R2022-054 2022-03-07DocuSign Envelope ID: BCE24888-89A2-4536-BD2D-142D53037D1C
RESOLUTION NO. R2022-54
A Resolution of the City Council of the City of Pearland, Texas, accepting the
City's annual comprehensive financial report for fiscal year 2021 and the
accompanying independent audit as presented by the accounting firm of BKD,
LLP.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That certain comprehensive annual financial report for fiscal year 2021, a
copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby
authorized and approved.
Section 2. That the City Council accepts the City's annual comprehensive financial report
for fiscal year 2021.
Section 3. That acceptance of the annual comprehensive financial report reflects the
City's compliance with the Federal Single Audit requirements for government organizations
expending federal funds.
PASSED, APPROVED and ADOPTED this the 7th day of March, A.D., 2022.
ATTEST:
DocuSigned by:
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LESLIE CRITTENDEN
INTERIM CITY SECRETARY
APPROVED AS TO FORM:
-DocuSigned by:
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DARRIN M. COKER
CITY ATTORNEY
DocuSigned by:
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J. KEVIN COLE
MAYOR
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CITY OF PEARLAND, TEXAS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
Year Ended September 30, 2021
Prepared by:
Finance Department
CITY OF PEARLAND, TEXAS
Table of Contents
September 30, 2021
Introductory Section (Unaudited)
Letter of Transmittal i-xv
Principal Officials xvi
Staff Organizational Chart xvii
GFOA Certificate of Achievement xviii
Financial Section
Independent Auditor's Report 1
Management's Discussion and Analysis 7
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position 21
Statement of Activities 22
Fund Financial Statements
Balance Sheet — Governmental Funds 24
Reconciliation of the Balance Sheet — Governmental Funds
to the Government -wide Statement of Net Position 26
Statement of Revenues, Expenditures and Changes in Fund
Balances — Governmental Funds 28
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balances — Governmental Funds to
the Government -wide Statement of Activities 30
Statement of Net Position — Proprietary Funds 31
Statement of Revenues, Expenses and Changes in Net Position —
Proprietary Funds 33
Statement of Cash Flows — Proprietary Funds 34
Statement of Fiduciary Net Position — Fiduciary Fund 36
Statement of Changes in Fiduciary Net Position —
Fiduciary Fund 37
Notes to Financial Statements 39
Required Supplementary Information (Unaudited)
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual — General Fund 85
Schedule of Revenues, Expenditures and Changes in Fund Balances —
Budget and Actual — Pearland Economic Development Corporation 86
Notes to Required Supplementary Budget Information 87
Schedule of Changes in Net Pension Liability and Related Ratios
Texas Municipal Retirement System 88
Schedule of Contributions — Texas Municipal Retirement System 89
Schedule of Changes in the Total OPEB Liability and Related Ratios —
Texas Municipal Retirement System Supplemental Death Benefits Fund 91
Schedule of Changes in the Total OPEB Liability and Related Ratios —
City of Pearland Retirement Health Care Plan 92
CITY OF PEARLAND, TEXAS
Table of Contents (Continued)
September 30, 2021
Other Supplementary Information
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds 97
Combining Balance Sheet — Nonmajor Governmental Funds 98
Combining Statement of Revenues, Expenditures and Changes
in Fund Balance — Nonmajor Governmental Funds 100
Combining Schedule of Revenues, Expenditures and Changes
in Fund Balance — Budget and Actual:
Major Governmental Fund — Debt Service Fund 102
Special Revenue Fund — Hotel/Motel Tax Fund 103
Special Revenue Fund — Court Security Fund 104
Special Revenue Fund — City -Wide Donation Fund 105
Special Revenue Fund — Court Technology Fund 106
Special Revenue Fund — Street Assessments Fund 107
Special Revenue Fund — Park Donation Fund 108
Special Revenue Fund — Police Seizure Fund 109
Special Revenue Fund — Parks and Recreation Development Fund 110
Special Revenue Fund — Sidewalk Fund 111
Special Revenue Fund — Grant Fund 112
Special Revenue Fund — Traffic Impact Improvement Fund 113
Special Revenue Fund — Juvenile Management Fund 114
Special Revenue Fund — Regional Detention Fund 115
Special Revenue Fund — Educational TV Fund 116
Special Revenue Fund — U of H Fund 117
Capital Projects Fund 118
Internal Service Funds 119
Combining Statement of Net Position — Internal Service Funds 120
Combining Statement of Revenues, Expenses and Changes
in Net Position — Internal Service Funds 121
Combining Statement of Cash Flows — Internal Service Funds 122
Statistical Section (Unaudited) 123
Financial Trends
Net Position by Component 124
Changes in Net Position 126
Fund Balances of Governmental Funds 130
Changes in Fund Balances of Governmental Funds 132
CITY OF PEARLAND, TEXAS
Table of Contents (Continued)
September 30, 2021
Revenue Capacity
Spending and Growth Analysis 134
Assessed Value and Estimated Actual Value of Taxable Property 136
Direct and Overlapping Property Tax Rates 138
Property Tax Levies and Collections 141
Principal Property Taxpayers 142
Principal Property Taxpayers — 2020 Total Taxes 143
Taxable Sales by Category 146
Debt Capacity
Outstanding Debt by Type 148
Ratio of Net General Bonded Debt to Assessed Value
and Net Bonded Debt Per Capita 150
Direct and Overlapping Governmental Activities Debt 151
Pledged Revenue Coverage 153
Demographic and Economic Information
Demographic and Economic Statistics 154
Principal Employers 155
Operating Information
Full-time Equivalent City Government Employees by Function/Program 156
Operating Indicators by Function/Program 158
Capital Asset Statistics by Function/Program 164
Introductory Section (Unaudited)
City of Pearland
3519 Liberty Drive
Pearland, Texas 77581
Tel: 281.652.1600
pearlandtx.gov
March 8, 2022
Honorable Mayor, Members
of City Council, and Citizens of the
City of Pearland, Texas USA
The Annual Comprehensive Financial Report (ACFR) of the City of Pearland, Texas (the "City")
for the fiscal year ended September 30, 2021, is hereby submitted as mandated by both local and
state statutes. The applicable ordinances and statutes require that the City issue an annual report
on its financial position and activity and that an independent firm of certified public accountants
audit this report.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal control that it has
established for this purpose. As standard practice, because the cost of internal control should not
exceed anticipated benefits, the objective is to provide reasonable, rather than absolute,
assurance that the financial statements are free of any material misstatements.
BKD, LLP, Certified Public Accountants, issued an unmodified (or "clean") opinion on the City of
Pearland's financial statements for the year ended September 30, 2021. The independent
auditor's report is located at the front of the financial section of this report.
Management's discussion and analysis (MD&A) immediately follows the independent auditor's
report and provides a narrative introduction, overview, and analysis of the basic financial
statements. The MD&A complements this letter of transmittal and should be read in conjunction
with the transmittal letter.
PROFILE OF THE GOVERNMENT
The City of Pearland, Texas was incorporated in December 1959 and adopted a Home Rule
Charter on February 6, 1971 and is a home -rule City operating under a Council -Manager form of
government. Policy -making and legislative authority are vested in a governing Council consisting
of the Mayor and seven members.
The Mayor and Council members are elected at -large, and each of them hold office for a period
of three consecutive years. Council members are limited to two full consecutive terms in office,
and there is no term limitation on the office held by the Mayor. The City Manager is appointed by
Council and is responsible for recommending a budget, implementation of City Council priorities,
keeping the City Council and community informed during the year, making recommendations, and
day-to-day management of all City operations.
The incorporated City is primarily located across the northern end of Brazoria County and shares
a common border with Houston, Texas to the north. The City extends into both Fort Bend and
Harris counties. The City of Pearland encompasses 48.82 square miles. The City is long, east to
west -- Broadway/FM 518 stretches across the community from Almeda Road/FM 521 on the
western city limit to the eastern limit border with Friendswood. That stretch of Broadway/FM 518
is 13.94 miles across. The geography of the City challenges City delivery of services. Moreover,
the community is fast-growing. Additional population due to Pearland's multi -faceted
attractiveness increased from 18,000 residents in 1990 to 125,828 residents as reported in the
official 2020 U.S. Census, an increase of 600% over thirty years.
A full range of municipal services is provided by the City of Pearland including public safety (full-
time professional police and fire); solid waste; water and wastewater utilities; public
improvements; repair and maintenance of infrastructure; recreational and community activities;
convention and visitor services; and general administrative services. The Pearland community is
one of opportunity with economic development supported for investment and jobs. The City
provides planning for future land use, traffic control, building codes, and health inspections, and
plans for new infrastructure and rehabilitation of infrastructure to meet the needs of the citizens
today, as well as tomorrow. The City is authorized to issue debt, subject to certain limitations, for
the purpose of financing its capital projects and the City is empowered to levy a property tax on
real property within its boundaries.
Activities of the general, debt service, water and sewer, solid waste, capital project funds, and
special revenue funds such as hotel/motel tax are included in the City's annual appropriated
budget. Capital project funds are budgeted for project length. The legal level of control for each
budget is at the fund level, which is to say that total expenditures for each fund should not exceed
total budgeted expenditures for that fund. The City Manager is authorized to transfer budgeted
amounts within and among departments. The City Council must approve any budget amendment
that increases appropriations by fund. The City amends the budget near the end of each fiscal
year to reflect current year projections for revenues and expenditures/expenses.
As an independent political subdivision of the State of Texas, the City is considered a primary
government. Pursuant to standards established by the Governmental Accounting Standards
Board (GASB), the City also reports for all funds for which the City, as the primary government,
is financially accountable. As such, this report includes financial activities of two component units
The Pearland Economic Development Corporation (PEDC) and the Development Authority of
Pearland (DAP). The Pearland Economic Development Corporation was created by the City in
1995 under the Texas Development Corporation Act of 1979 to promote, assist, and enhance
economic and related development activities on behalf of the City.
The Development Authority of Pearland was created in 2004 to provide financing for the
development of Tax Increment Reinvestment Zone #2. The Tax Increment Reinvestment Zone
(TIRZ #2) was created in 1998 for the purposes of development and redevelopment in the Zone
Area, better known as Shadow Creek Ranch. The City participates in the Zone by contributing a
portion of tax increments produced in the Zone to the Tax Increment Fund. Both component units
are considered blended component units and have been included as major funds in the
Governmental Funds.
ECONOMIC CONDITIONS
Local Economy
Pearland is a premier location for residential and commercial growth. The City is located 20
minutes away from downtown Houston, the nation's second largest seaport, the world-renowned
Texas Medical Center, Port of Houston, Port Freeport, major chemical refineries in south Brazoria
County, and NASA -Johnson Space Center. The Pearland economy and context are inexorably
linked with the Houston metropolitan area. With available land, business facilities, a sound
infrastructure, and a diverse workforce supported by educational programs, Pearland's growth
has been consistent and will continue to be sustained over time with continued residential and
commercial development.
Energy, healthcare and life sciences, and manufacturing have been key areas of interest for
Pearland for over ten years, combined with a mix of reinforcing land uses, urban planning, key
entertainment and cultural attractions, public spaces, and walkability and connectivity will provide
for livable sustainable developments.
As noted later in the Economic Development section, Pearland Economic Development
Corporation (PEDC) and the City continued implementation efforts for the Pearland Prosperity
community strategic plan and worked on several major projects in 2021, including opening of HCA
Healthcare's Center for Clinical Advancement in Pearland Town Center and Millar's
groundbreaking in the Lower Kirby District for its new 56,000 SF headquarters, R&D,
manufacturing, and warehousing facility.
The total of all new, non-residential construction permitted during the fiscal year was
approximately $391 million, an increase of 159% in value from FY 2020's $151 million. New
single-family housing permits totaled 751, up 66.5% from the previous FY. No multi -family permits
were issued in FY 2021. State law prevents the city from requesting single-family residential
valuation during the permitting process. Building permit revenues decreased by $987,000 or
approximately 23% as compared to FY 2020 revenue collections. Pearland is a regional shopping
destination, and the economy has mostly recovered from the initial negative impacts of the
COVID-19 Pandemic.
Pearland's unemployment rate was 4.1% in September 2021, down from 6.3% in September
2020, which was still feeling the impact of the COVID-19 pandemic. Through the most recently
available data, the rate is continuing its downward path to 3.7% as of November 2021.
(https://ycharts.com/indicators/pearland_tx_unemployment_rate) Those rates compare to the
rates for the same time periods in Brazoria County of 6.1 %, 9.2%, and 6.1% respectively
(https://ycharts.com/indicators/brazoria_county_tx_unemployment_rate). There are now the
seeds of recovery even as the virus continues its community spread. Hurricane Harvey and
"traditional' incidents are relatively 'quick' with an immediate impact followed by recovery &
rebuilding physical infrastructure. With the ongoing pandemic, we are still in the thick of things,
continuing to provide public services in this 'next normal' that will continue for the foreseeable
future. Uncertainties remain for safety and economy. Indicators contrary to each other abound --
sales tax, home values, private investment, and jobs.
Federal stimulus and support money remains a major feature of the current City budgetary and
overall economic landscape, particularly involving Coronavirus relief funding for the City's COVID-
19 pandemic and economic recovery. The City has been recipient of U.S. Treasury's American
Rescue Plan Act (ARPA) direct funding in two equal tranches of $5,944,486, one of which was
received in June 2021 and the second coming around that same timeframe in 2022. Portions of
FY 2020 CARES Act allocations of federal Coronavirus relief funding was available for use in a
portion of FY 2021, wrapping up necessary expenditures to close out the $6,719,195 that was
received from Texas Division of Emergency Management ($6,374,005), Harris County
($288,035), and Fort Bend County ($56,155). Of these amounts, the $5,421,967 unspent from FY
2020 was used and reimbursed accordingly in FY 2021, further aiding the local efforts to sustain
City services during the pandemic.
As a multi -faceted local government, the City of Pearland's impact, as monitored and reported
continuously, has not shown dire impact from effects of this ongoing pandemic. The combination
of early action, conservative budgeting, and continuous monitoring have kept City finances in
good standing. The City of Pearland through FY 2021 did not experience drastic revenue
reductions. As with FY 2020, throughout FY 2021, the City maintained a mantra of working to
maximize flexibility and reserves to deal with unknown change.
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Regional and State of Texas Economy
Houston is the world's energy capital, capital of an oil and gas industry that is in constant flux. At
this writing, during the ongoing COVID-19 public health emergency and pandemic, that instability
is in high gear. A collapse in oil prices rocked the energy industry at the same time COVID-19
shut down the economy in April 2020. Demand for global crude has been climbing as economies
reopen and people receive the COVID-19 vaccination and Greater Houston Partnership (GHP)
predicts global crude demand to return to pre -pandemic levels by the end of 2022.
The "Great Resignation" has continued as according to the U.S. Department of Labor more than
4.6 million people quit their jobs in November 2021 with Texas leading the way with more than
400,000 people resigning. GHP is forecasting for the Metro Houston area to "create 75,500 jobs
in '22. Job growth will occur in every sector of the economy, including several that struggled to
create jobs prior to the pandemic. The greatest gains will occur in administrative support;
government; health care and social assistance; professional, scientific and technical services;
and restaurants and bars."
GHP also stated that "several factors will drive Houston's growth in '22: a strong U.S. economy,
expanding global trade, energy consumption returning to pre -crisis levels, pent-up consumer
demand, local population growth, and the ongoing housing boom. The recovery will continue to
face headwinds, however. Elevated inflation, supply chain woes, and worker shortages may
temper growth but won't halt it."
Long -Term Financial Planning
The City adopts a one-year operating budget, including a five-year capital improvement program
(CIP). Even though a one-year budget is adopted, the budget implements strategies, both
financial and operational, to meet existing challenges and to plan ahead.
The City's adopted (July 26, 2021) Five -Year CIP for fiscal years 2022 through 2026 totals $471.5
million. The large and varying CIP for public investments of drainage, parks, facilities, streets,
water, and wastewater positions City infrastructure for serving the population and businesses that
are here and yet to come.
The 2022-2026 CIP document completes the balance of the $162 million bond program approved
by the voters in May 2007 and adds the new voter -approved May 2019 bond issue of $80 million.
Funding from projects is supported by non -debt sources ($33.2 million), leveraged outside funds
($30.5 million), tax -supported debt ($114.6 million), and water/sewer supported enterprise fund
debt repaid by user fees ($293.2 million). The ratio of outstanding property tax -supported debt to
taxable assessed valuation increased slightly from the previous year but remains below 5% at
about 3.3%.
For non -enterprise general obligations, the Debt Service Fund can meet current and future
obligations based on the City's Multi -Year Forecast and Five -Year CIP where needed. Issuance
of debt is factored into funding sources, based on the Five -Year CIP. The City's property tax rate
for the FY 2022 budget is $0.701416 of which $0.325103 cents is for actual debt service and
$0.066987 cents is for rebates to in -city MUD districts but considered as debt service component.
The Debt Service component, inclusive of in -City MUD district rebates, for the FY 2022 budget
was $0.392.
The City completes a Water/Sewer Cost of Service Rate Study annually for the forecast. The
study is built around the Five -Year CIP, operating budget, and future needs. Rate customers saw
a slight increase of 1.6% in FY 2020 and no increase in FY 2021 to bring revenue necessary to
maintain the system. The City's utility system continues to be self-supporting and financially
sound. City Council approved a 5% increase in the FY22 Budget to keep up with expenses and
debt issuance. As with other aspects of the City's service delivery package, there are substantial
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capital projects for expansion of plants, distribution and collection lines, and a variety of
modernizations to meet needs of the current and future community. Continued expansions and
improvements will require appropriate rate increases to provide adequate upkeep of the system.
Relevant Financial Policies/Guidelines
Financial policies guide the development and implementation of the budget, are a framework for
fiscal decision making, and ensure financial resources are available to meet the current and future
needs of the City. The policy statements address areas of reporting and auditing, budgeting,
revenues, capital improvements, debt, and grants to name a few. Some of the most relevant
policies are:
•
•
•
Recurring revenues fund recurring expenditures/expenses
Non -recurring funds fund non -recurring expenditures/expenses
General Fund Operating Reserves should be a minimum of three months of
operations
Water and Wastewater Operating Reserves shall strive to be maintained at 25%
of operations and a 1.4 bond coverage for Water and Sewer debt service
Budget revenues on a conservative basis
Fund existing services at current service levels
Enterprise Funds must be self-supporting
Leverage City dollars by seeking outside funding sources
Maintain stable property tax rates
Major Initiatives
The City Council, staff, and community share a vision that combines progress and innovation with
prudent controls to shape Pearland's future, as it becomes one of the largest suburbs in the
Houston area. Some of the major initiatives are as follows:
Public Safety
Personal safety is a key means of both attracting new residents and retaining existing ones in
Pearland; if citizens don't feel safe, they will not come nor will they stay. The Pearland Police
Department continues to focus on the strategic priority of Safe Community.
To operate more efficiently and
effectively, the Department employs a
data -driven approach to policing.
Examples of this are the implementation
of the Special Investigation Unit within
the Criminal Investigations Division to
quickly address emerging criminal
trends, continued efforts to thwart crime
and crashes in the identified Data Driven
Approaches to Crime and Traffic Safety
(DDACTS) zones, and crime analysis
updates which provide mapping and
data specific to the different police beats
within the City of Pearland. The City has
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two professional crime analysts, expert in data analysis and communication who work closely with
Criminal Investigations and Patrol operations.
The Pearland Police Department encourages public involvement through the programs offered
by members of the Community Outreach unit. This includes the Department's flagship program,
the Citizens' Police Academy. Another primary focus of the Police Department is training. In 2021,
the department launched its own Police Academy with the first group of cadets set to complete
the program in early 2022. Additionally, the Training Division provided over 30,000 training hours
last year, including internal personnel and attendees from over 160 outside agencies.
With the support of IT staff, the Pearland Police Department continues to be a leader in innovative
policing technology. A prime example is the Unmanned Aircraft System (UAS), aka drone, unit
that provides support to police department personnel, other police agencies, and other COP
Departments. In Fiscal Year 2021, a police officer was designated specifically to manage drone
operations city-wide which has expanded the program and its benefits even further.
The Animal Services section of the Police Department met and maintained an important milestone
in Fiscal Year 2021. This was the first complete fiscal year the shelter reached a no -kill status.
This milestone was achieved through staff focusing on adoption and rescue programs and will
continue to expand on these efforts after transitioning into the new Shari D. Coleman Animal
Shelter and Adoption Center in March 2022.
Fire Station 1, relocated on the northeast corner of McHard and Old Alvin Road, opened in
September 2019 to provide quicker response times. The new station totals approximately 9,500
sq. ft., while housing one fire engine and one ambulance.
Fire Station 8, pictured below, located in the master -planned community of Shadow Creek Ranch,
at the northwest corner of Shadow Creek Parkway and Reflection Bay Drive, was completed late
summer 2020. The station is approximately 18,000 sq. ft. and hosts one fire engine, one ladder
truck, and one ambulance. A second engine will be added in the future based on service demand
and available funding. During FY 2020 and FY 2021 an additional 30 full-time fire fighters were
onboarded for staffing. The City of Pearland was successfully awarded a FEMA SAFER grant,
which supports initial funding for 12 of those 30 new firefighters hired.
Fire Station 4 (located on Freedom Drive east of Cullen) will be relocated immediately adjacent
to the existing fire station, which was built in 2001 as a volunteer station. Modifications were
originally made in 2008 to accommodate some full-time staff, but the building is not sufficient for
modern operations. The new fire station opens in March 2022 with modern health and safety
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features, as well as improved technology to assist with fire fighter safety, productivity, efficiency,
and effective workflow. No additional staffing will be required to fully operate this station.
In May of 2019, Pearland voters approved a General Obligation bond of $1.3 million for Phase I
of the Fire Training Field Improvement Plan to construct a two-story live fire training building. The
building is located on the existing Fire Training Field behind the David L. Smith Fire Administration
Building on Veterans Drive and began operations in November of 2021.
Our Emergency Management
Program continues to grow,
finalizing the City's Hazard
Mitigation Plan and
implementing many lessons
and strategies learned from
Hurricane Harvey. Significant
Community Risk Reduction
efforts have resulted in the
removal of numerous
dilapidated and dangerous
structures, public -private
cooperation for subdivisions
with residential sprinklers, and
semi-annual inspections of all
establishments providing food
service. In addition, the Community Outreach Division has aided more than 20,000 Pearland
residents by completing community public safety education such as CPR certifications, car seat
inspections, and smoke alarm testing.
The 90th percentile city-wide response times for fire emergencies have continued to improve over
the last four years. The achievement is due primarily to the addition of fire stations and staffing of
operations with 131 full-time firefighters, who also provide Emergency Medical Services as
certified EMT and Paramedic professionals.
The City has received a letter from the Insurance Services Office, Inc. (ISO) that the City is being
recommended the highest possible rating from ISO, a Public Protection Class (PPC) 1 for the
incorporated city limits of Pearland. ISO ratings are for a series of factors, recognizing the
integrated nature of fire safety prevention and response, when required. The ISO upgrade reflects
their assessment of significant amount of improvements made, and currently in progress, in
Communications, Fire Department and Public Works since 2015. The improved rating will
promote lower insurance premiums for homeowners and businesses and contribute to economic
development by promoting Pearland as a safe community for business and residential
development.
Parks and Recreation
Parks and Recreation is the nucleus of health and lifestyle experiences that connects Pearland
residents, businesses, and visitors alike. From adaptive yoga to swim lessons, and Celebration
of Freedom to nature walks, the Pearland Parks and Recreation department is continuously
developing opportunities to meet the desires of the growing and diverse Pearland community. As
importantly, these offerings provide another reason for the sustained quality and attractiveness of
vii
the community to live and work while also connecting people from all backgrounds, interests, and
parts of Pearland.
One area where the commitment and
the quality is most evident is the phase
II development of the Sports Complex
at Shadow Creek Ranch. The phase
development represents a $10M further
investment which adds features that are
unique and important to the future
competitiveness of the community. The
additions include two cricket/rugby
fields covered in artificial turf to
maximize playability while minimizing
groundskeeping, the only multipurpose
Miracle Field in the surrounding area
that features a sports surface designed
to accommodate special needs
athletes, additional field lighting, approximately 250 parking spaces, expanded restrooms and
concession offerings, and an inclusive playground that will provide an opportunity for everyone to
play.
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In addition to programming and sports, Parks and
Recreation is responsible for some of the largest events in
the City. From beginning to end — planning, permitting,
security, traffic control, volunteer assignments, timing, a/v
equipment, event execution, and post -event analysis — the
special events team leads the way. Because of the
dedicated efforts of a select handful of employees and
dedicated investment from the City, the big events in
Pearland are always memorable community gatherings and always professional.
Finally, delivering against the vision of "building a healthy, connected, and vibrant community that
enriches lives through exceptional experiences" to the community, Parks and Recreations is a
liaison with the Brazoria County Library System playing an integral part of the two Brazoria County
Libraries in Pearland. The two Pearland libraries are the most visited libraries in the entire Brazoria
County Library System, and the soon to be completed once -in -a -lifetime West Pearland Library
will only increase visitor volume. This state-of-the-art facility built by the City and operated by the
Brazoria County Library System will include collaboration spaces, video editing room, 100 seat
viii
teaching theater, comfortable places to sit and read, and access to the Clear Creek Trail. It is
impossible to see the features of this building and not imagine all the community experiences that
will take place over the coming decades.
Economic Development
The Pearland Economic Development Corporation (PEDC) is a non-profit Type B Corporation
under the Texas Development Corporation Act and is primarily funded by a half -cent sales tax in
the City of Pearland. PEDC is committed to enhancing the community's economic vitality through
the attraction, retention and expansion of primary employers. PEDC works to ensure Pearland's
business climate and built environment strongly support these efforts by focusing on aesthetics,
infrastructure, quality of life, image, workforce and quality development and redevelopment of key
Pearland districts and corridors.
PEDC staff works with the City and partners to generally promote the City and to utilize various
tools to encourage and sustain quality private investment. Tools include PEDC investing in the
infrastructure that businesses rely upon and judicious use of tools such as tax abatement and the
authority granted the City under Chapter 380 of the Local Government Code to encourage new
jobs and investment in the community that are tied to performance of the private investment goals.
Throughout 2021, PEDC continued to coordinate implementation efforts for the Pearland
Prosperity Community Strategic Plan, which was adopted in early 2020. At the center of the
Pearland Prosperity framework are two community goals that broadly identify the desired
outcomes of Pearland's holistic economic development effort: (1) Economic growth and
diversification and (2) A community of choice in Greater Houston. These goals can be
pursued through a number of Strategic Initiatives grouped into seven high-level Focus Areas: (1)
Business Development, (2) Business Formation and Early Stage Growth, (3) Site Development,
(4) Corridors, (5) Infrastructure and Mobility, (6) Quality of Life and Quality of Place, and (7)
Workforce and Talent.
Stemming from the Business Formation and Early Stage Growth focus area of the Pearland
Prosperity strategic plan, in 2021, PEDC began the process to evaluate feasibility and implement
an entrepreneurship hub for the Pearland community. In June 2021, PEDC completed a Market
Opportunity Assessment and Business Model Canvas Report, which determined that there is a
market for an entrepreneurship hub that focuses on enhancing versus replacing the current
services available to support entrepreneurs and small business owners in Pearland. In April 2021,
the PEDC Board of Directors, along with the Pearland Prosperity Implementation Committee and
Chamber Board of Directors, voted to move forward with the creation of the Pearland Innovation
Hub. In November, PEDC partnered with The Cannon Workplace, LLC to create and implement
the hub. The hub will enhance Pearland's innovation entrepreneurship culture by creating events,
programs, and activities for entrepreneurs and small business owners to inspire ideation,
innovation and entrepreneurship and will connect the City to local and regional entrepreneurship
assistance programs, service providers and funding sources to ensure local entrepreneurs and
small businesses in Pearland connect with these resources to maximize their growth potential
and overall success.
The following highlights a few of PEDC's FY 2021 business development projects.
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• Millar, Inc. announced
Pearland's Lower Kirby District as
the location for its new
headquarters and manufacturing
facility in October. Founded in
1969, Millar, Inc. pioneered the
development of pressure sensor
technology, directing its design
and manufacturing expertise
toward integrating that technology
into catheters for life sciences and clinical applications. PEDC began working with Millar
in 2017 on its relocation to Pearland. The site Millar selected for its facility was part of tract
owned by PEDC, which it sold to Millar. The 56,000 square -foot headquarters and
manufacturing facility will also house the company's R&D and warehouse functions.
Located on a five -acre site on Kirby Drive just south of Beltway 8, the facility will be home
to approximately 120 employees.
• HCA Houston Healthcare celebrated
the grand opening of its HCA Healthcare
Center for Clinical Advancement in the
Pearland Town Center in June 2021. The
PEDC and city officials began recruitment
efforts for this project with HCA and CBL &
Associates in 2018. The 48,400 square -
foot, state-of-the-art training center houses
high-fidelity hospital simulation labs,
connected classrooms and de -briefing
rooms, where the health system's nearly
7,000 nurses receive ongoing clinical education and training. The center also serves as a
hub for all HCA Houston Healthcare new hire orientations and the division's Leadership
and Organizational Development training.
• Code Ninjas completed construction on its 8,500 SF new headquarters building in early
2021. The headquarters, located at 2880 Broadway Bend, includes space for franchisee
training and testing curriculum for Code Ninjas and is home to approximately 60
employees.
• Lonza opened the world's largest dedicated gene and cell therapy manufacturing facility
in Pearland's Lower Kirby District in April 2018, and the 300,000-square-foot facility
continues to grow. The company had multiple expansions in 2021, including the
construction of additional clean rooms. Lonza has also acquired a 19-acre parcel of land
south of the current facility for possible future growth. Since the facility's opening in 2018,
Lonza has grown from around 150 to more than 500 employees at the Pearland facility.
x
Another key initiative outlined in
the Pearland 20/20 Community
Strategic Plan is to optimize the
development potential of
Pearland's principal commercial
corridors. The State Highway 35
Redevelopment Strategy was
developed in 2016 developed to
provide detail to the Strategic Plan
strategic initiatives provide the
"big picture" strategic actions that
are needed to encourage more
investment in the corridor.
Stemming from the State Highway
35 Redevelopment Strategy is the redevelopment of the Rice Drier area, which is identified as
Catalyst 2 Business Park North in the strategy. In recent years, PEDC has funded multiple phases
of public infrastructure improvement in the area to support almost 58 acres of development. Rice
Drier and Halik streets are old and narrow asphalt roads that are in regular need of maintenance
due to truck traffic from commercial and industrial growth in the area. The Rice Drier Road
reconstruction project was completed in 2021 and Halik Road reconstruction is approximately
30% constructed. In addition, the former gas station at the corner of Broadway/FM 518 and
Main/State Highway 35 was redeveloped with PEDC assistance as a Scooter's Coffee, a national
coffee chain.
With construction of the managed toll lanes along State Highway 288, one of Pearland's principal
corridors, completed in both Harris and Brazoria Counties, PEDC, the City, and Pearland
Municipal Management District No. 2 (PMMD2) continue to implement the 288 Corridor Master
Improvements Plan. In November, a $19.5 million contract was awarded for the final phase of the
multiple -phase master improvements plan, which includes landscape elements, irrigation,
lighting, water fountains, pear sculptures, and sidewalks and gateway markers. Construction will
begin in early 2022 and the improvements are expected to be complete in 2023. PEDC is funding
the entire $24.1 million cost of the 288 Corridor Master Plan Improvements.
Workforce and Talent, the seventh focus area in the Pearland Prosperity Strategic Plan, serves
to connect and enhance Pearland's talent pipeline though a collaborative approach. PEDC
partnered with Thomas P. Miller and Associates (TPMA) to create a Workforce Development
Action Plan for the community. The final plan, approved by the Pearland Prosperity
Implementation Committee and PEDC Board of Directors in late 2021, addresses workforce skills
gaps, career planning and work -based learning opportunities, diversity and inclusion, and
development of young professionals. PEDC plans to hire a workforce director position in early
2022 to oversee the implementation of the plan.
Convention and Visitor's Bureau
The City's Convention and Visitors Bureau (CVB), funded by hotel occupancy taxes, also focuses
on economic development through visitation and attracting leisure and business visitors into the
City of Pearland. The CVB witnessed a gradual rebound of travel to the area during fiscal year
2021 with the release of COVID-19 vaccinations and the lifting of shutdown orders. Pearland's
visitor economy generated $1,242,365 in hotel occupancy tax revenue in 2021. While business
travel continues to be negatively impacted by the pandemic, sports tourism played a pivotal role
in the recovery of the local economy. The CVB initiated an agreement for Pearland to serve as
host city in 2021 for several girls youth softball tournaments by a nationally recognized sports
organization. The partnership generated 875 room nights for Pearland hotels welcoming a total
xi
of 189 teams with an overall attendance of 7,749 and an estimated economic impact of
$1,988,277. The City is quickly positioning as a viable sports destination and ultimately attracting
interest by regional sports organizations.
Land Use Plan/Annexation
Land use planning allows a community to accommodate its projected growth in a manner that
preserves its history and culture, as well enhance the overall quality of life for the current and
future residents and businesses. Planning allows a city a greater measure of control of its future
rather than simply reacting to change.
The City of Pearland uses its Comprehensive Plan as its primary planning policy document to
guide and balance future development, including infill and redevelopment, and community
enhancement efforts of the City. Pearland has evolved from a rural community to a bustling
suburb, fully integrated with the Houston metropolitan area. Through the Comprehensive Plan,
and associated implementation regulations such as zoning, Pearland continues to prepare for the
growth to come by focusing on the identifying forthcoming needs and setting concrete plans in
place to continue to manage this growth. To continue to stay ahead of the curve, Pearland is
currently in the process of updating the Comprehensive Plan to ensure the city is prepared for
key trends, new challenges, and the full array of opportunities ahead.
In 2019, the Texas State Legislature curtailed municipalities' abilities to proactively annex; long
used as a tool to assist in managing growth. However, with Pearland's water and wastewater
capacity, combined with its public safety and other services, the City is well -positioned to consider
voluntary annexations for mutual benefit and coordination.
Capital Improvement Projects and Planning
With continued residential and commercial
development, the need to plan and build new
infrastructure and maintain existing infrastructure
is a priority and will be implemented through an
aggressive capital improvement program. The
City's adopted (July 26, 2021) Five -Year CIP
2022-2026 totals $471.5 million. Projects include
drainage ($11.4 million), streets ($61.7 million),
facilities ($94.2 million), parks ($11.8 million),
water ($50.6 million) and wastewater ($241.9
million).
Major drainage projects include work in West Lea, Willowcrest, Hickory Slough, Mimosa Acres,
and Piper Road.
Major street projects include Mykawa Road Widening (BW 8 to FM 518), Smith Ranch Road
Expansion (Hughes Ranch to Broadway), Bailey Road Expansion (Veterans Drive to Main Street),
and various intersection improvements and neighborhood street reconstructions.
Facility projects include Fire Station #7, Fire Station #11, Police Training Center, Hillhouse Road
Annex Phase 2, Natatorium Air Handling Replacement, Water Operations Building, and Orange
Street Service Center Phase 2.
Parks projects include Clear Creek Trail, Woodcreek Park Bridge, and Independence Park Phase
II.
xii
Major projects for water improvements include the Surface Water Plant Phase 1 (10 MGD), Bailey
Water Plant Improvements, FM 518 Utility Relocations (SH288 to Cullen), Transite Pipe Waterline
Replacement Program, Water Production Facility Rehabilitation and Ground Storage Tank
Rehabilitation.
Wastewater projects include Barry Rose Water Reclamation Facility Expansion, JHEC Water
Reclamation Facility Expansion, Longwood Water Reclamation Facility decommissioning,
Sanitary Sewer Rehabilitation, Lift Station Rehabilitation, and Southdown Regional Lift Station &
Force Main.
Transportation Improvements and Strategic Planning
Charged with planning, establishing, and maintaining an effective transportation system, the City
of Pearland is involved in numerous activities to face this challenge. The City is involved in
regional efforts for long-range transportation planning and funding. The Mayor, a member of H-
GAC's Transportation Policy Council (TPC), with the Mayor Emeritus serving as an alternate. The
Deputy City Manager is the Chair of the Transportation Advisory Committee (TAC), a sub-
committee of the TPC and a member of the Transportation Improvement Program (TIP)
Subcommittee.
The prior TIP calls provided major funding for ongoing and upcoming projects in and around
Pearland as depicted below.
SH 288 / FM 518 Overpass
FM 518 / SH 288 Intersection
CR 101
Hughes Ranch Road
Green Tee Terrace Trail
Shadow Creek Ranch Trail
McHard Road
Mykawa Road
Safe Routes to School
Smith Ranch Road
Clear Creek Trail
CR 59
CR 58
FM 521
Brazoria County
Brazoria County
Brazoria County
City of Pearland
City of Pearland
City of Pearland
City of Pearland
City of Pearland
City of Pearland
City of Pearland
City of Pearland
Brazoria County
Brazoria County
City/County Federal State Total Project Projected
• its Lettin Date
Overpass Only
Intersection Only
FM 1128 to CR 90
Smith Ranch Rd to Cullen
Hughes Rd to FM 518
Nature Park to Kirby Dr
Mykawa to Cullen
FM518toBW8
Various
Hughes Rach Rd to FM 518
Hughes Rd to U of H
Kirby to Kingsley
Savannah Pkwy to CR 48
Fort Bend County FM 2234 to SH 6
$ 1,904,800.00
$ 2,800,200.00
$ 3,412,400.00
$ 8,313,156.00
$ 689,702.00
$ 767,760.00
$ 17,026,469.00
$ 15,330,623.00
$ 1,208,400.00
$ 6,620,409.00
$ 3,785,872.00
$ 1,954,000.00
$ 1,223,200.00
$ 15,045,400.00
$ 7,619,200.00
$ 11,200,800.00
$ 13,649,600.00
$ 14,536,844.00
$ 3,235,150.00
$ 1,548,366.00
$ 32,380,531.00
$ 2,237,680.00
$ 2,553,600.00
$ 3,899,591.00
$ 6,684,128.00
$ 7,816,000.00
$ 4,892,800.00
$ 60,181, 600.00
$ 9,524,000.00
$14,001,000.00
$17,062,000.00
$ 22,850,000.00
$ 3,924,852.00
$ 2,316,126.00
$49,407,000.00
$17,568,303.00
$ 3,762,000.00
$10,520,000.00
$10,470,000.00
$ 9,770,000.00
$ 6,116,000.00
$ 75,227,000.00
2016
2016
2017
2018
2018
2018
2020
2021
2021
2022
2022
2023
2023
2024
With the growth in population along the Highway 288 corridor and the number of Pearland
residents that rely on Hwy 288 to commute to Houston and the Texas Medical Center, the City
along with Brazoria County worked with the Texas Department of Transportation to provide traffic
relief on the corridor through managed toll lanes. The Toll Lanes from CR58 to US59 near
downtown Houston were opened in 2020. In conjunction with the Toll Lane project, TxDOT and
Brazoria County reconstructed the SH288 overpass at FM518 providing much needed additional
capacity at our busiest intersection.
Fiscal Responsibility and Sustainability
Fiscal sustainability can be defined as "the extent to which patterns of government spending do
not undermine the capability of the government to continue to spend to achieve its public
purposes." City Council takes a proactive stance in ensuring the fiscal health and sustainability of
the City. Council adopted a set of Financial Management Policy Statements and receives
quarterly Finance "Snapshot" presentations, which includes economic indicators. The City also
prepares a Five -Year Forecast for the City's major funds to see how the spending decisions made
today affect the future as well as to identify any issues/concerns that are forthcoming and to put
strategies in place today to address those issues/concerns for the future.
While the COVID-19 pandemic continues to impact the world, the local economy has remained
strong and healthy. Local Pearland sales taxes have continued to grow, seeing an increase in
sales tax revenue in FY 2021 of 14.9% over FY 2020.
Property tax revenue is projected to maintain the strong levels that have developed. Property
taxes provide a timing buffer from the standpoint that the FY 2022 budget relies upon values
determined by the three county appraisal districts as of January 1, 2021. Likewise values as of
January 1, 2022 will provide the General Fund and Debt Service Fund revenues for FY 2023.
Property values have remained strong despite the prevalence of COVID-19 and the housing
market continues to flourish. Looking ahead, property values as of January 1, 2023 will not come
into play until the City's FY 2024.
While about half -way into FY 2022, the City is already beginning to prepare for the FY 2023 budget
process and up -coming forecast with the continuing goal of being fiscally responsible to our
citizens.
xiv
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded
a Certificate of Achievement for the Excellence in Financial Reporting to the City of Pearland,
Texas, for its Annual Comprehensive Financial Report for the year ended September 30, 2020.
This was the 45t" consecutive year that the City has received this prestigious award. To be
awarded a Certificate of Achievement, a governmental unit must publish an easily readable and
efficiently organized comprehensive annual financial report. The City's report satisfies both
generally accepted principles and applicable legal requirements. A Certificate of Achievement is
valid for a period of one year only. City staff believe that our current comprehensive annual
financial report continues to meet the Certificate of Achievement program's requirements, and we
are submitting it to GFOA to determine its eligibility for another certificate.
In 2020, the Government Treasurers' Organization of Texas (GTOT) awarded the second
Certificate of Distinction to the City of Pearland for its Investment Policy. The certification is good
for a two-year period ending in 2022. The City of Pearland received its Certificate of Investment
Policy award for developing an investment policy that meets the requirements of the Public Funds
Investment Act and standards for prudent public investing established by the Government
Treasurers' Organization of Texas.
The City has also received the GFOA's Distinguished Budget Presentation Award for its annual
budget document for 34 consecutive years with its Fiscal Year 2020 budget document. In order
to qualify for the Distinguished Budget Presentation Award, the government's budget document
had to be judged proficient as a policy document, a financial plan, an operations guide, and a
communications device.
The City submitted a Popular Annual Financial Report (PAFR) to Government Finance Officers
Association (GFOA) for FY 2020. This is the second year in a row the City is participating in this
program. Due to COVID-19, GFOA has not yet completed the review of the FY 2020 PAFR
submission at the time of this report.
The preparation of this report was accomplished with the dedicated service of the Accounting staff
of the Finance Department. We express our sincere appreciation to these individuals who have
continually demonstrated the core beliefs of the City and who assisted and contributed to the
preparation of this report. We also thank the Mayor and members of the City Council for their
support in planning and conducting the financial operations of the City in a responsible manner.
Respec ully sybnjtted,
ay J.'Parson
it Manager
Amy Buckert Johnson
Chie inancial Officer
7/0,,
Trent Epperson
Deputy City Manager
/(/' e-t-a—
Kristen Woolley
Deputy Director of Finance
xv
CITY OF PEARLAND, TEXAS
Principal Officials
As of September 30, 2021
Elected Officials
Kevin Cole
Adrian Hernandez
Luke Orlando
Tony Carbone
Alex Kamkar
J. David Little
Trent Perez
Woody Owens
Appointed Officials
Clay Pearson
Darrin Coker
Letitia Farnie
City Management Position
Trent Epperson
Ron Fraser
Matt Buchanan
Amy Buckert Johnson
Crystal Roan
Robert Upton
LaRae James
Daniel McGhinnis
Johnny Spires
Carry Capers
Vance Riley
John McDonald
Tracy Rohrbacher
Joshua Lee
Jennifer Huhn
Position
Mayor
Mayor Pro Tenn
Councilmember - Position 1
Councilmember - Position 2
Councilmember - Position 3
Councilmember - Position 5
Councilmember - Position 6
Councilmember - Position 7
Position
City Manager
City Attorney
Municipal Court Judge
Deputy City Manager
Assistant City Manager
PEDC President
Chief Financial Officer
City Secretary
Director of Engineering and Public Works
Director of Human Resources
Chief Information Officer
Police Chief
Director of Parks and Recreation
Fire Chief
Director of Community Development
Executive Director, CVB
Director of Communications
Municipal Court Administrator
Term
Expires
May
2023
2024
2022
2024
2023
2022
2022
2023
xvi
CITY OF PEARLAND)
STAFF ORGANIZATION CHART?
PEARLAND COMMUNITY
MAYOR & CITY COUNCIL
CITY MANAGER]
COMMUNICATIONS
COMMUNITY
DEVELOPMENT
CONVENTION AND;
VISITORS BUREAU,
(FINANCE)
ASST. CITY MANAGER
DEPUTY CITY MANAGER
ENGINEERING AND
CAPITAL PROJECTS
(INFORMATION)
TECHNOLOGY
(LIBRARY)
PUBLIC WORKS)
HUMAN RESOURCES PARKS AN
■ RECREATION,
(PEARLAND ECONOMIC)
(DEVELOPMENT CORPORATION)
(CITY SECRETARY)
FIRE
(MUNICIPAL COURT]
cr(OFFICE OFZ
EMERGENCY
MANAGEMENT
MUNICIPAL COURT JUDGE)
‘--(LEGAL
(POLICE)
xvii
0
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Pearland
Texas
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
September 30, 2020
CIu" t.P)
Executive Director/CEO
xviii
Financial Section
BKD
CPAs & Advisors
The Mayor and City Council
City of Pearland, Texas
Pearland, Texas
2700 Post Oak Boulevard, Suite 1500 I Houston, TX 77056-5829
713.499.4600 I Fax 713.499.4699 I bkd.com
Independent Auditor's Report
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Pearland, Texas,
as of and for the year ended September 30, 2021, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
PRAXITY
\��� Empowering Business Globally
The Mayor and City Council
City of Pearland, Texas
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major fund
and the aggregate remaining fund information of the City of Pearland, Texas, as of September 30, 2021,
and the respective changes in financial position and, where applicable, cash flows thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As discussed in Note 1 to the financial statements, in 2021, the City adopted new accounting guidance,
Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities and Governmental
Accounting Standards Board Statement No. 97, Certain Component Unit Criteria, and Accounting and
Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans — an
amendment of Governmental Accounting Standards Board Statements No. 14 and 84, and a supersession
of GASB Statement No. 32. Our opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis, pension and other postemployment benefit information and the schedule of
revenues, expenditures and changes in fund balance budget and actual — general fund and Pearland
Economic Development Corporation as listed in the table of contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic or
historical context. We have applied certain limited procedures to the required supplementary information
in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements
and other knowledge we obtained during our audit of the basic financial statements. We do not express
an opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, combining and individual fund
statements and schedules and statistical section as listed in the table of contents are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
2
The Mayor and City Council
City of Pearland, Texas
The combining and individual fund statements and schedules are the responsibility of management and
was derived from and relates directly to the underlying accounting and other records used to prepare the
basic financial statements. 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 statements and schedules are fairly stated, in all material respects, in
relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we also have issued our report dated March 8, 2022,
on our consideration of the City's internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters.
The purpose of that report is solely to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the City's internal control over financial reporting or on compliance. That report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering the City's internal
control over financial reporting and compliance.
Houston, Texas
March 8, 2022
3
THIS PAGE LEFT BLANK INTENTIONALLY
4
Management's Discussion and Analysis
5
6
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis
Year Ended September 30, 2021
As Management of the City of Pearland, Texas (the City), we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City for the fiscal
year ended September 30, 2021. This information is not intended to be a complete statement of
the City's financial condition. We recommend and encourage readers to consider the information
presented here in conjunction with the additional information presented in the accompanying
transmittal letter (Pages i-xv of this report), and the statistical section (Pages 123-165 of this
report), as well as the annual budget found on the City's website at https://www.pearlandtx.gov/.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the primary government of the City
exceeded its liabilities and deferred inflows of resources as of September 30, 2021, by
$864.0 million (net position). Of this amount, $654.8 million is invested in capital assets,
net of related capital debt and $75.2 million is restricted for capital improvements, debt
service, community development programs, public safety and economic development.
• At the close of the current fiscal year, the City's governmental funds reported combined
ending fund balances of $163.5 million, an increase of $1.5 million in comparison to the
prior year. Approximately $135.8 million of the $163.5 million is considered restricted fund
balance and primarily consists of $37.3 million for economic development and $63.2
million for capital projects.
• As of September 30, 2021, the unassigned fund balance for the General Fund was $32.3
million or 37.3% of total General Fund expenditures. The total fund balance for the General
Fund is $32.5 million or 37.6% of General Fund expenditures.
• The City's long-term liabilities increased by $77.4 million primarily due to the issuance of
new debt.
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 of four components: 1)
government -wide financial statements, 2) fund financial statements, 3) notes to the financial
statements and 4) required supplementary information which includes this management's
discussion and analysis, information related to the City's pension plan and retiree health plans
and budgetary comparison information. This report also contains other supplementary
information as listed in the table of contents in addition to the basic 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 a
private -sector business.
The Statement of Net Position presents information on all of the City's assets, deferred outflows
of resources, liabilities, and deferred inflows of resources, 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.
7
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
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 related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in the
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, public works, community services and parks and recreation. The
business -type activities of the City include water, sewer, and solid waste. The government -wide
financial statements can be found on pages 21 through 23 of this report. The government -wide
financial statements include not only the City, itself (known as the primary government), but also
a legally separate Economic Development Corporation and the Development Authority of
Pearland for which the City is financially accountable. Financial information for these blended
component units is reported together with the financial information presented for the primary
government.
Fund Financial Statements — A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City,
like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements. All funds of the City can be divided into two
categories — governmental funds and proprietary funds.
Governmental Funds — Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government -wide financial statements.
However, unlike the government -wide financial statements, governmental fund financial
statement focus on current sources and uses of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government's near -term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near -term
financing decisions. Both the governmental funds balance sheet and the governmental fund
statements of revenues, expenditures, and changes in fund balance provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
Beginning on page 24 of this report, 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, Debt Service, Capital Projects, Pearland Economic
Development Corporation, Tax Increment Reinvestment Zone #2, and Development Authority of
Pearland, which are considered to be major funds. Data from the non -major governmental funds
are combined into a single, aggregated presentation. Individual fund data for each of these non -
major governmental funds is provided in the form of combining statements elsewhere in this
report.
8
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison
statement has been provided for the General Fund to demonstrate compliance with the budget.
Proprietary Funds — The City maintains two types of proprietary funds. Enterprise Funds are used
to report the same functions presented as business -type activities in the government -wide
financial statements. The City uses an Enterprise Fund to account for its Water and Sewer Fund
and Solid Waste Fund. Additionally, the City maintains an Internal Service Fund to account for
the financing of goods or services provided by one department or agency to other departments
or agencies of the City on a cost reimbursement basis. The Internal Service Fund is included in
governmental activities for government -wide reporting purposes.
Proprietary funds provide the same type of information as the government -wide financial
statements, only in more detail. The basic proprietary fund financial statements, which begin on
page 31 of this report, provide separate information for the Water and Sewer and Solid Waste
Enterprise Funds since they are considered to be a major fund of the City. The basic proprietary
fund financial statements can be found on pages 31 through 35 of this report.
Fiduciary Fund — The fiduciary fund administered by the City includes the State Court Costs
Custodial Fund. This fund includes court costs collected by the City on behalf of the State of
Texas, which are remitted to the state quarterly. Funds collected by the City Fiduciary Fund are
not presented in the government -wide financial statements as these funds are restricted and are
not available to support the programs of the City. The basic fiduciary fund financial statements can
be found on pages 36 through 37 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 financial statements can be found beginning on page 39 of this report.
Other Information — In addition to the basic financial statements and accompanying notes, this
report also presents other required supplementary information as well as combining and
individual fund statements and schedules that further support the information in the financial
statements. This information is presented immediately following the notes to the financial
statements beginning on page 85 of this report.
Government -wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City, assets and deferred outflows of resources exceeded liabilities by
$864.0 million at the close of the most recent fiscal year.
By far the largest portion of the City's net position (75.8%) reflects its investment in capital assets
(e.g., land, infrastructure, buildings, machinery, and equipment), less any related debt used to
acquire those assets that is still outstanding. The City uses these capital assets to provide
services to citizens; consequently, these assets are not available for future spending. Although
the City's investment in its capital assets is reported net of related debt, it should be noted that
the resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
9
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
Comparative Statement of Net Position
September 30, 2021 and 2020
Amounts in (000's)
Assets
Current and other assets
Capital assets
Total assets
Deferred outflows of
resources
Net Position
Governmental Activities Business -type Activities Total
2021 2020 2021 2020 2021 2020
$ 206,342 $ 192,268 $ 257,312 $ 231,423 $ 463,654 $ 423,691
898,673 863,249 463,619 414,669 1,362,292 1,277,918
1,105,015 1,055,517 720,931 646,092 1,825,946 1,701,609
13,916 15,134 2,059 2,191 15,975 17,325
Liabilities
Current 29,360 17,203 24,644 18,633 54,004 35,836
Long-term liabilities
outstanding 493,796 480,762 425,313 360,155 919,109 840,917
Total liabilities 523,156 497,965 449,957 378,788 973,113 876,753
Deferred inflows of
resources
4,147 4,275 626 622 4,773 4,897
Net position
Net investment in
capital assets 493,670 490,304 161,158 213,081 654,828 703,385
Restricted 45,162 44,928 30,064 16,776 75,226 61,704
Unrestricted 52,796 33,179 81,185 39,016 133,981 72,195
Total net position $ 591,628 $ 568,411 $ 272,407 $ 268,873 $ 864,035 $ 837,284
10
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
Comparative Statement of Activities
September 30, 2021 and 2020
Amounts in (000's)
Changes in Net Position
Governmental Activities Business -type Activities Total
2021 2020 2021 2020 2021 2020
Revenues
Program revenues
Charges for services $ 28,255 $ 24,861 $ 60,713 $ 62,465 $ 88,968 $ 87,326
Operating grants and
contributions 20,006 20,774 1 225 20,007 20,999
Capital grants and
contributions 1,876 7,148 1,007 1,456 2,883 8,604
General revenues
Property taxes 100,075 97,106 100,075 97,106
Sales and use taxes 40,248 34,928 - 40,248 34,928
Franchise taxes 6,940 7,270 - - 6,940 7,270
Investment income 209 1,626 94 1,277 303 2,903
Other 4,793 4,865 16 13 4,809 4,878
Total revenues 202,402 198,578 61,831 65,436 264,233 264,014
Expenses
General government 27,594 25,504 - 27,594 25,504
Public safety 53,503 51,031 - - 53,503 51,031
Public works 48,115 44,862 48,115 44,862
Community services 4,465 4,383 - - 4,465 4,383
Parks and recreation 6,799 8,197 - - 6,799 8,197
Economic development 30,653 28,683 30,653 28,683
Interest on long-term debt 13,604 14,042 - - 13,604 14,042
Water and sewer - 44,655 45,054 44,655 45,054
Solid waste - 8,094 7,930 8,094 7,930
Total expenses 184,733 176,702 52,749 52,984 237,482 229,686
Increase in Net Position 17,669 21,876 9,082 12,452 26,751 34,328
Before Transfers
Transfers 5,548 5,460 (5,548) (5,460)
Change in Net Position 23,217 27,336 3,534 6,992 26,751 34,328
Net Position, Beginning 568,411 541,075 268,873 261,881 837,284 802,956
Net Position, Ending $ 591,628 $ 568,411 $ 272,407 $ 268,873 $ 864,035 $ 837,284
11
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
The increase in total net position from the prior year is $26.8 million is primarily attributable to the
increase in capital assets funded by debt issued in the current and prior fiscal year.
Governmental activities — Governmental activities increased the City's net position by $23.2
million, thereby accounting for 86.7% of the total increase in the net position of the City. Key
elements of this increase are as follows:
• Property taxes, sales and use taxes, and franchise taxes totaled $100.1 million, $40.2
million, and $6.9 million, respectively. These revenues increased by $7.9 million from prior
year primarily as a result of an increase in taxable assessed values driven by increased
local real estate market values and local sales and use taxes.
• Capital grants and contributions totaled $1.9 million as a result of infrastructure contributed
by developers.
• The revenues were offset by expenses for general government, public safety, public
works, economic development of $27.6 million, $53.5 million, $48.1 million, and $30.7
million, respectively.
Business -type activities — Business -type activities increased the City's net position by $3.5
million, thereby accounting for 13.3% of the total increase in the net position of the City. Key
elements of this increase are as follows:
• Program revenues of $61.8 million decreased approximately $3.6 million from the prior
year primarily due to decreases in charges for services and capital grants.
• Operating grants and contributions of $1 thousand decreased by $0.7 thousand from the
prior year due to decreases in grant funding from federal and state agencies.
• Capital grants and contributions of $1.0 million decreased $0.5 million from the prior year
primarily due to a decrease in contributions from developers for impact fees.
• The revenues listed above were offset by expenses of $44.7 million and $8.1 million,
respectively, for Water and Sewer and Solid Waste, respectively. Expenses decreased
from the prior year by $235 thousand.
FINANCIAL ANALYSIS OF THE CITY'S FUNDS
As noted earlier, fund accounting is used to demonstrate and ensure compliance with finance -
related legal requirements.
Governmental Funds — The focus of the City's governmental funds is to provide information of
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 City's net resources available for spending at the end of the fiscal year.
12
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
The City's governmental funds reflect a combined fund balance of $163.5 million. A portion of the
combined fund balance, or $27.5 million, is unassigned and available for day-to-day operations
of the City; $63.2 million is restricted for capital projects; $37.3 million for economic development
and the remaining balance is restricted for debt service and other programs.
There was an increase in the combined governmental fund balance of $1.5 million from the prior
year. The increase in fund balance includes increases in the General Fund of $3.4 million,
Pearland Economic Development Corporation of $14.8 million, and the Tax Increment
Reinvestment Zone #2 of $208 thousand. These increases in fund balance were partially offset
by decreases in fund balance in the Debt Service Fund of $275 thousand, Capital Projects Fund
of $10.0 million, Development Authority of Pearland of $1.8 million. The General Fund's fund
balance totaled $32.5 million at year-end.
Tax Increment Reinvestment Zone #2 had expenditures totaling $12.7 million, leaving an ending
restricted fund balance of $7.1 million.
The Pearland Economic Development Corporation and Development Authority of Pearland, the
City's blended component units, had expenditures totaling $28.3 million, leaving an ending fund
balance of $37.3 million, and $12.9 million, respectively, all considered restricted.
Proprietary Funds — The City's business -type activities contain two activities (water and sewer,
and solid waste). The City's proprietary funds provide the same type of information found in the
government -wide financial statement business -type activities. Total net position in the Internal
Service Funds was $14.0 million at year-end, a $4.7 million increase from the prior year.
GENERAL FUND BUDGETARY HIGHLIGHTS
During the year, there was a $4.4 million increase in appropriations between the adopted and
amended budget. The increase in appropriations is attributable to Winter Storm Uri and repairs to
two fire stations.
Actual revenues of $87.3 million were $1.9 million over the amended budget mainly in sales and
uses taxes. Actual expenditures of $86.6 million were under the amended budget, resulting in a
year-end fund balance of $32.5 million, in excess of budget by $5.7 million.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets — At the end of fiscal year 2021, the City's governmental activities and business -
type activities had invested $898.7 million and $463.6 million, respectively, in a variety of capital
assets and infrastructure, as reflected in the following schedule. This represents a net increase
of $35.4 million, or 4.1% over the end of last fiscal year for the governmental activities of $49.0
million or 11.8% over the end of last fiscal year for business -type activities.
13
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
Capital Assets
Amounts in (000's)
Governmental Activities Business -type Activities Total
2021 2020 2021 2020 2021 2020
Land $ 34,530 $31,212 $ 3,877 $3,796 $ 38,407 $ 35,008
Construction in progress 180,206 162,308 185,657 148,246 365,863 310,554
Infrastructure 587,723 583,556 234,746 220,811 822,469 804,367
Buildings and improvements 83,394 75,115 22,098 22,833 105,492 97,948
Machinery and equipment 10,345 9,161 1,010 1,366 11,355 10,527
Furniture and fixtures 2,475 1,897 21 32 2,496 1,929
Contractual water rights - 16,210 17,585 16,210 17,585
Total capital assets $ 898,673 $ 863,249 $ 463,619 $ 414,669 $ 1,362,292 $ 1,277,918
Construction in progress at year-end represents numerous ongoing projects, the largest of which
relate to street, parks, and water/sewer projects. City's capital assets can be found in Note 4 to
the financial statements.
Long -Term Debt - At the end of the current fiscal year, the City had total bonds, certificates of
obligation, and capital leases outstanding of $880.1 million. Of this amount, $263.9 million is
composed of general obligation bonds, $86.2 million is composed of certificates of obligation, and
$474.1 million represents revenue bonds secured solely by specified revenue sources.
Outstanding Debt
Amounts in (000's)
Governmental Activities Business -Type Activities Total
2021 2020 2021 2020 2021 2020
General obligation bonds $ 260,840 $ 268,680 $ 3,020 $ 4,110 $ 263,860 $ 272,790
Certificates of obligation 86,220 66,405 - - 86,220 66,405
Revenue bonds 73,235 81,445 400,840 335,435 474,075 416,880
Unamortized issuance
premium 38,710 29,963 16,917 16,168 55,627 46,131
Capital leases payable 381 541 - - 381 541
Total outstanding debt $ 459,386 $ 447,034 $ 420,777 $ 355,713 $ 880,163 $ 802,747
The City's general obligation bonds and certificates of obligation debt for governmental activities
increased to $347.1 million, a net increase of $12.0 million from the previous year. The increase
is due to new debt issued offset by scheduled principal payments. The City's debt for business -
type activities increased to $403.9 million, a net increase of $64.3 million from the previous year,
which was a result of new debt issued offset by scheduled principal payments.
14
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
Current credit ratings on debt issues are as follows:
Moody's
Standard Investor
& Poor's Fitch Services
General obligation bonds AA AA Aa2
Certificates of obligation AA AA Aa2
Revenue bonds AA- AA- Aa3
Both the Pearland Economic Development Corporation (PEDC) and the Development Authority
of Pearland (DAP), component units of the City, have issued debt. The PEDC bonds are rated Al
from Moody's. The DAP bonds are rated A- by Standard and Poor's. Additional information on
the City's long-term debt can be found in Note 5 to the financial statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET AND RATES
The City of Pearland continues with its forward momentum in FY 2022, less in terms of population
and more in terms of growing value. The City's sales tax revenue is expected to continue strongly,
providing $24.6 million in FY 2022. Sales tax revenue actually provides substantially to General
Fund operations as well as being the funding source for our Pearland Economic Development
Corporation for another $11.8 million in FY 2022. The City also saw an estimated $437 million, or
3.6%, increase in added taxable value in FY 2022. The combination of rooftops and retailers in
Pearland helps provide the local economy with jobs and investments and obviously provides
tremendous value to our local government operations.
The City received positive ratings from Moody's Investor Services and Fitch Ratings, Inc. for its
2021 bond issuances. The City's Permanent Improvement Bonds Series 2021 for $14.905 million,
the City's Certificates of Obligation Series 2021 A and 2021 B for $7.01 million and $15.605 million,
respectively, were assigned a rating of 'AA' by Fitch and `Aa2' by Moody's. Separately, our
enterprise fund Water and Sewer System Revenue and Refunding Bonds Series 2021B for
$10.37 million were assigned `AA-' by Fitch and `Aa3' by Moody's. These ratings demonstrate
strong creditworthiness relative to other U.S. municipal or tax-exempt issuers or issues. The City,
however, is significantly leveraged, which was necessary to allow the City to grow successfully.
15
General Obligation Debt
Miuians
$4011 • Other' • 2001 Bonds Authorrzation • 2007 Bonds Authorrzation • COs • 2019 and AuthorizEtian • 11RZ COs
$350
S300
5250
5200
$150
$100
S50
50
5172
$';_42
$221
5260
1
5309
5263
5306
$328 5325 $326
$307 $323
5339 S350
04/06 05106 06/07 07/06 08/09 12/13 13/14 14115 15/15 16/17 17113 18/19 19/20 20121
6.0%
5.0%
4.0%
3.0%
2_0%
0.0%
Debt to Assessed Value (AV)
+G O Debt to AV with 71 RZ +G O Debt to AV w{ a 111 RZ
5.2%
04/05 05/06 06/07 07/08 OS/09 12413 13/14 14}15 15f16 16/17 17/18 18}19 19120 20/21
16
CITY OF PEARLAND, TEXAS
Management's Discussion and Analysis (Continued)
Year Ended September 30, 2021
The City's growth allows debt service payments to be spread over a larger tax base, steadying
the debt service rate while continuing moderate new debt issuances for capital investment
projects. The debt service rate decreased over two cents from $0.4150 in 2021 to $0.3920 in
2022. Anticipated future increases to the Debt to AV ratio are precipitated by the voter -approved
2019 bond package, which included $79 million in general obligation projects. As of
September 30, 2021, the City had $350 million in General Obligation and Certificates of Obligation
outstanding principal being paid back primarily by property taxes. Our financial obligations will
continue to be met, and the City will continue to grow, but knowing that the heavy investments
both past and future may limit our resources for ongoing operations and innovations.
With a growing Houston area economy and the continued growth in value and population, the
City General Fund revenues and other sources are projected to increase from $91,541,723 in FY
2021 to $100,353,728 in FY 2022, an increase of $9,062,005, or 9.9%, mainly due to an increase
in property tax, sales tax, and charges for services. Property tax revenues increased in FY 2022
by 11.7% over FY 2021 year-end amended revenue, resulting in steady property tax revenue as
a percent of total revenues, remaining flat at 31 % of the FY 2021 and FY 2022 budgets, and just
under two cent decrease in the overall property tax rate from $0.7200 to $0.701416 per $100
valuation.
FY 2022 total expenditures are $99,624,052, 6.2% more than the FY 2021 Amended Budget.
Salaries and benefits remain the major expenditure for FY 2021, at 70.0% of the total. The FY
2022 budget incorporated an updated compensation and classification study completed in FY
2021. At least a 2% increase in salary is included for all personnel, to support recruitment and
retention efforts, with higher increases for personnel brought up to current market.
The City adopted a new fund balance policy in FY 2021 which requires a fund balance equal to
three months of recurring operating expenses. The General Fund meets reserve requirements
and the fund is structurally in balance for FY 2022 whereby operating revenues are greater than
expenditures. The adopted FY 2022 fund balance over policy is $2,268,114, with the adopted
ending fund balance of $26,820,128.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
The financial report is designed to provide our citizens, customers, investors and creditors with a
general overview of City's finances. If you have questions about this report or need any additional
financial information, contact Kristen Woolley, Deputy Director of Finance, at 3523 Liberty Drive,
Pearland, Texas 77581, or 652-1698. The report and general information can be found on the City's
website at www.pearlandtx.gov.
17
18
Basic Financial Statements
19
20
CITY OF PEARLAND, TEXAS
Statement of Net Position
September 30, 2021
Assets
Cash and cash equivalents
Investments
Receivables (net of allowance for
uncollectibles, where applicable)
Internal balances
Inventories
Prepaids
Restricted cash and cash equivalents
Restricted investments
Capital assets
Nondepreciable
Depreciable, net
Total capital assets
Total Assets
Deferred Outflows of Resources
Deferred charge on refunding
OPEB
Pension
Total Deferred Outflows of Resources
Liabilities
Accounts payable and other
accrued liabilities
Accrued interest payable
Unearned revenues
Customer deposits
Noncurrent liabilities
Due within one year: Bonds,
certificates of obligation,
leases, compensated
absences
Due in more than one year:
Bonds, certificates of
obligation, leases,
compensated absences
Total OPEB liability
Net pension liability
Total Liabilities
Deferred Inflows of Resources
OPEB
Pension
Total Deferred Inflows of Resources
Net Position
Net investment in capital assets
Restricted for
Debt service
Capital projects
Community development programs
Public safety
Economic development
Unrestricted
Total Net Position
Primary Government
Governmental
Activities
Business -type
Activities
Total
$ 52,037,246 $ 54,969,452 $ 107,006,698
121,657,570 26,693,342 148,350,912
36,458,581
(3,924,417)
110,554
3,431
214,735,696
683,936,806
12,906,892
3,924,417
152,998,768
5,819,175
49,365,473
110,554
3,431
152,998,768
5,819,175
189,533,548 404,269,244
274,085,785 958,022,591
898,672,502 463,619,333 1,362,291,835
1,105,015,467 720,931,379 1,825,946,846
6,253,360
1,509,454
6,153,166
13,915,980
19,024,349
1,429,699
7,764,314
1,141,652
32,356,228
436,128,619
7,204,119
18,106,634
523,155,614
410,405
3,736,534
4,146, 939
873,637
268,701
916,181
2,058,519
19,842,090
667,523
4,134,484
18,663,234
403,097,761
1,248,094
2,304,094
7,126,997
1,778,155
7,069,347
15,974,499
38,866,439
2,097,222
7,764,314
5,276,136
51,019,462
839,226,380
8,452,213
20,410,728
449,957,280 973,112,894
69,864
556,355
626,219
493, 670, 517 161,157, 349
7,338,762
547,246
37,276,472
52,795,897
13,087,664
16,975,931
81,185,455
480,269
4,292,889
4,773,158
654,827,866
13,087,664
16,975,931
7,338,762
547,246
37,276,472
133,981,352
$ 591,628,894 $ 272,406,399 $ 864,035,293
See Notes to Financial Statements 21
CITY OF PEARLAND, TEXAS
Statement of Activities
Year Ended September 30, 2021
Functions/Programs:
Expenses
Program Revenues
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Primary Government
Governmental Activities
General government
Public safety
Public works
Community services
Parks and recreation
Economic development
Interest on long-term debt
Total Governmental Activities
Business -type Activities
Water and sewer
Solid waste
Total Business -type Activities
Total Primary Government
$ 27,596,156
53,502,615
48,115, 099
4,464,698
6,798,930
30,652,723
13,604,125
$ 15,425,359 $ 1,692,907 $
5,048,130
156,760 17,584,491
6,090,084 728,515
1,089,835
445,288
184,734,346 28,255,456
44,653,892
8,093,617
52,648,763
8,064,182
52,747,509 60,712,945
20,005,913
1,022
1,022
1,875,761
1,875,761
1,006,508
1,006,508
$ 237,481,855 $ 88,968,401 $ 20,006,935 $ 2,882,269
General Revenues
Property taxes
Sales and use taxes
Franchise fees
Unrestricted investment earnings
Miscellaneous
Transfers
Total General Revenues And Transfers
Change In Net Position
Net Position, Beginning
Net Position, Ending
See Notes to Financial Statements 22
CITY OF PEARLAND, TEXAS
Statement of Activities (Continued)
Year Ended September 30, 2021
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental
Activities
Business -type
Activities
Total
$ (10,477,890)
(48,454,485)
(28,498,087)
2,353,901
(5,709,095)
(30,207,435)
(13,604,125)
(134,597,216)
(134,597,216)
100,074,901
40,248,440
6,939,859
209,431
4,793,320
5,548,428
$
9,001,379
(28,413)
8,972,966
8,972,966
93,593
15,556
(5,548,428)
157,814,379 (5,439,279)
23,217,163 3,533,687
568,411,731 268,872,712
$ 591,628,894 $ 272,406,399
$ (10,477,890)
(48,454,485)
(28,498,087)
2,353,901
(5,709,095)
(30,207,435)
(13,604,125)
(134,597,216)
9,001,379
(28,413)
8,972,966
(125, 624, 250)
100,074,901
40,248,440
6,939,859
303,024
4,808,876
152,375,100
26,750,850
837,284,443
$ 864,035,293
See Notes to Financial Statements 23
CITY OF PEARLAND, TEXAS
Balance Sheet — Governmental Funds
September 30, 2021
Pearland
Debt Capital Economic
General Service Projects Development
Fund Fund Fund Corporation
Assets
Cash and cash equivalents $ 429,993 $ 2,363,306 $ 3,370,836 $ 12,305,224
Investments 31,137,093 3,651,716 59,273,563 23,062,754
Receivables (net of allowance for
uncollectibles, where applicable) 7,139,158 5,981,513 14,859,545 5,176,698
Prepaids 3,102 - - 310
Total Assets $ 38,709,346 $ 11,996,535 $ 77,503,944 $ 40,544,986
Liabilities
Accounts payable
Accrued expenditures
Customer deposits
Unearned revenue
Total Liabilities
Deferred Inflows of Resources
Unavailable revenue
Total Deferred Inflows of Resources
Fund Balances
Nonspendable
Restricted
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances
$ 2,360,975 $
2,100,599
1,139,802
105,808
$ 10,106,750 $ 263,301
132,080 2,590,427 123,303
1,850
91,507 1,622,513
5,707,184
223,587
14,321,540 386,604
477,761 5,885,717 - 2,881,600
477,761 5,885,717 2,881,600
3,102
215,885
32,305,414
5,887,231
- 310
63,182,404 37,276,472
32,524,401 5,887,231
63,182,404 37,276,782
$ 38,709,346 $ 11,996,535 $ 77,503,944 $ 40,544,986
See Notes to Financial Statements 24
CITY OF PEARLAND, TEXAS
Balance Sheet — Governmental Funds (Continued)
September 30, 2021
Tax Increment
Reinvestment
Zone #2
Development
Authority of
Pearland
Other
Governmental
Funds
Total
Governmental
Funds
$ 7,104,630
$ 12,869,906 $ 4,952,555 $ 43,396,450
4,532,444 121,657,570
$ 7,104,630 $
$ 16,362 $
3,009,264
36,166,178
3,412
12,869,906 $ 12,494,263 $ 201,223,610
16,362
7,088,268
12,869,906
7,088,268
12,869,906
$ 7,104,630 $
$ 393,051
15,645
5,944,486
$ 13,140,439
4,962,054
1,141,652
7,764,314
6,353,182
27,008,459
1,486,878
10,731,956
1,486,878
10,731,956
9,450,568
(4,796,365)
3,412
135,754,849
215,885
27,509,049
4,654,203
163,483,195
12,869,906 $ 12,494,263 $ 201,223,610
See Notes to Financial Statements 25
CITY OF PEARLAND, TEXAS
Reconciliation of the Balance Sheet — Governmental Funds to the
Government -wide Statement of Net Position
Year Ended September 30, 2021
Total Fund Balances - Governmental Funds $ 163,483,195
Amounts reported for the governmental activities in the statement of net position are different
because:
Capital assets used in governmental activities are not financial resources and, therefore,
are not reported in the funds. 892,640,481
Deferred outflows represent a consumption of net position that applies to future reporting
periods and therefore will not be recognized as an outflow of resources until then.
Deferred charge on refunding 6,253,360
Deferred outflows relating to OPEB activities 1,488,471
Deferred outflows relating to pension activities 6,094,202
Long-term liabilities are not due and payable in the current period and, therefore, are not
reported in the funds.
Bonds and capital leases payable
Compensated absences
Accrued interest governmental activity debt
Total OPEB liability
Net pension liability
(459,385,833)
(9,099,014)
(1,429,699)
(7,168,153)
(17,973,294)
Deferred inflows represent an acquisition of net position that applies to future reporting
periods and therefore will not be recognized as an inflow of resources until then.
Deferred inflows relating to OPEB activities (405,378)
Deferred inflows relating to pension activities (3,694,644)
Deferred inflows relating to unavailable revenue 10,731,956
Internal service funds are used by management to charge the cost of certain activities to
individual funds. A portion of the assets and liabilities of the internal service funds are
included in the governmental activities in the statement of net position.
10,093,244
Net Position of Governmental Activities $ 591,628,894
See Notes to Financial Statements 26
27
CITY OF PEARLAND, TEXAS
Statement of Revenues, Expenditures and Changes
in Fund Balances — Governmental Funds
Year Ended September 30, 2021
Pearland
Debt Capital Economic
General Service Projects Development
Fund Fund Fund Corporation
Revenues
Property taxes $ 28,319,667 $ 38,374,498 $ - $
Sales and use taxes 26,138,991 - - 12,877,864
Franchise fees 6,719,483
Licenses and permits 4,257,527
Fines and forfeitures 1,754,717
Charges for services 19,428,409 429,331
Investment earnings 22,321 8,425 116,614 35,327
Intergovernmental 550,140 16,449,841 12,000
Other 70,906 755,469 1,878,426 6,000
Total Revenues 87,262,161 39,138,392 18,444,881 13,360,522
Expenditures
Current
General government 13,378,761
Public safety 51,097,863
Public works 11,369,557 1,113,038
Community services 4,098,950
Parks and recreation 6,075,729
Economic development 3,880,652
Debt service
Principal 268,266 21,030,000 - 250,000
Interest and other charges 6,047 14,685,250 446,467 35,400
Capital outlay 275,566 - 74,232,429 1,384,450
Intergovernmental 7,116,216
Total Expenditures 86,570,739 42,831,466 75,791,934 5,550,502
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Sources (Uses)
Proceeds from sale of assets
Proceeds from issuance of debt
Premium on debt issued
Payment to escrow agent
Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
691,422 (3,693,074)
177,135
6,261,713
(3,682,166)
(57,347,053) 7,810,020
27,220,000 37,520,000
5,402,641 7,977,121
(31,735,000) -
2,530,075 3,552,158
- (1,718,724)
2,756,682 3,417,716
7,173,996
(181,628)
47,330,555 6,992,368
3,448,104
29,076,297
(275,358)
6,162,589
(10,016,498)
73,198, 902
14,802,388
22,474,394
$ 32,524,401 $ 5,887,231 $ 63,182,404 $ 37,276,782
See Notes to Financial Statements 28
CITY OF PEARLAND, TEXAS
Statement of Revenues, Expenditures and Changes
in Fund Balances — Governmental Funds (Continued)
Year Ended September 30, 2021
Tax Increment Development Other Total
Reinvestment Authority of Governmental Governmental
Zone #2 Pearland Funds Funds
$ 33,833,900 $ $ - $ 100,528,065
1,231,585 40,248,440
220,376 6,939,859
4,257,527
113,323 1,868,040
- 19,857,740
17,188 3,245 4,860 207,980
- 2,868,262 19,880,243
496,175 3,206,976
33,851,088 3,245
4,934,581 196,994,870
56,841
12,668,546
12,626,300
7,960,000
2,178,446
6,024,017 19,459,619
1,093,293 52,191,156
12,482,595
149,759 4,248,709
25,784 6,101,513
29,175,498
68,501 29,576,767
5,253 17,356,863
1,221,848 77,114,293
7,116,216
12,725,387 22,764,746
8,588,455 254,823,229
21,125,701
(22,761,501) (3,653,874) (57,828,359)
20,917,299
(20,917,299) (1,213,000)
7,173,996
64,917,135
13,379,762
(31,735,000)
33,261,245
(27,712,817)
(20,917,299) 20,917,299
(1,213,000) 59,284,321
208,402 (1,844,202) (4,866,874) 1,455,962
6,879,866 14,714,108
9,521,077 162,027,233
$ 7,088,268 $ 12,869,906 $ 4,654,203 $ 163,483,195
See Notes to Financial Statements 29
CITY OF PEARLAND, TEXAS
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances — Governmental Funds to the
Government -wide Statement of Activities
Year Ended September 30, 2021
Net Change In Fund Balances — Total Governmental Funds $ 1,455,962
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities,
the cost of those assets is allocated over their estimated useful lives and reported as depreciation
expense. This is the amount by which capital outlays of $77,114,293 exceeded depreciation
expense of $41,540,678 and loss on sale of property of $4,680,208 in the current period.
Capital assets acquired through city development recognized as capital contributions in the
statement of activities
The repayment of the principal of long-term debt consumes the current financial resources of
governmental funds. The transaction, however, does not have any effect on net position. Also,
governmental funds report the effect of bond premiums, discounts and similar items when debt is
first issued, whereas the amounts are deferred and amortized in the statement of activities. The
effect of these differences in the treatment of long-term debt and related items was:
Proceeds from issuance of long term debt
Payment to escrow agent
Repayment of long-term debt
Premiums on bonds payable
Deferred loss on refunding
Current year changes in other long-term liabilities do not require the use of current financial
resources; therefore, are not reported as expenditures in governmental funds. The effect of these
differences in the treatment of other long-term liabilities was:
Compensated absences
Current year changes in accrued interest payable do not require the use of current financial
resources; therefore, are not reported as an expenditure in the governmental funds.
Governmental funds do not present revenues that are not available to pay current obligations. In
contrast, such revenues are reported in the statement of activities when earned.
The net change in the OPEB-related deferred outflows and inflows of resources and total OPEB
liability do not require the use of current financial resources; therefore, are not reported as
expenditures in the governmental funds.
The net change in the pension -related deferred outflows and inflows of resources and net pension
liability do not require the use of current financial resources; therefore, are not reported as
expenditures in the governmental funds.
An internal service fund is used by management to charge the cost of certain activities, such as
insurance and fleet management, to individual funds. A portion of the change in net position of the
internal service funds is included in governmental activities in the statement of activities.
30,893,407
1,875,761
(64,917,135)
31,735,000
29,576,767
(8,746,941)
(1,551,541)
(404,534)
(38,807)
(407,207)
(841,210)
1,110,803
3,476,838
Change In Net Position of Governmental Activities $ 23,217,163
See Notes to Financial Statements 30
CITY OF PEARLAND, TEXAS
Statement of Net Position - Proprietary Funds
Year Ended September 30, 2021
Business -type Activities - Enterprise Funds
Water and Solid Waste
Sewer Fund Fund
Total
Governmental
Activities
Internal
Service Funds
Assets
Current Assets
Cash and cash equivalents $ 54,647,608 $ 321,844 $ 54,969,452 $ 8,640,796
Investments 26,693,342 - 26,693,342 -
Receivables (net of allowance for
uncollectibles, where applicable) 11,858,353 1,048,539 12,906,892 292,403
Inventories - - - 110,554
Prepaids - - 19
Restricted cash and cash equivalents 152,998,768 152,998,768
Restricted investments 5,819,175 - 5,819,175 -
Total Current Assets 252,017,246 1,370,383 253,387,629 9,043,772
Noncurrent Assets
Capital assets
Land and improvements 3,877,031 - 3,877,031 -
Construction in progress 185,656,517 185,656,517
Contractual rights to water supply 34,511,428 34,511,428
Infrastructure 391,239,811 391,239,811
Buildings 32,042,833 32,042,833 -
Machinery and equipment 5,644,358 - 5,644,358 6,877,836
Less accumulated depreciation (189,352,645) - (189,352,645) (845,815)
Total Noncurrent Assets 463,619,333 - 463,619,333 6,032,021
Total Assets 715,636,579 1,370,383 717,006,962 15,075,793
Deferred Outflows of Resources
Deferred charge on refunding 873,637 873,637 -
OPEB 268,701 268,701 20,983
Pension 916,181 - 916,181 58,964
Total Deferred Outflows of Resources 2,058,519 2,058,519 79,947
Current Liabilities
Accounts payable and accrued expenses 19,137,134 704,956 19,842,090 333,243
Claims payable 588,613
Accrued interest payable 667,523 - 667,523 -
Customer deposits 4,134,484 4,134,484
Current portion of long-term liabilities:
Compensated absences 298,234 - 298,234 -
Bonds and permanent improvement
bonds payable 18,365,000 - 18,365,000 -
Total Current Liabilities 42,602,375 704,956 43,307,331 921,856
See Notes to Financial Statements 31
CITY OF PEARLAND, TEXAS
Statement of Net Position - Proprietary Funds (Continued)
Year Ended September 30, 2021
Business -type Activities - Enterprise Funds
Governmental
Activities
Water and Solid Waste Internal
Sewer Fund Fund Total Service Funds
Noncurrent Liabilities
Compensated absences 685,620 685,620 -
Total OPEB liability 1,248,094 1,248,094 35,966
Net pension liability 2,304,094 2,304,094 133,340
Bonds and permanent improvement
bonds payable 402,412,141 402,412,141
Total Noncurrent Liabilities 406,649,949 406,649,949 169,306
Total Liabilities 449,252,324 704,956 449,957,280 1,091,162
Deferred Inflows of Resources
OPEB
Pension
Total Deferred Inflows of Resources
69,864
556,355
626,219
69,864 5,027
556,355 41,890
626,219 46,917
Net Position
Net investment in capital assets 161,157,349 161,157,349 6,032,021
Restricted for debt service 13,087,664 13,087,664 -
Restricted for capital projects 16,975,931 16,975,931 -
Unrestricted 76,595,611 665,427 77,261,038 7,985,640
Total Net Position $ 267,816,555 $ 665,427 268,481,982 $ 14,017,661
Adjustment to reflect the consolidation of
internal services fund activities related
to enterprise funds
3,924,417
Net Position of Business -type Activities $ 272,406,399
See Notes to Financial Statements 32
CITY OF PEARLAND, TEXAS
Statement of Revenues, Expenses and Changes
in Net Position — Proprietary Funds
Year Ended September 30, 2021
Operating Revenues
Charges for sales and services
Total Operating Revenues
Operating Expenses
Personnel services
Supplies and materials
Contractual services
Repairs and maintenance
Other expenses
Depreciation and amortization
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Intergovernmental
Earnings on investments
Gain (loss) on sale of capital assets
Miscellaneous revenue
Debt issuance costs
Interest expenses
Net Nonoperating Revenues
Income (Loss) Before Transfers
and Capital Contributions
Capital contributions
Transfers in
Transfers out
Change in Net Position
Net Position, Beginning
Business -type Activities - Enterprise Funds
Water and Solid Waste
Sewer Fund Fund
Total
Governmental
Activities
Internal
Service Funds
$ 52,648,763 $ 8,064,163 $ 60,712,926 $ 18,517,647
52,648,763 8,064,163 60,712,926 18,517,647
10, 321, 360
5,389,395
6,608,532
3,230,652
13,273,524
8,093,617
38,823,463 8,093,617
10,321,360 712,133
5,389,395 24,386
14,702,149 11,495,937
3,230,652 1,237,654
40,993
13,273,524 666,360
46, 917, 080 14,177,463
13,825,300 (29,454) 13,795,846 4,340,184
93,564
(76,423)
15,556
(1,548,514)
(5,468,051)
29
1,041
(6,983,868) 1,070
6,841,432 (28,384)
93,593 1,498
(76,423) 397,715
16,597 -
(1,548,514)
(5,468,051)
(6,982,798) 399,213
6,813,048 4,739,397
1,006,508 1,006,508
190,970,560 190,970,560
(196,518,988) (196,518,988)
2,299,512 (28,384) 2,271,128 4,739,397
265,517,043 693,811 266,210,854 9,278,264
Net Position, Ending $ 267,816,555 $ 665,427 $ 268,481,982 $ 14,017,661
Reconciliation to government -wide statement of activities
Change in Net Position of enterprise funds $ 2,271,128
Adjustment for the net effect of the current year
activity between the internal service funds and
the enterprise funds
1,262,559
Change in Net Position of Business -type Activities $ 3,533,687
See Notes to Financial Statements 33
CITY OF PEARLAND, TEXAS
Statement of Cash Flows - Proprietary Funds
Year Ended September 30, 2021
Business -type Activities - Enterprise Funds
Water and Solid Waste
Sewer Fund Fund
Total
Governmental
Activities
Internal
Service Funds
Cash Flows from Operating Activities
Receipts from customers and users $ 55,655,901 $ 8,143,454 $ 63,799,355 $ 4,616,738
Receipts from interfund charges for services 13,616,575
Payments to employees for salaries and benefits (10,271,006) - (10,271,006) (710,249)
Payments for interfund services used (3,296,621) - (3,296,621) -
Payments to suppliers and service providers (6,062,521) (8,029,498) (14,092,019) (12,936,621)
Net Cash Provided By Operating Activities 36,025,753 113,956 36,139,709 4,586,443
Cash Flows from Noncapital Financing Activities
Transfers from other funds
Transfers to other funds
Net Cash Provided By (Used In) Noncapital
Financing Activities
190,970,560
(196,518,988)
190,970,560
(196,518,988)
(5,548,428) (5,548,428)
Cash Flows from Capital and Related Financing
Activities
Acquisition and construction of capital assets (61,217,748) - (61,217,748) (3,152,108)
Proceeds from sale of assets (76,423) - (76,423) 397,715
Proceeds from issuance of debt 87,188,114 - 87,188,114 -
Debt issuance costs (1,548,514) - (1,548,514) -
Principal paid on capital debt (22,123,702) - (22,123,702) -
Interest paid on capital debt (5,210,178) - (5,210,178) -
Net Cash Used In Capital and Related
Financing Activities (2,988,451) - (2,988,451) (2,754,393)
Cash Flows from Investing Activities
Interest on investments 93,564 29 93,593 1,498
Investment maturities (5,164,167) - (5,164,167) -
Net Cash Provided By (Used In) Investing Activities (5,070,603) 29 (5,070,574) 1,498
Increase in Cash and Cash Equivalents 22,418,271 113,985 22,532,256 1,833,548
Cash and Cash Equivalents, Beginning of Year 185,228,105 207,859 185,435,964 6,807,248
Cash and Cash Equivalents, End of Year $ 207,646,376 $ 321,844 $ 207,968,220 $ 8,640,796
Reconciliation to the Statement of Net
Position - Proprietary Funds
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents
$ 54,647,608 $ 321,844 $ 54,969,452
152,998,768 - 152,998,768
$ 8,640,796
$ 207,646,376 $ 321,844 $ 207,968,220 $ 8,640,796
See Notes to Financial Statements 34
CITY OF PEARLAND, TEXAS
Statement of Cash Flows — Proprietary Funds (Continued)
Year Ended September 30, 2021
Business -type Activities - Enterprise Funds
Water and Solid Waste
Sewer Fund Fund
Total
Governmental
Activities
Internal
Service Funds
Reconciliation of Operating Income to Net Cash
Provided By (Used In) Operating Activities
Operating income (loss) $ 13,825,300 $ (29,454) $ 13,795,846 $ 4,340,184
Items not requiring cash
Depreciation and amortization 13,273,524 - 13,273,524 666,360
Changes in
Receivables, net 3,007,138 79,291 3,086,429 (284,334)
Prepaids - - - (26,308)
Inventories - - - (35,624)
Accounts payable and accrued liabilities 5,962,664 64,119 6,026,783 (75,719)
Deposits payable (93,261) - (93,261)
Compensated absences 59,910 - 59,910
Total OPEB liability 107,711 107,711 15,885
Net pension liability (73,580) (73,580) (7,868)
Deferred outflows - OPEB 27,806 - 27,806 (5,734)
Deferred inflows - OPEB 24,830 - 24,830 2,666
Deferred outflows - Pension (75,327) - (75,327) (14,267)
Deferred inflows - Pension (20,962) - (20,962) 11,202
Net Cash Provided By Operating Activities
Summary of Non -cash Transactions
Contributed capital assets
Capital asset acquisitions in accounts payable
$ 36,025,753 $ 113,956 $ 36,139,709 $ 4,586,443
$ 1,006,508 $ - $ 1,006,508 $
12,697,177 - 12,697,177
See Notes to Financial Statements 35
CITY OF PEARLAND, TEXAS
Statement of Fiduciary Net Position — Fiduciary Fund
Year Ended September 30, 2021
Assets
Current Assets
Cash and cash equivalents
Total Current Assets
Total Assets
Current Liabilities
Due to State of Texas
Total Current Liabilities
Total Liabilities
Net Position
Restricted
Total Net Position
Custodial Fund
State Court
Costs Fund
$ 165,623
165,623
165,623
165,623
165,623
165,623
$
See Notes to Financial Statements 36
CITY OF PEARLAND, TEXAS
Statement of Changes in Fiduciary Net Position — Fiduciary Fund
Year Ended September 30, 2021
Custodial Fund
State Court
Costs Fund
Additions
State court costs $ 676,339
Total Additions 676,339
Deductions
Court costs distributed to state
Total Deductions
Net increase in fiduciary net position
Net Position, Beginning
676,339
676,339
Net Position, Ending $
See Notes to Financial Statements 37
38
CITY OF PEARLAND, TEXAS
Notes to Financial Statements
September 30, 2021
Note 1 — Summary of Significant Accounting Policies
The City of Pearland, Texas (the "City") was incorporated in December 1959 and adopted a "Home
Rule Charter" February 6, 1971. The Charter, as amended, provides for a Council -Manager form of
government and provides services authorized by its charter. Presently, these services include police,
fire and emergency medical, water and sewer services, drainage, sanitation, building and code
inspection, planning, zoning, engineering, street repair and maintenance, park maintenance,
recreational activities for citizens, and general administrative services. Fire protection is provided
through a combination full-time part-time/volunteer department. The City is governed by an elected
mayor and seven -member Council.
The Mayor and all members are elected at large. The Mayor is allowed to vote only in case of a tie
vote. The Mayor and each Council member hold office for a period of three years and until his/her
successor is elected and qualified. Council members shall be limited to two full consecutive terms of
office and there is no limitation on the office of the Mayor. The City Manager is appointed by Council
and is responsible for implementation of Council policy, execution of the laws, and all day-to-day
operations of the City.
A. Financial Reporting Entity
The City is an independent political subdivision of the State of Texas governed by an elected council
and a mayor and is considered a primary government. As required by accounting principles generally
accepted in the United States of America, these financial statements have been prepared based
on considerations regarding the potential for inclusion of component units, which are other entities
or organizations that are financially accountable to the City. Blended component units are component
units that are considered so closely related to the legal entity that the blended component unit funds
appear as funds that are integral parts of the primary government. The City's financial statements
include the following blended component units: the Pearland Economic Development Corporation
(PEDC) and the Development Authority of Pearland (DAP). No other entities have been included
in the City's reporting entity. Additionally, as the City is considered a primary government for
financial reporting purposes, its activities are not considered a part of any other governmental or other
type of reporting entity.
Considerations regarding the potential for inclusion of other entities, organizations, or functions in
the City's financial reporting entity are based on criteria prescribed by generally accepted
accounting principles. These same criteria are evaluated in considering whether the City is a part
of any other governmental or other type of reporting entity. The overriding elements associated with
prescribed criteria considered in determining that the City's financial reporting entity status is that of
a primary government are that it has a separately elected governing body; it is legally separate; and
it is fiscally independent of other state and local governments.
The financial reporting entity consists of the City and its component units. Component units are
legally separate organizations for which the City is financially accountable or other organizations
whose nature and significant relationship with the City are such that exclusion would cause the City's
financial statements to be misleading. Financial accountability is defined as the appointment of a
voting majority of the component unit's board, and (i) either the City's ability to impose its will on the
organization or (ii) there is potential for the organization to provide a financial benefit to or impose a
financial burden on the City.
39
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The basic financial statements include blended component units. The blended component units,
although legally separate entities are, in substance, part of the City's operations and so data from
these units are combined with data of the primary government.
For financial reporting purposes, the City's basic financial statements include all financial activities
that are controlled by or are dependent upon actions taken by City Council. The component units
do not issue separate financial statements.
Blended Component Units: Each of these units are presented as governmental fund types.
Pearland Economic Development Corporation (PEDC)
In 1995, the citizens of Pearland established the Pearland Economic Development Corporation
(PEDC) to help the citizens and public officials of Pearland attract new businesses and to help
existing businesses to expand. The mechanism to fund the operations of the corporation is through
a sales tax levy at a rate of one-half of one percent (1/2%). The PEDC is governed by a board
appointed by the City Council. Although it is legally separated from the City, the PEDC relies upon
the primary government for appointing the board, also City Council must approve the PEDC's
budget and any debt issuances. The PEDC provides services entirely, or almost entirely, to the
City or otherwise exclusively, or almost exclusively, benefits the City even though it may not provide
services directly to it.
Development Authority of Pearland
In 2004, the City created the Development Authority of Pearland to provide financing for the
development of the TIRZ #2. Proceeds from bond sales are to be used to reimburse developers and
fund a debt service reserve. The Development Authority of Pearland is governed by a board
appointed by the City Council. Although it is legally separated from the City, the Development
Authority of Pearland is fiscally dependent upon the primary government because the City Council
must also approve any debt issuances done on behalf of the Development Authority of Pearland.
The Development Authority of Pearland provides services entirely, or almost entirely, to the City or
otherwise exclusively, or almost exclusively, benefits the City even though it may not provide
services directly to it.
B. Government -wide and Fund Financial Statements
The government -wide financial statements (i.e., the Statement of Net Position and the Statement
of Changes in Net Position) report information about the City as a whole. These statements include
all activities of the primary government and its component units. For the most part, the effect of
interfund activity has been eliminated from the government -wide statements. Exceptions to this
general rule are charges between the City's business -type and governmental funds. Elimination of
these charges would distort the direct costs and program revenues reported for the various
functions concerned. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business -type activities, which rely to a
significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include 1) charges to
customers or applicants who purchase, use or directly benefit from goods, services, or privileges
provided by a given function or segment and 2) grants and contributions that are restricted to
40
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead as general
revenues.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements and all proprietary funds are reported using the economic
resources measurement focus and the accrual basis of accounting. Revenues are recognized when
earned and expenses are recorded when a liability is incurred, regardless of the timing of the related
cash flows. With this measurement focus, all assets and all liabilities associated with the operations
of these activities are included on the statement of net position. Proprietary fund -type operating
statements present increases (i.e., revenues) and decreases (i.e., expenses) in net total assets.
Furniture and equipment capitalized in the Proprietary Fund Types are valued at cost.
The governmental fund financial statements are presented on a current financial resources
measurement focus and modified accrual basis of accounting. This is the manner in which these
funds are normally budgeted. 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. Revenues susceptible to accrual include
property taxes, sales and use taxes, franchise fees, charges for services and interest on temporary
investments. Grant revenues are recognized when reimbursable expenditures are made, all other
eligibility requirements imposed by the provider have been met, and the City receives
reimbursement within one year of the current fiscal period. Other receipts become measurable and
available when cash is received by the government and are recognized as revenue at that time.
Under modified accrual accounting, expenditures are recognized in the accounting period in which
the liability is incurred, if measurable, except for interest on general long-term debt, which is
recognized when due. Since the governmental fund statements are presented on a different
measurement focus and basis of accounting than the government -wide statements' governmental
column, a reconciliation is presented which briefly explains the adjustments necessary to reconcile
fund -based financial statements with the governmental column of the government -wide
presentation.
In the fund financial statements, the accounts of the City are organized on the basis of funds, each
of which is considered a separate accounting entity. The operations of each fund are accounted for
with a separate set of self -balancing accounts that comprise its assets, liabilities, fund equity,
revenues, and expenditures or expenses, as appropriate. Following is a description of the various
funds:
Governmental funds are those funds through which most governmental functions are typically
financed. The City reports the following major governmental funds:
The General Fund is used to account for all financial transactions not properly includable in other
funds. The principal sources of revenues include local property taxes, sales and franchise taxes,
licenses and permits, fines and forfeitures, and charges for services. Expenditures include general
government, public works, parks and recreation, community services, and public safety.
The Debt Service Fund is used to account for the payment of interest and principal on all general
obligation bonds and other governmental long-term debt of the City. The primary source of revenue
41
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
for debt service is local property taxes. The Debt Service Fund is considered a major fund for
reporting purposes.
The Capital Projects Fund is used to account for the expenditures of resources accumulated on a
pay-as-you-go basis and the sale of bonds and related interest earnings for capital improvement
projects.
The Pearland Economic Development Corporation, a blended component unit, is a special
revenue fund used to account for the revenues and expenditures associated with the half -cent
sales tax for economic development approved by the voters in 1995. Use of the funds are governed
by State Law.
The Tax Increment Reinvestment Zone #2 fund is a special revenue fund used to account for the
incremental property tax revenues in the specific geographical area and use thereof from the
participating taxing entities in the Zone. In 1998, the Tax Increment Reinvestment Zone (TIRZ #2)
was established for a period of 30 years or until dissolved by the City. The TIRZ #2 provides tax -
assisted property development and/or redevelopment in specific geographic areas in accordance
with applicable state laws. The TIRZ #2 is governed by a board appointed by the City Council.
The Development Authority of Pearland fund, a blended component unit, is a special revenue
fund used to account for the financing of the development of the TIRZ #2.
The City's business -type activities consist of the following funds:
The Enterprise Funds are used to account for the operations that provide water and sewer utility
services as well as solid waste collection services to the public. 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 the financing of goods
or services provided by one department or agency to other departments or agencies of the City
on a cost -reimbursement basis. Services provided by the Internal Service Funds include property
and liability insurance coverage, employee benefits, health claims, and motor pool. The Internal
Service Funds is included in governmental activities for government -wide reporting purposes.
All assets, deferred outflows of resources, liabilities, equities, revenues, expenses and transfers
relating to the government's business activities are accounted for through proprietary funds. The
measurement focus is on determination of net income, financial position and cash flows.
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 water and sewer
function and various other functions of the government. Elimination of these charges would distort
the direct costs and program revenue reported for the various functions concerned.
Amounts reported as program revenues include: (1) charges to customers or applicants for goods,
services, or privileges provided, (2) operating grants and contributions, and (3) capital grants and
contributions, including special assessments. Internally dedicated resources are reported as general
revenues rather than as program revenue. Likewise, general revenue includes all taxes.
42
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with a proprietary fund's principal ongoing operations. The principal operating revenues
of the City's Enterprise Funds are charges to customers for sales and services. Operating expenses
for Enterprise Funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenue and expenses not meeting this definition are reported as
nonoperating revenue and expense.
Fiduciary Funds are used to account for assets held by the City in a trustee capacity or as a custodian
for other governmental agencies. The City reports the following Fiduciary Fund:
The State Court Costs Custodial Fund is used to account for the portion of municipal court fees and
fines collected by the City that are due to the State of Texas. These fees and fines are remitted
quarterly to the Texas Comptroller.
D. 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.
E. Fund Balance Flow Assumption
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. It is the City's policy to consider restricted fund
balance to have been depleted before using any of the components of unrestricted fund balance.
Further, when the components of unrestricted fund balance can be used for the same purpose,
committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund
balance is applied last.
F. Fund Balance Working Capital Policies
Governmental Funds are presented in the financial statements as follows:
Nonspendable — Amounts that cannot be spent either because they are not in a spendable form
or because they are legally or contractually required to be maintained intact.
Restricted — Amounts that can be spent only for specific purposes because of the City Charter,
City Code, State or federal laws, or externally imposed conditions by grantors or creditors.
Committed — Amounts than can be used only for specific purposes determined by ordinances
passed by City Council, the City's highest level of decision -making authority. Commitments may
be modified or rescinded only through ordinances approved by City Council.
43
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Assigned — Amounts that are intended to be used for a specific purpose, but do not meet the
definition of restricted or committed fund balance. Under the City's policy, amounts can be
assigned by the City's Chief Financial Officer.
Unassigned — Amounts that are available for any purpose. Positive amounts are reported only in
the General Fund.
City Council has authorized the Chief Financial Officer as the official authorized to assign fund
balance to a specific purpose. City Council has established fund balance and working capital
policies under which the City shall maintain the fund balance and working capital of the various
operating funds at the following levels:
General Fund Unassigned Fund Balance
The City shall maintain the General Fund unassigned fund balance equivalent to three months of
recurring operating expenditures, based on current year expenditures. If the fund balance
exceeds this amount, funding non -recurring expenditures in the following fiscal year may be used
to draw down the balance.
Water/Sewer Unreserved Working Capital
The City shall maintain a working capital sufficient to provide for reserves for emergencies and
revenue shortfalls. A cash equivalent operating reserve will be established and maintained at
25% of the current year's budget appropriation for recurring operating expenses.
The cash equivalent operating reserve is derived by dividing the total cash equivalents balance
by recurring operating expenses.
Use of Fund Balance/Working Capital
Fund balance/working capital shall only be used for emergencies, non -recurring
expenditures/expenses or major capital purchases that cannot be accommodated through current
year savings. Should such use reduce balances below the level established as the objective for
that fund, restoration recommendations will accompany the request/decision to utilize said
balances.
Debt Service Fund Total Fund Balance
The City shall maintain the debt service fund balance at 10% of annual debt service requirements
OR a fund balance reserve as required by bond ordinances, whichever is greater.
Property Liability Insurance Fund Unrestricted Net Position
The Property Liability Insurance Fund accounts for uninsured and deductible claims for the City's
property and liability insurance. Claims cannot be reasonably predicted and budgeted for;
therefore, the fund will maintain a balance that approximates the prior average annual expense
for the last three years, excluding extra -ordinary expenses in the fund.
Employee Benefits Fund and Health Claims Fund
The Employee Benefits Fund and Health Claims Fund are funded through City and employee
contributions. Estimated costs shall be determined during each budget year and the contributions
adjusted accordingly. There is no minimum balance for this fund as it relates to employee benefits.
44
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Water/Sewer Revenue Debt Coverage Reserves
Revenues shall be maintained at 1.15 times coverage in a fiscal year where the water/sewer fund
is not issuing additional debt and 1.4 times coverage in a year where debt is anticipated to be
issued.
Bond Issuance Reserves
Debt service reserves should be maintained for each bond issue as required by bond covenants.
Contingency Fund
Pursuant to the City Charter, a provision shall be made within the annual budget for a contingency
fund in an amount not more than 7% of the total budget (General Fund) to be used in case of
unforeseen items of expenditure.
G. Cash and Cash Equivalents
The City's cash and cash equivalents are cash on hand, demand deposits, 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 accounts and 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.
H. Investments
Investments consist of Local Government Investment Pools, United States (U.S.) government
agency securities, and Certificates of Deposit with original maturities greater than three months
from the date of acquisition. The City reports all investments at fair value, except for investment
pools. The City's investment pools are valued and reported at Net Asset Value (NAV), which
approximates fair value.
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 observable inputs other those in Level 1; Level
3 inputs are unobservable inputs. The City's local government investment pools are recorded at NAV
as permitted by GASB Statement No. 79, Certain Investment Pools and Pool Participants and are
exempt from reporting in the fair value hierarchy.
I. Receivables
All receivables are reported at their gross value, and where appropriate, are reduced by the
estimated portion that is expected to be uncollectible. Trade accounts receivable in excess of 120
days comprise the trade accounts receivable allowance for uncollectibles.
45
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
J. Due to and Due from Other Funds
Interfund receivables and payables arise from interfund transactions and are recorded by all funds
affected in the period in which the transactions are executed. These receivables and payables
are classified as "due from other funds" or "due to other funds." Interfund receivables and payables
which are not expected to be paid within 12 months are classified as loans from/loans to other
funds.
K. Inventories and Prepaids
Inventory, which consists of fuel and auto parts for use in the City's vehicles, is stated at cost (first -
in, first -out method). Expenditures are recognized as the fuel and auto parts are consumed rather
when purchased. Certain payments to vendors reflect costs applicable to future accounting
periods and are recorded as prepaid items in both the government -wide and fund financial
statements. The cost of prepaid items is recorded as expenditures/expenses when consumed
rather than when purchased.
L. Restricted Assets
Certain proceeds of the Water and Sewer Enterprise Fund revenue bonds and certain resources set
aside for their repayment are classified as restricted assets on the balance sheet because their use
is limited by applicable bond covenants. Certain resources are also set aside for repayment of
Pearland Economic Development Corporation Bonds and are reported as restricted assets.
M. Capital Assets
Capital assets which include property, plant, equipment and infrastructure, are reported in the
applicable governmental or business -type activities columns in the government -wide financial
statements. The City defines capital assets as assets with an initial, individual cost of more than
$5,000 and an estimated useful life of greater than one year. 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.
Property, plant, and equipment are depreciated using the straight-line method over the following
useful lives:
Infrastructure 10-50
Water and sewer system 30-50
Buildings and improvements 10-45
Machinery and equipment 3-15
Furniture and fixtures 3-10
Intangible Assets - Contractual Water Rights 25
N. Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation, sick and holiday
pay benefits.
46
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Employees hired prior to October 1, 2005 earn vacation leave at the rate of 15 days per year from
1-15 years of service, 20 days per year for service of 16-19 years, and 25 days per year for service
of 20 years or more. Employees, who are non-exempt and are hired after October 1, 2005 earn
vacation at a rate of 10 days per year from 1-4 years of service, 15 days per year for 5-14 years of
service and 20 days for 15 and over years of service. Employees, who are exempt and are hired
after October 1, 2005 earn vacation at a rate of 15 days per year from 1-14 years of service, and 20
days for 15 and over years of service. Certified police personnel earn 15 days of vacation after one
year and 20 days of vacation after 15 years. Effective October 1, 2011 certified fire fighter personnel
earn 168 hours of vacation from 1-4 years, 241 hours of vacation for 5-14 years and 312 hours after
15 years.
City employees receive 10 paid holidays per year. In addition to providing paid time off for the City -
observed holidays, the City permits regular full-time employees to take up to two (2) paid personal
days (designated holidays) annually. Employees required to work on a City -observed holiday may
be paid or may elect to receive compensatory time off for the holiday. Overtime is earned at one and
one-half times the regular rate of pay for non-exempt employees. Employees may be paid or receive
compensatory time. The maximum accrual for compensatory time is 120 hours, including employees
involved in public safety.
All sick leave benefits are accumulated and paid to employees upon separation from the City not to
exceed 720 hours for employees hired prior to July 24, 2006, and 360 hours for employees hired
after. Vacation, sick and holiday pay benefits are accrued when incurred in the government -wide
and proprietary fund financial statements. A liability for these amounts is reported in governmental
funds only if they have matured, for example, as a result of employee resignations and retirements.
O. 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 disclosure of contingent assets and liabilities at the date of financial
statements and the reported amounts of revenues and expenditures during the reporting period.
Actual results could differ from those estimates.
P. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position includes a separate section for deferred
outflows of resources. Deferred outflows of resources represents a consumption of net position
or fund balance that applies to a future period(s) and thus, will not be recognized as an outflow of
resources (expense/expenditure) until then. The City has three items that qualify for reporting in
this category.
• Deferred outflows of resources for refunding — Reported in the government -wide
statement of net position, this 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.
47
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
• Deferred outflows of resources for pension — Reported in the government -wide financial
statement of net position, this deferred outflow results from pension plan contributions
made after the measurement date of the net pension liability and the results of 1) changes
in actuarial assumptions; 2) differences between expected and actual actuarial
experiences. The deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of
the net pension liability in the next fiscal year. The deferred outflows resulting from
differences between projected and actual earnings on pension plan investments will be
amortized over a closed five-year period. The remaining pension related deferred outflows
will be amortized over the expected remaining service lives of all employees (active and
inactive employees) that are provided with pensions through the pension plan.
• Deferred outflows of resources for other postemployment benefits (OPEB) — Reported in
the government -wide financial statement of net position, these deferred outflows result
from OPEB plan contributions made after the measurement date of the net OPEB liability
and the results of changes in assumptions and other inputs. The deferred outflows of
resources resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the total OPEB liability in the next fiscal year. The other OPEB
related outflow will be amortized over the expected remaining service lives of all
employees (active and inactive employees) who are provided with OPEB benefits.
In addition to liabilities, the statement of financial position 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 or fund balance 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 three items that qualify for reporting in this category.
• Deferred inflows of resources for unavailable revenues — Reported only in the
governmental funds balance sheet, unavailable revenues arise under the modified accrual
basis of accounting. These amounts are deferred and recognized as an inflow of
resources in the period that the amounts become available.
• Deferred inflows of resources for pension — Reported in the government -wide financial
statement of net position, these deferred inflows result from differences between projected
and actual earnings on pension plan investments. These pension related deferred inflows
will be amortized over the expected remaining service lives of all employees (active and
inactive employees) that are provided with pensions through the pension plan.
• Deferred inflows of resources for OPEB — Reported in the government -wide financial
statement of net position, these deferred inflows result from 1) differences between
expected and actual experience and 2) changes in actuarial assumptions. These OPEB
related deferred inflows will be amortized over the expected remaining service lives of all
employees (active and inactive employees) that are provided with OPEB through the
OPEB plans.
48
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Q. Pensions
For purposes of measuring the net pension liability, pension related deferred outflows and inflows
of resources, and pension expense, City specific information about its Fiduciary Net Position in
the Texas Municipal Retirement System (TMRS) and additions to/deductions from the City's
Fiduciary Net Position have been determined on the same basis as they are reported by TMRS.
For this purpose, plan contributions are recognized in the period that compensation is reported
for the employee, which is when contributions are legally due. Benefit payments and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported
at fair value. Information regarding the City's Total Pension Liability is obtained from TMRS
through a report prepared for the City by TMRS consulting actuary, Gabriel Roeder Smith &
Company, in compliance with Governmental Accounting Standards Board (GASB) Statement
No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement
No. 71.
R. Other Postemployment Benefits (OPEB) — Retiree Health Care
The City provides its retirees the opportunity to maintain health insurance coverage by
participating in the City's insurance plan. The City reports the total liability for this plan on the
government -wide and proprietary fund financial statements. The actual cost recorded in the
governmental fund financial statements is the cost of the health benefits incurred on behalf of the
retirees less the premiums collected from the retirees. Information regarding the City's total liability
for this plan is obtained through a report prepared by HUB International, the City's third -party
actuary, in compliance with GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions.
S. Other Postemployment Benefits (OPEB) — TMRS Supplemental Death Benefits
Additionally, the City participates in a defined -benefit group -term life insurance plan, both for
current and retired employees, administered by the Texas Municipal Retirement System (TMRS).
The City reports the total liability for this plan on the government -wide and proprietary fund
financial statements. Information regarding the City's total OPEB liability is obtained from TMRS
through a report prepared for the City by TMRS' consulting actuary, Gabriel Roeder Smith &
Company, in compliance with GASB Statement No. 75.
T. New Accounting Standards
The following standards have been issued, but have not been implemented as not yet effective.
GASB Statement No. 87, Leases. This statement establishes standards of accounting and
financial reporting for leases by lessees and lessors.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction
Period. This statement establishes accounting requirements for interest cost incurred before the
end of a construction period.
GASB Statement No. 91, Conduit Debt Obligations. This statement will provide a single method
of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with
commitments extended by issuers, arrangements associated with conduit debt obligations, and
related note disclosures.
49
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
GASB Statement No. 92, Omnibus 2020. This statement will enhance comparability in accounting
and financial reporting and to improve the consistency of authoritative literature by addressing
practice issues that have been identified during implementation and application of certain GASB
Statements.
GASB Statement No. 93, Replacement of Interbank Offered Rates. This statement will address
those and other accounting and financial reporting implications that result from the replacement
of an interbank offered rate (IBOR).
GASB Statement No. 94, Public -Private and Public -Public Partnerships and Availability Payment
Arrangements. The primary objective of this statement is to improve financial reporting by
addressing issues related to public -private and public -public partnership arrangements (PPPs).
GASB Statement No. 96, Subscription -Based Information Technology Arrangements. This
statement provides guidance on the accounting and financial reporting for subscription -based
information technology arrangements (SBITAs) for government end users (governments).
The City has not fully determined the effects that implementation of these statements will have on
the City's financial statements.
The City adopted new accounting guidance Governmental Accounting Standards Board
Statement No. 84, Fiduciary Activities and Governmental Accounting Standards Board Statement
No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal
Revenue Code Section 457 Deferred Compensation Plans, an amendment of GASB Statements
No. 14 and 84, and a supersession of GASB Statement No. 32 during 2021. As a result, the State
Court Costs Fund is reported as a custodial fund within the fiduciary fund financial statements.
The City adopted new accounting guidance Governmental Accounting Standards Board
Statement No. 90, Majority Equity Interests. This statement is an amendment of GASB
Statements No. 14 and No. 6, will improve the consistency and comparability of reporting a
government's majority equity interest in a legally separate organization and to improve the
relevance of financial statement information for certain component units. The City does not hold
equity interest in legally separate organizations. This Statement had no impact to the City in fiscal
year 2021.
GASB Statement No. 98, The Annual Comprehensive Financial Report establishes the term
annual comprehensive financial report and its acronym ACFR. That new term and acronym
replace instances of comprehensive annual financial report and its acronym in generally accepted
accounting principles for state and local governments. The City modified all applicable areas of
the financial statements accordingly.
Note 2 — Deposits (Cash) and Investments
Authorization for Deposits and Investments
The City's investment portfolio is managed in accordance with the Texas Public Funds Investment
Act, as amended, and its own Investment Policy. The Texas Public Funds Investment Act (PFIA),
as prescribed in Chapter 2256 of the Texas Government Code, regulates what types of
investments can be made, requires written investment policies, mandates training requirements
of investment officers, requires internal management reports to be produced at least quarterly,
and provides for the selection of authorized broker -dealers and investment managers.
50
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The Council has adopted a written investment policy regarding the investment of City funds as
required by the Public Funds Investment Act (Chapter 2256, Texas Government Code). 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 to obligations of the U.S. government or U.S. government agencies, obligations of
states, counties, and cities, fully collateralized certificates of deposit, bankers' acceptances,
mutual funds, repurchase agreements and local government investment pools. The maximum
maturity allowed is five years from date of purchase. The City's investment policy does not allow
investments in collateralized mortgage obligations. As of September 30, 2021, the City's
investment portfolio contains certificates of deposit, government investment pools, and
obligations of U.S. government agencies. Each of the City's investments are in compliance with
the PFIA.
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 fair 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 fair value of principal and accrued interest.
The City's cash and investments are classified as: cash and cash equivalents, investments, and
restricted cash and investments. The cash and cash equivalents include cash on hand, demand
deposits with financial institutions, and short-term investments, which have maturities at purchase
of less than three months, consisting mainly of certificates of deposits. The restricted cash and
investments are assets restricted for specific use. The restricted cash and investments include
cash on deposit with financial institutions. For better management of cash, the City pools the cash,
based on the City's needs, into either bank/sweep accounts, or in longer -term investments in U.S.
government securities. However, each fund's balance of cash and investments is maintained in
the books of the City. The City's investments primarily consist of government investment pools.
The City's investments in government pools are measured at net asset value. The investment
pools do not have any limitations or restrictions on withdrawals, such as notice periods or
maximum transaction amounts, and do not impose any liquidity or redemption gates.
Deposit and Investment Amounts
The deposit and investment policies for the Pearland Economic Development Corporation, TIRZ
No. 2 and Development Authority of Pearland are substantially the same as the City.
51
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The following schedule shows the City's recorded cash and cash equivalents and investments at
year-end:
Total Cash and
Investments
Cash and cash equivalents $ 260,171,089
Temporary Investments
Texas CLASS 141,872,409
TexSTAR 9,281,642
FAMC discount note 2,016,036
Certificates of deposit 1,000,000
$ 414,341,176
At September 30, 2021, the City's demand deposits of $51,634,436 were covered by $2,250,000
of federal depository insurance, and $18,867,039 of pledged collateral held by the City's agent in
the City's name. The remaining $30,517,397 of cash deposits were uncollateralized. Additional
collateral was pledged on October 1, 2021 to cover the uncollateralized balances remaining from
the previous day.
The FAMC discount note is valued based on price data obtained from observed transactions and
market price quotations from broker dealers and/or pricing vendors. Certificates of deposit are
stated at amortized cost. The amount of increase or decrease in the fair value of investments
during the current year is included in the City's investment income as follows:
Interest income
Net unrealized loss on
temporary investments
$ 400,422
(97,398)
$ 303,024
The City's investments' fair value measurements are as follows at September 30, 2021:
Fair Value Measurements Using
Fair Value
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by fair value level:
FAMC discount note $ 2,016,036 $
- $ 2,016,036
$
The City's investments in government pools include deposits in TexSTAR and Texas CLASS.
These pools operate similarly to money market funds and each share is equal in value to $1.00.
The value of the pool is equal to the value of the pool shares. The investments in government
pools are measured at NAV and are exempt from reporting in the fair value hierarchy.
TexSTAR was created in April 2002 pursuant to the Interlocal Cooperation Act of the State of
Texas, chapter 791 of the Texas Government Code and the Public Funds Investment Act, chapter
2256 of the Texas Government Code. TexSTAR policies require that local government deposits
52
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
be used to purchase investments authorized by the Texas Public Funds Investment Act. The
State Comptroller of Public Accounts exercises responsibility over TexSTAR. TexSTAR is
administered by Hilltop Securities, Inc. and J.P. Morgan Investment Management. J.P. Morgan
Investment Management, Inc. provides investment advisory services.
The Texas Cooperative Liquid Assets Securities System Trust (Texas CLASS) was created as a
local government investment pool (LGIP) pursuant to Section 2256.016 of the Public Funds
Investment Act, Texas Government Code (PFIA). Per state code, entities may pool any of their
funds, or funds under their control, to preserve principal, maintain the liquidity of the funds, and
maximize yield. 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 Wells
Fargo Bank Texas, N.A. as Custodian. The investment pools do not have any limitations or
restrictions on withdrawals, such as notice periods or maximum transaction amounts, and do not
impose any liquidity or redemption gates.
Interest Rate Risk
At year-end, the City had the following investments subject to interest rate risk disclosure, under
U.S. generally accepted accounting principles:
Investments
Weighted
Average Maturity
(days)
Temporary Investments
Texas CLASS $ 141,872,409 41
TexSTAR 9,281,642 62
FAMC discount note 2,016,036 146
Certificates of deposit 1,000,000 154
$ 154,170,087
Portfolio weighted average maturity 44
The City's investment policy specifies a maximum weighted average maturity for the portfolio of
900 days or 30 months based on the stated maturity date of the investments. When including
cash investments, the weighted average maturity for the City is 90 days.
To the extent possible, the City attempts to match investments with anticipated cash flow
requirements. The City does not directly invest in securities with a stated maturity date more than
five years or 1,825 days from date of purchase. The settlement date is considered the date of
purchase.
Concentration of Credit Risk
With the exception of U.S. Treasury Securities and interest bearing checking accounts that are
fully collateralized, no more than 75% of the City's total investment portfolio will be invested in a
single security type. If the City elects to participate in more than one investment pool, the total
percent invested in all pools shall not exceed the maximum percent allowed.
53
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
As of September 30, 2021, the City's investment portfolio consisted of investment pools
representing 36%, FAMC discount note representing 1%, certificates of deposits representing
0%, and sweep accounts representing 63% of the City's investment portfolio.
Credit Risk
The Federal Agricultural Mortgage Corporation discount note was rated AA+ by Standard & Poor's
and Aaa by Moody's Investors Service.
All credit ratings meet acceptable levels required by guidelines prescribed by both the PFIA and
the City's investment policy. A public fund investment pool must be continuously rated no lower
than AAA or AAAm or no lower than investment grade by at least one nationally recognized rating
service and have a weighted average maturity no greater than 90 days. Investments with
minimum required ratings do not qualify as authorized investments during the period the
investment does not have the minimum rating. TexSTAR and Texas CLASS are both rated AAAm
by S&P Global Ratings.
In accordance with GASB Statement No. 79, Certain External Investment Pools and Pool
Participants, the Local Government Investment Pools do not have any limitations and restrictions
on withdrawals such as notice periods or maximum transaction amounts. These pools do not
impose any liquidity fees or redemption gates.
Restricted Assets
The Enterprise Funds have restricted certain cash and investments for customer deposits, reserve
and emergency expenses, capital improvements, cash restricted for others, and revenue bond debt
service. Because of certain bond covenants, the Enterprise Funds are required to maintain
prescribed amounts of resources that can be used only to service outstanding debt. Some of the
proceeds from debt or from funds received from acquisition of Municipal Utility Districts are restricted
for use on capital projects.
Revenue bond debt service $ 13,087,664
Customer deposits 4,007,081
Capital improvements 141,723,198
Total $ 158,817,943
54
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 3 — Receivables
Receivables at September 30, 2021, consisted of the following:
Primary Government:
Governmental Funds:
Pearland
Economic Tax Increment Non -Major
Debt Capital Development Reinvestment Governmental
General Fund Service Fund Projects Fund Fund Zone #2 Funds
Total
Receivables
Property taxes,
including penalties
and interest $ 494,045 $ 782,560 $ - $ - $ $ $ 1,276,605
Lease receivable 5,219,157 - 5,219,157
Sales and other taxes 5,945,333 - - 2,311,963 383,515 8,640,811
Interest - - - 15,536 - 15,536
Grants - - 12,237,032 - 1,048,924 13,285,956
Other 713,355 - 2,622,513 2,849,199 1,576,825 7,761,892
Gross receivable
Less allowance for
uncollectibles
Net receivable
7,152,733 6,001,717
(13,575)
14,859,545
5,176,698 3,009,264 36,199,957
(20,204) - - (33,779)
$ 7,139,158 $ 5,981,513 $ 14,859,545 $ 5,176,698 $ - $ 3,009,264 $ 36,166,178
Governmental funds report receivables for revenues that are not considered to be available to
liquidate liabilities of the current period. At the end of the current fiscal year, the various components
of unavailable and unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned
Delinquent property taxes receivable - general fund $ 477,761 $
Delinquent property taxes receivable - debt service fund 758,067
Lease revenues - principal 5,127,650 -
Street assessments 1,486,878 -
Other 2,881,600 1,622,513
Lease interest revenues 91,507
Grants and revenues prior to meeting all eligibility requirements 6,050,294
$ 10,731,956 $ 7,764,314
55
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Proprietary Funds:
Governmental
Business -type Activities - Enterprise Funds Activities
Water and Solid Waste Internal
Sewer Fund Fund Total Service Fund
Receivables
Customer accounts
Billed $ 2,900,170 $ 616,462 $ 3,516,632 $ 292,403
Unbilled 9,669,202 666,379 10,335,581
Allowance for
uncollectibles (711,019) (234,302) (945,321)
$ 11,858,353 $ 1,048,539 $ 12,906,892 $ 292,403
City utility customers are billed on the basis of monthly cycle billings. At fiscal year-end, the City
accrues estimated unbilled revenues for water and sewer services and solid waste services provided
before the period ended September 30, to be billed after year-end.
Property Taxes
Property taxes are levied by October 1 in conformity with Subtitle E, Texas Property Tax Code. Taxes
are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following
the year in which imposed. On January 1 of each year, a tax lien attaches to property to secure the
payment of all taxes, penalties, and interest ultimately imposed. The Central Appraisal District (CAD)
of Brazoria County, Harris County, and Fort Bend County, Texas, establishes appraised values.
Taxes are levied by the City Council based on the appraised values and operating needs of the City.
The City contracts billing and collection of tax levies with the Brazoria County Tax Assessor -
Collector.
56
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 4 — Capital Assets
A summary of changes in the primary government's capital assets for the year ended September 30,
2021, follows:
Governmental activities:
Capital assets, not being depreciated
Land
Construction in progress
Total capital assets, not being
depreciated
Capital assets, being depreciated
Infrastructure
Buildings and improvements
Machinery and equipment
Furniture and fixtures
Total capital assets, being
depreciated
Less accumulated depreciation
Infrastructure
Buildings and improvements
Machinery and equipment
Furniture and fixtures
Total accumulated depreciation
Total capital assets being
depreciated, net
Governmental activities capital assets, net
Beginning
Balance
Increases
Decreases
Transfers Ending Balance
$ 31,212,398 $ 382,942 $
162,307,604 75,549,191
$ 2,934,563 $ 34,529,903
(57,651,002) 180,205,793
193,520,002 75,932,133
(54,716,439) 214,735,696
1,050,165,484
123,307,311
27,460,586
8,754,377
1,915,173
567,922
4,116,109
60,254
(6,901,520)
(1,562,132)
36,498,410 1,088,579,067
16,981,218 133,954,931
30,014,563
1,236,811 10,051,442
1,209,687,758
6,659,458
(8,463,652) 54,716,439 1,262,600,003
(466,610,214) (34,246,179)
(48,191,961) (4,671,919)
(18,299,548) (2,569,500)
(6,856,897) (719,440)
2,302,642
1,199,819
(500,856,393)
(50,561,238)
(19,669,229)
(7,576,337)
(539,958,620) (42,207,038)
3,502,461
(578,663,197)
669,729,138 (35,547,580) (4,961,191) 54,716,439
683,936,806
$ 863,249,140 $ 40,384,553 $ (4,961,191) $ - $ 898,672,502
57
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Business -type activities:
Beginning
Balance Increases Decreases Transfers Ending Balance
Capital assets, not being depreciated
Land $ 3,796,382 $ 80,649 $ - $ - $ 3,877,031
Construction in progress 148,245,611 61,607,434 - (24,196,528) 185,656,517
Total capital assets, not being
depreciated 152,041,993 61,688,083 - (24,196,528) 189,533,548
Capital assets, being depreciated
Water and sewer system 366,628,617 414,666 24,196,528 391,239,811
Buildings and improvements 32,042,833 - - 32,042,833
Machinery and equipment 5,783,065 129,553 (421,310) 5,491,308
Furniture and fixtures 153,050 - - 153,050
Contractual water rights 34,511,428 - - 34,511,428
Total capital assets, being
depreciated 439,118,993 129,553 (6,644) 24,196,528 463,438,430
Less accumulated depreciation
Water and sewer system (145,818,635) (10,675,848) 964 (156,493,519)
Buildings and improvements (9,210,175) (734,928) - (9,945,103)
Machinery and equipment (4,416,630) (476,698) 412,300 (4,481,028)
Furniture and fixtures (120,883) (10,982) - (131,865)
Contractual water rights (16,926,062) (1,375,068) - (18,301,130)
Total accumulated depreciation (176,492,385) (13,273,524)
Total capital assets being
depreciated, net 262,626,608
413,264 (189,352,645)
(13,143,971) 406,620
Business -type activities capital assets, net $ 414,668,601 $ 48,544,112 $
Depreciation was charged to programs as follows:
Governmental activities
General government
Public safety
Public works
Community services
Parks and recreation
24,196,528 274,085,785
406,620 $ - $ 463,619,333
$ 3,367,635
2,005,221
35,410,864
118,203
1,305,115
42,207,038
Business -type activities
Water and sewer 13,273,524
Total depreciation expense, primary government $ 55,480,562
58
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The City had active construction projects as of September 30, 2021. The projects included
various improvements to streets, drainage and facilities and water and sewer improvements. At
year-end, the City's contractual commitments on projects were as follows:
Total Remaining
Project Description Contract In Progress Commitment
Governmental activities
Drainage Improvement
Building Improvements
Street Improvement
Park Improvements
Total governmental activities
Business -type activities
Water and Sewer Improvements
Total business -type activities
Total Primary Government
Note 5 — Long -Term Debt
A. Governmental Activity Debt
$ 37,741,333 $ 13,176,809 $ 24,564,524
91,790,147 49,669,498 42,120,649
195,718,587 96,551,666 99,166,921
43,882,256 20,807,820 23,074,436
369,132, 323 180, 205, 793 188, 926, 530
436,310,445
436,310,445
185,656,517 250,653,928
185,656,517 250,653,928
$ 805,442,768 $ 365,862,310 $ 439,580,458
The City issues general obligation bonds and certificates of obligation, and upon annexation and
dissolution of Municipal Utility Districts, assumes unlimited tax and revenue obligations. The assumed
obligations were used to acquire and construct major capital facilities. General obligation bonds,
certificates of obligation, and assumed obligations from dissolved and annexed areas are for both
governmental and business -type activities. The bonds are reported in the Proprietary Funds only if
they are expected to be repaid from proprietary revenues. The general long-term bonds, certificates
of obligation and assumed obligations are paid through the Debt Service Fund from tax revenues.
The City's component units, which are considered blended components units, have revenue bonds
used to acquire and construct or to reimburse developers for major capital improvements. Revenue
bonds are paid through the Pearland Economic Development Corporation from sales tax and through
the Development Authority of Pearland from property tax increment.
The Permanent Improvement Refunding Bonds, Series 2020 were issued in December 2020 in the
amount of $30,240,000 for the refunding of certain outstanding obligations of the City. The bonds bear
interest from 3.00% to 5.00% and are due in annual installments ranging from $45,000 to $5,710,000
through March 1, 2036.
The Permanent Improvement Bonds, Series 2021 were issued in August 2021 in the amount of
$14,905,000 for construction and improvements to City streets, construction and improvements to
City drainage system, construction and improvements to City parks, construction and improvements
to City facilities, and construction of a fire training facility. The bonds bear interest from 2.00% to 5.00%
and are due in annual installments ranging from $265,000 to $1,585,000 through March 1, 2041.
59
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The Certificates of Obligation, Series 2021A were issued in August 2021 in the amount of $7,010,000
for construction and improvements to the Hillhouse Annex Phase II, certain improvements to Fire
Station #4, construction and improvements to Police Training Center, acquisition and improvements
to Cowarts Creek Detention Pump Generator, and construction and improvements to Clear Creek
Trail. The bonds bear interest from 2.00% to 5.00% and are due in annual installments ranging from
$160,000 to $895,000 through March 1, 2041.
The Certificates of Obligation, Series 2021 B were issued in August 2021 in the amount of $15,605,000
for improvements to Shadow Creek Library, improvements to certain road and street intersections in
Shadow Creek Ranch, and improvements and extensions to certain sidewalks in Shadow Creek
Ranch. The bonds bear interest of 5.00% and is due in one installment of $15,605,000 in on
March 1, 2041.
The following is a summary of changes in the City's total governmental long-term liabilities for the year
ended September 30, 2021. In general, the City uses the General and Debt Service funds as well as
the Economic Development Corporation and Development Authority to liquidate governmental long-
term liabilities.
Governmental Activities
Bonds payable
General obligation bonds
Certificates of obligation
Sales tax revenue bonds
Tax increment revenue bonds
Unamortized discount/premium
Total bonds payable
Other liabilities
Obligations under capital lease
Compensated absences
Total governmental activities
long-term liabilities
Beginning
Balance Increases Decreases
Ending
Balance
Amounts Due
in One Year
$ 268,680,000 $ 42,125,000 $ (49,965,000) $
66,405,000 22,615,000 (2,800,000)
1,500,000 - (250,000)
79,945,000 - (7,960,000)
29,962,676 13,379,762 (4,632,821)
446,492,676 78,119,762 (65,607,821)
540,848 184,518 (344,150)
8,611,373 11,861,857 (11,374,216)
260,840,000
86,220,000
1,250, 000
71,985, 000
38,709,617
459,004,617
381,216
9,099,014
$ 18,755,000
2,750,000
250,000
7,900,000
29,655,000
261,678
2,439,550
$ 455,644,897 $ 90,166,137 $ (77,326,187) $ 468,484,847 $ 32,356,228
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.
The full amount estimated to be required for debt service on general obligation debt is provided by (1)
the debt service portion of the tax levy; (2) interest earned in the Debt Service Fund; and (3) transfers
from the Water and Sewer Enterprise Fund. Transfers from the Enterprise Funds are approved at
the discretion of City Council and are not intended to service a specific bond series.
60
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
A summary of the terms of general obligation bonds and certificates of obligation, as of
September 30, 2021, follows:
General Obligation Bonds
Permanent Improvement Bonds, Series 2013
Permanent Improvement & Refunding Bonds, Series 2014
Permanent Improvement Refunding Bonds, Series 2015
Permanent Improvement Bonds, Series 2015
Permanent Improvement Refunding Bonds, Series 2015A
Permanent Improvement & Refunding Bonds, Series 2016A
Permanent Improvement Refunding Bonds, Series 2016B
Permanent Improvement & Refunding Bonds, Series 2017
Permanent Improvement Bonds, Series 2018
Permanent Improvement & Refunding Bonds, Series 2019
Permanent Improvement Bonds, Series 2020
Permanent Improvement Refunding Bonds, Series 2020
Permanent Improvement Bonds, Series 2021
Certificates Of Obligation
Certificates of Obligation, Series 2013
Certificates of Obligation, Series 2014
Certificates of Obligation, Series 2015
Certificates of Obligation, Series 2016
Certificates of Obligation, Series 2017
Certificates of Obligation, Series 2018
Certificates of Obligation, Series 2019A
Certificates of Obligation, Series 2019E
Certificates of Obligation, Series 2020A
Certificates of Obligation, Series 2020B
Certificates of Obligation, Series 2021A
Certificates of Obligation, Series 2021 B
Interest Rate Debt
Original Issue Matures (%) Outstanding
$ 9,315,000
40,410,000
47,165,000
8,495,000
10,210,000
33,275,000
29,840,000
59,600,000
7,440,000
15,755,000
15,310,000
27,220,000
14,905,000
2038
2034
2032
2035
2029
2036
2031
2037
2038
2039
2040
2036
2041
$ 2,745,000 2038
4,625,000 2034
4,860,000 2035
13,995,000 2036
6,205,000 2037
7,085,000 2038
4,465,000 2039
11,980,000 2030
8,540,000 2040
9,575,000 2030
7,010,000 2041
15,605,000 2041
3.00-4.625
2.00-5.00
2.00-5.00
2.00-4.00
2.00-3.00
2.00-5.00
2.00-5.00
2.00-5.00
2.00-5.00
4.00-5.00
3.00-5.00
3.00-5.00
2.00-5.00
3.00-4.625
2.00-4.00
2.00-4.00
2.00-4.00
2.00-4.00
2.00-5.00
3.00-4.00
5.00
3.00-5.00
5.00
2.00 - 5.00
5.00
$ 6,870,000
30,070,000
5,760,000
5,945,000
36,295,000
28,705,000
19,415,000
50,155,000
6,320,000
14,635,000
14,545,000
27,220,000
14,905,000
$ 260,840,000
$ 2,040,000
3,010,000
3,400,000
10,495,000
4,960,000
6,020,000
4,015,000
11,980,000
8,110,000
9,575,000
7,010,000
15,605,000
$ 86,220,000
61
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
A summary of the terms of the revenue bonds recorded as long-term liabilities in the Pearland
Economic Development Corporation and Development Authority of Pearland as of September 30,
2021, is as follows:
Pearland Economic Development Corporation
Sales Tax Revenue Refunding Bonds, Series 2016
Development Authority of Pearland
Tax Increment Revenue Bonds, Series 2013
Tax Increment Revenue Bonds, Series 2014
Tax Increment Revenue Bonds, Series 2015
Tax Increment Revenue Bonds, Series 2016
Tax Increment Revenue Bonds, Series 2017
Tax Increment Revenue Bonds, Series 2018
Tax Increment Revenue Bonds, Series 2019
Prior Year Refunding
Interest Rate Debt
Original Issue Matures (%) Outstanding
$ 14,640,000 2026 2.36 $ 1,250,000
$ 9,150,000 2029 3.77
8,060,000 2029 2.72
66,030,000 2029 3.00
12,320,000 2029 2.22
8,555,000 2029 2.30
5,835,000 2029 3.41
4,255,000 2029 1.91
$ 5,855,000
4,435,000
39,435,000
8,125,000
6,070,000
4,495,000
3,570,000
$ 71,985,000
In prior years, the City defeased certain general obligation and other bonds by placing the proceeds
of the new bonds in an irrevocable trust to provide for all future debt service payments on the
refunded bonds. Accordingly, the trust account assets and the liability for the defeased bonds are
not included in the City's financial statements. At September 30, 2021, the City did not have any
previously refunded bonds outstanding or outstanding refunding escrows.
Capital Lease Obligations
The City has entered into certain capital lease agreements in order to purchase public safety and
management information systems, equipment and other construction -related equipment. The capital
lease obligations are paid out of the General, Debt Service and Water and Sewer Funds. The
historical purchase price of the capital assets under lease is approximately $7.4 million and entirely
classified as machinery and equipment.
Following is a summary of future lease payments due on this equipment:
Fiscal Year Obligations
2022 $ 260,595
2023 133,869
Total 394,464
Less: Interest (13,248)
Obligations under capital leases $ 381,216
62
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The annual requirements to amortize governmental activity general obligation bonds and certificates
of obligation outstanding at September 30, 2021, were as follows:
Capital assets, not being depreciated
Land
Construction in progress
Total capital assets, not being
depreciated
Beginning
Balance Increases Decreases Transfers Ending Balance
$ 31,212,398 $ 382,942 $
162,307,604 75,549,191
193,520,002 75,932,133
$ 2,934,563 $ 34,529,903
(57,651,002) 180,205,793
(54,716,439) 214,735,696
Capital assets, being depreciated
Infrastructure 1,050,165,484 1,915,173 36,498,410 1,088,579,067
Buildings and improvements 123,307,311 567,922 (6,901,520) 16,981,218 133,954,931
Machinery and equipment 27,460,586 4,116,109 (1,562,132) - 30,014,563
Furniture and fixtures 8,754,377 60,254 1,236,811 10,051,442
Total capital assets, being
depreciated 1,209,687,758 6,659,458 (8,463,652) 54,716,439 1,262,600,003
Less accumulated depreciation
Infrastructure (466,610,214) (34,246,179)
Buildings and improvements (48,191,961) (4,671,919)
Machinery and equipment (18,299,548) (2,569,500)
Furniture and fixtures (6,856,897) (719,440)
Total accumulated depreciation
Total capital assets being
depreciated, net
Governmental activities capital assets, net
2,302,642
1,199,819
(500,856,393)
(50,561,238)
(19,669,229)
(7,576,337)
(539,958,620) (42,207,038) 3,502,461 - (578,663,197)
669,729,138 (35,547,580)
(4,961,191) 54,716,439
683,936,806
$ 863,249,140 $ 40,384,553 $ (4,961,191) $ $ 898,672,502
The annual requirements to amortize blended component unit revenue bonds outstanding at
September 30, 2021, were as follows:
Fiscal Year
Governmental Activities
Sales Tax Revenue Bonds Tax Increment Revenue Bonds
Principal Interest Principal Interest
2022 $ 250,000 $ 29,500 $ 8,175,000 $ 1,963,336
2023 250,000 23,600 8,400,000 1,739,934
2024 250,000 17,700 8,625,000 1,512,321
2025 250,000 11,800 8,860,000 1,278,086
2026 250,000 5,900 9,100,000 1,037,023
2027-2031 - 28,825,000 1,593,151
B. Business -type Activity Debt
$ 1,250,000 $ 88,500 $ 71,985,000 $ 9,123,851
The Water and Sewer System Revenue Bonds, Series 2021A were issued in April 2021 in the
amount of $75,000,000. The bonds bear interest from 0.60% to 2.08%, due to the Texas Water
Development Board subsidy and are due in annual installments ranging from $1,725,000 to
$2,530,000 through September 1, 2051.
The Water and Sewer System Revenue & Refunding Bonds, Series 2021 B were issued in August
2021 in the amount of $10,370,000. The bonds bear interest from 3.00% to 5.00% and are due
in annual installments ranging from $345,000 to $670,000 through September 1, 2041. Proceeds
of the bonds will be used for waterworks and sanitary sewer system improvements.
63
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The following is a summary of changes in the City's total business -type long-term liabilities for the
year ended September 30, 2021.
Business -type Activities
Bonds payable:
Permanent Improvement Bonds
Water and sewer revenue bonds
Unamortized discount/premium
Total bonds payable
Other liabilities:
Compensated absences
Total business -type activities
long-term liabilities
Beginning
Balance
Increases
Decreases
Ending Balance
Amounts Due
in One Year
$ 4,110,000 $ 3,020,000
335,435,000 85,370,000
16,167,729 2,828,114
355,712,729 91,218,114
923,978 1,310,520
$ (4,110,000)
(19,965,000)
(2,078,702)
(26,153, 702)
(1,250, 644)
$ 3,020,000
400,840,000
16,917,141
420,777,141
$ 310,000
18,055,000
18,365,000
983,854 298,234
$ 356,636,707 $ 92,528,634 $ (27,404,346) $ 421,760,995 $ 18,663,234
The business -type activity long-term debt will be repaid, plus accrued interest, from operating
revenues of the Water and Sewer Fund. The City is required by the applicable revenue bond
indentures to pledge the net revenues of the Water and Sewer Fund for the retirement of its
outstanding revenue bonds, including interest thereon. Revenue bonds and refunding bonds are
payable solely from and, equally secured by, a first lien on and pledge of the net revenue of the City's
Water and Sewer Fund.
A summary of the terms of revenue bonds and permanent improvement bonds recorded in the
Enterprise Funds as of September 30, 2021, is as follows:
Water and Wastewater Fund
Permanent Improvement Refunding Bonds, Series 2020
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Series 2017C
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Series 2019B
Water & Sewer System
Water & Sewer System
Water & Sewer System
Water & Sewer System
Series 2021 B
Revenue Bonds, Series 2014
Revenue Bonds, Series 2016A
Revenue Bonds, Series 2016B
Revenue Bonds, Series 2016C
Revenue Bonds, Series 2017A
Revenue Bonds, Series 2017B
Revenue & Refunding Bonds,
Revenue Bonds, Series 2018A
Revenue Bonds, Series 2018B
Revenue Bonds, Series 2019A
Revenue & Refunding Bonds,
Revenue Bonds, Series 2020A
Revenue Bonds, Series 2020B
Revenue Bonds, Series 2021A
Revenue & Refunding Bonds,
Original Issue
$ 3,020,000
9,210,000
8,880,000
11,100, 000
50,100,000
10,225,000
12,025,000
60,970,000
8,650,000
19,050,000
21,000,000
34,590,000
107,600,000
7,190, 000
75,000,000
10,370,000
Interest Rate Debt
Matures (%) Outstanding
2036 3.00-5.00 $ 3,020,000
2039 2.00-4.00 $ 7,710,000
2036 2.00-4.00 6,655,000
2025 0.00-0.32 4,935,000
2045 0.00-1.12 40,805,000
2027 0.00-1.29 6,190,000
2047 0.00-2.10 10,665,000
2037 2.00-5.00 52,790,000
2048 0.47-2.07 7,780,000
2038 2.00-5.00 16,185,000
2049 0.00-1.14 19,600,000
2039 4.00-5.00 31,315,000
2050 0.00-0.63 104,010,000
2040 2.00-5.00 6,830,000
2051 0.60-2.08 75,000,000
2041 3.00-5.00 10, 370, 000
$ 400,840,000
64
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The annual requirements to amortize Enterprise Fund revenue bonds and permanent improvement
bonds outstanding at September 30, 2021, were as follows:
Fiscal Year
Business -Type Activities
Revenue Bonds Permanent Improvement bonds
Principal Interest Principal Interest
2022 $ 18,055,000 $ 9,743,037 $ 310,000 $ 143,250
2023 19,700,000 10,186,642 330,000 127,250
2024 18,895,000 9,790,156 1,135,000 90,625
2025 19,165,000 9,427,433 1,245,000 31,125
2026 19,660,000 9,025,526 -
2027-2031 97,505,000 37,551,860 -
2032-2036 77,050,000 26,776,104 -
2037-2041 55,935,000 20,663,786 -
2042-2046 44,720,000 17,526,260 - -
2047-2050 30,155,000 14,262,669 -
Note 6 — Interfund Transactions
$ 400,840,000 $ 164,953,473 $ 3,020,000 $ 392,250
A summary of interfund transfers, the purpose of which is to cover operational expenses/expenditures,
for the year ended September 30, 2021, is as follows:
Transfers in Transfers out
General Fund $ 6,261,713 $ 3,682,166
Debt Service Fund 2,530,075
Capital Projects Fund 3,552,158 1,718,724
Pearland Economic Development Corporation - 181,628
Tax Increment Reinvestment Zone #2 - 20,917,299
Development Authority of Pearland 20,917,299
Other Governmental Funds - 1,213,000
Water and Sewer Fund 190,970,560 196,518,988
$ 224,231,805 $ 224,231,805
Note 7 — Fund Balance / Net Position
Encumbrances
Encumbrance accounting is employed as an extension of formal budgetary integration for the
General Fund, Special Revenue Funds, and Capital Projects Funds. Certain amounts which were
classified as restricted, committed, or assigned for specific purposes have been encumbered in
the governmental funds.
Significant encumbrances, primarily for capital improvements and street maintenance, included
in governmental fund balances are as follows:
General Fund — assigned $215,885
65
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Fund Balance Deficits
The following funds reported deficit fund balances as of September 30, 2021:
Nonmajor Governmental Funds:
Grant Fund
U of H Fund
$4,769,066
$ 27,299
Note 8 — Deferred Compensation Plan
The City maintains, for its employees, a tax -deferred compensation plan meeting the requirements
of Internal Revenue Code Section 457. The plan was established in the 1995 fiscal year by City
Ordinance, and MissionSquare Retirement is the plan record keeper. The deferred compensation is
not available to employees until termination, retirement, death, or unforeseen emergency. The plan's
trust arrangements are established to protect deferred compensation amounts of employees under
the plan from any other use other than intended under the plan (eventual payment to employees
deferring the compensation) in accordance with federal tax laws. Amounts of compensation deferred
by employees under plan provisions are disbursed bi-weekly by the City to a third -party
administrator. The City does not contribute to the plan. The third -party administrator handles all
funds in the plan and makes investment decisions and disburses funds to employees in accordance
with plan provisions.
Note 9 — Employee Retirement System
Texas Municipal Retirement System
Plan Description and Provisions
The City participates as one of 895 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 that can be obtained at www.tmrs.com.
All eligible employees of the City are required to participate in TMRS.
Benefits Provided
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the
governing body of the City, within the options available in the state statutes governing TMRS.
At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest,
and the City -financed monetary credits with interest were used to purchase an annuity. Members
may choose to receive their retirement benefit in one of seven actuarially equivalent payments
options. Members may also choose to receive a portion of their benefit as a partial lump -sum
distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of
the member's deposits and interest.
66
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
At the date the plan began, the City granted monetary credits for service rendered before the plan
began of a 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:
Plan Year
2020
Employee deposit rate 7.00%
Matching ratio (City to employee) 2 to 1
Years required for vesting 5
Service requirement eligibility 60/5, 0/20
(expressed as age/years of service)
Updated service credit
Annuity increase (to retirees)
100% Repeating,
Transfers
70% of CPI Repeating
At the December 31, 2020 valuation and measurement date, the following employees were
covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 271
Inactive employees entitled to but not yet receiving benefits 339
Active employees 763
Total 1,373
Contributions
The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross
earnings, and the City matching percentages are either 100%, 150%, or 200%, both as adopted
by the governing body of the City. Under the state law governing TMRS, the contribution rate for
each City is determined annually by the 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 7% of their annual gross earnings during the
fiscal year. For fiscal year 2021, the City's contribution rate was 13.14% for the months in 2020
and 13.10% for the months in 2021. The City's contributions to TMRS for the year ended
September 30, 2021 were $7,545,831 and were equal to the required contributions.
Net Pension Liability
The City's Net Pension Liability (NPL) was measured as of December 31, 2020, and the Total
Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial
valuation as of that date.
67
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Actuarial Assumptions
The Total Pension Liability in the December 31, 2020 actuarial valuation was determined using
the following actuarial assumptions:
Inflation
Overall payroll growth
Investment rate of return
2.5% per year
2.75% per year
6.75%, net of pension plan investment
expense, including inflation
Salary increases were based on a service -related table. Mortality rates for active members are
based on the PUB (10) mortality tables with the Public Safety table used for males and the
General Employee table used for females. Mortality rates for healthy retirees and beneficiaries
are based on the gender -distinct 2019 Municipal Retirees of Texas mortality tables. The rates for
actives, healthy retirees and beneficiaries are projected on a fully generational basis by Scale
UMP to account for future mortality improvements. For disabled annuitants, the same mortality
tables for healthy retirees is used with a 4-year set -forward for males and a 3-year set -forward for
females. In addition, a 3.5% and 3.0% minimum mortality rate is applied, for males and females
respectively, to reflect the impairment for younger members who become disabled. The rates are
projected on a fully generational basis by Scale UMP to account for future mortality improvements
subject to the floor.
These actuarial assumptions were developed primarily from the actuarial investigation of the
experience of TMRS over the 4-year period from December 31, 2014 to December 31, 2018.
They were adopted in 2019 and first used in the December 31, 2019 actuarial valuation. The
postretirement mortality assumption for Annuity Purchase Rates (APRs) is based on the Mortality
Experience Investigation Study covering 2009 through 2011 and dated December 31, 2013. Plan
assets are managed on a total return basis with an emphasis on both capital appreciation as well
as the production of income in order to satisfy the short-term and long-term funding needs of
TMRS.
The long-term expected rate of return on pension plan investments was determined using a
building-block method in which best estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class. These ranges are combined to produce the long-term expected rate of return
by weighting the expected future real rates of return by the target asset allocation percentage and
by adding expected inflation. In determining their best estimate of a recommended investment
return assumption under the various alternative asset allocation portfolios, the plan's actuary
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).
68
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The target allocation and best estimates of arithmetic real rates of return for each major asset
class are summarized in the following table:
Asset Class
Long-term Expected
Target Real Rate of Return
Allocation (Arithmetic)
Global equity
Core fixed income
Non -core fixed income
Real return
Real estate
Absolute return
Private equity
Total
Discount Rate
30.00%
10.00%
20.00%
10.00%
10.00%
10.00%
10.00%
100.00%
5.30%
1.25%
4.14%
3.85%
4.00%
3.48%
7.75%
The discount rate used to measure the Total Pension Liability was 6.75%. The projection of cash
flows used to determine the discount rate assumed that employee and employer contributions will
be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary
Net Position was projected to be available to make all projected future benefit payments of current
active and inactive employees. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the Total
Pension Liability.
Changes in the Net Pension Liability
Plan Fiduciary NPL
TPL (a) Net Position (b) (a) - (b)
Balances at October 1, 2020 $ 173,230,668 $ 152,220,264 $ 21,010,404
Changes for the year
Service cost 9,324,466 - 9,324,466
Interest 11,845,518 - 11,845,518
Difference between expected and
actual experience 847,255 - 847,255
Contributions — employer - 7,258,507 (7,258,507)
Contributions — employee - 3,866,781 (3,866,781)
Net investment income - 11,569,310 (11,569,310)
Benefit payments, including refunds
of employee contributions (4,807,485) (4,807,485) -
Administrative expenses - (74,766) 74,766
Other changes - (2,917) 2,917
Net changes 17,209,754 17,809,430 (599,676)
Balances at September 30, 2021 $ 190,440,422 $ 170,029,694 $ 20,410,728
69
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The following presents the net pension liability of the City, calculated using the discount rate of
6.75%, as well as what the City's net pension liability would be if it were calculated using a
discount rate that is 1-percentage-point lower (5.75%) or 1-percentage-point higher (7.75%) than
the current rate:
1% Decrease
Current Single
Rate Assumption 1% Increase
(5.75%) (6.75%) (7.75%)
Net Pension Liability (Asset) $ 53,515,665 $ 20,410,728 $ (6,137,879)
Pension Plan Fiduciary Net Position
Detailed information about the pension plan's Fiduciary Net Position is available in a separately
issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com.
Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to
Pensions
For the year ended September 30, 2021, the City recognized pension expense of $6,235,104.
At September 30, 2021, the City reported deferred outflows and inflows of resources related to
pensions from the following sources:
Differences between expected and
actual economic experience
Changes in actuarial assumptions
Difference between projected and actual
pension plan investment earnings
Contributions subsequent to the
measurement date
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 986,615 $
600,263
- 4,292,889
5,482,469
Total $ 7,069,347 $ 4,292,889
70
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Deferred outflows of resources related to pensions resulting from contributions subsequent to the
measurement date of $5,482,469 will be recognized as a reduction of the net pension liability for
the measurement year ended December 31, 2021 (i.e. recognized in the City's financial
statements at September 30, 2022). Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ending September 30,
2022 $ (1,026,928)
2023 382,301
2024 (2,107,394)
2025 (9,420)
2026 55,430
Total $ (2,706,011)
Note 10 — Other Postemployment Benefits
The City offers two other postemployment benefit (OPEB) plans; the Retiree Health Care Plan
and the TMRS-Supplemental Death Benefits Fund as discussed below. OPEB items for the two
plans are as follows.
Total OPEB Liability
Deferred outflows of
resources
Deferred inflows of
resources
OPEB expense
TMRS -
Supplemental
Death Benefits Retiree Health
Fund Care Plan
Total
$ 1,963,865 $ 6,488,348 $ 8,452,213
582,011
241,653
222,196
TMRS Supplemental Death Benefits Fund
Benefit Plan Description
1,196,144
238,616
835,202
1,778,155
480,269
1,057,398
The City also participates in the single -employer defined benefit group -term life insurance plan
operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death
Benefits Fund (SDBF). The City elected, by ordinance, to provide group -term life insurance coverage
to both current and retired employees. The City may terminate coverage under and discontinue
participation in the SDBF by adopting an ordinance before November 1 of any year to be effective
the following January 1.
The death benefit for active employees provides a lump -sum payment approximately equal to the
employee's annual salary (calculated based on the employee's actual earnings, for the 12-month
period preceding the month of death); retired employees are insured for $7,500; this coverage is
another postemployment benefit (OPEB). As the SDBF covers both active and retiree participants,
with no segregation of assets, the SDBF is considered to be an unfunded OPEB plan (i.e. no assets
are accumulated).
71
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Membership in the plan as of the measurement date of December 31, 2020 was as follows:
Inactive employees currently receiving benefits
Inactive employees entitled to but not yet receiving benefits
Active employees
Contributions
204
101
763
1,068
Contributions are made monthly based on the covered payroll of employee members of the
participating member city. The contractually required contribution rate is determined annually for
each city (currently 0.11 % of covered payroll). The rate is based on the mortality and service
experience of all employees covered by the SDBF and the demographics specific to the workforce
of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the
employer contribution rate and the calendar year when the rate goes into effect. The funding policy
of this plan 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. As such, contributions are utilized to fund active member deaths on a pay-as-you-go basis;
any excess contributions and investment income over payments then become net position available
for benefits.
Discount Rate
The TMRS SDBF program is treated as unfunded OPEB plan because the SDBF trust covers both
active employees and retirees and the assets are not segregated for these groups. Under GASB
Statement No. 75, the discount rate for an unfunded OPEB plan should be based on 20-year tax-
exempt AA or higher Municipal Bonds. Therefore, a discount rate of 2.0% based on the 20-Year
Municipal GO AA Index rate published by bondbuyer.com is used as of the measurement date of
December 31, 2020.
Actuarial Assumptions
The City's total OPEB liability was measured at December 31, 2020 and was determined by an
actuarial valuation as of that date using the following actuarial assumptions:
Valuation Date:
Methods and Assumptions:
Inflation:
Salary Increases:
Discount rate:
Retirees' share of benefit related costs:
Administrative expenses:
Mortality rates — service retirees:
December 31, 2020
2.50%
3.50% to 11.50%, including inflation
2.00%. The discount rate was based on the Fidelity
Index's "20-Year Municipal GO AA Index" rate as of
December 31, 2020.
$0
All administrative expenses are paid through the
Pension Trust and accounted for under reporting
requirements under GASB Statement No. 68.
2019 Municipal Retirees of Texas Mortality Tables.
The rates are projected on a fully generational basis
with scale UMP.
72
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Mortality rates — disabled retirees:
Other Information
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 3.0%
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.
The actuarial assumptions used in the December 31, 2020 valuation were based on the results of
an actuarial experience study for the period December 31, 2014 to December 31, 2018.
Changes in the Total OPEB Liability
Balance as of October 1, 2020
Changes for the year
Service cost
Interest on total OPEB liability
Differences between expected and actual experience
Change of assumptions
Benefit payments
Balance as of September 30, 2021
Sensitivity Analysis
Total OPEB
Liability
$ 1,550,183
110,479
44,073
(27,031)
291,685
(5,524)
$ 1,963,865
The following presents the total OPEB liability of the employer, calculated using the discount rate of
3.0%, as well as what the City's total OPEB liability would be if it were calculated using a discount
rate that is 1-percentage-point lower (2.0%) or 1-percentage-point higher (3.0%) than the current
rate. Note that the healthcare cost trend rate does not affect the total OPEB liability, so sensitivity to
the healthcare cost trend rate is not shown.
1% Decrease in Current 1% Increase in
Discount Discount Discount
Rate (1.00%) Rate (2.00%) Rate (3.00%)
Total OPEB liability $ 2,458,228 $ 1,963,865 $ 1,587,807
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB Activity
73
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
For the year ended September 30, 2021, the City recognized OPEB expense of $222,196. As of
September 30, 2021, the City reported deferred outflows of resources related to OPEB from the
following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Difference between expected and actual experience $ 83,681 $ 183,509
Changes of assumptions 496,139 58,144
Benefit payments subsequent to the
measurement date 2,191
Total $ 582,011 $ 241,653
The $2,191 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 total
OPEB liability in the year ending September 30, 2022. Amounts currently reported as deferred
outflows and deferred inflows of resources related to OPEB, excluding contributions subsequent to
the measurement date, will be recognized in OPEB expense as follows:
Year Ending September 30
2022 $ 67,644
2023 67,644
2024 67,644
2025 55,097
2026 47,224
Thereafter 32,914
$ 338,167
Retiree Health Care Plan (RHCP)
Plan Description
The City's defined benefit OPEB plan, City of Pearland Retiree Health Care Plan (RHCP),
provides OPEB through an implicit healthcare premium for retirees for all permanent full-time
employees of the City. RHCP is a single -employer defined benefit OPEB plan administered by
the City. At this time, no assets are accumulated in a trust to fund the future requirements of the
RHCP.
Benefits provided
Retirees who are entitled to receive retirement benefits under the City's retirement plan may
purchase continued health benefits coverage for the retiree and the retiree's dependents, but shall
pay 100% of the premium for coverage. The retiree, however, is able to receive a lower rate by
participating in the City's plan as opposed to individually purchasing health insurance. The City's
coverage is secondary to Medicare when the person becomes eligible for these benefits.
74
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Employees covered by benefit terms. At October 1, 2019, the actuarial valuation date, the
following employees were covered by the benefit terms:
Inactive employees currently receiving benefits 6
Inactive employees entitled to but not yet receiving benefits -
Active employees 687
Total 693
Total OPEB Liability
The City's total OPEB liability of $6,488,348 was measured as of September 30, 2021, and was
determined by an actuarial valuation as of October 1, 2019.
Actuarial assumptions and methods
The total OPEB liability was determined using the following actuarial assumptions, applied to all
periods included in the measurement, unless otherwise specified:
Valuation Date: October 1, 2019
Measurement Date: September 30, 2021
Methods and Assumptions:
Discount Rate: 2.43% per annum, which includes inflation
Inflation: 2.25% per annum
Salary Increases: 3.00% average which includes inflation
Healthcare cost trend rates: 11.87% initial medical trend rate for retirees
decreasing to an ultimate rate of 4.60% in the year
2041
Mortality rates were updated and are based upon the sex distinct PUB-210 headcount weighted
mortality improvement scale MP-2019.
Discount Rate
The discount rate of 2.43% is based upon the yield of 20-year tax-exempt general obligation
municipal bonds with an average rating of AA/Aa or higher. The other financial assumptions for
long-term inflation, payroll growth, and salary scale were taken from the TMRS actuary study. The
per capita claims costs and how these costs are expected to escalate in the future were set by
HUB International who develops the funding rates.
Plan Assets
There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB
Statement No. 75.
75
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Changes in the Total OPEB Liability
The retiree medical plan sponsored by the City is offered to all former employees who satisfy the
retirement eligibility provisions of the plan, however only a grandfathered group of employees and
retirees are eligible for a subsidy which is based upon accrued service with the City as of
October 1, 2006 and or the number of years of City service at retirement. The following table
shows the changes in total OPEB liability:
Total OPEB
Liability
Balance as of October 1, 2020 $ 6,074,955
Changes for the year
Service cost 515,331
Interest on total OPEB liability 140,612
Differences between expected and actual experience -
Change of assumptions (203,273)
Benefit payments (39,277)
Balance as of September 30, 2021 $ 6,488,348
Assumption Changes. For the fiscal year ended September 30, 2021, the discount rate increased
from 2.14% to 2.43%.
Sensitivity of the total OPEB liability to changes in the discount rate
The following presents the plan's total OPEB liability, calculated using a discount rate of 2.43%,
as well as what the plan's total OPEB liability would be if it were calculated using a discount rate
that is 1-percentage-point lower (1.43%) or 1-percentage-point higher (3.43%) than the current
rate:
1% Decrease in Current 1% Increase in
Discount Discount Discount
Rate (1.43%) Rate (2.43%) Rate (3.43%)
Total OPEB liability $ 7,212,005 $ 6,488,348 $ 5,835,186
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates
The following presents the plan's total OPEB liability, calculated using the assumed trend rates
as well as what the plan's total OPEB liability would be if it were calculated using a trend rate that
is 1-percentage-point lower (10.87%) or 1-percentage-point higher (12.87%) than the current rate:
Current
Healthcare
Cost Trend
Rates
1% Decrease Assumption 1% Increase
(10.87%) (11.87%) (12.87%)
Total OPEB liability $ 5,478,337 $ 6,488,348 $ 7,580,881
76
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the year ended September 30, 2021, the City recognized OPEB expense of $835,202. At
September 30, 2021, the City reported deferred outflows of resources and deferred inflows of
resources related to OPEB from the following sources:
Difference between expected and actual experience
Changes of assumptions
Deferred Deferred
Outflows of Inflows of
Resources Resources
$ 155,071 $ 57,929
1,041,073 180,687
$ 1,196,144 $ 238,616
Amounts currently reported as deferred outflows and inflows of resources related to OPEB will be
recognized in OPEB expense as follows:
Year Ending September 30
2022 $ 179,259
2023 179,259
2024 179,260
2025 121,422
2026 106,971
Thereafter 191,357
Total $ 957,528
77
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 11 — Fund Balance Classifications
In accordance with the guidance in GASB No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions, the City has classified ending fund balance based on the availability of
funds for expenditure on programs and services. As of September 30, 2021, the following
balances were reported in the governmental fund balances:
Nonspendable Restricted Assigned Unassigned
Prepaids $ 3,412 $ $ $
General obligation
bonds - 5,887,231
Capital projects 63,182,404
Economic development 50,146,378
TIRZ development 7,088,268
Tourism - 5,917,730
Court security 48,975
Public safety 171,212
Court technology 7,725
Parks and recreation - 522,216
Law enforcement
(seized funds) 363,121
Park development - 898,932
Sidewalks 46,635
Regional detention 1,000
Traffic improvements 617,993
Juvenile case
management 5,188
Public -access television
broadcasting 849,841
Subsequent year's
budget - 215,885
Unassigned
27,509,049
3,412 $ 135,754,849 $ 215,885 $ 27,509,049
78
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 12 - Commitments and Contingencies
Litigation and Other Contingencies
The City was involved in various lawsuits and arbitration proceedings at September 30, 2021. The
City and its legal counsel believe that any amounts which the City might ultimately be required to pay
will not exceed underlying insurance coverage.
Reimbursements due to Developers/Business Assistance
Pursuant to the Local Government Code, the Economic Development Corporation offers incentives
to attract and retain businesses to the City. The following are the current incentives.
Current Incentives
Amounts Paid
Original Outstanding
Amount Prior Years Current Year Balance
Adient Medical $ 40,000 $ 10,000 $ $ 30,000
Base Pair 2017 60,000 45,000 15,000
Coastal Swim 54,200 - - 54,200
Endress+Hauser 525,000 - 301,000 224,000
Graham Ventures - Code Ninja 638,000 638,000
H-Town HealthCare 70,000 17,500 17,500 35,000
Keystone 189,000 189,000
KS Management -Grant 2,663,000 1,775,340 295,890 591,770
KS Management -Sales Tax 600,000 127,025 29,814 443,161
Lonza Phase 2 750,000 750,000
MHI 250,000 250,000
Multalloy (FloWorks Intl/Shale-Inland) 350,000 210,000 140,000
Ref -Chem 880,000 880,000
Tool Flo 1,152,000 748,000 - 404,000
Wilmar 116,000 76,000 40,000
Lower Kirby Urban Center Master Plan
$ 8,337,200 $ 2,932,865 $ 1,720,204 $ 3,684,131
One of the strategies of the Pearland Prosperity Strategic Plan is to implement plans to develop the
Lower Kirby Urban Center as Pearland's most intensive mixed -use employment, residential, and
entertainment district. The Lower Kirby Master Plan identified $48 million in priority construction
projects that include drainage, water, sewer, streets, traffic, sidewalks, and streetscape necessary to
facilitate development of the area. On March 10, 2014, the City entered into a Master Financing
Agreement with Lower Kirby Pearland Management District and Pearland Municipal Management
District which outlines the process for the City to advance funds to the District(s) in order to facilitate
the development. The City will be reimbursed from the District(s) from bond sales as the area is
developed and the Districts' taxable values support bond issuances. Each project is taken on a case
by case basis and is approved via a Letter of Financing Agreement (LFA).
79
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
The following LFA's have been approved by and between the City and the LKMD and the PMMD#1.
The City had receivable balances at September 30, 2021 of $3,465,780 relating to these LFA's.
Lower Kirby Pearland
Pearland Municipal
Management Management
3/10/2014 Cost District District #1
Detention Pond $ 1,947,753 0.00% $ - 27.70% $ 539,528
Master Drainage Plan $ 127,410 0.00% - 30.80% 39,268
Regional Drainage Plan $ 183,031 0.00% - 23.90% 43,717
Subtotal - 622,513
8/24/2015
South Spectrum PER $ 214,137 57.40% - 40.20% 86,124
4/26/2016
TxDOT Ditch Acquisition $ 400,000 73.00% - 27.00% 128,508
2/28/2017
South Spectrum West $ 5,755,789 0.00% - 21.30% 1,228,378
5/8/2017
West Conveyance Pond $ 277,000 0.00% - 88.80% 246,044
7/10/2017
288 Waterline & LK Park Improvements $ 1,189,000 100.00% 1,000,000 0.00% -
5/8/2019
LK Regional Detention Property Acquisition $ 32,097 0.00% - 100.00% 154,214
$ 1,000,000 $ 2,465,781
City funding for these LFA's is via Reimbursement Agreements with the Pearland Economic
Development Corporation, whereby the City gets reimbursed for the cost of these projects by the
Corporation; so that the City is not actually out any dollars.
Chapter 380 Economic Development Agreements
The City had one Chapter 380 agreement in effect during the current fiscal year with Kelsey-
Seybold. The City's legal obligations and limitations relating to the sales tax incentive agreements
are outlined by the Texas Local Government Code, Title 12, Subtitle A, Chapter 380,
Miscellaneous Provisions Relating to Municipal Planning and Development.
Kelsey-Seybold (Kelsey) is a large multi -specialty clinic system located in the Greater Houston
area and is Houston's largest and most renowned private multi -specialty physician group. The
Kelsey System is a major provider of healthcare for NASA and a center for healthcare research.
The City of Pearland and Pearland Economic Development Corporation made certain agreements
with Kelsey to relocate its administrative headquarters to Shadow Creek Ranch in Pearland. The
headquarters is in a four story, 170,000-square-foot building at the intersection of Shadow Creek
Parkway and Kirby Drive. The headquarters had a cost of $36 million, including the costs for
equipment, construction, and fees. Construction began in May 2012 and Kelsey began operations
at the site in October 2013.
The City of Pearland and the Pearland Economic Development Corporation (PEDC) each have a
10-year sales tax incentive agreement with Kelsey that allows Kelsey to receive an incentive of
60% of the sales tax remitted by Kelsey and its vendors. The agreements with the City and the
PEDC require Kelsey to maintain a minimum of 600 jobs to be in place as an eligibility factor. To
date the City and the PEDC have paid $558,766 in sales tax incentives.
80
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 13 — Risk Management
The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction
of assets; errors and omissions; injuries to employees; and natural disasters. The City's risk
management program mainly encompasses obtaining property and liability insurance through
Texas Municipal League's Intergovernmental Risk -Pool (TML-IRP), and through commercial
insurance carriers. The participation of the City in TML-IRP is limited to payment of premiums.
The City has not had any significant reduction in insurance coverage, and the amounts of
insurance settlements have not exceeded insurance coverage for any of the last three years.
The City also provides Workers' Compensation insurance on its employees through TML-
Workers' Compensation Fund. Workers' Compensation premiums are subject to change when
audited by TML Workers' Compensation Fund. At fiscal year-end September 30, 2021, the City
believed the amounts paid on Workers' Compensation would not change significantly from the
amounts recorded.
The City uses the Property Liability Insurance Internal Service Fund to account for the activities
of the City's property and casualty insurance. Coverage includes general liability, law
enforcement, public official and employees' liability, auto liability, physical damage and multi -peril,
mobile equipment, real and personal property, and windstorm coverage. The fund accounts for
the annual premiums and accounts for insurance recovery funds on eligible claims.
The City uses the Health Claims Fund, a medical self-insurance fund, to account for and finance
the City's employee health insurance medical claims. The fund accounts for employee, City,
retiree and COBRA contributions, claims and administrative fees.
Changes in the balance of claims liabilities as reported in the Health Claims Fund (an Internal
Service Fund) during the past two years are as follows:
Employee Health
Insurance
Liability - September 30, 2019 $ 487,017
Claims incurred 6,883,700
Claims payments (6,871,489)
Liability - September 30, 2020 499,228
Claims incurred 8,007,351
Claims payments (7,917,966)
Liability - September 30, 2021 $ 588,613
81
CITY OF PEARLAND, TEXAS
Notes to Financial Statements (Continued)
September 30, 2021
Note 14 — Capital Lease
The City has a 20-year agreement to lease a facility to the University of Houston Clear Lake
(UHCL), which commenced in July 2010. Rent or lease payments are broken into two parts, debt
service and operating. For accounting purposes, the City has classified the lease as a direct
financing lease. Because this lease is recorded in the Debt Service Fund (a governmental fund),
the revenue is deferred and the distinction between a sales and direct financing lease is not
relevant at the fund level.
UHCL has an option to purchase the facility upon the commencement date of July 2010 until the
61st day preceding the 20th anniversary of the commencement date.
The lease payments related to debt service to be received coincide with debt service payments
the City is required to make on a bond that matures on March 1, 2029. At September 30, 2021,
the future minimum debt service lease payments to be received under the lease are as follows:
Fiscal year
ending
September 30, Payment
2022 $ 737,205
2023 716,401
2024 695,169
2025 669,142
2026 651,309
2027-2029 1,811,528
$ 5,280,754
82
Required Supplementary Information
(Unaudited)
83
84
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in
Fund Balances — Budget and Actual
General Fund
For the Year Ended September 30, 2021
Original Final
Budget Budget
Actual
Variance With
Final Budget
Favorable
(Unfavorable)
Revenues
Property taxes $ 28,420,428 $ 28,457,983 $ 28,319,667 $ (138,316)
Sales and use taxes 22,452,153 24,268,440 26,138,991 1,870,551
Franchise and other 6,922,658 6,709,754 6,719,483 9,729
License and permits 4,150,000 4,305,336 4,257,527 (47,809)
Fines and forfeitures 2,392,706 1,866,192 1,754,717 (111,475)
Charges for services 19,502,964 18,961,315 19,428,409 467,094
Investment earnings 456,568 48,000 22,321 (25,679)
Intergovernmental - - 550,140 550,140
Other 754,433 697,933 70,906 (627,027)
Total Revenues 85,051,910 85,314,953 87,262,161 1,947,208
Expenditures
Current
General government 11,781,597 12,926,665 13,378,761 (452,096)
Public safety 50,876,948 52,510,149 51,097,863 1,412,286
Public works 12,555,837 12,209,422 11,369,557 839,865
Community services 4,254,227 4,552,628 4,098,950 453,678
Parks and recreation 6,681,968 6,367,480 6,075,729 291,751
Debt Service
Principal 206,760 206,760 268,266 (61,506)
Interest and other charges 6,047 6,047 6,047
Capital Outlay 223,590 285,001 275,566 9,435
Total Expenditures 86,586,974 89,064,152 86,570,739 2,493,413
Excess (Deficiency) of Revenues
Over Expenditures (1,535,064) (3,749,199) 691,422 4,440,621
Other Financing Sources (Uses)
Proceeds from issuance of debt
Transfers in
Transfers out
Total Other Financing
Sources (Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
177,135 177,135
5,226,770 6,226,770 6,261,713 34,943
(2,887,081) (4,763,768) (3,682,166) 1,081,602
2,339,689 1,463,002 2,756,682 1,293,680
$ 804,625 $ (2,286,197) 3,448,104 $ 5,734,301
29,076,297
$ 32,524,401
85
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in
Fund Balances — Budget and Actual
Pearland Economic Development Corporation
For the Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative) 2020
Revenues
Sales and use taxes $ 11,017,128 $ 11,567,984 $ 12,877,864 $ 1,309,880 $ 11,217,696
Charges for services 230,000 310,500 429,331 118,831 459,996
Investment earnings 200,000 81,000 35,327 (45,673) 259,866
Intergovernmental - - 12,000 12,000 707,623
Other 31,000 31,000 6,000 (25,000) 59,132
Total Revenues 11,478,128 11,990,484 13,360,522 1,370,038 12,704,313
Expenditures
Current
Economic development 22,994,094 6,811,640
Debt Service
Principal 250,000 250,000
Interest and other charges 35,400 35,400
Capital Outlay 515,000 716,791
Total Expenditures 23,794,494 7,813,831
Excess (Deficiency) of Revenues
Over Expenditures
3,880,652
250,000
35,400
1,384,450
5,550,502
2,930,988 3,095,628
(667,659)
250,000
41,300
3,405,448
2,263,329 6,792,376
(12,316,366) 4,176,653 7,810,020 3,633,367 5,911,937
Other Financing Sources (Uses)
Proceeds from sale of assets - - 7,173,996 7,173,996
Transfers out (181,628) (181,628) (181,628) (172,979)
Total Other Financing
Sources (Uses) (181,628) (181,628) 6,992,368 7,173,996 (172,979)
Net Change in Fund Balance (12,497,994) 3,995,025 14,802,388 10,807,363 5,738,958
Fund Balance, Beginning of Year 22,474,394 22,474,394 22,474,394 16,735,436
Fund Balance, End of Year $ 9,976,400 $ 26,469,419 $ 37,276,782 $ 10,807,363 $ 22,474,394
86
CITY OF PEARLAND, TEXAS
Notes to Required Supplementary Budget Information
For the Year Ended September 30, 2021
Budgetary Compliance
The City has complied with all material budget requirements for the year ended September 30,
2021.
Annual appropriated budgets are adopted for the General, Special Revenue and Debt Service
Funds, using the same basis of accounting as for financial reporting. All annual appropriations lapse
at fiscal year-end. Project length budgets are adopted for the Capital Project Funds. The City, for
management control, approves a financial plan for the Enterprise Fund. The City does not legally
adopt an annual appropriated budget for the Development Authority of Pearland or TIRZ #2.
Expenditures may not legally exceed budgeted appropriations at the fund level (i.e. General Fund,
Debt Service Fund, etc.). Expenditure requests, which would require an increase in total budgeted
appropriations, must be approved by City Council through a formal budget amendment. At any
time in the fiscal year, the Council may make emergency appropriations to meet a pressing need
for public expenditure in order to protect the public health, safety, or welfare. The Council has the
power to transfer any unencumbered funds allocated by the budget from one activity, function, or
department, to another activity, function, or department, to re -estimate revenues and expenditures,
and to amend the budget.
Because City Council adopts the budget at the fund level, management has the authority to transfer
available funds allocated by the budget from one function/department or activity to another function
or activity within the same department. In cooperation with the directors and department heads of
the City, the Budget Officer, the Chief Financial Officer and the City Manager prepare an annual
budget for the General Fund, Special Revenue Funds and Debt Service Fund for the ensuing
fiscal year, in a form and style as deemed desirable by the City Manager. The City Manager shall
submit to the Council, for its review, consideration, and revision, both a letter describing the
proposed new budget, as well as a balanced budget for the forthcoming fiscal year, between 60
(sixty) and 90 (ninety) days prior to the beginning of the fiscal year. The budget, as adopted, must
set forth the appropriations for services, functions, and activities of the various City departments
and agencies, and shall meet all fund requirements provided by law and required by bond
covenants. Capital projects are budgeted on a project -length basis.
Amounts reported in the accompanying financial statements represent the budgeted amount with all
supplemental appropriations.
87
CITY OF PEARLAND, TEXAS
Schedule of Changes in Net Pension Liability and Related Ratios
Texas Municipal Retirement System
Last Six Measurement Years
Measurement Year
2014 2015 2016 2017 2018 2019 2020
Total Pension Liability
Service cost $ 5,118,873 $ 6,035,636 $ 6,756,543 $ 7,548,267 $ 7,869,363 $ 8,361,735 $ 9,324,466
Interest 7,010,813 7,680,048 8,166,924 9,064,733 9,914,570 10,784,493 11,845,518
Difference between expected
and actual experience 241,450 846,833 1,159,738 33,887 41,404 249,817 847,255
Change of assumptions (304,820) 952,323
Benefit payments, including refunds of
employee contributions (2,729,973) (3,808,062) (2,875,256) (3,481,143) (4,953,354) (5,414,199) (4,807,485)
Net Change in Total Pension Liability 9,641,163 10,449,635 13,207,949 13,165,744 12,871,983 14,934,169 17,209,754
Total pension liability - beginning 98,960,025 108,601,188 119,050,823 132,258,772 145,424,516 158,296,499 173,230,668
Total pension liability - ending (a) $ 108,601,188 $ 119,050,823 $ 132,258,772 $ 145,424,516 $ 158,296,499 $ 173,230,668 $ 190,440,422
Plan Fiduciary Net Position
Contributions -employer $ 4,339,785 $ 4,786,602 $ 5,253,253 $ 5,991,467 $ 6,225,163 $ 6,543,589 $ 7,258,507
Contributions - employee 2,355,095 2,498,961 2,749,756 3,081,580 3,216,353 3,439,022 3,866,781
Net investment income 4,766,828 135,758 6,458,752 14,836,941 (3,818,135) 19,805,631 11,569,310
Benefit payments, including refunds of
employee contributions (2,729,973) (3,808,062) (2,875,256) (3,481,143) (4,953,354) (5,414,199) (4,807,485)
Administrative expense (49,756) (82,673) (72,899) (76,869) (73,737) (111,780) (74,766)
Other (4,091) (4,083) (3,927) (3,896) (3,853) (3,359) (2,917)
Net Change in Plan Fiduciary Net Position 8,677,888 3,526,503 11,509,679 20,348,080 592,437 24,258,904 17,809,430
Plan Fiduciary Net Position, Beginning 83,306,773 91,984,661 95,511,164 107,020,843 127,368,923 127,961,360 152,220,264
Plan Fiduciary Net Position, Ending (b) $ 91,984,661 $ 95,511,164 $ 107,020,843 $ 127,368,923 $ 127,961,360 $ 152,220,264 $ 170,029,694
Net Pension Liability, Ending (a) -(b) $ 16,616,527 $ 23,539,659 $ 25,237,929 $ 18,055,593 $ 30,335,139 $ 21,010,403 $ 20,410,728
Plan Fiduciary Net Position as a Percentage
of Total Pension Liability 84.70% 80.23% 80.92% 87.58% 80.84% 87.87% 89.28%
Covered Payroll $ 33,615,923 $ 35,545,557 $ 39,282,225 $ 44,013,221 $ 45,939,075 $ 49,128,879 $ 55,239,728
Net Pension Liability as a Percentage
of Covered Payroll 49.43% 66.22% 64.25% 41.02% 66.03% 42.77% 36.95%
Notes to the Required Supplementary Information
(a) Amounts presented are for each measurement year, which end the preceding December
31 of the City's fiscal year-end.
(b) Ten years of data should be presented in this schedule, but data was unavailable prior to
2014.
88
CITY OF PEARLAND, TEXAS
Schedule of Contributions (Continued)
Texas Municipal Retirement System
Last Ten Fiscal Years
Fiscal Year
2017 2018 2019
2020 2021
Actuarially determined contribution $ 5,924,405
Contributions in relation to the actuarially
determined contribution 5,924,405
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered
payroll
$ 6,072,762 $ 6,461,150 $ 6,818,604 $ 7,545,831
6,072,762 6,461,150
6,818,604 7,545,831
$ 43,703,166 $ 44,772,623 $ 48,297,918 $ 51,414,583 $ 57,237,508
13.56% 13.56% 13.38% 13.26% 13.18%
Fiscal Year
2012 2013 2014
2015 2016
Actuarially determined contribution $ 3,518,289
Contributions in relation to the actuarially
determined contribution 3,518,289
Contribution deficiency (excess) $
Covered payroll $ 27,756,555
Contributions as a percentage of covered
payroll 12.68%
$ 3,780,847 $ 4,311,811 $ 4,600,419 $ 5,295,359
3,780,847 4,311,811
$ $
4,600,419 5,295,359
$ - $
$ 28,876,260 $ 30,580,987 $ 34,650,598 $ 39,566,838
13.09% 14.10%
13.28% 13.38%
NOTES TO REQUIRED PENSION SYSTEM SUPPLEMENTARY INFORMATION
Valuation Date:
Notes:
Actuarial determined contribution rates are calculated as of
December 31 and become effective in January 13 months
later.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method:
Amortization Method:
Remaining Amortization Period:
Asset Valuation Method:
Inflation:
Salary Increases:
Investment Rate of Return:
Retirement Age:
Mortality:
Entry Age Normal
Level Percentage of Payroll, Closed
25 years
10 Year smoothed market; 12% soft corridor
2.50%
3.50% to 11.50% including inflation
6.75%
Experience -based table of rates that are specific to the
City's plan of benefits. Last updated for the 2019 valuation
pursuant to an experience study of the period 2014-2018.
Postretirement: 2019 Municipal Retirees of Texas Mortality
Tables. The rates are projected on a fully generational basis
with scale UMP. Preretirement: 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.
89
CITY OF PEARLAND, TEXAS
Schedule of Contributions (Continued)
Texas Municipal Retirement System
Last Ten Fiscal Years
Other Information:
Notes: There were no benefit changes during the year.
90
CITY OF PEARLAND, TEXAS
Schedule of Changes in the Total OPEB Liability and Related Ratios
Texas Municipal Retirement System Supplemental Death Benefits Fund
Last Four Measurement Years
Measurement Year
2017 2018 2019 2020
Total OPEB Liability
Service cost $ 66,020 $ 82,690 $ 73,693 $ 110,479
Interest 39,025 41,463 52,362 44,073
Difference between expected
and actual experience - 143,594 (224,466) (27,031)
Change of assumptions 111,349 (99,775) 276,531 291,685
Benefit payments, including refunds of
employee contributions (4,401) (4,594) (4,913) (5,524)
Net Change in Total OPEB Liability 211,993 163,378 173,207 413,682
Total OPEB Liability - Beginning
Total OPEB Liability - Ending
Covered -Employee Payroll
Total OPEB Liability as a Percentage
of Covered -Employee Payroll
1,001,605 1,213,598
1,376,976 1,550,183
$ 1,213,598 $ 1,376,976 $ 1,550,183 $ 1,963,865
$ 44,013,221 $ 45,939,075 $ 49,128,879 $ 55,239,728
2.76% 3.00%
Notes to the Required Supplementary Information
3.16% 3.56%
Amounts presented are for each measurement year, which end the preceding December 31 of
the City's fiscal year-end.
Ten years of data should be presented in this schedule, but data was unavailable prior to 2017.
There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB
Statement No. 75.
91
CITY OF PEARLAND, TEXAS
Schedule of Changes in the Total OPEB Liability and Related Ratios
City of Pearland Retirement Health Care Plan
Last Four Measurement Years
Measurement Year
2018 2019 2020 2021
Total OPEB Liability
Service cost $ 456,161 $ 295,552 $ 364,519 $ 515,331
Interest 240,852 157,119 167,755 140,612
Changes of benefit terms (2,314,150) - - -
Difference between expected
and actual experience 361,831 - (74,479) -
Change of assumptions 43,043 101,145 1,240,492 (203,273)
Benefit payments, including refunds of
employee contributions (127,339) (66,167) (38,350) (39,277)
Net Change in Total OPEB Liability (1,339,602) 487,649 1,659,937 413,393
Total OPEB Liability - Beginning 5,266,971 3,927,369 4,415,018 6,074,955
Total OPEB Liability - Ending $ 3,927,369 $ 4,415,018 $ 6,074,955 $ 6,488,348
Covered -Employee Payroll $ 44,772,623 $ 48,297,918 $ 51,067,300 $ 54,267,466
Total OPEB Liability as a Percentage
of Covered -Employee Payroll 8.77% 9.14% 11.90% 11.96%
Notes to the Required Supplementary Information
Amounts presented are for each measurement year, which is the same as the City's fiscal year-
end.
Ten years of data should be presented in this schedule, but data was unavailable prior to 2018.
There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB
Statement No. 75.
Assumption Changes
Since the prior valuation, the mortality improvement scale was updated from MP-2018 to the MP-
2019 table. Also, the per capita claims costs and trend were updated to reflect recent experience.
For the fiscal year ended September 30, 2021, the discount rate increased from 2.14% to 2.43%,
the mortality table has been updated to use the new PUB-2010 tables recently published by the
Society of Actuaries, and update the per capita costs and how these costs escalate in the future
using recent experience. The discount rate used under GASB 75 for unfunded plans must be
based upon the yield as of the measurement date of a set of 20-year tax-exempt general
obligation municipal bonds with an average rating of AA/Aa or higher.
92
Other Supplementary Information
93
94
Combining and Individual Fund Statements and Schedules
95
96
CITY OF PEARLAND, TEXAS
Nonmajor Governmental Funds
September 30, 2021
To account for the proceeds of specific revenue sources that, are legally restricted to expenditures
for specific purposes.
Hotel/Motel Tax Fund — A fund created to account for hotel/motel occupancy tax revenue.
Court Security Fund — A fund created to account for the receipt and expenditure of revenues
from court fines for court security.
City -Wide Donation Fund — A fund created to account for miscellaneous donations for all City
departments except parks.
Court Technology Fund — This fund is used to account for the receipt and expenditure of
revenues from court fines for court technology.
Street Assessments Fund — A fund created to account for the revenue and expenditure of street
assessments as approved by City Council for a designated street(s).
Park Donation Fund — A fund used to account for park donations for park special events and
development of parks. This fund also includes funds from tree trust donations.
Police Seizure Fund — A fund created to account for state and federal seizure funds which are
used solely for law enforcement purposes.
Park and Recreation Development Fund — A fund created to account for the receipt and
expenditure of payment in lieu of parkland for the development of parks.
Sidewalk Fund — A fund created to account for resources designated for sidewalks.
Grant Fund — A fund created to account for revenues and expenditures associated with federal,
state, and local grants.
Traffic Impact Improvement Fund — A fund created to account for resources and expenditures
from traffic impact analysis.
Juvenile Management Fund — A fund created to account for receipt and expenditure of revenues
from court fines for juvenile case manager.
Regional Detention Fund — Educational TV Fund - A fund created to account for the revenues
and expenditures associated with the purchase of equipment for public -access television
broadcasting under rules set forth by the Federal Communications Commission (FCC).
University of Houston (U of H) Fund — A fund created to account for lease revenues and the
operating expenditures related to the University of Houston Clear Lake-Pearland Campus built by
the City and leased to the University of Houston Clear Lake and the Pearland Economic
Development Corporation.
97
CITY OF PEARLAND, TEXAS
Combining Balance Sheet - Nonmajor Governmental Funds
September 30, 2021
Hotel/Motel Court City -Wide Court Street Park Police
Tax Security Donation Technology Assessments Donation Seizure
Assets
Cash and cash equivalents $ 1,447,453 $ 49,723 $ 171,212 $ 9,311 $ - $ 522,216 $ 274,524
Investments 4,146,027 - -
Receivables (net of allowance for
uncollectibles, where applicable)
Total Assets
383,515
1,486,878 89,947
$ 5,976,995 $ 49,723 $ 171,212 $ 9,311 $ 1,486,878 $ 522,216 $ 364,471
Liabilities
Accounts payable $ 47,711 $ - $ - $ 1,586 $ - $ - $ 1,350
Accrued liabilities 11,554 748 - - - -
Unearned revenue - -
Total Liabilities 59,265 748 1,586 1,350
Deferred Inflows of Resources
Unavailable revenue
Total Deferred Inflows of
Resources
1,486,878
1,486,878
Fund Balances
Restricted for
Capital improvements - -
Community development programs 5,917,730 48,975
Public safety - - 171,212 7,725
Unassigned - -
Total Fund Balances 5,917,730 48,975 171,212 7,725
522,216
363,121
522,216 363,121
Total Liabilities and Fund
Balances $ 5,976,995 $ 49,723 $ 171,212 $ 9,311 $ 1,486,878 $ 522,216 $ 364,471
98
CITY OF PEARLAND, TEXAS
Combining Balance Sheet - Nonmajor Governmental Funds (Continued)
September 30, 2021
Total
Park and Traffic Nonmajor
Recreation Impact Juvenile Regional Educational Governmental
Development Sidewalk Grant Improvement Management Detention TV U of H Funds
$ 1,002,212 $ 46,635 $ 340,259 $ 617,993 $ 6,593 $ 1,000 $ 463,424 $ - $ 4,952,555
386,417 - 4,532,444
1,048,924 - 3,009,264
$ 1,002,212 $ 46,635 $ 1,389,183 $ 617,993 $ 6,593 $ 1,000 $ 849,841 $ $ 12,494,263
$ 103,280 $ - $ 210,420 $ $ 1,405 $ - $ - $ 27,299 $ 393,051
- 3,343 - - - 15,645
5,944,486 - 5,944,486
103,280 6,158,249 1,405 - 27,299 6,353,182
898,932 46,635
1,486,878
1,486,878
- 617,993 1,000 - 1,564,560
- - - - 849,841 7,338,762
- 5,188 - - 547,246
(4,769,066) - - - (27,299) (4,796,365)
898,932 46,635
(4,769,066) 617,993
5,188 1,000
849,841 (27,299) 4,654,203
$ 1,002,212 $ 46,635 $ 1,389,183 $ 617,993 $ 6,593 $ 1,000 $ 849,841 $ - $ 12,494,263
99
CITY OF PEARLAND, TEXAS
Combining Statement of Revenues, Expenditures and
Changes in Fund Balance - Nonmajor Governmental Funds
Year Ended September 30, 2021
Revenues
Sales and use taxes
Franchise fees
Fines and forfeitures
Investment earnings
Intergovernmental
Other
Total Revenues
Hotel/Motel Court City -Wide Court Street Park Police
Tax Security Donation Technology Assessments Donation Seizure
$ 1,231,585 $
3,834
12,385
$
39,118
3
- $ - $
15
- 42,478
32,721
- $ - $
- 53 25
- 10,988 159,838
1,247,804 39,121
42,493 32,721
11,041 159,863
Expenditures
Current
General government 899,417 - 1,500 - -
Public safety - 12,543 - 75,333
Community services 28,508 31,352 - -
Parks and recreation - - 25,784
Debt Service
Principal
Interest and other charges
Capital Outlay
Total Expenditures 899,417 28,508 14,043 31,352 - 25,784 75,333
Excess (Deficiency) of Revenues
Over Expenditures
Other Financing Uses
Transfers out
Total Other Financing Uses
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
348,387 10,613
28,450 1,369
(14,743) 84,530
348,387 10,613
5,569,343 38,362
28,450 1,369
142,762 6,356
(14,743) 84,530
536,959 278,591
$ 5,917,730 $ 48,975 $ 171,212 $ 7,725 $ - $ 522,216 $ 363,121
100
CITY OF PEARLAND, TEXAS
Combining Statement of Revenues, Expenditures and
Changes in Fund Balance - Nonmajor Governmental Funds (Continued)
Year Ended September 30, 2021
Park and Traffic
Recreation Impact Juvenile Regional Educational
Development Sidewalk Grant Improvement Management Detention TV
U of H
Total
Nonmajor
Governmental
Funds
$ - $ - $ - $ - $ - $ - $ - $ - $ 1,231,585
- 220,376 220,376
- - - 41,484 - - - 113,323
224 5 - 62 1 - 638 - 4,860
- 2,868,262 - - - - 2,868,262
200,992 68,494 1,000 496,175
201,216 5 2,936,756 62 41,485 1,000 221,014 4,934,581
5,123,100 6,024,017
1,005,417 - - - - 1,093,293
- - 61,413 - 28,486 - 149,759
- - - - - 25,784
68,501 - - - - - - 68,501
5,253 - - - - - - 5,253
255,982 731,179 234,687 1,221,848
329,736 - 6,859,696 - 61,413 - 263,173 - 8,588,455
(128,520) 5 (3,922,940) 62 (19,928) 1,000 (42,159) - (3,653,874)
(117,000) (1,000,000)
(96,000) (1,213,000)
(117,000) - (1,000,000) - - (96,000) - (1,213,000)
(245,520) 5 (4,922,940) 62 (19,928) 1,000 (138,159) - (4,866,874)
1,144,452
46,630 153,874
617,931 25,116
988,000
(27,299) 9,521,077
$ 898,932 $ 46,635 $ (4,769,066) $ 617,993 $ 5,188 $ 1,000 $ 849,841 $ (27,299) $ 4,654,203
101
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Major Governmental Fund — Debt Service Fund
Year Ended September 30, 2021
Revenues
Property taxes
Investment earnings
Other
Total Revenues
Expenditures
Debt service
Principal
Interest and other charges
Intergovernmental
Total Expenditures
Original
Budget
Amended
Budget
Actual
Variance
Positive /
(Negative)
2020
$ 38,592,242 $ 38,720,616 $ 38,374,498
150,000 10,000 8,425
757,155 757,155 755,469
39,499,397 39,487,771 39,138,392
21,115,000 21,030,000 21,030,000
14,069,944 14,016,199 14,685,250
7,964,741 7,116,216 7,116,216
43,149,685 42,162,415 42,831,466
Deficiency of Revenues
Over Expenditures (3,650,288) (2,674,644)
Other Financing Sources (Uses)
Proceeds from issuance of debt
Premium on debt issued
Payment to escrow agent -
Transfers in 2,530,075 2,530,075
Total Other Financing Sources 2,530,075 2,530,075
Net Change in Fund Balance (1,120,213) (144,569)
Fund Balance, Beginning of Year 6,162,589 6,162,589
Fund Balance, End of Year
$ (346,118)
(1,575)
(1,686)
(349,379)
(669,051)
$ 37,924,975
156,977
770,355
38,852,307
19,480,000
12,934,251
7,768,815
(669,051) 40,183,066
(3,693,074) (1,018,430)
27,220,000 27,220,000
5,402,641 5,402,641
(31,735,000) (31,735,000) -
2,530,075 - 2,066,739
(1,330,759)
3,417,716
(275,358)
6,162, 589
887,641 2,066,739
(130,789) 735,980
5,426,609
$ 5,042,376 $ 6,018,020 $ 5,887,231 $ (130,789) $ 6,162,589
102
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Hotel/Motel Tax Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Sales and use taxes $ 921,900 $ 921,900 $ 1,231,585 $ 309,685 $ 993,985
Investment earnings 10,800 6,000 3,834 (2,166) 64,954
Intergovernmental - - - 3,325
Other 4,000 12,385 8,385 25,199
Total Revenues 932,700 931,900 1,247,804 315,904 1,087,463
Expenditures
Current
General government 1,439,333 1,528,006 899,417 628,589 906,422
Total Expenditures 1,439,333 1,528,006 899,417 628,589 906,422
Net Change in Fund Balance
Fund Balance, Beginning
Fund Balance, Ending
(506,633)
(596,106) 348,387
5,569,343 5,569,343
944,493 181,041
5,569,343 - 5,388,302
$ 5,062,710 $ 4,973,237 $ 5,917,730 $ 944,493 $ 5,569,343
103
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Court Security Fund
Year Ended September 30, 2021
Variance
Original Amended Positive /
Budget Budget Actual (Negative) 2020
Revenues
Fines and forfeitures $ 48,000 $ 39,000 $ 39,118 $ 118 $ 31,919
Investment earnings 350 6 3 (3) 324
Intergovernmental - - 114
Total Revenues 48,350 39,006 39,121 115 32,357
Expenditures
Current
Community services 38,476 29,455 28,508 947 30,302
Total Expenditures 38,476 29,455 28,508 947 30,302
Net Change in Fund Balance 9,874 9,551 10,613 1,062 2,055
Fund Balance, Beginning 38,362 38,362 38,362 - 36,307
Fund Balance, Ending $ 48,236 $ 47,913 $ 48,975 $ 1,062 $ 38,362
104
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Special Revenue Fund - City -Wide Donation Fund
Year Ended September 30, 2021
Variance
Original Amended Positive /
Budget Budget Actual (Negative) 2020
Revenues
Investment earnings $ 1,000 $ - $ 15 $ 15 $ 1,088
Other 29,967 37,100 42,478 5,378 53,016
Total Revenues 30,967 37,100 42,493 5,393 54,104
Expenditures
Current
General government - 1,500 1,500 - -
Public safety 64,551 54,125 12,543 41,582 23,827
Capital outlay - - - - 50,000
Total Expenditures 64,551 55,625 14,043 41,582 73,827
Net Change in Fund Balance (33,584) (18,525) 28,450 46,975 (19,723)
Fund Balance, Beginning 142,762 142,762 142,762 162,485
Fund Balance, Ending $ 109,178 $ 124,237 $ 171,212 $ 46,975 $ 142,762
105
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Court Technology Fund
Year Ended September 30, 2021
Revenues
Fines and forfeitures
Investment earnings
Total Revenues
Variance
Original Amended Positive /
Budget Budget Actual (Negative) 2020
$ 45,000 $ 34,000 $ 32,721 $ (1,279) $ 31,154
100 - - - 114
45,100
34,000 32,721
(1,279) 31,268
Expenditures
Current
Parks and Recreation 38,534 34,314 31,352 2,962 51,703
Total Expenditures 38,534 34,314 31,352 2,962 51,703
Net Change in Fund Balance 6,566 (314) 1,369 1,683 (20,435)
Fund Balance, Beginning 6,356 6,356 6,356 26,791
Fund Balance, Ending $ 12,922 $ 6,042 $ 7,725 $ 1,683 $ 6,356
106
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Street Assessments Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Investment earnings $ - $ - $ - $ - $
Other - - - -
Total Revenues -
Expenditures
Parks and recreation
Net Change in Fund Balance -
Fund Balance, Beginning -
Fund Balance, Ending $ - $ - $ - $ - $
107
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Special Revenue Fund - Park Donation Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Charges for services $ 2,000 $ $ $ - $ 33,450
Investment earnings 5,050 70 53 (17) 4,326
Other 108,050 12,917 10,988 (1,929) 53,828
Total Revenues 115,100 12,987 11,041 (1,946) 91,604
Expenditures
Current
Parks and recreation 151,800 96,122 25,784 70,338 84,695
Total Expenditures 151,800 96,122 25,784 70,338 84,695
Net Change in Fund Balance (36,700) (83,135) (14,743) 68,392 6,909
Fund Balance, Beginning 536,959 536,959 536,959 530,050
Fund Balance, Ending $ 500,259 $ 453,824 $ 522,216 $ 68,392 $ 536,959
108
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Special Revenue Fund - Police Seizure Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative) 2020
Revenues
Investment earnings $ 5,200 $ 20 $ 25 $ 5 $ 1,631
Other - 15,236 159,838 144,602 218,947
Total Revenues 5,200 15,256 159,863 144,607 220,578
Expenditures
Current
Public safety 75,700 92,832 75,333 17,499 31,665
Capital outlay - - - 182,869
Total Expenditures 75,700 92,832 75,333 17,499 214,534
Net Change in Fund Balance (70,500) (77,576) 84,530 162,106 6,044
Fund Balance, Beginning 278,591 278,591 278,591 - 272,547
Fund Balance, Ending $ 208,091 $ 201,015 $ 363,121 $ 162,106 $ 278,591
109
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Special Revenue Fund - Parks and Recreation Development Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative) 2020
Revenues
Investment earnings $ 18,000 $ 3,000 $ 224 $ (2,776) $ 14,200
Other 302,154 50,000 200,992 150,992 456,169
Total Revenues 320,154 53,000 201,216 148,216 470,369
Expenditures
Current
Parks and recreation - - - - 1,095
Debt service
Principal - 68,501 68,501 -
Interest and other charges - 5,253 5,253 -
Capital outlay 118,754 395,276 255,982 139,294 265,820
Total Expenditures 118,754 469,030 329,736 139,294 266,915
Excess (Deficiency) of Revenues
Over Expenditures 201,400 (416,030) (128,520) 287,510 203,454
Other Financing Uses
Transfers out - - (117,000) (117,000)
Total Other Financing Uses - (117,000) (117,000)
Net Change in Fund Balance 201,400 (416,030) (245,520) 170,510 203,454
Fund Balance, Beginning 1,144,452 1,144,452 1,144,452 - 940,998
Fund Balance, Ending $ 1,345,852 $ 728,422 $ 898,932 $ 170,510 $ 1,144,452
110
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Sidewalk Fund
Year Ended September 30, 2021
Variance
Original Amended Positive /
Budget Budget Actual (Negative) 2020
Revenues
Charges for services $ 5,000 $ $ - $ - $
Investment earnings 200 6 5 (1) 379
Total Revenues 5,200 6 5 (1) 379
Net Change in Fund Balance 5,200 6 5 (1) 379
Fund Balance, Beginning 46,630 46,630 46,630 46,251
Fund Balance, Ending $ 51,830 $ 46,636 $ 46,635 $ (1) $ 46,630
111
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Grant Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Investment earnings $ 75 $ - $ - $ - $ -
Intergovernmental 3,936,517 23,895,320 2,868,262 (21,027,058) 825,535
Other - 315,259 68,494 (246,765) -
Total Revenues 3,936,592 24,210,579 2,936,756 (21,273,823) 825,535
Expenditures
Current
General government 1,039,739 7,346,083 5,123,100 2,222,983 -
Public safety 948,028 1,112,329 1,005,417 106,912 553,215
Community service - - - 461,512
Capital outlay 2,745,237 9,641,930 731,179 8,910,751 24,112
Total Expenditures 4,733,004 18,100,342 6,859,696 11,240,646 1,038,839
Excess (Deficiency) of Revenues
Over Expenditures (796,412) 6,110,237 (3,922,940) (10,033,177) (213,304)
Other Financing Uses
Transfers out - - (1,000,000) (1,000,000) -
Total Other Financing Uses (1,000,000) (1,000,000)
Net Change in Fund Balance (796,412) 6,110,237 (4,922,940) (11,033,177) (213,304)
Fund Balance, Beginning 153,874 153,874 153,874 - 367,178
Fund Balance, Ending $ (642,538) $ 6,264,111 $ (4,769,066) $ (11,033,177) $ 153,874
112
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Traffic Impact Improvement Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Investment earnings $ 5,000 $ 90 $ 62 $ (28) $ 5,028
Total Revenues 5,000 90 62 (28) 5,028
Expenditures
Capital outlay
Total Expenditures
214,920
214,920
Net Change in Fund Balance (209,920) 90 62 (28) 5,028
Fund Balance, Beginning 617,931 617,931 617,931 - 612,903
Fund Balance, Ending $ 408,011 $ 618,021 $ 617,993 $ (28) $ 617,931
113
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Juvenile Management Fund
Year Ended September 30, 2021
Variance
Original Amended Positive /
Budget Budget Actual (Negative) 2020
Revenues
Fines and forfeitures $ 53,500 $ 40,300 $ 41,484 $ 1,184 $ 42,769
Investment earnings 225 3 1 (2) 358
Total Revenues 53,725 40,303 41,485 1,182 43,127
Expenditures
Current
Community services 66,255 63,864 61,413 2,451 60,108
Total Expenditures 66,255 63,864 61,413 2,451 60,108
Net Change in Fund Balance (12,530) (23,561) (19,928) 3,633 (16,981)
Fund Balance, Beginning 25,116 25,116 25,116 42,097
Fund Balance, Ending $ 12,586 $ 1,555 $ 5,188 $ 3,633 $ 25,116
114
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — Regional Detention Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Revenues
Investment earnings $ $ - $ - $ $ 41
Other - 1,000 1,000 30,951
Total Revenues - 1,000 1,000 30,992
Excess of Revenues
Over Expenditures - 1,000 1,000 30,992
Other Financing Uses
Transfers out
Total Other Financing Uses
- (30,992)
Net Change in Fund Balance - 1,000 1,000
Fund Balance, Beginning - -
(30,992)
Fund Balance, Ending $ $ - $ 1,000 $ 1,000 $
115
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance -
Budget and Actual
Special Revenue Fund - Educational TV Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative) 2020
Revenues
Franchise fees $ 235,000 $ 235,000 $ 220,376 $ (14,624) $ 256,463
Investment earnings (30,000) (45,995) 638 46,633 9,939
Total Revenues 205,000 189,005 221,014 32,009 266,402
Expenditures
Current
Community services 59,100 56,670 28,486 28,184 49,656
Capital outlay - 235,387 234,687 700 137,793
Total Expenditures 59,100 292,057 263,173 28,884 187,449
Excess (Deficiency) of Revenues
Over Expenditures 145,900 (103,052) (42,159) 60,893 78,953
Other Financing Uses
Transfers out (96,000) (96,000) (96,000) -
Total Other Financing Uses (96,000) (96,000) (96,000) -
Net Change in Fund Balance 49,900 (199,052) (138,159) 60,893 78,953
Fund Balance, Beginning 988,000 988,000 988,000 - 909,047
Fund Balance, Ending $ 1,037,900 $ 788,948 $ 849,841 $ 60,893 $ 988,000
116
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Special Revenue Fund — U of H Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative)
2020
Other Financing Sources
Transfers in $ - $ $ $ $
Total Other Financing Sources - - - -
Net Change in Fund Balance
Fund Balance, Beginning (27,299) (27,299) (27,299) (27,299)
Fund Balance, Ending $ (27,299) $ (27,299) $ (27,299) $ - $ (27,299)
117
CITY OF PEARLAND, TEXAS
Schedule of Revenues, Expenditures and Changes in Fund Balance —
Budget and Actual
Capital Projects Fund
Year Ended September 30, 2021
Original Amended
Budget Budget
Actual
Variance
Positive /
(Negative) 2020
Revenues
Investment earnings $ 1,135,000 $ 158,406 $ 116,614 $ (41,792) $ 574,906
Intergovernmental - 10,866,837 16,449,841 5,583,004 11,518,373
Other - 2,000,000 1,878,426 (121,574) 9,370
Total Revenues 1,135,000 13,025,243 18,444,881 5,419,638 12,102,649
Expenditures
Current
Public works 20,484,493 18,556,328 1,113,038 17,443,290 190,550
Debt service
Interest and other charges - 446,467 (446,467) 409,229
Capital outlay 57,886,858 (8,751,891) 74,232,429 (82,984,320) 33,681,769
Total Expenditures 78,371,351 9,804,437 75,791,934 (65,987,497) 34,281,548
Excess (Deficiency) of Revenues
Over Expenditures (77,236,351) 3,220,806 (57,347,053) (60,567,859) (22,178,899)
Other Financing Sources (Uses)
Proceeds from issuance of debt 57,928,412 26,566,250 37,520,000 10,953,750 33,425,000
Premium on debt issued - 7,977,121 7,977,121 6,897,046
Transfers in (328,296) (328,296) 3,552,158 3,880,454 2,000,663
Transfers out (696,684) 2,909,952 (1,718,724) (4,628,676) (1,402,310)
Total Other Financing Sources 56,903,432 29,147,906 47,330,555 18,182,649 40,920,399
Net Change in Fund Balance (20,332,919) 32,368,712 (10,016,498) (42,385,210) 18,741,500
Fund Balance, Beginning of Year 73,198,902 73,198,902 73,198,902 54,457,402
Fund Balance, End of Year $ 52,865,983 $ 105,567,614 $ 63,182,404 $ (42,385,210) $ 73,198,902
118
CITY OF PEARLAND, TEXAS
Internal Service Funds
September 30, 2021
Internal Service Funds are used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the government and to other
government units, on a cost reimbursement basis.
Property Liability Insurance Fund — To account for the activities of the City's property and
casualty insurance. Coverage includes general liability, law enforcement, public official and
employees' liability, auto liability, physical damage and multi -peril, mobile equipment, real and
personal property, and windstorm coverage.
Employee Benefits Fund -- City to employees except for health insurance.
Health Claims Fund — To account for the activities of the City's employee health insurance. The
fund accounts for retiree and COBRA contributions, claims and coverage.
Motor Pool Fund — To account for the operations and maintenance of the City's fleet. Its
customers are City departments, and its primary revenue source is payments from those
departments for vehicle and equipment maintenance and replacement.
119
CITY OF PEARLAND, TEXAS
Combining Statement of Net Position - Internal Service Funds
September 30, 2021
Property
Liability Employee Health Motor
Insurance Benefits Claims Pool
Fund Fund Fund Fund
Total
Assets
Current assets
Cash and cash equivalents $ 1,161,353 $ 196,300 $ 3,622,598 $ 3,660,545 $ 8,640,796
Accounts receivable, net 11,428 523 4,452 276,000 292,403
Inventories - - 110,554 110,554
Prepaids - - 19 19
Total current assets 1,172,781 196,823 3,627,050 4,047,118 9,043,772
Noncurrent Assets
Capital assets
Machinery and equipment
Less accumulated depreciation
Total non -current assets
Total assets
- - 6,877,836 6,877,836
- - (845,815) (845,815)
- - 6,032,021 6,032,021
$ 1,172,781 $ 196,823 $ 3,627,050 $ 10,079,139 $ 15,075,793
Deferred Outflows of Resources
OPEB $ 1,426 $ - $ - $ 19,557 $ 20,983
Pensions 5,483 - - 53,481 58,964
Total deferred outflows of resources 6,909 - - 73,038 79,947
Liabilities
Current Liabilities
Accounts payable
Claims payable
Noncurrent Liabilities
Total OPEB liability
Net pension liability
Total noncurrent liabilities
1,576 160,215 7,536 163,916 333,243
- 588,613 - 588,613
1,576 160,215 596,149 163,916 921,856
2,528
10,854
13,382
Total liabilities 14,958
- - 33,438 35,966
- - 122,486 133,340
- - 155,924 169,306
160,215 596,149
319,840 1,091,162
Deferred Inflows of Resources
OPEB 385 - - 4,642
Pensions 9,413 - - 32,477
Total deferred inflows of resources 9,798 - - 37,119
5,027
41,890
46,917
Net Position
Net investment in capital assets - - 6,032,021 6,032,021
Unrestricted 1,154,934 36,608 3,030,901 3,763,197 7,985,640
Total net position $ 1,154,934 $ 36,608 $ 3,030,901 $ 9,795,218 $ 14,017,661
120
CITY OF PEARLAND, TEXAS
Combining Statement of Revenues, Expenses and
Changes In Net Position — Internal Service Funds
Year Ended September 30, 2021
Property
Liability Employee Health Motor
Insurance Benefits Claims Pool
Fund Fund Fund Fund
Total
Operating Revenues
Charges for services $ 2,474,844 $ $ 9,280,896 $ 6,761,907 $ 18,517,647
Total operating revenues 2,474,844 9,280,896 6,761,907 18,517,647
Operating Expenses
Personnel services 59,625 652,508 712,133
Supplies and materials 110 24,276 24,386
Contractual services 1,853,594 9,346,673 295,670 11,495,937
Repairs and maintenance 22 1,237,632 1,237,654
Other expenses - 40,993 - 40,993
Depreciation and amortization - - 666,360 666,360
Total operating expenses 1,913,351 9,387,666 2,876,446 14,177,463
Operating Income
561,493 (106,770) 3,885,461 4,340,184
Nonoperating Revenues
Investment earnings 3 1,103 392 1,498
Gain on disposal of property - - 397,715 397,715
Total nonoperating revenues 3 1,103 398,107 399,213
Change in Net Position 561,493 3 (105,667) 4,283,568 4,739,397
Net Position, Beginning 593,441 36,605 3,136,568 5,511,650 9,278,264
Net Position, Ending $ 1,154,934 $ 36,608 $ 3,030,901 $ 9,795,218 $ 14,017,661
121
CITY OF PEARLAND, TEXAS
Combining Statement of Cash Flows — Internal Service Funds
Year Ended September 30, 2021
Property Total
Liability Employee Health Motor Internal
Insurance Benefits Claims Pool Service
Fund Fund Fund Fund Funds
Cash Flows from Operating Activities
Receipts from customers and users $ 800,370 $ - $ 1,948,410 $ 1,867,958 $ 4,616,738
Receipts from interfund charges for services 1,664,003 (154) 7,334,777 4,617,949 13,616,575
Payments to employees for salaries and benefits (59,830) - (650,419) (710,249)
Payments to suppliers and service providers (1,855,750) 314,658 (9,427,473) (1,968,056) (12,936,621)
Net Cash Provided By (Used In) Operating Activities 548,793 314,504 (144,286) 3,867,432 4,586,443
Cash Flows from Capital and Related Financing
Activities
Acquisition and construction of capital assets
Proceeds from sale of assets
Net Cash Used In Capital And Related
financing activities
(3,152,108)
397,715
(3,152,108)
397,715
(2,754,393) (2,754,393)
Cash Flows from Investing Activities
Interest on investments 3 1,103 392 1,498
Net Cash Provided By Investing Activities 3 1,103 392 1,498
Increase (Decrease) in Cash and Cash Equivalents 548,793 314,507 (143,183) 1,113,431 1,833,548
Cash and Cash Equivalents, Beginning of Year 612,560 (118,207) 3,765,781 2,547,114 6,807,248
Cash and Cash Equivalents, End of Year $ 1,161,353 $ 196,300 $ 3,622,598 $ 3,660,545 $ 8,640,796
Reconciliation of Operating Income to Net Cash
Provided By Operating Activities
Operating income (loss) $ 561,493 $ $ (106,770) $ 3,885,461 $ 4,340,184
Items not requiring cash:
Depreciation - - - 666,360 666,360
Changes in
Accounts receivable, net (10,471) (154) 2,291 (276,000) (284,334)
Inventories (26,308) (26,308)
Prepaids 4,202 (39,807) (19) (35,624)
Accounts payable and accrued liabilities (2,024) 310,456 (384,151) (75,719)
Total OPEB liability 669 - - 15,216 15,885
Net pension liability (6,687) - (1,181) (7,868)
Deferred outflows - OPEB 23 - (5,757) (5,734)
Deferred inflows - OPEB 120 - 2,546 2,666
Deferred outflows - Pension 69 - (14,336) (14,267)
Deferred inflows - Pension 5,601 - 5,601 11,202
Net Cash Provided By (Used In) Operating Activities $ 548,793 $ 314,504 $ (144,286) $ 3,867,432 $ 4,586,443
122
CITY OF PEARLAND, TEXAS
Statistical Section (Unaudited)
September 30, 2021
This part of the City of Pearland's comprehensive annual 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 124
These schedules contain trend information to help the readers understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity 134
These schedules contain information to help the reader assess the City's most significant local
revenue sources, sales and property tax.
Debt Capacity 148
These schedules present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 154
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place.
Operating Information 156
These schedules contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the city provides and the activities
it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year.
123
CITY OF PEARLAND, TEXAS
Net Position by Component
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
20121 20131'2 2014 2015 2016
Governmental Activities
Net investment in capital assets $ 353,160 $ 391,032 $ 397,346 $ 423,706 $ 439,923
Restricted 38,933 43,413 52,209 53,883 60,640
Unrestricted 10,117 14,696 2,477 3,800 3,185
Total governmental activities
net position $ 402,210 $ 449,141 $ 452,032 $ 481,389 $ 503,748
Business -type activities
Net investment in capital assets $ 156,888 $ 165,915 $ 174,955 $ 186,819 $ 187,937
Restricted 9,821 9,542 14,484 13,539 15,852
Unrestricted 12,439 16,704 15,612 12,815 13,351
Total business -type activities
net position $ 179,148 $ 192,161 $ 205,051 $ 213,173 $ 217,140
Primary government
Investment in capital assets $ 510,048 $ 556,947 $ 572,301 $ 610,525 $ 627,860
Restricted 48,754 52,955 66,693 67,422 76,492
Unrestricted 22,556 31,400 18,089 16,615 16,536
Total primary government
net position $ 581,358 $ 641,302 $ 657,083 $ 694,562 $ 720,888
1 Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and 2013 have been
restated for comparison purposes.
2 Due to implementation of GASB 61, the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013. Fiscal year 2012 has been restated
for comparison purposes.
124
CITY OF PEARLAND, TEXAS
Net Position by Component (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
2017 2018 2019 2020 2021
Governmental Activities
Net investment in capital assets $ 449,141 $ 454,670 $ 488,077 $ 490,304 $ 493,671
Restricted 60,310 67,263 56,491 44,928 45,162
Unrestricted (5,045) (2,500) (734) 33,179 52,796
Total governmental activities
net position $ 504,406 $ 519,433 $ 543,834 $ 568,411 $ 591,629
Business -type activities
Net investment in capital assets $ 205,827 $ 210,674 $ 214,672 $ 213,081 $ 161,157
Restricted 13,972 14,525 15,270 16,776 30,064
Unrestricted 6,972 20,663 29,806 39,015 81,185
Total business -type activities
net position $ 226,771 $ 245,862 $ 259,748 $ 268,872 $ 272,406
Primary government
Investment in capital assets $ 654,968 $ 665,344 $ 702,749 $ 703,386 $ 654,828
Restricted 74,282 81,788 71,761 61,704 75,226
Unrestricted 1,927 18,163 29,072 72,195 133,981
Total primary government
net position $ 731,177 $ 765,295 $ 803,582 $ 837,283 $ 864,035
125
CITY OF PEARLAND, TEXAS
Changes in Net Position
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
Expenses
Governmental activities
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Economic Development
Interest on long-term debt
Total government activities expenses
Business -type activities
Water and Sewer
Solid Waste
Total business -type activities
Total primary government expenses
Program Revenue
Governmental activities:
Charges for services
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Economic Development
Operating grants and contributions
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Economic Development
Capital grants and contributions
General Government
Public Safety
Public Works
Parks and Recreation
20121
2013 1'2
$ 13,334 $ 13,358
27,403 28,944
28,510 31,690
4,267 3,807
9,264 9,524
26,311 17,411
11,572 10,534
120,661 115,268
29,392 31,289
7,528 8,324
36,920 39,613
$ 157,581 $ 154,881
$ 7,624 $ 6,326
4,206 7,410
43 3,096
5,855 3,264
2,080 2,209
413 414
6,045 44
711 603
53 1,388
311 108
542 182
- 180
18,743 52,921
100
Total governmental activities program revenues 46,726
Business -type activities
Charges for services
Water and Sewer 27,535
Solid Waste 7,654
Operating grants and contributions
Water and Sewer 205
Capital grants and contributions
Water and Sewer 8,118
Total business -type activities program revenues 43,512
Total primary government program revenues $ 90,238
78,145
29,008
8,175
16,273
53,456
$ 131,601
2014
$ 12,241
32,130
38,579
4,687
6,896
26,498
16,225
137,256
32,444
6,664
39,108
$ 176,364
2015
$ 17,189
33,179
45,894
3,641
3,731
26,159
15,569
2016
$ 18,015
38,933
46,449
3,711
4,820
31,330
15,946
145,362 159,204
34,266
6,417
40,683
$ 186,045
$ 6,637 $
2,793
322
7,375
2,290
430
440
434
7,612
337
474
29,269
58,413
28,929
7,008
17,677
53,614
$ 112,027
7,624
4,110
338
7,771
2,412
1,209
747
294
4,589
216
1,586
36,440
67,336
30,201
6,637
2,512
13,177
52,527
$ 119,863
1 Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and 2013 have been
restated for comparison purposes.
2 Due to implementation of GASB 61, the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013. Fiscal year 2012 has been restated
for comparison purposes.
37,941
6,833
44,774
$ 203,978
$ 8,547
4,276
320
8,520
2,218
13
2,595
11,123
24,636
62,248
43,677
6,945
30
4,094
54,746
$ 116,994
126
CITY OF PEARLAND, TEXAS
Changes in Net Position (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
Expenses
Governmental activities
General Government
Public Safety
Public Works
Community Services
Parks and Recreation
Economic Development
Interest on long-term debt
Total government activities expenses
Business -type activities
Water and Sewer
Solid Waste
Total business -type activities
Total primary government expenses
2017 2018 2019 2020 2021
$ 20,121 $ 20,360 $ 21,249 $ 25,504 $ 27,596
44,343 43,275 47,948 51,031 53,503
49,221 53,271 46,631 44,862 48,115
5,107 4,509 4,616 4,383 4,465
8,823 7,194 7,683 8,197 6,799
31,293 29,521 33,470 28,683 30,653
14,422 14,441 14,017 14,042 13,604
173,330 172,571 175,614 176,702 184,735
41,475 41,683 39,413 45,055 44,654
7,059 7,441 7,752 7,930 8,094
48,534 49,124 47,165 52,985 52,748
$ 221,864 $ 221,695 $ 222,779 $ 229,687 $ 237,483
Program Revenue
Governmental activities
Charges for services
General Government $ 9,518 $ 10,414 $ 10,826 $ 12,424 $ 15,425
Public Safety 3,949 3,777 4,413 4,772 5,048
Public Works 1,395 253 1,379 113 157
Community Services 8,026 6,566 6,888 6,100 6,090
Parks and Recreation 2,001 2,766 2,328 992 1,090
Economic Development 3,886 3,503 1,951 460 445
Operating grants and contributions
General Government - 6,609 1,693
Public Safety - 11 -
Public Works 12,459 5,884 8,765 14,164 17,584
Community Services 575 232 239 - 729
Parks and Recreation - - - - -
Economic Development - - - - -
Capital grants and contributions
General Government - - - - -
Public Safety - - - - -
Public Works 10,107 19,241 16,678 7,148 1,876
Parks and Recreation - - - - -
Total governmental activities program revenues 51,916 52,647 53,467 52,782 50,137
Business -type activities
Charges for services
Water and Sewer 51,544 55,593 55,696 54,710 52,649
Solid Waste 6,549 7,842 8,621 7,755 8,064
Operating grants and contributions
Water and Sewer - - 1,497 225 -
Capital grants and contributions
Water and Sewer 2,027 4,613 4,113 1,456 1,007
Total business -type activities program revenues 60,120 68,048 69,927 64,146 61,720
Total primary government program revenues $ 112,036 $ 120,695 $ 123,394 $ 116,928 $ 111,857
127
CITY OF PEARLAND, TEXAS
Changes in Net Position (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
20121 20131'2 2014 2015 2016
Net (Expense)/Revenue
Governmental activities $ (73,935) $ (37,123) $ (78,843) $ (78,026) $ (96,956)
Business -type activities 6,592 13,843 14,506 11,844 9,972
Total primary government net expense $ (67,343) $ (23,280) $ (64,337) $ (66,182) $ (86,984)
General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Property taxes $ 33,451 $ 52,230 $ 57,378 $ 62,974 $ 67,644
Sales and use taxes 13,983 22,969 27,295 29,970 31,293
Franchise taxes 5,605 5,670 6,484 6,971 7,228
Unrestricted grants and contributions
Investment earnings 157 134 254 491 729
Miscellaneous 1,854 1,554 2,399 4,149 5,957
Special item - - - -
Transfers 1,475 2,269 1,607 2,828 6,464
Total governmental activities 56,525 84,826 95,417 107,383 119,315
Business -type activities
Investment earnings 116 68 95 325 294
Miscellaneous 9 444 682 219 166
Transfers (1,475) (2,269) (1,607) (2,828) (6,464)
Total business -type activities (1,350) (1,757) (830) (2,284) (6,004)
Total primary government $ 55,175 $ 83,069 $ 94,587 $ 105,099 $ 113,311
Change in Net Position
Governmental activities $ (17,410) $ 47,703 $ 16,574 $ 29,357 $ 22,359
Business -type activities 5,242 12,086 13,676 9,560 3,968
Total primary government $ (12,168) $ 59,789 $ 30,250 $ 38,917 $ 26,327
1 Restated due to implementation of GASB 65 in fiscal year 2014. Fiscal years 2012 and 2013 have been
restated for comparison purposes.
2 Due to implementation of GASB 61, the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013. Fiscal year 2012 has been restated
for comparison purposes.
128
CITY OF PEARLAND, TEXAS
Changes in Net Position (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Accrual Basis of Accounting)
Net (Expense)/Revenue
Governmental activities
Business -type activities
Total primary government net expense
2017 2018 2019 2020 2021
$ (121,414) $ (119,924) $ (122,147) $ (123,919) $ (134,598)
11,586 18,924 22,762 11,162 8,972
$ (109,828) $ (101,000) $ (99,385) $ (112,757) $ (125,626)
General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Property taxes $ 76,686 $ 83,803 $ 89,930 $ 97,106 $ 100,075
Sales and use taxes 31,976 35,437 34,872 34,928 40,248
Franchise taxes 7,263 7,358 7,480 7,270 6,940
Unrestricted grants and contributions
Investment earnings 622 1,651 3,293 1,626 209
Miscellaneous 3,108 4,691 562 4,865 4,793
Special item - - - -
Transfers 2,417 3,103 11,364 5,460 5,548
Total governmental activities 122,072 136,043 147,501 151,256 157,814
Business -type activities
Investment earnings 396 1,361 2,947 1,277 94
Miscellaneous 66 7 2,361 13 16
Transfers (2,417) (3,103) (11,364) (5,460) (5,548)
Total business -type activities (1,955) (1,735) (6,056) (4,170) (5,439)
Total primary government $ 120,117 $ 134,308 $ 141,445 $ 147,085 $ 152,375
Change in Net Position
Governmental activities $ 658 $ 16,117 $ 25,354 $ 27,336 $ 23,216
Business -type activities 9,631 17,189 16,706 6,991 3,533
Total primary government $ 10,289 $ 33,306 $ 42,060 $ 34,328 $ 26,749
129
CITY OF PEARLAND, TEXAS
Fund Balances of Governmental Funds
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2012 20131 2014 2015 2016
General fund
Non -spendable $ 182 $ 158 $ 202 $ 293 $ 151
Restricted - - - -
Assigned 167 1,554 1,394 1,406 3,994
Unassigned 17,222 16,911 17,859 19,655 16,775
Total General Fund $ 17,571 $ 18,623 $ 19,455 $ 21,354 $ 20,919
All other governmental funds
Non -spendable $ - $ 183 $ 209 $ 173 $
Restricted
Debt service 4,992 5,192 5,951 5,835 8,276
Capital improvements 13,776 14,536 17,519 22,484 47,361
Public safety 702 715 390 394 342
Economic Development - 20,777 23,814 24,117 32,844
Community development programs
Tourism 1,821 2,267 2,994 3,685 4,194
Parks and recreation 968 985 168 105 131
Capital projects - other 797 866 - -
Other 215 638 918 1,149 1,264
Unassigned - -
Total other Governmental Funds $ 23,271 $ 46,159 $ 51,963 $ 57,940 $ 94,411
Due to implementation of GASB 61, the City's component units are now considered blended
component units versus discretely presented as in years prior to fiscal year 2013.
130
CITY OF PEARLAND, TEXAS
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2017 2018 2019 2020 2021
General fund
Non -spendable $ 101 $ 136 $ 15 $ 28 $ 3
Restricted - - - - -
Assigned 3,000 1,538 1,521 648 216
Unassigned 11,262 12,314 15,666 28,400 32,305
Total General Fund $ 14,363 $ 13,988 $ 17,202 $ 29,076 $ 32,524
All other governmental funds
Non -spendable $ 4 $ - $ - $ - $ -
Restricted
Debt service 5,912 6,797 5,427 6,163 5,887
Capital improvements 59,200 43,912 52,952 73,316 63,182
Public safety 364 506 504 453 591
Economic Development 36,795 44,634 34,659 44,068 57,235
Community development programs
Tourism 4,604 4,661 5,388 5,569 5,918
Parks and recreation 262 517 530 537 1,421
Capital projects - other - - - - -
Other 779 783 1,313 1,180 1,521
Unassigned (28) (52) (28) (27) (4,796)
Total other Governmental Funds $ 107,892 $ 101,758 $ 100,745 $ 131,259 $ 130,958
Due to implementation of GASB 61, the City's component units are now considered blended component units versus
discretely presented as in years prior to fiscal year 2013.
131
CITY OF PEARLAND, TEXAS
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2012 20131 2014 2015 2016
Revenues
Property taxes 34,362 54,475 57,378 62,922 67,569
Sales and use taxes 15,632 24,942 27,295 29,970 31,293
Franchise fees 5,817 5,999 6,484 6,971 7,228
Licenses and permits 2,320 2,989 4,149 4,544 5,677
Fines and forfeitures 3,374 3,534 3,121 3,108 2,931
Charges for services 11,891 12,982 13,078 14,661 15,313
Investment earnings 92 154 254 433 728
Intergovernmental 3,089 4,595 2,541 3,197 15,959
Other 2,541 7,973 4,157 7,076 5,065
Total Revenues 79,118 117,643 118,457 132,882 151,763
Expenditures
General government 7,784 7,958 8,027 10,470 11,609
Public safety 25,372 26,204 29,171 32,229 36,818
Public works 5,533 7,812 8,121 10,298 13,292
Community services 4,246 3,523 3,960 3,408 4,294
Parks and recreation 7,499 7,244 7,816 5,823 6,458
Economic development 17,414 25,248 25,625 31,051
Debt service:
Principal 9,373 15,637 15,815 23,790 19,736
Interest and other charges 12,401 15,859 16,373 16,595 15,841
Capital outlay 9,201 22,101 15,536 24,471 31,982
Intergovernmental 3,992 4,058 4,307 4,792 4,847
Total Expenditures 85,401 127,810 134,374 157,501 175,928
Excess of revenues over (under) expenditures (6,283) (10,167) (15,917) (24,619) (24,165)
Other Financing Sources (Uses)
Transfers in 5,909 15,515 16,507 17,043 26,062
Transfers out (5,096) (14,583) (16,967) (15,233) (20,844)
Debt issued 49,805 12,060 49,560 81,258 142,701
Payment to Escrow Agent (54,478) (33,182) (54,303) (89,638)
Capital leases 1,179 1,853 574 1,918
Other 3,809 331 4,784 3,157
Total Other Financing Sources (Uses) (51) 14,502 22,555 32,496 60,199
Net change in fund balances
$ (6,334) $ 4,335 $ 6,638 $ 7,877 $ 36,034
Debt service as a percentage of noncapital
expenditures 28.3% 29.8% 27.0% 29.9% 24.8%
Due to implementation of GASB 61, the City's component units are now considered blended component
units versus discretely presented as in years prior to fiscal year 2013.
132
CITY OF PEARLAND, TEXAS
Changes in Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
2017 2018 2019 2020 2021
Revenues
Property taxes $ 76,562 $ 83,484 $ 90,252 $ 97,106 $ 100,528
Sales and use taxes 31,976 35,437 34,872 34,928 40,248
Franchise fees 7,263 7,358 7,480 7,270 6,940
Licenses and permits 5,435 4,146 4,198 4,424 4,258
Fines and forfeitures 2,654 2,468 2,712 1,723 1,868
Charges for services 16,015 16,769 17,726 18,714 19,858
Investment earnings 619 1,600 3,186 1,583 208
Intergovernmental 16,010 8,579 10,329 19,480 19,880
Other 5,736 7,200 3,947 2,553 3,207
Total Revenues 162,270 167,041 174,702 187,782 196,995
Expenditures
General government 11,223 11,300 11,173 12,513 19,460
Public safety 40,858 41,273 42,716 47,218 52,191
Public works 17,365 16,968 12,596 11,693 12,483
Community services 4,837 4,313 4,219 4,452 4,249
Parks and recreation 6,419 5,959 6,065 5,483 6,102
Economic development 29,001 29,195 38,288 25,843 29,175
Debt service:
Principal 24,341 23,547 38,007 27,796 29,577
Interest and other charges 15,221 15,814 15,646 15,939 17,357
Capital outlay 43,860 43,474 39,541 38,359 77,114
Intergovernmental 6,937 7,168 7,325 7,769 7,116
Total Expenditures 200,062 199,011 215,576 197,065 254,824
Excess of revenues over (under) expenditures (37,792) (31,970) (40,874) (9,284) (57,829)
Other Financing Sources (Uses)
Transfers in
Transfers out
Debt issued
Payment to Escrow Agent
Capital leases
Other
Total Other Financing Sources (Uses)
28,466 24,456 34,200 31,561 33,261
(26,860) (22,266) (22,866) (26,101) (27,713)
115,718 24,223 44,292 44,798 46,562
(72,608) - (12,551) -
- - - 7,174
44,716 26,413 43,075 50,258 59,284
Net change in fund balances $ 6,924 $ (5,557) $ 2,201 $ 40,975 $ 1,455
Debt service as a percentage of noncapital
expenditures 25.3% 24.9% 30.3% 27.6% 26.4%
133
CITY OF PEARLAND, TEXAS
Spending and Growth Analysis - Governmental Funds
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
Expenditures
General Gov't
Public Safety
Public Works
Community Services
Parks & recreation
Economic Development
Debt Service - principal
Debt service - interest
Capital outlay
Intergovernmental
Total
Distribution of Spending
General Gov't
Public Safety
Public Works
Community Services
Parks & recreation
Economic Development
Debt Service - principal
Debt service - interest
Capital outlay
Intergovernmental
Total
Adjusted for CPI
POPULATION
PER CAPITA
CPI INDEX (NATIONAL)
PER CAPITA ADJ TO 2021
PER CAPITA ADJ TO 2012
2012 2013
$ 7,797
25,372
5,533
4,246
7,499
20,397
12,893
15,534
9,201
4,158
$ 7,958
26,204
7,812
3,523
7,244
17,414
15,637
15,859
22,101
4,058
2014
$ 8,027
29,171
8,121
3,960
7,816
25,248
15,815
16,373
15,536
4,307
$ 112,630 $ 127,810 $ 134,374
2015
$ 10,470
32,229
10,298
3,408
5,823
25,625
23,790
16,595
24,471
4,792
$ 157,501
2016
$ 11,609
36,818
13,292
4,294
6,458
31,051
19,736
15,841
31,982
4,847
$ 175,928
2017
$ 11,223
40,858
17,365
4,837
6,419
29,001
24,341
15,221
43,860
6,937
$ 200,062
6.9% 6.2% 6.0% 6.6% 6.6% 5.6%
22.5% 20.5% 21.7% 20.5% 20.9% 20.4%
4.9% 6.1 % 6.0% 6.5% 7.6% 8.7%
3.8% 2.8% 2.9% 2.2% 2.4% 2.4%
6.7% 5.7% 5.8% 3.7% 3.7% 3.2%
18.1 % 13.6% 18.8% 16.3% 17.6% 14.5%
11.4% 12.2% 11.8% 15.1 % 11.2% 12.2%
13.8% 12.4% 12.2% 10.5% 9.0% 7.6%
8.2% 17.3% 11.6% 15.5% 18.2% 21.9%
3.7% 3.2% 3.2% 3.0% 2.8% 3.5%
100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
99,800
104,100
106,900 112,300
117,100 121,500
$ 1,129 $ 1,228 $ 1,257 $ 1,403 $ 1,502 $ 1,647
229.59
$ 1,348
$ 1,129
232.96
$ 1,446
$ 1,210
234.75
$ 1,469
$ 1,229
236.70
$ 1,625
$ 1,360
241.40
$ 1,707
$ 1,429
246.37
$ 1,833
$ 1,534
134
CITY OF PEARLAND, TEXAS
Spending and Growth Analysis - Governmental Funds (Continued)
Last Ten Fiscal Years
Amounts in (000's)
(Modified Accrual Basis of Accounting)
Expenditures
General Gov't
Public Safety
Public Works
Community Services
Parks & recreation
Economic Development
Debt Service - principal
Debt service - interest
Capital outlay
Intergovernmental
Total
Distribution of Spending
General Gov't
Public Safety
Public Works
Community Services
Parks & recreation
Economic Development
Debt Service - principal
Debt service - interest
Capital outlay
Intergovernmental
Total
Adjusted for CPI
POPULATION
PER CAPITA
CPI INDEX (NATIONAL)
PER CAPITA ADJ TO 2020
PER CAPITA ADJ TO 2011
2018 2019 2020
$ 11,300 $ 11,173 $
41,273 42,716
16,968 12,596
4,313 4,219
5,959 6,065
29,195 38,288
23,547 38,007
15,814 15,646
43,474 39,541
7,168 7,325
12,513
47,218
11,693
4,452
5,483
25,843
27,796
15,939
38,359
7,769
Ten
Year
2021 % CHG
$ 19,460 149.6%
52,191 105.7%
12,483 125.6%
4,249 0.1%
6,102 -18.6%
29,175 43.0%
29,577 129.4%
17,357 11.7%
77,114 738.1
7,116 71.1%
$ 199,011 $ 215,576 $ 197,065 $ 254,824 126.2%
5.7% 5.2% 6.3% 7.6%
20.7% 19.8% 24.0% 20.5%
8.5% 5.8% 5.9% 4.9%
2.2% 2.0% 2.3% 1.7%
3.0% 2.8% 2.8% 2.4%
14.7% 17.8% 13.1% 11.4%
11.8% 17.6% 14.1% 11.6%
7.9% 7.3% 8.1% 6.8%
21.8% 18.3% 19.5% 30.3%
3.6% 3.4% 3.9% 2.8%
100.0% 100.0% 100.0% 100.0%
125,198
127,500
131,448 125,828
$ 1,590 $ 1,691 $ 1,499 $ 2,025
252.44
$ 1,727
$ 1,446
256.76
$ 1,691
$ 1,512
260.28
$ 1,499
$ 1,322
274.31
$ 2,025
$ 1,695
Average
Compounded
Growth Rate
10.70%
8.34%
9.46%
0.01%
-2.26%
4.06%
9.66%
1.24%
26.65%
6.15%
9.50%
Average
Compounded
Growth Rate
2.61
6.71%
2.00%
4.62%
4.62%
135
CITY OF PEARLAND, TEXAS
Assessed Value and Estimated Actual Value
of Taxable Property
Last Ten Fiscal Years
Real Property
Fiscal Tax
Year Year Residential Commercial
2012 2011 4,929,336,548 1,897,683,176
2013 (1) 2012 5,042,965,503 1,954,587,058
2014 2013 5,530,854,515 1,966,675,342
2015 2014 6,000,588,340 2,035,398,664
2016 2015 6,687,172,478 2,200,841,575
2017 2016 7,800,700,555 2,552,439,217
2018 2017 8,160,296,748 3,201,012,344
2019 2018 8,388,984,355 3,467,102,770
2020 2019 8,795,872,742 3,632,391,578
2021 2020 10,759,083,987 1,941,047,529
Notes:
Personal
Property
488,098,315
612,564,952
614,461,500
670,832,220
677,182,023
776,125,452
801,094,174
880,377,068
1,018,446,748
865,343,567
Less Tax Exempt
Real Property
592,996,676
617,274,555
627,308,465
673,524,095
677,182,023
835,697,201
916,937,992
882,979,174
903,424,894
974,936,904
(1) Assessed valuation for fiscal year 2013 does not include Brazoria County MUD #4 valuation of
$241,712,166 that was annexed into the City on December 31, 2012.
Assessed values presented here are for the City and include the Tax Increment Reinvestment Zone
Assessed value based on adjusted tax roll at year-end.
136
CITY OF PEARLAND, TEXAS
Assessed Value and Estimated Actual Value
of Taxable Property (Continued)
Last Ten Fiscal Years
Assessed
Value as a
Less Other Total Percent of
Fiscal Tax Exemptions and Total Taxable Direct Estimated Actual Actual Taxable
Year Year Abatements Assessed Value Tax Rate Taxable Value Value
2012 2011 352,494,382 6,369,626,981 0.6851 6,369,626,981 100%
2013 (1) 2012 454,866,920 6,537,976,038 0.7051 6,537,976,038 100%
2014 2013 487,709,374 6,996,973,518 0.7051 6,996,973,518 100%
2015 2014 452,738,140 7,580,556,989 0.7121 7,580,556,989 100%
2016 2015 423,238,764 8,464,775,289 0.7053 8,464,775,289 100%
2017 2016 571,315,443 9,722,252,580 0.6812 9,722,252,580 100%
2018 2017 681,810,199 10,563,655,075 0.6851 10,563,655,075 100%
2019 2018 904,072,816 10,949,412,203 0.7092 10,949,412,203 100%
2020 2019 1,004,810,809 11,538,475,365 0.7412 11,538,475,365 100%
2021 2020 813,268,531 11,777,269,648 1.0000 11,777,269,648 100%
Notes:
(1) Assessed valuation for fiscal year 2013 does not include Brazoria County Mud #4 valuation of
$241,712,166 that was annexed into the City on December 31, 2012.
Assessed values presented here are for the City and include the Tax Increment Reinvestment Zone.
Assessed value based on adjusted tax roll at year-end.
137
CITY OF PEARLAND, TEXAS
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of assessed value)
City Direct Rates Overlapping Rates (a)
Pearland Pasadena Alvin
Independent Independent Independent Alvin Fort
Fiscal M & 0 I & S Total School School School Comm Brazoria Bend
Year Rate Rate Direct District District District College County County
2011 0.215 0.450 0.665 1.419 1.350 1.304 0.200 0.463 0.500
2012 0.215 0.470 0.685 1.419 1.350 1.344 0.199 0.473 0.500
2013 0.215 0.490 0.705 1.419 1.350 1.329 0.200 0.486 0.500
2014 0.215 0.490 0.705 1.416 1.350 1.329 0.194 0.492 0.500
2015 0.222 0.490 0.712 1.416 1.350 1.417 0.204 0.499 0.495
2016 0.223 0.483 0.705 1.416 1.350 1.417 0.204 0.486 0.486
2017 0.241 0.440 0.681 1.416 1.350 1.450 0.192 0.457 0.474
2018 0.255 0.430 0.685 1.416 1.480 1.450 0.181 0.440 0.458
2019 0.279 0.430 0.709 1.416 1.416 1.450 0.188 0.368 0.445
2020 0.307 0.434 0.741 1.396 1.378 1.398 0.186 0.365 0.445
2021 0.305 0.415 0.720 1.319 1.383 1.398 0.183 0.342 0.436
Source: Brazoria County, Harris County, and Fort Bend County Appraisal Districts.
(a) Overlapping rates are those of local and county governments that apply to property owners within the City of Pearland.
Not all overlapping rates apply to all Pearland property owners; for example, although the county property tax rates apply to
all.
138
CITY OF PEARLAND, TEXAS
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Overlapping Rates (a)
Harris Harris Harris Brazoria/
Port of County County County Ft Bend
Fiscal Harris Houston Flood Hospital Dept of MUD MUD MUD MUD
Year County Authority Control District Education No. 1 No. 17 No. 18 No. 19
2011 0.388 0.021 0.029 0.192 0.007 0.850 0.547 0.550 0.620
2012 0.391 0.019 0.028 0.192 0.007 0.850 0.547 0.545 0.600
2013 0.400 0.020 0.028 0.182 0.007 0.850 0.547 0.530 0.580
2014 0.415 0.017 0.028 0.170 0.006 0.850 0.544 0.510 0.550
2015 0.417 0.015 0.027 0.170 0.006 0.850 0.520 0.470 0.510
2016 0.419 0.013 0.027 0.170 0.005 0.848 0.460 0.390 0.450
2017 0.417 0.013 0.028 0.172 0.005 0.848 0.410 0.350 0.400
2018 0.418 0.013 0.028 0.171 0.005 0.848 0.380 0.310 0.380
2019 0.419 0.012 0.029 0.171 0.005 0.848 0.380 0.310 0.360
2020 0.407 0.011 0.028 0.166 0.005 0.848 0.360 0.290 0.350
2021 0.391 0.010 0.031 0.167 0.005 0.848 0.340 0.270 0.310
Source: Brazoria County, Harris County, and Fort Bend County Appraisal Districts.
(a) Overlapping rates are those of local and county governments that apply to property owners within the City of
Pearland. Not all overlapping rates apply to all Pearland property owners; for example, although the county
property tax rates apply to all.
139
CITY OF PEARLAND, TEXAS
Direct and Overlapping Property Tax Rates (Continued)
Last Ten Fiscal Years
(rate per $100 of assessed value)
Overlapping Rates (a)
Fiscal MUD MUD MUD MUD MUD
Year No. 23 No. 26 No. 28 No. 34 No. 35
2011 0.770 0.710 0.820 0.850 1.020
2012 0.630 0.690 0.820 0.850 1.020
2013 0.610 0.690 0.820 0.850 1.020
2014 0.600 0.690 0.820 0.850 1.020
2015 0.580 0.690 0.820 0.850 1.020
2016 0.540 0.690 0.820 0.820 1.020
2017 0.480 0.690 0.820 0.800 1.020
2018 0.470 0.690 0.820 0.800 1.000
2019 0.460 0.690 0.820 0.780 1.000
2020 0.460 0.690 0.820 0.750 1.000
2021 0.460 0.530 0.820 0.730 1.000
Source: Brazoria County, Harris County, and Fort Bend County Appraisal Districts.
(a) Overlapping rates are those of local and county governments that apply to property owners within the City
of Pearland. Not all overlapping rates apply to all Pearland property owners; for example, although the county
property tax rates apply to all.
140
CITY OF PEARLAND, TEXAS
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal Collected within the
Year Taxes Levied Fiscal Year of the Levy Collections Total Collections to Date
Ended for the Percentage in Subsequent Percentage
Sept 30, Fiscal Year Amount of Levy Years Amount of Levy
2012 43,441,562 43,110,373 99.24% 320,658 43,431,031 100.0%
2013 45,850,388 45,509,522 99.26% 302,589 45,812,111 99.9%
2014 49,096,238 48,802,720 99.40% 246,723 49,049,443 99.9%
2015 53,468,069 53,175,174 99.45% 186,651 53,361,825 99.8%
2016 58,834,077 58,545,664 99.51% 136,250 58,681,914 99.7%
2017 64,982,191 64,579,894 99.38% 220,965 64,800,859 99.7%
2018 70,630,574 70,216,601 99.41% 226,461 70,443,062 99.7%
2019 75,672,998 75,276,247 99.48% 222,017 75,498,264 99.8%
2020 83,055,340 82,617,167 99.47% 82,617,167 99.5%
2021 86,120,247 85,751,572 99.57% 85,751,572 99.6%
Source: Brazoria County Tax Office
Note: Taxes levied based on adjusted tax roll.
141
CITY OF PEARLAND, TEXAS
Principal Property Taxpayers
Current Year and Nine Years Ago
Taxpayer
Pearland Town Center LP
Amreit SPF Shadow Creek LP
HCA Healthcare Corp
Mar Shadow Creek LP
MHI Compressor Manufacturer LLC
DD Shadow Creek V LLC
Goodgarden Owner GP
2500 Business Center Owner LP
Brazoria-SCR Associates LLC
W-F&B 11900 Shadow Creek VIII
Pearland Investments Inc.
Weatherford U.S., Inc.
Villas Shadow Creek Ranch LP
Centerpoint Energy Inc
Walmart Real Estate Bus TR
Shadow Kirby LTD Partnership
MRP Shadow Creek LP
Total
2021 2012
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Assessed Assessed Assessed Assessed
Value Rank Value Value Rank Value
$ 82,539,900 1
75,249,010 2
72,689,590 3
61,000,000 4
43,941,476 5
43,741,490 6
41,000,000 7
40,000,000 8
39,000,000 9
38,900,000 10
$ 538,061,466
Source: Brazoria County Appraisal District
* Tax Year 2020
0.70% $ 66,933,820 1 1.06%
0.64% 41,006,650 2 0.65%
0.62% 19,074,620 10 0.30%
0.52%
0.37%
0.37%
0.35%
0.34%
0.33%
0.33%
4.57%
31,696,920 3
31,613,080 4
29,000,460 5
26,536,120 6
23,678,280 7
23,114,059 8
21,000,000 9
$ 313,654,009
0.50%
0.50%
0.46%
0.42%
0.37%
0.37%
0.33%
4.96%
142
CITY OF PEARLAND, TEXAS
Principal Property Taxpayers (Table 8A)
2020 Total Taxes
Taxpayer
Pearland Town Amreit SPF HCA
Shadow Creek Healthcare
Center LP LP Corp
Property Use
Retail mixed use Retail Health
center Care/Hospital
Taxable Value
$82,539,900 $75,249,010 $72,689,590
Taxing Unit
Tax Rate
Alvin ISD
1.397700
$ 1,153,660
$ 1,051,755
$ 972,244
Pearland ISD
1.318500
-
-
41,260
Houston ISD
1.136700
-
-
-
City of Pearland
0.720000
594,287
541,793
523,365
Harris County
0.391160
-
-
-
Brazoria County
0.342017
282,300
257,364
248,611
Brazoria County Special Road & Bridge
0.050000
41,270
37,625
36,345
Alvin Community College
0.183443
151,414
138,039
18,021
Harris County Hospital District
0.166710
-
-
-
Brazoria Drainage District 4
0.146000
120,508
109,864
106,127
Brazoria County C&R District
0.150000
-
-
-
Houston Community College System
0.100263
-
-
-
Pearland Municipal Management
District #2
0.091750
75,730
69,041
-
Harris County Flood Control District
0.031420
-
-
-
Port of Houston Authority
0.009910
-
-
-
Harris County Dept. of Education
0.004993
-
-
-
Total Tax
$ 2,419,169
$ 2,205,481
$ 1,945,973
% Paid to City of Pearland
24.6%
24.6%
26.9%
Source: Brazoria County Tax Office & Harris County Tax Office
Table does not include multiple taxpayers from the same address.
143
CITY OF PEARLAND, TEXAS
Principal Property Taxpayers (Table 8A) (Continued)
2020 Total Taxes
MHI
Taxpayer
Mar Shadow Compressor DD SCR V
Creek LP Manufacturer LLC
LLC
Property Use
Multi -Family Industrial / Multi -Family
Housing Manufacturing Housing
Taxable Value
$61,000,000 $43,941,476 $43,741,490
Taxing Unit
Tax Rate
Alvin ISD
1.397700
$852,597.00
$ -
$611,375.00
Pearland ISD
1.318500
-
-
-
Houston ISD
1.136700
-
499,483
-
City of Pearland
0.720000
439,200
316,379
314,939
Harris County
0.391160
-
171,881
-
Brazoria County
0.342017
208,630
-
149,603
Brazoria County Special Road & Bridge
0.050000
30,500
-
21,871
Alvin Community College
0.183443
111,900
-
80,241
Harris County Hospital District
0.166710
-
73,255
-
Brazoria Drainage District 4
0.146000
89,060
-
63,863
Brazoria County C&R District
0.150000
-
-
-
Houston Community College System
0.100263
-
44,057
-
Pearland Municipal Management
0.091750
-
-
-
District #2
Harris County Flood Control District
0.031420
-
13,806
-
Port of Houston Authority
0.009910
-
4,355
-
Harris County Dept. of Education
0.004993
-
2,194
-
Total Tax
$ 1,731,887
$ 1,125,410
$ 1,241,892
% Paid to City of Pearland
25.4%
28.1%
25.4%
Source: Brazoria County Tax Office & Harris County Tax Office
Table does not include multiple taxpayers from the same address.
144
CITY OF PEARLAND, TEXAS
Principal Property Taxpayers (Table 8A) (Continued)
2020 Total Taxes
Taxpayer
Goodgarden 2500 Business Brazoria-SCR W-F&B 11900
Center Owner Associates
Owner GP Shadow Creek
LP LLC
VIII
Property Use
Multi -Family Multi -Family Multi -Family Multi -Family
Housing Housing Housing Housing
Taxable Value
$41,000,000 $ 40,000,000 $ 39,000,000 $38,900,000
Taxing Unit
Tax Rate
Alvin ISD
1.397700
$ 573,057
$ -
$ 545,103
$ 543,705
Pearland ISD
1.318500
-
631,143
-
-
Houston ISD
1.136700
-
-
-
-
City of Pearland
0.720000
295,200
340,186
280,800
288,331
Harris County
0.391160
-
-
-
-
Brazoria County
0.342017
140,227
177,425
133,387
142,076
Brazoria County Special Road & Bridge
0.050000
20,500
24,289
19,500
19,450
Alvin Community College
0.183443
75,212
-
71,543
72,300
Harris County Hospital District
0.166710
-
-
-
-
Brazoria Drainage District 4
0.146000
59,860
67,008
56,940
56,794
Brazoria County C&R District
0.150000
-
-
-
-
Houston Community College System
0.100263
-
-
-
-
Pearland Municipal Management
District #2
0.091750
Harris County Flood Control District
0.031420
-
-
-
-
Port of Houston Authority
0.009910
-
-
-
-
Harris County Dept. of Education
0.004993
-
-
-
-
Total Tax
$ 1,164,056
$ 1,240,051 1
$ 1,107,273
$ 1,122,656
% Paid to City of Pearland
25.4%
27.4%
25.4%
25.7%
Source: Brazoria County Tax Office & Harris County Tax Office
Table does not include multiple taxpayers from the same address.
145
CITY OF PEARLAND, TEXAS
Taxable Sales by Category
Last Ten Calendar Years
(in thousands of dollars)
Retail Trade
Accommodations & Food Services
Real Estate/Rental/Leasing
Manufacturing
Wholesale Trade
Other Services (Except Public Admin)
Information
Construction
Arts, Entertainment & Recreation
Mining, Quarrying, Oil and Gas
Admin/Support/Waste Mgmt/Remediation
Professional/Scientific/Technical
Health Care/Social Assistance
Finance, Insurance
Agriculture, Forestry, Fishing
Transportation/Warehousing
Educational Services
Utilities
Total
City direct sales tax rate b
Calendar Year
2012 2013
$ 764,460 $ 828,225
198,439 215,705
61,690 55,811
48,213 34,562
33,566 34,356
30,669 34,119
19,194 24,369
23,181 24,367
12,710 13,569
3,726 12,865
12,696 13,344
9,037 11,210
351 1,065
1,347 1,246
468 772
425 318
429 372
3 7
$ 1,220,604
1.00%
Source: State Comptroller's Office.
a 2021 taxable sales thru 1st quarter of 2021.
b The City direct sales tax rate includes the City only
and not the Pearland Economic Development Corp. (4B).
2014
$ 871,813
240,961
61,392
51,274
42,915
38,539
29,602
26,350
14,692
14,520
12,963
10,531
3,205
1,483
728
406
350
7
2015
2016
$ 961,565 $ 999,033
272,540 298,860
48,024 32,786
41,175 40,192
41,491 48,114
40,373 40,181
33,614 33,449
32,168 24,655
15,555 16,020
7,285 8,141
12,808 12,725
11,307 12,177
5,007 2,307
2,226 2,182
1,609 2,112
285 372
393 406
$ 1,306,282 $ 1,421,731 $ 1,527,425 $ 1,573,712
1.00%
1.00%
1.00% 1.00%
146
CITY OF PEARLAND, TEXAS
Taxable Sales by Category (Continued)
Last Ten Calendar Years
(in thousands of dollars)
Calendar Year
2017 2018 2019 2020 2021 a
Retail Trade $ 1,042,624 $ 1,056,690 $ 1,030,791 $ 1,056,636 $ 269,165
Accommodations & Food Services 316,070 341,462 375,329 343,407 97,929
Real Estate/Rental/Leasing 44,540 44,467 - 39,671 7,094
Manufacturing 39,860 39,133 32,215 20,889 4,785
Wholesale Trade 49,702 56,347 58,202 47,894 11,591
Other Services (Except Public Admin) 41,711 43,812 42,928 41,106 10,773
Information 35,824 39,187 34,340 22,832 7,155
Construction 21,363 27,310 33,948 31,595 6,825
Arts, Entertainment & Recreation 16,344 17,127 - 15,182 4,069
Mining, Quarrying, Oil and Gas 11,682 11,125 3,794 2,287 543
Admin/Support/Waste Mgmt/Remediation 14,489 16,918 - 17,681 3,991
Professional/Scientific/Technical 6,689 8,371 30,721 8,852 3,209
Health Care/Social Assistance 3,751 3,355 4,386 743
Finance, Insurance 2,108 1,906 43,987 1,853 430
Agriculture, Forestry, Fishing 3,471 2,496 - 2,049 776
Transportation/Warehousing 560 678 763 538 55
Educational Services 439 512 5,103 390 122
Utilities - - 5 -
Total $ 1,651,227 $ 1,710,896 $ 1,692,121 $ 1,657,253 $ 429,255
City direct sales tax rate b 1.00%
Source: State Comptroller's Office.
a 2021 taxable sales thru 1st quarter of 2021.
b The City direct sales tax rate includes the City only
and not the Pearland Economic Development Corp. (4B).
1.00% 1.00%
1.00% 1.00%
147
CITY OF PEARLAND, TEXAS
Outstanding Debt by Type
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Governmental Activities Business -Type Activities
General Unamortized Capital Permanent
Fiscal Obligation Certificates Revenue Premiums/ Lease Revenue Improvement
Year Bonds of Obligation Bonds (Discounts) Obligations Bonds Bonds
2012 224,170 65,425 3,629 6,479 3,407 109,305 15,130
2013* 236,199 64,690 75,125 6,159 3,681 105,690 14,020
2014 246,791 56,505 80,186 10,122 4,344 102,517 12,865
2015 261,998 50,030 77,012 16,185 3,629 108,099 11,305
2016 262,865 50,070 91,370 18,793 4,229 173,570 9,775
2017 283,140 37,505 97,215 25,832 1,838 196,200 7,360
2018 278,175 41,750 98,025 23,844 1,282 214,705 4,845
2019 269,520 51,620 85,065 26,639 761 232,415 4,480
2020 268,680 66,405 81,445 29,963 541 335,435 4,110
2021 260,840 86,220 73,235 38,710 381 400,840 3,020
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements.
* Due to implementation of GASB 61 in fiscal year 2013, the City's component units are now considered blended
component units versus discretely as in years prior to fiscal year 2013. As such, the outstanding debt for the
components units have been added; however, the City, or primary government is not legally responsible for the
payment of its debt.
148
CITY OF PEARLAND, TEXAS
Outstanding Debt by Type (Continued)
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Fiscal
Year
Business -Type Activities
Unamortized Capital
Premiums/ Lease
(Discounts) Obligations
2012 882
2013* 730
2014 592
2015 659
2016 850
2017 9,395
2018 10,897
2019 16,808
2020 16,168
2020 16,917
342
253
169
82
375
257
173
86
Total
Primary
Government
428,769
506,547
514,091
528,999
611,897
658,742
673,696
687,394
802,746
880,163
Percentage
of Personal
Income
Total
Per
Capita
Excluding
Component
Units
Per Capita
13.1% 4,223
14.1% 4,800 4,019
13.2% 4,709 3,859
12.6% 4,561 3,875
13.2% 5,225 4,445
15.3% 5,422 4,622
13.1% 5,381 4,598
13.4% 5,490 4,811
13.3% 6,107 5,487
13.3% 6,107 5,487
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
* Due to implementation of GASB 61 in fiscal year 2013, the City's component units are now
considered blended component units versus discretely as in years prior to fiscal year 2013. As
such, the outstanding debt for the components units have been added; however, the City, or
primary government is not legally responsible for the payment of its debt.
149
CITY OF PEARLAND, TEXAS
Ratio of Net General Bonded Debt to Assessed
Value and Net Bonded Debt Per Capita
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Fiscal Tax
Year Year
2012 2011
2013 2012
2014 2013
2015 2014
2016 2015
2017 2016
2018 2017
2019 2018
2020 2019
2021 2020
General Bonded
Debt a
Less Debt Ratio of Net
Service Net Bonded Bonded Debt to
Funds Debt Assessed Value
311,204 5,160
321,068 4,992
326,283 4,643
339,518 4,536
341,503 5,034
353,837 8,276
348,614 5,911
433,605 6,797
335,085 5,427
347,060 5,427
306,044
316,076
321,640
334,982
336,469
345,561
342,703
426,808
329,658
341,633
4.8%
4.8%
4.6%
4.4%
4.0%
3.6%
3.2%
3.9%
2.9%
2.9%
Percentage
of Personal
Income b
9.5%
8.9%
8.4%
8.2%
7.3%
8.0%
6.7%
8.0%
5.5%
5.7%
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Per Capita b
3,067
3,036
3,009
2,983
2,873
2,844
2,737
3,348
2,508
2,715
a Includes general obligation bonds, certificates of obligation, sales, increment, and permanent improvement bonds net of
related premiums/discounts.
b Population and personal income data can be found in demographic and economic statistics table.
150
CITY OF PEARLAND, TEXAS
Direct and Overlapping Governmental Activities Debt
September 30, 2021 and 2020
Taxing Jurisdiction
Alvin Community College District
Alvin ISD
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
Brazoria
County
County
County
County
County
County
County
County
County
County
MUD No. 6
MUD No. 17
MUD No. 18
MUD No. 19
MUD No. 23
MUD No. 26
MUD No. 28
MUD No. 34
MUD No. 35
Brazoria-Fort Bend County MUD No. 1
Fort Bend County
Harris County (a)
Harris County Dept. of Education
Harris County Flood Control District
Harris County Hospital District
Harris-Brazoria Counties
Lower Kirby Pearland Man
Pasadena ISD
Pearland ISD
Port of Houston Authority
Total estimated Overlapping
Debt as of
September 30,
2020
The City $
Total Direct and Estimated
Population
Per Capita Debt - Direct and Overlapping Debt
28,625,000
906,860,000
139,678,313
12,620,000
19,105,000
19,515,000
23,280,000
12,630,000
6,790,000
54,290,000
36,445,000
8,170,000
63,680,000
630,766,310
1,743,427,125
6,320,000
334,270,000
86,050,000
41,975,000
24,565,000
724,005,000
433,230,000
492,439,397
335,085,000
Overlapping
Percent
Amount
27.55% $ 7,886,188
31.83% 288,653,538
20.40% 28,494,376
0.31 % 39,122
100.00% 19,105,000
100.00% 19,515,000
100.00% 23,280,000
100.00% 12,630,000
100.00% 6,790,000
100.00% 54,290,000
100.00% 36,445,000
100.00% 8,170,000
100.00% 63,680,000
0.78% 4,919,977
0.24% 4,184,225
0.24% 15,168
0.24% 802,248
0.24% 206,520
100.00% 41,975,000
100.00% 24,565,000
1.79% 12,959,690
79.21 % 343,161,483
0.24% 1,181,855
1,002,949,390
100.00% 335,085,000
$ 1,338,034,390
131,448
$ 10,179
Source: Individual jurisdictions and/or Texas Municipal Reports.
(a) Harris County Toll Road Certificates are considered self-supporting and are not included
in the amount shown for Harris County.
151
CITY OF PEARLAND, TEXAS
Direct and Overlapping Governmental Activities Debt (Continued)
September 30, 2021 and 2020
Taxing Jurisdiction
Debt as of
September 30,
2021
Alvin Community College District $
Alvin ISD
Brazoria County
Brazoria County MUD No. 6
Brazoria County MUD No. 17
Brazoria County MUD No. 18
Brazoria County MUD No. 19
Brazoria County MUD No. 23
Brazoria County MUD No. 26
Brazoria County MUD No. 28
Brazoria County MUD No. 34
Brazoria County MUD No. 35
Brazoria-Fort Bend County MUD No. 1
Fort Bend County
Harris County (a)
Harris County Dept. of Education
Harris County Flood Control District
Harris County Hospital District
Harris-Brazoria Counties MUD No. 509
Lower Kirby Pearland Management
Pasadena ISD
Pearland ISD
Port of Houston Authority
Total estimated Overlapping
The City $
Total Direct and Estimated
Population
Per Capita Debt - Direct and Overlapping Debt
26,515,000
879,220,000
56,490,000
10,290,000
17,670,000
19,435,000
21,215,000
11,900,000
4,530,000
54,840,000
34,665,000
7,780,000
56,505,000
547,784,567
1,093,033,215
6,320,000
713,005,000
81,540,000
41,165, 000
28,510,000
714,955,000
401,235,000
469,434,000
347,060,000
Overlapping
Percent Amount
27.55%
31.83%
20.40%
0.31%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
0.78%
0.24%
0.24%
0.24%
0.24%
100.00%
100.00%
1.79%
79.21%
0.24%
100.00%
$ 7,304,883
279,855,726
11,523,960
31,899
17,670,000
19,435,000
21,215,000
11,900,000
4,530,000
54,840,000
34,665,000
7,780,000
56,505,000
4,272,720
2,623,280
15,168
1,711,212
195,696
41,165, 000
28,510,000
12,797,695
317,818,244
1,126,642
937,492,125
347,060,000
$ 1,284,552,125
125,828
$ 10,209
Source: Individual jurisdictions and/or Texas Municipal Reports.
(a) Harris County Toll Road Certificates are considered self-supporting and are not included
in the amount shown for Harris County.
152
CITY OF PEARLAND, TEXAS
Pledged Revenue Coverage
Last Ten Fiscal Years
Amounts in (000's)
Water & Sewer Revenue Bonds
Net
Less: Revenue Debt Service
Fiscal Gross Operating Available for
Year Revenues Expenses Debt Service Principal Interest Total Coverage
2012 27,969 15,946 12,023 3,305 5,016 8,321 1.44
2013 29,607 17,423 12,184 3,615 4,724 8,339 1.46
2014 29,341 17,707 11,634 3,765 4,584 8,349 1.39
2015 30,744 18,767 11,977 3,920 4,622 8,542 1.40
2016 44,163 21,167 22,995 7,630 4,918 12,548 1.83
2017 52,005 24,178 27,828 9,195 4,297 13,492 2.06
2018 56,960 24,247 32,713 10,630 5,129 15,759 2.08
2019 61,001 22,340 38,661 11,770 6,586 18,356 2.11
2020 56,221 26,128 30,093 15,935 6,867 22,802 1.32
2021 52,681 25,550 30,093 18,055 9,743 22,802 1.32
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. Operating
expenses do not include interest, depreciation, or amortization expenses. Debt service excludes Permanent
Improvement Bonds paid with system revenues, as those bonds do not require bond coverage.
153
CITY OF PEARLAND, TEXAS
Demographic and Economic Statistics
Last Ten Fiscal Years
Education
Personal Per Capita Level in
Fiscal Population Income Personal Median Years of School Unemployment
Year (A) (in $000's) Income (B) Age (B) Schooling Enrollment (C) Rate (D)
2012 99,800 3,213,184 32,196 34.8 14.2 21,721 5.6%
2013 104,100 3,555,431 34,154 34.4 14.2 23,771 5.0%
2014 106,900 3,822,958 35,762 34.6 14.2 23,075 4.3%
2015 112,300 4,063,014 36,180 34.6 14.2 23,241 3.3%
2016 117,100 4,637,394 39,602 33.9 14.2 24,096 3.8%
2017 121,500 4,305,839 35,439 36.1 14.2 24,400 4.0%
2018 125,198 5,134,370 41,010 34.7 14.2 30,739 3.5%
2019 127,500 5,313,435 41,674 35.3 14.2 37,400 2.7%
2020 131,448 6,015,060 45,760 36.1 14.2 28,568 6.7%
2021 125,828 6,015,060 45,760 36.1 14.2 28,568 4.1%*
(A) Pearland Economic Development Corporation, 2019 American Community Survey 1-year estimates (November 2020).
Note: the 2020 ACS estimates were delayed due to COVID, therefore the 2019 data (same as the previous year) is the most
current data available).
(B) Texas Education Agency - Beginning in FY 2018, school enrollment was obtained by surveying each school located in
the City limits and ETJ. Data unavailable for FY 2021, therefore FY 2020 is the most current data available.
(C) Local Area Unemployment Statistics (LAUS) Report, *Data as of September 2021
154
CITY OF PEARLAND, TEXAS
Principal Employers
Current Year and Nine Years Ago
2021 2012
Percentage Percentage
of Total City of Total City
Employer Employees * Rank Employment Employees Rank Employment
Pearland ISD 2,684 1 4.13% 2,268 1 4.97%
Kelsey Seybold 913 2 1.40%
Alvin ISD 753 3 1.16%
City of Pearland 750 4 1.15% 633 3 1.39%
Memorial Hermann 635 5 0.98%
Lonza 600 6 0.92%
Merit Medical 720 7 1.11%
HCA (Pearland Medical Center) 300 8 0.46%
Third Coast 230 9 0.35%
Kemlon 228 10 0.35% 390 4 0.86%
Dover Energy 204 11 0.31%
Mitsubishi Heavy Industries Compressor C 170 12 0.26%
Tool -Flo 162 13 0.25%
Endress+Hauser 150 14 0.23%
Buc-ee's 140 15 0.22%
Wal-Mart 1,150 2 2.52%
HEB 350 5 0.77%
Davis -Lynch 300 6 0.66%
Sam's Club 230 7 0.50%
Bass Pro Shop 225 8 0.49%
Home Depot 223 9 0.49%
Packaging Service Co Inc 205 10 0.45%
Total 8,639 13.28% 5,974 13.10%
Sources:
Pearland Economic Development Corp.
Retail establishments data not available in 2021.
Labor force participation in 2021 is 65,031 and in 2012 is 53,136.
155
CITY OF PEARLAND, TEXAS
Full-time Equivalent City Government
Employees by Function/Program
Last Ten Fiscal Years
2012 2013 2014 2015 2016
Function/Program
Governmental Activities
General Government 56 44 45 52 62
Public Safety 286 295 313 339 370
Public Works 31 57 60 67 54
Community Services 56 51 53 40 42
Parks and Recreation 109 101 99 88 89
Business -type Activities
Water & Sewer 90 99 101 105 106
Component Unit
Economic Development 5 5 9 5 5
Total 633 652 680 696 728
Source: City Budget
156
CITY OF PEARLAND, TEXAS
Full-time Equivalent City Government
Employees by Function/Program (Continued)
Last Ten Fiscal Years
2017 2018 2019 2020 2021
Function/Program
Governmental Activities
General Government 52 54 55 66 64
Public Safety 370 379 390 408 424
Public Works 65 73 85 80 76
Community Services 50 46 46 48 47
Parks and Recreation 84 89 90 94 97
Business -type Activities
Water & Sewer 109 114 108 117 134
Component Unit
Economic Development 5 6 6 6 6
Total
Source: City Budget
735 761 780 819 848
157
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program
Last Ten Fiscal Years
2012 2013 2014 2015 2016
Function/Program
GENERAL GOVERNMENT
Finance
Number of purchase orders 2,415 2,671 2,640 2,377 2,159
Number of budget transfers 429 465 548 489 362
Number of invoices paid 20,768 23,512 21,486 22,212 26,675
Average number of employees paid per month 1,481 1,527 1,548 1,523 1,536
Human Resources
Number of hires 112 94 98 131 194
Number of applications received 4,936 7,642 8,507 9,132 10,420
Legal
Number of resolutions and ordinances prepared 220 254 243 271 279
Information Technology
Average monthly service requests 832 843 838 854 871
Number of PC's supported 448 454 575 649 680
PUBLIC SAFETY
Police
Fire
Part 1 Crimes 1,819 2,115 2,098 2,411 2,202
Traffic Crashes 1,465 1,529 1,590 1,761 1,728
Arrests 5,685 6,946 6,705 5,781 5,044
Citizen Calls for Service 27,379 29,242 29,744 31,474 31,744
Traffic Stops 49,531 52,945 43,783 33,472 35,764
Priority 1 Average Response Time 3:50 4:15 3:50 4:16 4:11
Total number of arson incidents 2 6 7 1 7
Fires investigated 18 16 25 20 27
Total annual inspections 1,537 1,958 1,644 1,640 1,244
Total code violation cases 1,952 2,244 2,140 4,596 2,560
Total calls for service 10,494 10,789 15,048 17,407 9,904
Patients treated 6,537 6,537 6,936 7,180 6,117
Sources: Various city departments.
158
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
2017 2018 2019 2020 2021
Function/Program (continued)
GENERAL GOVERNMENT
Finance
Number of purchase orders 589 1,811 1,673 1,724 2,090
Number of budget transfers 750 552 509 472 475
Number of invoices paid 24,548 21,547 17,641 16,482 17,387
Average number of employees paid per month 1,704 1,641 1,665 1,713 1,800
Human Resources
Number of hires 170 163 183 161 212
Number of applications received 13,010 15,452 17,382 16,610 12,226
Legal
Number of resolutions and ordinances prepared 276 290 340 307 310
Information Technology
Average monthly service requests 894 325 400 347 380
Number of PC's supported 706 715 732 782 810
PUBLIC SAFETY
Police
Fire
Part 1 Crimes 2,193 1,962 2,175 1,934 1,876
Traffic Crashes 1,813 2,150 2,150 1,719 1,857
Arrests 4,865 4,844 4,604 2,613 3,018
Citizen Calls for Service 31,945 31,579 32,548 30,341 31,092
Traffic Stops 37,025 33,101 33,559 21,764 26,806
Priority 1 Average Response Time 3:40 4:03 3:53 3:59 4:00
Total number of arson incidents 4 2 2 4 9
Fires investigated 19 15 23 60 47
Total annual inspections 2,607 3,123 1,263 1,155 569
Total code violation cases 2,302 2,034 2,387 1,577 1,866
Total calls for service 9,965 10,666 10,720 10,587 12,677
Patients treated 4,610 6,273 7,181 7,618 8,891
Sources: Various city departments.
159
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
2012 2013 2014 2015 2016
Function/Program (continued)
PUBLIC WORKS
Fleet Maintenance
Fleet maintenance jobs completed 3,581 3,817 3,860 3,887 1,452
Preventative maintenance performed 682 611 610 437 750
Other Public Works
Fuel issued (gallons) 377,754 350,186 353,890 332,745 265,669
Street sweeping (miles) 1,079 1,155 871 648 1,160
Street signs maintained/replaced 1,090 884 993 1,477 1,370
Total work orders completed 17,803 18,346 21,212 25,873 31,163
PARKS AND RECREATION
All Parks and recreation
ROW maintained - acres 251 251 251 550 459
Trees maintained 6,157 6,312 6,313 6,430 7,922
Acres of city property mowed 1,380 1,035 1,035 1,116 632
Total number of park work orders received 230 140 180 147 190
Parkland - acres 138 138 138 138 337
Total number of special events held 22 22 20 19 16
Total number of tournaments held 2 1 3 - 26
Number of recreation classes offered (I) 486 281 272 306 384
Average monthly attendance (all locations) (2) 18,378 18,980 21,366 14,371 19,636
Sources: Various city departments.
Information not presented was not available at time of publication.
(1) In FY2020 and FY2021, recreation classes were cancelled due to COVID-19.
(2) In FY2020 and FY2021, attendance was down due to COVID-19.
160
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
2017 2018 2019 2020 2021
Function/Program (continued)
PUBLIC WORKS
Fleet Maintenance
Fleet maintenance jobs completed 1,797 1,382 1,998 1,632 1,704
Preventative maintenance performed 742 663 856 645 721
Other Public Works
Fuel issued (gallons) 331,005 315,941 323,734 351,123 277,230
Street sweeping (miles) 1,112 1,815 497 564 453
Street signs maintained/replaced 1,179 1,471 1,511 4,638 662
Total work orders completed 25,688 24,529 20,791 17,696 17,431
PARKS AND RECREATION
All Parks and recreation
ROW maintained - acres 327 345 404 381 299
Trees maintained 8,355 8,523 8,873 9,223 10,873
Acres of city property mowed 664 443 523 523 561
Total number of park work orders received 114 147 55 19 22
Parkland - acres 388 392 547 547 547
Total number of special events held 19 17 23 13 11
Total number of tournaments held 5 12 18 19
Number of recreation classes offered (I) 265 868 908 289 237
Average monthly attendance (all locations) (2) 16,814 24,035 19,518 9,661 9,872
Sources: Various city departments.
Information not presented was not available at time of publication.
(1) In FY2020 and FY2021, recreation classes were cancelled due to COVID-19.
(2) In FY2020 and FY2021, attendance was down due to COVID-19.
161
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
2012 2013 2014 2015 2016
Function/Program (continued)
COMMUNITY SERVICES
Animal Control
Animal Services Calls for Service 4,618 5,167 5,822 5,230 5,484
Animal Shelter Live Release % 42% 42% 48% 53% 54%
Inspection Services
Total building inspections 22,416 26,274 28,434 36,497 37,206
Total permits issued 8,696 10,630 13,972 18,186 14,612
Number of plans reviewed 1,050 939 1,185 1,584 1,349
Municipal Court
Number of trials (3) 1,116 885 839 856 443
Number of charges (3) 30,187 27,439 23,182 19,223 17,611
Warrants cleared (3) 10,080 10,328 9,050 7,476 7,525
WATER & SEWER
Distribution and Collection
Fire hydrant maintenance and inspections (3) 887 1,399 837 612 854
Backed up sewer repairs 275 286 334 305 497
Water mains repaired 283 380 111 189 120
Water Production
Water produced - wells
(in millions of gallons) 2,916 2,859 2,470 1,933 2,190
Surface Water Purchased
(in millions of gallons) 1,321 1,816 2,133 2,276 2,517
Billing & Collections
Annual meter reads 370,755 403,220 414,499 428,265 445,154
Number of bills 359,716 387,997 388,338 400,662 417,312
Wastewater Treatment
Wastewater treated
(in millions of gallons) 2,364 2,530 2,493 3,067 3,367
Sources: Various city departments.
Information not presented was not available at time of publication.
(3) In FY2020 and FY2021, COVID-19 impacted Municipal Court operations.
(4) Prior to FY2020, fire hydrant maintenance and inspections was contracted out.
162
CITY OF PEARLAND, TEXAS
Operating Indicators by Function/Program (Continued)
Last Ten Fiscal Years
2017 2018 2019 2020 2021
Function/Program (continued)
COMMUNITY SERVICES
Animal Control
Animal Services Calls for Service 5,153 4,699 4,582 4,596 5,237
Animal Shelter Live Release % 56% 56% 55% 80% 94%
Inspection Services
Total building inspections 34,880 36,774 36,481 30,781 29,525
Total permits issued 13,075 8,894 7,270 5,545 11,066
Number of plans reviewed 1,278 1,971 2,419 2,196 1,926
Municipal Court
Number of trials (3) 656 567 664 390 233
Number of charges (3) 16,334 15,463 19,020 9,577 11,351
Warrants cleared (3) 8,463 5,801 6,095 3,757 3,873
WATER & SEWER
Distribution and Collection
Fire hydrant maintenance and inspections (3) 186 114 87 2,358 903
Backed up sewer repairs 545 308 196 233 178
Water mains repaired 102 126 125 114 121
Water Production
Water produced - wells
(in millions of gallons) 2,417 3,024 2,333 3,816 2,211
Surface Water Purchased
(in millions of gallons) 2,584 2,545 2,754 2,975 2,506
Billing & Collections
Annual meter reads 461,502 467,910 469,499 469,908 486,717
Number of bills 471,549 445,446 449,933 452,465 460,147
Wastewater Treatment
Wastewater treated
(in millions of gallons) 3,455 3,308 3,775 3,577 3,737
Sources: Various city departments.
Information not presented was not available at time of publication.
(3) In FY2020 and FY2021, COVID-19 impacted Municipal Court operations.
(4) Prior to FY2020, fire hydrant maintenance and inspections was contracted out.
163
CITY OF PEARLAND, TEXAS
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Fiscal Year
2012 2013 2014 2015 2016
Function/Program
PUBLIC SAFETY
Police
Police stations 1 1 1 1 1
Police vehicles 155 157 161 143 186
Police K9s - - 2 4
FARO Laser Scanning System (1) - - 1
Pole Camera System (2) - - -
Animal Services
Animal Services Building (shelter) 1 1 1 1 1
Animal Services Vehicles (2) 10 10
Fire
Fire stations 6 6 6 6 6
Fire vehicles 23 26 26 26 42
Ambulances (3) - 9 7 9
EMS
Ambulances (3) 8 9
PUBLIC WORKS
Other public works
Streets (miles) 806 839 844 842 936
Vehicle inventory 385 374 375 372 451
Traffic signals 74 81 81 73 87
PARKS AND RECREATION
Parks and recreation
Developed acreage 138 138 138 168 334
Pools 3 3 3 3 3
Outdoor basketball courts 6 6 6 6 6
Soccer fields 12 12 12 12 18
Activity buildings 3 3 3 3 3
Baseball/softball fields 4 4 4 4 6
WATER AND SEWER
Water Production
Water wells 11 10 10 10 10
Pumping stations 3 3 3 3 3
Ground storage tanks 15 15 15 15 15
Elevated towers 6 6 6 6 6
Wastewater
Treatment plants 5 5 5 5 5
Lift stations 80 75 76 73 74
Distribution and Collection
Water mains (miles)
Sanitary sewers (miles)
448 469 488 509 537
382 400 415 433 440
Sources: Various city departments.
Note: No capital asset indicators are available for the general government and community services functions.
Information not presented was not available at time of publication.
(1) Purchased in FY16. System used to scan accident/crime scenes for full 3D image of scene.
(2) Purchased in FY20. Includes a pole camera and an under the door camera.
(3) Beginning in FY15, Animal Services moved to Police Department.
(4) Beginning in FY14, EMS was rolled into the Fire Department.
164
CITY OF PEARLAND, TEXAS
Capital Asset Statistics by Function/Program (Continued)
Last Ten Fiscal Years
Fiscal Year
2017 2018 2019 2020 2021
Function/Program
PUBLIC SAFETY
Police
Police stations 1 1 1 1 1
Police vehicles 194 209 211 210 201
Police K9s 5 5 5 5 4
FARO Laser Scanning System (1) 1 1 1 1 1
Pole Camera System (2) - 1 1
Animal Services 1
Animal Services Building (shelter) 1 1 1 1 1
Animal Services Vehicles (2) 10 11 11 11 11
Fire
Fire stations 7 6 5 6 6
Fire vehicles 56 60 61 56 55
Ambulances (3) 9 10 10 9 9
EMS
Ambulances (3) - - -
PUBLIC WORKS
Other public works
Streets (miles) 928 940 978 978 971
Vehicle inventory 385 338 434 502 443
Traffic signals 91 96 97 100 104
PARKS AND RECREATION
Parks and recreation
Developed acreage 388 392 443 458 458
Pools 3 3 2 2 2
Outdoor basketball courts 6 6 8 8 8
Soccer fields 12 14 12 12 11
Activity buildings 3 3 4 4 4
Baseball/softball fields 14 16 16 16 16
WATER AND SEWER
Water Production
Water wells 10 10 10 10 10
Pumping stations 3 3 3 3 3
Ground storage tanks 15 15 15 15 16
Elevated towers 6 6 6 6 6
Wastewater
Treatment plants 5 5 6 5 5
Lift stations 72 78 69 69 68
Distribution and Collection
Water mains (miles)
Sanitary sewers (miles)
546 551 553 553 538
448 456 459 459 453
Sources: Various city departments.
Note: No capital asset indicators are available for the general government and community services functions.
Information not presented was not available at time of publication.
(1) Purchased in FY16. System used to scan accident/crime scenes for full 3D image of scene.
(2) Purchased in FY20. Includes a pole camera and an under the door camera.
(3) Beginning in FY15, Animal Services moved to Police Department.
(4) Beginning in FY14, EMS was rolled into the Fire Department.
165
PEARLAND
TEXAS
l 89%
CITY OF PEARLAND
3519 LIBERTY DRIVE I PEARLAND, TEXAS 77581
281.652.1600 I PEARLANDTX.GOV