-type activities Net investment in capital assets 149,596,148$ 164,809,262$ 171,580,002$ 165,055,391$ Restricted 17,849,732 23,940,482 2,590,324 - Unrestricted (34,056,600) (50,781,466) (49,909,131) 2,961,390 Total Business-Type Activities Net Position 133,389,280$ 137,968,278$ 124,261,195$ 168,016,781$ Primary government Net investment in capital assets 169,966,590$ 184,248,806$ 199,881,319$ 215,647,130$ Restricted 23,257,875 31,682,546 12,685,506 10,763,957 Unrestricted (5,742,324) (11,515,294) (11,223,844) (15,077,554) Total Primary Government Net Position 187,482,141$ 204,416,058$ 201,342,981$ 211,333,533$ Fiscal Year NET POSITION BY COMPONENT CITY OF PORT ARTHUR, TEXAS (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING)LAST TEN FISCAL YEARS 109 TABLE 1 2019 2020 2021 2022 2023 2024 57,134,749$ 65,163,108$ 99,890,124$ 109,308,680$ 121,338,454$ 133,718,412$ 12,983,580 14,969,052 21,839,272 27,292,378 27,649,931 32,638,516 (8,121,555) (11,493,472) (31,653,922) (11,672,014) (21,512,076) (20,692,879) 61,996,774$ 68,638,688$ 90,075,474$ 124,929,044$ 127,476,309$ 145,664,049$ 160,640,367$ 164,929,073$ 154,811,511$ 147,491,212$ 140,854,750$ 132,554,356$ - - - - - - (2,752,940) (12,642,790) (6,071,732) (12,164,550) (14,275,607) (10,905,292) 157,887,427$ 152,286,283$ 148,739,779$ 135,326,662$ 126,579,143$ 121,649,064$ 217,775,116$ 230,092,181$ 254,701,635$ 256,799,892$ 262,193,204$ 266,272,768$ 12,983,580 14,969,052 21,839,272 27,292,378 27,649,931 32,638,516 (10,874,495) (24,136,262) (37,725,654) (23,836,564) (35,787,683) (31,598,171) 219,884,201$ 220,924,971$ 238,815,253$ 260,255,706$ 254,055,452$ 267,313,113$ Fiscal Year 110 2015 2016 2017 2018 Expenses Governmental activities: General government 11,385,637$ 7,057,160$ 13,002,450$ 8,632,259$ Culture and recreation 4,984,372 5,175,478 5,031,724 4,731,919 Public safety 34,427,192 36,329,118 36,245,028 29,140,681 Community development 692,118 3,487,825 5,102,477 21,749,997 Health and welfare 3,727,255 3,771,534 4,359,744 4,288,178 Public transportation 3,776,876 3,018,411 3,160,735 2,252,533 Public works 8,631,505 13,203,189 16,073,288 14,900,764 Economic development - - 237,764 3,045,766 Interest and other fees 2,022,798 2,249,175 1,942,212 1,537,202 Total Governmental Activities Expenses 69,647,753 74,291,890 85,155,422 90,279,299 Business-type activities: Water and sewer 18,442,439 21,813,413 25,211,555 22,551,451 Solid waste 6,281,595 7,709,320 8,760,628 6,564,493 Pleasure Island 1,230,789 1,006,664 985,765 1,006,356 Total Business-Type Activities Expenses 25,954,823 30,529,397 34,957,948 30,122,300 Total Primary Government Expenses 95,602,576 104,821,287 120,113,370 120,401,599 Program Revenues Governmental activities: Charges for services: General government 1,226,403 838,342 790,598 870,654 Culture and recreation 117,778 107,214 105,806 105,520 Public safety 1,642,870 1,587,887 859,737 893,233 Community development 120,867 45,973 34,550 99,719 Health and welfare 163,234 272,680 175,879 182,207 Public transportation 129,545 132,140 119,651 129,621 Operating grants and contributions 12,211,879 8,061,925 14,562,198 14,832,433 Capital grants and contributions 1,053,104 454,145 458,624 557,351 Total Governmental Activities Program Revenues 16,665,680 11,500,306 17,107,043 17,670,738 Business-type activities: Charges for services: Water and sewer 18,199,672 19,189,568 18,334,199 23,197,981 Solid waste 6,747,254 7,593,285 8,108,275 8,994,705 Pleasure Island 952,149 1,059,096 971,959 1,043,211 Capital grants and contributions 70,296,368 8,607,135 - - Total Business-Type Activities Program Revenues 96,195,443 36,449,084 27,414,433 33,235,897 Total Primary Government Program Revenues 112,861,123 47,949,390 44,521,476 50,906,635 Net (expense) revenue: Governmental activities (52,982,073) (62,791,584) (68,048,379) (72,608,561) Business-type activities 70,240,620 5,919,687 (7,543,515) 3,113,597 Total Primary Government Net Expense 17,258,547 (56,871,897) (75,591,894) (69,494,964) CHANGE IN NET POSITION CITY OF PORT ARTHUR, TEXAS (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING) LAST TEN FISCAL YEARS Fiscal Year 111 TABLE 2 2019 2020 2021 2022 2023 2024 12,739,209$ 14,261,996$ 21,592,478$ 17,225,213$ 20,810,975$ 20,936,668$ 5,432,984 6,124,273 6,682,451 6,817,065 9,789,671 8,957,108 37,876,038 36,722,942 35,388,810 31,659,840 46,012,264 38,789,326 4,973,938 8,841,182 4,568,256 3,366,387 16,175,876 3,815,450 5,059,284 5,397,477 5,404,677 4,694,658 5,994,823 6,081,187 2,963,960 2,873,955 7,396,959 10,636,973 3,464,996 3,053,362 15,275,933 13,444,809 10,448,831 8,911,480 10,615,687 22,364,247 - - - - - - 1,283,766 1,312,452 1,491,645 1,853,664 2,190,510 2,514,433 85,605,112 88,979,086 92,974,107 85,165,280 115,054,802 106,511,781 27,788,855 29,211,754 26,951,153 35,307,142 41,665,536 39,513,032 8,256,080 9,109,251 8,447,267 8,096,538 8,241,569 8,513,580 1,046,916 1,269,013 1,115,172 1,178,275 2,186,968 1,768,032 37,091,851 39,590,018 36,513,592 44,581,955 52,094,073 49,794,644 122,696,963 128,569,104 129,487,699 129,747,235 167,148,875 156,306,425 1,086,065 1,296,471 1,374,790 1,398,662 723,727 898,494 103,917 50,270 103,134 104,114 155,127 205,756 1,490,131 674,990 652,133 325,373 123,149 123,533 71,675 144,535 142,780 228,367 157,144 770,142 196,108 173,797 170,965 173,457 192,726 185,523 125,264 93,880 94,663 109,198 21,477 155,571 16,496,692 13,899,700 15,570,630 11,388,251 6,938,014 11,521,254 41,610 5,595 4,242,540 1,869,003 12,206,842 13,780,610 19,611,462 16,339,238 22,351,635 15,596,425 20,518,206 27,640,883 25,732,721 26,716,302 28,808,409 31,625,792 35,791,813 38,345,144 7,907,573 8,513,186 9,265,320 9,565,977 12,011,143 11,055,518 947,305 1,035,353 1,062,753 903,228 1,226,207 962,382 772,946 4,250,000 - - - - 35,360,545 40,514,841 39,136,482 42,094,997 49,029,163 50,363,044 54,972,007 56,854,079 61,488,117 57,691,422 69,547,369 78,003,927 (65,993,650) (72,639,848) (70,622,472) (69,568,855) (94,536,596) (78,870,898) (1,731,306) 924,823 2,622,890 (2,486,958) (3,064,910) 568,400 (67,724,956) (71,715,025) (67,999,582) (72,055,813) (97,601,506) (78,302,498) Fiscal Year 112 2015 2016 2017 2018 General Revenues and Other Changes in Net Position Governmental activities: Property taxes 18,520,422$ 19,484,500$ 19,914,886$ 20,127,665$ Industrial direct payments 30,952,606 33,900,392 31,221,614 30,644,284 Sales taxes 10,621,901 10,178,436 11,189,162 13,493,822 Franchise taxes 8,682,192 9,752,132 9,543,170 9,010,780 Investment earnings 27,607 13,133 139,427 629,941 Miscellaneous 2,059,810 1,608,753 450,880 10,442,558 Gain on sale of assets - - - - Transfers 7,970,332 687,675 6,223,246 (46,414,054) Total Governmental Activities 78,834,870 75,625,021 78,682,385 37,934,996 Business-type activities: Investment earnings 31,992 5,387 59,678 133,400 Miscellaneous - - - 734,611 Transfers (7,970,332) (1,824,910) (6,223,246) 46,414,054 Total Business-Type Activities (7,938,340) (1,819,523) (6,163,568) 47,282,065 Total Primary Government 70,896,530 73,805,498 72,518,817 85,217,061 Change in Net Position Governmental activities 25,852,797 12,833,437 10,634,006 (34,673,565) Business-type activities 62,302,280 4,100,164 (13,707,083) 50,395,662 Total Primary Government 88,155,077$ 16,933,601$ (3,073,077)$ 15,722,097$ Source: City financial statements Fiscal Year (UNAUDITED) (ACCRUAL BASIS OF ACCOUNTING) CHANGE IN NET POSITION LAST TEN FISCAL YEARS CITY OF PORT ARTHUR, TEXAS 113 TABLE 2 2019 2020 2021 2022 2023 2024 19,836,606$ 24,083,197$ 23,438,319$ 25,141,477$ 25,651,375$ 24,201,068$ 30,834,585 31,000,321 34,372,873 33,272,431 28,827,547 30,604,396 12,710,463 14,327,107 15,204,691 16,555,875 17,110,189 18,008,352 9,271,760 8,734,643 8,690,160 10,588,507 10,171,363 11,461,218 1,608,850 855,112 68,501 855,811 6,287,481 4,635,323 1,614,690 1,959,129 1,376,889 1,067,260 1,319,685 2,121,042 - 341,844 2,609,077 1,145,924 1,246,520 792,674 8,796,718 6,744,639 6,298,748 11,442,577 8,834,753 6,649,535 84,673,672 88,045,992 92,059,258 100,069,862 99,448,913 98,473,608 243,591 183,965 (147,561) 319,700 2,807,562 1,013,597 155,079 34,707 276,915 196,718 344,582 137,459 (8,796,718) (6,744,639) (6,298,748) (11,442,577) (8,834,753) (6,649,535) (8,398,048) (6,525,967) (6,169,394) (10,926,159) (5,682,609) (5,498,479) 76,275,624 81,520,025 85,889,864 89,143,703 93,766,304 92,975,129 18,680,022 15,406,144 21,436,786 30,501,007 4,912,317 19,602,710 (10,129,354) (5,601,144) (3,546,504) (13,413,117) (8,747,519) (4,930,079) 8,550,668$ 9,805,000$ 17,890,282$ 17,087,890$ (3,835,202)$ 14,672,631$ Fiscal Year 114 2015 2016 2017 2018 General fund Non-spendable: Inventory 21,200$ 20,650$ -$ 30,888$ Prepaid items 29,575 60,373 61,204 43,282 Long-term interfund advance 44,214,357 47,588,701 52,255,375 2,605,230 Unassigned 16,999,295 20,135,122 19,691,779 19,943,884 Total general fund 61,264,427 67,804,846 72,008,358 22,623,284 All other governmental funds Non-spendable: Prepaid items - - - - Long-term interfund advance 2,453,643 - - - Community development 755,374 - - - Restricted: Debt service funds 2,492,560 2,499,782 - 4,104,227 Capital projects funds 2,902,533 2,541,023 11,934,091 19,144,725 Public works 70,262 - - - Community development - 2,946,745 3,129,045 4,127,303 Culture and recreation 1,419,243 268,905 449,317 557,136 Public safety 469,039 560,794 639,603 604,576 Committed: Capital improvements - - - - Assigned: Culture and recreation 244,920 - - - Community development 821,611 - - - Special revenue funds 108,907 - - - Unassigned (931,529) - (32,142) (8,024,561) Total all other governmental funds 10,806,563$ 8,817,249$ 16,119,914$ 20,513,406$ Source: Balance Sheets - Governmental Funds in City's ACFRs. (UNAUDITED) (MODIFIED ACCRUAL BASIS OF ACCOUNTING)LAST TEN FISCAL YEARS FUND BALANCES OF GOVERNMENTAL FUNDS CITY OF PORT ARTHUR, TEXAS 115 TABLE 3 2019 2020 2021 2022 2023 2024 31,069$ 39,320$ 6,891$ 221,789$ 111,081$ 301,865$ 67,920 48,524 88,522 111,669 181,836 201,464 1,334,608 1,321,707 1,321,707 1,321,706 1,321,706 1,321,706 28,872,710 31,809,961 30,128,005 32,421,609 28,653,018 23,837,654 30,306,307 33,219,512 31,545,125 34,076,773 30,267,641 25,662,689 174,055 185,905 - - - - - - - - - - - - - - - - 5,300,410 7,126,646 7,911,042 13,029,847 18,173,066 18,686,789 16,447,517 25,711,790 54,772,228 63,874,285 69,614,515 85,032,621 - - - - - - 3,875,138 4,112,090 4,522,151 4,623,256 5,639,387 5,880,284 550,708 242,205 301,520 371,756 324,748 334,139 1,938,493 2,069,945 2,388,661 2,366,782 2,018,601 1,489,484 - - - - - 2,155,907 - - - - - - - - - - - - - - - - - - (5,811,017) (14,588,374) (20,138,859) (12,149,912) (13,607,978) (19,240,802) 22,475,304$ 24,860,207$ 49,756,743$ 72,116,014$ 82,162,339$ 94,338,422$ 116 2015 2016 2017 2018 Revenues Property taxes 18,339,046$ 19,502,871$ 20,118,218$ 19,921,508$ Industrial district payments 30,952,606 33,900,392 31,221,614 30,644,284 Franchise fees 8,682,192 9,752,132 9,543,170 9,010,780 Sales taxes 10,622,363 10,183,536 11,192,552 13,502,043 Licenses, fees, and permits 1,161,799 777,952 751,937 841,860 Charges for services 495,770 1,084,437 1,315,649 476,722 Fines and forfeitures 1,684,002 1,584,719 885,492 1,052,293 Intergovernmental 13,242,877 8,022,490 13,500,366 14,911,064 Investment earnings 23,296 10,973 91,015 448,526 Miscellaneous 2,140,794 1,296,433 1,767,183 11,732,924 Total Revenues 87,344,745 86,115,935 90,387,196 102,542,004 Expenditures Current: General government 9,703,785 10,137,806 10,446,312 10,387,286 Culture and recreation 4,659,356 5,116,885 4,919,893 4,724,133 Public safety 31,983,226 34,535,388 33,235,137 32,728,611 Community development 766,161 3,363,767 6,515,885 20,875,951 Health and welfare 3,500,148 3,706,443 4,121,355 4,395,841 Public transportation 3,785,768 2,738,052 2,601,298 2,360,954 Public works 7,929,082 8,508,114 9,108,268 8,249,583 Capital outlay 7,962,730 4,949,371 3,117,116 6,977,030 Debt service: Principal 5,765,000 5,480,000 23,549,604 6,234,352 Interest and fiscal charges 2,021,462 1,876,679 1,537,881 1,296,653 Bond issue costs - - - - Total Expenditures 78,076,718 80,412,505 99,152,749 98,230,394 Excess of Revenues Over (Under) Expenditures 9,268,027 5,703,430 (8,765,553) 4,311,610 Other Financing Sources (Uses) Issuance of debt - - 18,619,782 1,223,742 Refunding bonds issued - - - - Premium on issuance of debt - - - - Proceeds from sale of capital assets - - - - Insurance proceeds - - - - Payment of refunding bonds - - - - Transfer in 9,436,096 9,074,287 15,550,187 17,529,429 Transfer out (3,415,757) (10,226,612) (10,246,941) (66,007,574) Net Other Financing Sources (Uses)6,020,339 (1,152,325) 23,923,028 (47,254,403) Net Change in Fund Balances 15,288,366$ 4,551,105$ 15,157,475$ (42,942,793)$ Debt Service as a Percentage of Noncapital Expenditures 11.9% 11.3% 7.8% 8.3% Source: Statement of Revenues, Expenditures, and Changes in Fund Balance for Governmental Funds. (UNAUDITED)(MODIFIED ACCRUAL BASIS OF ACCOUNTING) LAST TEN FISCAL YEARS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS CITY OF PORT ARTHUR, TEXAS 117 TABLE 4 2019 2020 2021 2022 2023 2024 19,859,790$ 23,929,422$ 23,348,546$ 24,726,055$ 24,892,085$ 25,826,582$ 30,834,585 31,000,321 34,372,873 33,272,431 28,827,547 30,604,396 9,271,760 8,734,643 8,690,160 10,588,507 10,171,363 11,461,218 12,711,677 14,330,725 15,204,691 16,555,875 17,110,189 18,008,352 994,038 1,273,469 1,499,886 1,386,311 1,047,612 867,124 555,877 423,054 428,521 727,670 323,802 1,475,124 1,505,173 644,196 608,799 251,687 8,839 25,347 13,384,392 8,326,360 20,825,237 16,314,400 22,851,590 20,083,069 1,204,322 694,725 66,879 731,059 6,166,823 4,362,598 696,021 833,613 1,336,465 562,608 1,319,685 2,121,042 91,017,635 90,190,528 106,382,057 105,116,603 112,719,535 114,834,852 12,256,037 12,644,892 14,671,284 17,702,458 17,777,685 18,580,152 5,503,379 6,052,007 6,391,713 6,736,460 7,474,170 7,649,549 33,999,153 32,796,399 33,693,210 35,752,339 36,494,293 36,809,478 5,044,910 9,098,197 4,552,502 3,271,613 2,969,343 1,929,462 4,902,594 5,015,073 5,182,777 4,787,502 4,877,107 5,416,899 3,920,649 5,516,643 2,502,942 2,435,880 2,657,471 2,410,670 9,631,708 9,391,534 9,771,399 8,718,223 8,735,852 8,267,569 5,855,243 12,188,612 25,119,199 13,527,457 36,216,663 34,479,772 6,389,772 6,234,482 6,595,193 5,411,248 6,307,045 6,347,320 1,073,268 1,153,231 1,125,379 1,940,217 2,044,339 2,439,384 - 193,277 320,614 230,194 263,907 296,452 88,576,713 100,284,347 109,926,212 100,513,591 125,817,875 124,626,707 2,440,922 (10,093,819) (3,544,155) 4,603,012 (13,098,340) (9,791,855) 9,120,000 8,900,000 19,685,000 11,150,280 15,955,000 18,245,000 - - 1,530,000 - - - 1,298,549 1,293,277 3,816,562 670,337 924,407 1,749,302 122,575 408,498 2,080,106 295,477 128,135 792,674 1,431,541 1,283,083 528,971 850,447 1,118,385 177,175 (10,446,884) - (1,710,948) - - - 13,801,845 16,554,495 19,927,471 17,772,077 14,042,422 13,959,650 (8,123,627) (13,047,426) (19,090,858) (13,151,000) (12,120,038) (17,560,815) 7,203,999 15,391,927 26,766,304 17,587,618 20,048,311 17,362,986 9,644,921$ 5,298,108$ 23,222,149$ 22,190,630$ 6,949,971$ 7,571,131$ 9.3% 9.0% 9.0% 8.2% 8.0% 8.3% 118 THIS PAGE LEFT BLANK INTENTIONALLY Table 5 Taxable Assessed Value as a Total Estimated Percentage of Fiscal Residential Commercial Total Taxable Tax Actual Actual Year Property Property Asessed Value Rate Taxable Value Taxable Value 2015 $ 858,575,416 $ 1,506,290,290 $ 2,364,865,706 0.792 2,364,865,706$ 100% 2016 911,217,350 1,598,645,642 2,509,862,992 0.792 2,509,862,992 100% 2017 921,777,952 1,617,173,230 2,538,951,182 0.792 2,538,951,182 100% 2018 939,014,483 1,615,563,958 2,554,578,441 0.792 2,554,578,441 100% 2019 920,706,744 1,625,734,284 2,546,441,028 0.792 2,546,441,028 100% 2020 1,054,637,029 1,758,565,174 2,813,202,203 0.792 2,813,202,203 100% 2021 1,138,262,911 1,839,449,150 2,977,712,061 0.792 2,977,712,061 100% 2022 1,472,638,077 1,927,937,437 3,400,575,514 0.741 3,400,575,514 100% 2023 1,499,067,959 2,344,696,040 3,843,763,999 0.692 3,843,763,999 100% 2024 1,652,892,360 2,585,293,178 4,238,185,538 0.649 4,238,185,538 100% Source:Jefferson and Orange County Appraisal Districts and Texas Municipal Report (MAC) Notes: CITY OF PORT ARTHUR, TEXAS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (UNAUDITED) Property in Jefferson and Orange Counties are assessed once every two years on average. The counties assess property at 100 percent of actual values for commercial, industrial, and residential property. Estimated actual taxable value is calculated by dividing taxable assessed value by those percentages. Tax rates are per $100 at assessed value. 119 General Fiscal Maintenance Obligation Total PortYear&Debt Direct Arthur Nederland Fiscal Year Operation Service Rate I.S.D.I.S.D. 2024 0.398 0.250 0.648 1.326 0.998 2023 0.435 0.257 0.692 1.583 1.172 2022 0.492 0.249 0.741 1.586 1.17220210.508 0.284 0.792 1.586 1.275 2020 0.494 0.298 0.792 1.481 1.330 2019 0.490 0.302 0.792 1.485 1.150 2018 0.485 0.307 0.792 1.481 1.150 2017 0.485 0.307 0.792 1.353 1.16020160.500 0.292 0.792 1.353 1.16 2015 0.471 0.321 0.792 1.353 1.145 Source:Jefferson County Property Tax Website Note: Fiscal Year = Previous Tax Year (ie: FY2024 = Tax Year 2023)Rate per $100 of assessed value Overlapping Rates Overlapping rates are those of local and county governments that apply to property owners within the City of Port Arthur. Not all overlapping rates apply to all city property owners. City Direct Rates CITY OF PORT ARTHUR, TEXAS DIRECT AND OVERLAPPING PROPERTY TAX RATES LAST TEN FISCAL YEARS (UNAUDITED) 120 Table 6 Overlapping Rates Port Port Neches-Sabine Sabine Arthur JeffersonGrovesPassPass Port Navigation County Jefferson I.S.D.I.S.D.Authority District DD #7 County 1.144 1.051 0.191 0.179 0.321 0.359 1.281 1.148 0.191 0.190 0.259 0.363 1.376 1.177 0.204 0.200 0.285 0.3631.343 1.163 0.226 0.185 0.295 0.365 1.343 1.163 0.255 0.200 0.312 0.365 1.444 1.343 0.260 0.213 0.240 0.365 1.444 1.227 0.249 0.169 0.200 0.365 1.444 1.213 0.275 0.167 0.161 0.3651.444 1.199 0.264 0.157 0.165 0.365 1.444 1.184 0.257 0.214 0.171 0.365 121 Table 7 Percentage Percentage of Total City of Total City Taxable Taxable Taxable Taxable Assessed Assessed Assessed Assessed Property Taxpayer Value Rank Value Value Rank Value Entergy Texas Inc (Gen) $ 233,328,359 1 5.20 %201,876,995$ 1 8.63 % Enterprise Texas Pipeline LP 164,304,265 2 3.66 %117,838,020 2 5.04 % Motiva Enterprises 131,276,358 3 2.93 % 23,147,570 9 0.99 % Entergy Texas Inc 115,600,587 4 2.58 %N/A Port Arthur Terminal, LLC 68,498,259 5 1.53 %N/A Premcor Refining Group Inc 67,680,319 6 1.51 %N/A Irg Willow LLC 48,578,368 7 1.08 %N/A MPT of Port Arthur LLC 46,498,391 8 1.04 %51,200,080 3 2.19 % GSSW 9th Avenue Station LLC 39,404,919 9 0.88 %N/A Wal-Mart Stores 36,195,810 10 0.81 %32,851,650 5 1.40 % TOTAL Petrochemical - N/A 0.00 % 46,352,210 4 1.98 % KMTEX Inc.- N/A 0.00 % 28,885,980 6 1.24 % GG&A Central Mall Partners - N/A 0.00 % 28,071,040 7 1.20 % Medical Center of SETX 23,427,900 8 1.00 % Willow Lake Apartments LTD 20,125,630 10 0.86% Subtotal 951,365,635$ 21.22 %573,777,075$ 24.530% Other taxpayers 78.78%75.47% Total 100%100% Source: Texas Municipal Report (MAC) Note: Fiscal Year = Previous Tax Year (ie: FY2024 = Tax Year 2023) 2024 2015 CITY OF PORT ARTHUR, TEXAS PRINCIPAL PROPERTY TAX PAYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 122 Table 8 Percentage Percentage of Total of Total Taxable Industrial Taxable Industrial Assessed District Assessed District Property Taxpayer Value Rank Values Value Rank Values Motiva Enterprises $ 1,851,182,261 1 29.31 % $ 5,707,284,200 1 56.90 % Total- Expansion Side Cracker 864,337,212 2 13.68 % The Premcor Refining Group Inc 796,036,038 3 12.60 %2,026,660,248 2 Golden Pass LNG Terminal 434,372,003 4 6.88 %20.21 % Total 399,327,003 5 6.32 %762,068,424 3 7.60 % Multiple (CAGI) 318,015,608 6 5.03 % Chevron Phillips Chemical Co 238,191,508 7 3.77 %309,758,960 6 Golden Pass LNG Expansion (Train 1, 2 & 3). 213,600,000 8 3.38 %3.09 % BTP- BASF - Atofina Joint Venture 201,039,935 9 3.18 % Motiva Chemicals, LLC 171,968,069 10 2.72 %2.98 % Total Deep Conversion 151,922,400 11 2.41 % Praxair- Valero 148,882,528 12 2.36 %299,329,130 7 Diamond Green Diesel 110,390,000 13 1.75 %108,396,060 10 1.08 % Chevron USA 89,212,925 14 1.41 %2.13 % BASF OS Expansion 87,312,900 15 1.38 %213,298,700 9 3.47 % BASF(Old Sandoz)68,902,702 16 1.09 %348,251,840 5 BTP Expansion- BASF - Atofina Joint Venture Expansion 60,607,000 17 0.96 % Oxbow Calcining LLC 47,652,991 18 0.75 % Praxair- Motiva 33,658,977 19 0.53 % Multiple (Non-CAGI)29,574,405 20 0.47 %254,673,450 8 2.54 % 6,316,186,465$ 100.00 %10,029,721,012$ 100.00% Source: Capital Appraisal Note: Fiscal Year = Previous Tax Year (ie: FY2024 = Tax Year 2023) CITY OF PORT ARTHUR, TEXAS PRINCIPAL INDUSTRIAL DISTRICTS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 2024 2015 123 Table 9 Taxes Levied for Collection in Fiscal the Fiscal Percentage Subsequent Percentage Year Year Amount of Levy Years Amount of Levy 2024 $ 25,189,739 $ 23,439,035 93.05 % $ - $ 23,439,035 93.05 % 2023 25,238,300 22,759,235 90.18 % 1,784,865 24,544,100 97.25 % 2022 24,428,274 23,156,957 94.80 % 746,733 23,903,690 97.85 % 2021 22,908,177 22,136,358 96.63 % 456,289 22,592,647 98.62 % 2020 22,536,021 21,738,445 96.46 % 517,765 22,256,210 98.76 % 2019 20,817,809 18,946,341 91.01 % 1,633,388 20,579,729 98.86 % 2018 20,041,127 19,015,496 94.88 % 811,751 19,827,247 98.93 % 2017 19,741,028 19,062,017 96.56 % 502,046 19,564,063 99.10 % 2016 19,433,982 18,789,996 96.69 % 447,531 19,237,527 98.99 % 2015 18,294,850 17,630,247 96.37 % 489,928 18,120,175 99.05 % Source: Jefferson County Appraisal District Collected within the Fiscal Year of the Levy Total Collections to Date CITY OF PORT ARTHUR, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) 124 Table 10 Business-Type Activities General Certificates Total Percentage Fiscal Obligation Certificates Financed Of Primary of Personal Per Year Bonds of Obligation Purchase Obligation Government Income Capita (1) 2024 $ 9,120,000 $ 62,238,392 $ 5,023,449 $ 71,431,609 $ 147,813,450 10.35 % 2,649 2023 10,945,000 43,935,000 4,434,868 73,040,000 132,354,868 9.81 % 2,362 2022 12,705,000 46,760,000 6,719,415 74,825,000 141,009,415 11.16 % 2,516 2021 17,120,000 27,615,000 8,856,101 68,410,000 122,001,101 11.13 % 2,177 2020 20,610,000 10,810,000 7,274,270 60,920,000 99,614,270 3.95 % 1,778 2019 26,235,000 2,120,000 8,303,716 5,505,000 42,163,716 4.56 % 873 2018 33,185,000 2,315,000 9,344,221 6,400,000 51,244,221 5.07 % 936 2017 38,825,000 2,500,000 9,155,646 7,295,000 57,775,646 5.80 % 1,074 2016 37,485,000 9,605,000 95,028,223 8,190,000 150,308,223 6.33 % 1,169 2015 42,365,000 10,205,000 10,216,510 9,075,000 71,861,510 7.38 % 1,317 (UNAUDITED) Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 See the Schedule of Demographic and Economic Statistics for personal income and population data. Governmental Activities CITY OF PORT ARTHUR, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS 125 Table 11 As a Percentage of General Actual Taxable Fiscal Obligation Certificates Value of Per Year Bonds of Obligation Total Property Capita 2024 $ 9,120,000 $ 133,670,001 $ 142,790,001 3.37 %2,559 2023 10,945,000 122,225,000 133,170,000 3.46 %2,376 2022 12,705,000 103,675,000 116,380,000 3.42 %2,077 2021 17,120,000 96,025,000 113,145,000 3.80 %2,019 2020 20,610,000 71,730,000 92,340,000 3.28 %1,648 2019 26,235,000 7,625,000 33,860,000 1.34 %621 2018 33,185,000 8,715,000 41,900,000 1.66 %755 2017 38,825,000 9,795,000 48,620,000 1.91 %903 2016 37,485,000 17,795,000 55,280,000 2.20 %997 2015 42,365,000 19,280,000 61,645,000 2.61 %1,114 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Assessed Value and Estimate Value Tax Property for property value data. Population data can be found on Demographic and Economic Stat. CITY OF PORT ARTHUR, TEXAS RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) 126 Table 12 Estimated Share Estimated of Direct and Debt Percentage Overlapping Outstanding Applicable Debt Overlapping debt: Beaumont ISD 192,924,434$ 0.05 %96,462$ Bridge City ISD 85,659,991 11.56 % 9,902,295 Hamshire- Fannett ISD 50,363,685 0.02 % 10,073 Jefferson County 17,105,000 12.26 % 2,097,073 Jefferson County Drainage District #7 11,750,000 25.54 % 3,000,950 Nederland Independent School District 135,377,565 8.26 % 11,182,187 Orange County 3,065,000 2.97 % 91,031 Port Arthur ISD 298,990,000 45.37 % 135,651,763 Port Neches - Groves Independent School District 179,285,000 7.43 % 13,320,876 Pt of Beaumont Nav Dist. 66,440,000 0.05 % 33,220 Port of Port Arthur Navigation District 87,410,000 48.05 % 42,000,505 Sabine Pass Independent School District 92,143,256 10.50 % 9,675,042 Sabine Pass Port Authority 6,900,000 10.30 % 710,700 Sabine-Neches Nav Dist. 195,265,000 12.26 % 23,939,489 Total Overlapping Debt:1,422,678,931$ 251,711,666$ City of Port Arthur, Net of Financed Purchase (9/30/23)48,326,555$ 100.00 %48,326,555$ Total, Direct and Overlapping Debt:300,038,221$ Total Direct and Overlapping Debt % of A.V.:6.69 % Total Direct and Overlapping Debt per Capita 5,384$ Estimate of overlapping percentages are provided by the Municipal Advisory Council of Texas Source: Texas Municipal Report (MAC) CITY OF PORT ARTHUR, TEXAS DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT SEPTEMBER 30, 2024 (UNAUDITED) The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of each governmental unit's taxable assessed value that is within the City's boundaries and dividing it by the governmental unit's total taxable assessed value. 127 Table 13 Education Median Level in Fiscal Income per Median Personal Years of School Unemployment Year Population (1) Household (1) Age (1) Income (1)Schooling Enrollment (2) Rate (3) 2024 55,799 45,752 34.4 $ 25,593 12.1 8,001 5.10 % 2023 56,039 45,357 33.7 24,065 12.1 8,152 8.80 % 2022 56,039 42,933 34.5 22,557 12.1 7,843 10.40 % 2021 56,039 36,557 34.5 19,563 12.1 7,957 13.90 % 2020 56,039 36,557 34.2 19,563 12.1 8,319 17.20 % 2019 54,548 34,987 33.6 19,168 12.1 8,898 10.60 % 2018 55,498 32,571 33.5 18,471 12.1 8,898 8.90 % 2017 53,818 32,003 35.0 18,519 12.1 8,898 10.80 % 2016 55,427 32,863 33.4 18,464 12.1 9,045 12.30 % 2015 54,548 31,315 35.2 17,859 12.1 8,982 13.70 % (3) Texas Education Agency (4) Texas Workforce Commission CITY OF PORT ARTHUR, TEXAS DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) Source: (1) U.S. Census Bureau 128 Table 14 Percentage Percentage of Total City of Total City Employer Employees Rank Employment Employees Rank Employment Port Arthur Independent School District 1,340 1 2.39 %1,340 1 5.90 % Motiva Enterprises (Formerly Star)1,300 2 2.32 %1300 2 5.57 % HuntmanCorp 1,250 3 2.23 %1,250 3 5.35 % Christus St. Mary Hospital*900 4 1.61 %900 4 3.85 % Valero Refining (formerly Clark)825 5 1.47 %825 5 3.53 % City of Port Arthur 801 6 1.43 %675 6 2.89 % Wal-Mart Supercenters 650 7 1.16 %650 7 2.78 % The Medical Center of Southeast 562 8 1.00 %562 8 2.41 % Echo Maintenance 500 9 0.89 %500 10 2.14 % TOTAL Petrochemicals 500 10 0.89 %500 9 2.14 % Source: Texas Municipal Report (MAC) 2024 2015 CITY OF PORT ARTHUR, TEXAS PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO (UNAUDITED) 129 2015 2016 2017 2018 2019 General government 71 60 78 74 74 Culture and recreation 34 21 15 12 21Police168167164166167 Fire 107 108 108 108 108 Community development --60 82 60 Health and welfare 41 36 47 38 52 Public works 76 79 91 81 79Public transportation 27 26 29 28 29 Water utilities 85 100 113 121 120 Solid waste 44 44 47 48 48 Total 653 641 752 758 758 Source: City of Port Arthur Annual Budgets CITY OF PORT ARTHUR, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 130 Table 15 2020 2021 2022 2023 2024 69 73 75 80 80 44 45 46 47 47167168169169169 107 108 109 110 110 47 51 54 56 56 41 41 41 41 41 88 92 93 97 962929313131 121 121 120 122 122 47 48 48 48 48 760 776 786 801 800 Source: City of Port Arthur Annual Budgets Fiscal Year 131 2015 2016 2017 2018 General government: Building permits issued Commercial Construction 475 247 239 234 Residential Construction 1,511 632 532 494 Calls for service 58,199 66,323 14,893 12,185 Fires 355 360 365 374 Rescue, EMC 7,120 9,400 10,680 9,344 Other Calls 1,810 2,107 3,848 2,467 Landfill: Compacted refuse disposed (cubic yards) 206,016 206,686 190,122 178,546 Non-compacted refuse disposed (cubic yards) 222,300 251,665 361,002 565,771 Other public works: Street resurfacing (miles) 3 2 1 3 Drainage regrading (miles) 18 10 16 6 Library: Volumes in collection 158,144 156,193 128,848 46,614 Library cards in force 14,582 14,152 13,999 978 Water and Sewer: Meters in service 17,334 19,001 17,023 17,167 Water calls 2,533 2,119 176 2,387 Average daily production (millions of gallons) 14 14 17 19 Peak daily production (millions of gallons) 19 17 21 23 Wastewater: Sewer calls 6,060 5,597 5,233 5,718 Transit: Total route miles 384,385 786,590 788,025 371,445 Passengers 143,922 113,116 99,286 105,664 Source: Various city department CITY OF PORT ARTHUR, TEXAS OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 132 Table 16 2019 2020 2021 2022 2023 2024 1,187 1,616 1,747 2,022 1,782 1,124 1,558 1,805 2,154 1,615 1,225 1,520 11,665 11,747 11,835 11,769 12,990 12,320 2,971 2,285 346 394 408 320 8,694 8,859 8,595 8,602 9,153 8,874 - 603 2,894 3,167 3,029 3,049 171,797 171,235 171,586 218,482 157,178 145,111 427,581 441,429 548,708 321,596 378,304 406,206 6 12 6 13 10 6 12 11 17 15 10 6 45,423 58,728 54,707 43,856 39,612 39,837 3,522 31,012 830 32,548 3,344 3,718 19,165 17,317 19,167 17,797 19,111 19,059 2,723 2,380 3,165 3,335 3,836 2,919 17 15 16 18 22 23 22 18 20 27 29 29 6,007 5,530 5,378 6,019 5,246 5,674 364,107 365,935 386,458 494,603 517,109 459,158 117,268 100,109 82,752 95,223 95,287 97,961 Fiscal Year 133 2015 2016 2017 2018 2019 Public Safety:Police Stations 1 1 1 1 1 Fire Stations 7 7 8 8 7 Hydrants 2,210 2,231 2,231 2,265 2,269 Streets: Streets (miles) 350 350 350 350 350 Sidewalks (miles) 208 208 205 206 205 Drainage: Storm Sewers (miles) 283 160 110 181 253 Libraries: Number of libraries 1 1 1 1 1 Parks and Recreation: Acreage 516 516 516 516 516 Golf Course 2 2 2 2 2 Swimming Pools 3 3 3 3 3 Playgrounds 18 18 18 22 22 Recreation center 1 1 1 1 1 Water and Sewer: Water mains (miles) 350 350 400 350 350 Sanitary sewer mains (miles) 330 330 350 500 350 Source: Various City Departments Fiscal Year CITY OF PORT ARTHUR, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS (UNAUDITED) 134 Table 17 2020 2021 2022 2023 2024 1 1 1 1 1 7 8 7 7 7 2,268 2,264 2,275 2,290 2,280 383 383 383 383 687 205 205 205 205 205 253 283 283 283 253 1 1 1 1 1 516 325 325 319 323 2 2 2 2 2 2 2 2 2 2 20 25 25 20 24 1 1 1 1 1 350 350 350 561 561 350 350 400 235 335 Fiscal Year 135 THIS PAGE LEFT BLANK INTENTIONALLY