Popular Annual Financial Report 2022 (PDF)

City of Irving, Texas

Annual Report

FISCAL YEAR 2021-22

Fiscal Year Ended September 30, 2022

POPULAR ANNUAL FINANCIAL REPORT

MESSAGE FROM THE MAYOR

The City of Irving incorporated more than 100 years ago and has a tremendous history. From historical south Irving where the city’s first homes and businesses were developed to the corporate campuses and office buildings in Las Colinas, Irving has a wide variety of neighborhoods, amenities, businesses and people. As the community continues to grow and flourish, city leadership is focused on reinvesting for the future to support tomorrow’s opportunities.

Ensuring that city infrastructure remains in good condition is vital to providing a healthy, safe community for residents and businesses. A strong support structure is also necessary to delivering key city services such as clean water, effective drainage, safe roads, essential sewer, public safety and more.

In Fiscal Year 2021-22 (FY22), the city accomplished its goal to invest $100 million in road and street improvements over five years.

In addition to completing several Road to the Future projects, the city also managed $38.7 million in drainage projects and $59.9 million in other capital improvement projects. Investing in critical infrastructure is the foundation for a strong, successful city, and Irving will continue to allocate operational and financial resources to maintain its core assets for future generations.

The city’s Annual Report is full of great information about Irving, and I hope you enjoy learning more about our fantastic city!

Richard H. Stopfer Mayor

Government Finance Officers Association

Triple Crown Winner

Mayor Richard H. Stopfer

Irving City Council

The City of Irving is governed by a council-manager form of government where the City Council sets city policy and the City Manager is responsible for implementing that policy and managing city operations.

The council consists of a mayor and eight council members who are elected for three-year terms. Elected officials are under a mixed system, which includes three at-large districts (Mayor, place 2 and 8), and six singlemember districts (places 1, 3, 4, 5, 6 and 7).

COUNCIL MEETINGS

Irving City Council meetings are held on designated Thursdays at 7 p.m. in the Council Chambers at Irving City Hall, 825 W. Irving Blvd.

Work Sessions are held prior to council meetings and begin at various times depending on the agenda. Work Sessions are open to the public in the first floor Council Conference Room at Irving City Hall, 825 W. Irving Blvd. Check specific meeting agendas to confirm start times.

2,247 Full-Time-Equivalent City Employees

21 Appointed Boards, Commissions and Committees with Almost 200 Irving Residents Serving Various Volunteer Functions

EMAIL Mayor and City Council members ccouncil@cityofirving.org

Left to Right: Dennis Webb, Brad M. LaMorgese, Al Zapanta, Mark Zeske, J. Oscar Ward, John Bloch, Phil Riddle, Kyle Taylor, Mayor Richard H. Stopfer

The financial data highlighted in the Popular Annual Financial Report (PAFR) is designed to provide a summary view of the city’s financial activities for Fiscal Year 2021-22 (FY22). Information included in this report can be found in greater detail in the FY22 Annual Comprehensive Financial Report (ACFR) located at CityofIrving.org/ACFR or by contacting the Finance Department by mail at 825 W. Irving Blvd., Irving, TX 75060 or by phone at (972) 721-2401. The financial report was prepared in accordance with Generally Accepted Accounting Principles (GAAP) and was audited by independent certified public accounting firm Weaver and Tidwell, L.L.P.

MESSAGE FROM THE CITY MANAGER

Comprehensive Financial Report for the Fiscal Year ended September 30, 2022

Strategic thinking, planning and management play a strong role in the City of Irving’s organizational culture. The city’s organizational strategy, Future in Focus, consists of five focus areas and 18 operating strategies. Based on input from city leadership and key stakeholders, the plan works in tandem with the city’s five-year capital plans, City Council priorities and annual budgets.

Future in Focus encompasses key initiatives that allow the city to stay focused on what matters most, which is to deliver exceptional services and promote a high quality of life for residents, businesses and visitors.

Chris Hillman

History of Irving

Settlers came to the area that is now Irving in the 1850s, and communities such as Sowers, Kit, Shady Grove, Union Bower, Finley, Estelle and Bear Creek sprang up in the last half of the 19th century. The new town of Irving, founded in 1903 by J.O. Schulze and Otis Brown, eventually included most of these settlements. Irving was officially incorporated April 14, 1914.

Access  Amenities  Lifestyle

Home of DFW International Airport and Adjacent to Dallas Love Field Airport

Trinity Railway Express (TRE) with Two Stations in Irving Connecting Passengers to Destinations Throughout Dallas and Tarrant Counties

Dallas Area Rapid Transit (DART) Commuter Rail Line and Local Buses

Four 18-hole Championship Golf Courses

More than 92 Parks, 33+ Miles of Trails, Three Libraries and a Municipal Golf Course

Smithsonian-Affiliated Arts Center, Four Museums, Three Symphonies and Award-Winning Theater Productions

Home of Toyota Music Factory, an Entertainment and Restaurant Complex featuring the 8,000-person capacity The Pavilion at Toyota Music Factory and Texas Lottery® Plaza

Demographics

43.2% Bachelor’s Degree

Visit the Irving Archives and Museum, located at the Jack D. Huffman Community Building, 801 W. Irving Blvd., to learn more about Irving's history.

$502 Million in New Capital Investments  Combined $245 Million in Net New Taxable Value on Real Property and Business Personal Property

9,148 Permits Issued  8,636 Jobs Added and Retained  80.5% Office Occupancy Rate  93.6 Million Sq. Ft. Commercial Space Occupied

A Look Back A LOOK AHEAD

SP 482

TEXAS DEPARTMENT OF TRANSPORTATION

at SH 183, Loop 12, SH 114,

DETAILS

0581-02-124, 0094-03-060

Plaza Dr. to Union Bower

12 to SH 183 (1 mi.)

Century Center Blvd. to Carl Rd. to Grauwyler Rd.

$301 million

Begin: Late 2020

Completion: Late summer 2023

STATUS

~65% completion, ~57% project completion –

ƒ Phase 1 of the direct connector from eastbound SH 114 to eastbound SH 183 has been opened to traffic.

ƒ The newly constructed bridge from southbound Spur 482 to Maryland Drive will be opened before the holidays with the installation of a new traffic signal at SH 183 and Maryland Drive

ƒ 27 retaining walls have been completed along Loop 12, SH 183, SH 114 and Spur 482.

ƒ Roadway work such as asphalt concrete pavement and subgrade preparation continue along Loop 12, SH 183 and SH 114.

ƒ Several bridge decks over Loop 12, SH 183, SH 114 and Spur 482 including direct connectors are currently under construction.

ƒ Drainage culverts and pipes along Loop 12 and SH 183 main lanes are under construction.

ƒ City of Irving utility work is 99% complete

MATERIALS THAT WILL BE USED:

1.2 MILLION SQUARE FEET of reinforced concrete slab

170,000 LINEAR FEET of concrete bridge beams. (That equals 32.2 MILES)

200,000 CUBIC YARDS of concrete

90,000 TONS of hot mix asphalt

MILES

2.8 MILLION POUNDS of steel plate beams

41 retaining walls will be constructed

700+ drilled shafts foundations

500+ columns will be built as part of this project

ROAD TO THE FUTURE

Phase Two of Irving's Road to the Future program begins in 2023, extending the commitment to improve roads across the city by allocating another $100 million over the next five years.

Irving Boulevard Reconstruction

The $22.2 million project includes paving, drainage, water, wastewater and sidewalks. Construction began in November 2021 and is scheduled for completion in November 2023.

CITYWIDE WI-FI IN PARKS

By the end of 2023, free Wi-Fi will be available at Levy Event Plaza, Williams Square, West Park, Lively Pointe Youth Center and Senter Park Recreation Center. The city has plans to extend Wi-Fi capability at additional facilities over time.

KING SQUARE PARK

In 2023, Irving dedicated a new pocket park in Bear Creek to honor the legacy of Martin Luther King Jr. The $310,000 project was funded through the Community Development Block Grant (CDBG) Program allocated through the U.S. Department of Housing and Urban Development.

1167_121922

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FY22 GENERAL FUND $389.1 Million Budget

$382.2 Million Actual Expenditure

The General Fund is the city’s main operating fund used to account for day-to-day operations except those required to be reported in other funds. The majority of city departments and personnel are budgeted in this fund. References to General Fund budget include funds aggregated with the General Fund as reported in the Annual Comprehensive Financial Report.

The majority of General Fund revenues are generated from tax revenues. These are primarily comprised of property taxes and sales taxes at city rates of $0.5941 per $100 valuation and 1% of taxable sales, respectively.

Irving City Council Adopted a Balanced $798.3 Million Operating Budget, which Includes the General Fund and Several Dedicated Funds.

Financial Highlights

GENERAL FUND FINANCIAL TREND SUMMARY

31%

for 31% of all funds combined.

69% Dedicated Funds

 15% Water and Sewer System Funds

 10% Debt Service Funds

 10% Special Revenue Funds

 34% Other Funds Include Internal Services, Grants, Solid Waste Services, Hotel/Motel Tax and Municipal Drainage Utility

Financial Highlights

GENERAL FUND REVENUES AND EXPENDITURES

Property tax and sales tax collections represent the largest sources of revenue for the General Fund. When combined with Franchise Fee revenue, tax collections comprise 88% of total General Fund revenues.

FY22 Revenues

The increase in tax revenue from FY21 to FY22 resulted primarily from $13 Million Sales Tax Increase and $1.3 Million increase in franchise fees.

Expenditures increased from $229.3 Million in FY21 to $382.2 Million in FY22 due to contributions made to the pension plans after bonds were sold.

FY22 Expenditures

Financial Highlights

SALES TAX REVENUES

Sales tax revenues are the second largest source of funding for general fund revenues. For the prior three years the city collected:

FY22 SALES TAX ALLOCATION

$825.2 Million in Sales Tax Revenues were Collected in Irving for FY22, 76% of which goes to the State of Texas.

TOP 10 SALES TAX CATEGORIES

Retail Trade

Wholesale Trade Information

Manufacturing

Accommodation and Food Services

Professional, Scientific and Technical Services

Construction Utilities

Administrative/Support, Waste Management and Remediation Services

Real Estate, Rental and Leasing

TAXABLE VALUES

$22,270,768 $15,732,433 $8,325,758 $7,794,611 $7,207,357 $6,313,381 $5,068,504 $3,810,750 $2,532,784 $2,408,430

According to the Dallas Central Appraisal District (DCAD), the Total Estimated Taxable Value for the 2022 Fiscal Year is $32,039,018,052, an Increase of $2,111,570,834 over the Prior Year.

New Residential Construction Added 1,273 New Properties with an Average Value of $170,743 and New Commercial Construction Increased by 55 Properties with an Average Value of $3.56 Million.

Financial Highlights

PROPERTY TAX

The largest share of property tax collected goes to one of three Independent School Districts (ISDs) serving Irving residents: Irving ISD, Carrollton-Farmers Branch ISD or Coppell ISD. Other taxing authorities include the city, Dallas County, School Equalizations, Parkland Hospital and the Dallas County Community College.

FY22 Total Property Tax Bill Breakdown

Based on Average Single-Family Taxable* Home Value of $220,694 with a 20% Homestead Exemption PROPERTY TAX

*The average Irving homeowner will pay $1,048.91 per year, or $2.87 per day in city property taxes. Average taxable value based on tax rate/$100 valuation. Homeowners age 65+ or with proof of disability qualify for a $45,000 exemption off their residence’s taxable value.

RESERVE REQUIREMENTS City Reserves

The city has a Fund Balance Policy to target a minimum General Fund balance for operations that is 30% of annual revenues. This financial policy ensures an adequate fund balance in operating funds to maintain liquidity, as well as provide the city with capital in the event of unexpected financial impacts, such as economic downturns and natural disasters.

As of September 30, 2022, the city has a general fund reserve rate of 38%. 38%

The Average Taxable Value for an Irving Home is $220,694 with an Average Market Value of $281,434.

The City’s Debt Service Reserve Balance was $15.7 Million in FY22

Financial Highlights

STATEMENT OF ACTIVITIES

(Changes in Net Position)

Irving’s fiscal year runs Oct. 1 to Sept. 30. The city’s statement of activities for fiscal years ending September 30, 2020-2022 are shown in the chart below.

ACTIVITIES/CHANGES IN NET POSITION

FY 2021-22 Net Position

$1,207,812,836

Over time, increases or decreases in the city’s net position may be an indication of whether the financial situation of the city is improving or deteriorating.

The City of Irving’s overall net position increased 11% or $123 Million from the prior fiscal year.

NET INVESTMENT IN CAPITAL ASSETS

As of September 30, 2022,

THE FUND BALANCE OF THE GENERAL FUND WAS $100.9 Million

GENERAL FUND BALANCE

The most significant portion of net position ($990.2 Million) is invested in capital assets. Irving uses these capital assets to provide a variety of public goods and services to its residents. For that reason, these assets are not available for future spending. Irving’s investment in capital assets is reported net of related debt.

RESTRICTED NET POSITION

82% Capital Assets

General Fund balance represents city reserves and amounts nonspendable, committed assigned or unassigned for special purposes. These are shown for the fiscal years ending September 30, 2020-2022 in the chart below.

This portion of net position ($99.7 Million) is restricted, representing funds that are limited to construction activities, payment of debt or specific programs by law.

UNRESTRICTED NET POSITION

The remaining portion of net position ($117.9 Million) is unrestricted, representing resources that are available for services.

Financial Highlights Financial GLOSSARY OF TERMS

CAPITAL ASSETS

Capital assets represent a significant portion of the city’s financial position used to deliver services and community needs.

Major Capital Asset Additions

Assigned funds: Amounts set aside by the city for specific purposes that are not restricted or committed.

Committed fund balance: Amounts that can only be used for a specific purpose by formal action from City Council.

Dedicated funds: Amounts set aside for a specific purpose.

Deferred outflows of resources: Amounts pending recognition as expenses in future periods.

Deferred inflows of resources: Amounts pending recognition as revenues in future periods.

Franchise fees: Charges to utility companies for the use of public rights-of-way.

General fund: The main operating fund for the city.

Intergovernmental: Revenue recognized from grant awards and reimbursement of operating costs by other funds.

Net investment in capital assets: Capital assets, net of accumulated depreciation, reduced by outstanding capital related debt.

Net position: The net position of the city is equal to city assets and deferred outflows reduced by liabilities and deferred inflows.

Nonspendable funds: Fund balance representing assets not in a spendable form (i.e. inventory).

DEBT

Long-term debt represents borrowings used to finance the construction and purchase of capital assets used by the city. In FY22, the city issued $165.8 Million in new debt to fund a variety of planned capital projects ranging from building and park facility improvements and renovations to water main replacements and drainage improvements. The city also issued $167 Million in pension obligation bonds to pay for a portion of the unfunded liability on retirement plans.

Aaa/AAA are the highest ratings assigned to an issuer's bonds by the major credit-rating agencies. The city's strong credit worthiness allows Irving to borrow at reduced interest rates and reduced overall cost.

Reserves: Amounts of fund balance that are not available for appropriation or are set aside for a specific future use.

Restricted fund balance: Amounts that can only be used for a specific purpose set by external entities.

Restricted net position: Restricted assets reduced by liabilities and deferred inflows of resources related to those assets.

Unassigned fund balance: Remaining amount that has not been assigned to other funds or been restricted, committed or assigned to specific purposes.

Unrestricted net position: Remaining net position not included in net investment in capital assets or restricted net position.

Accomplishments AWARDS

Irving named second most culturally diverse city in the country – Dallas Morning News

20 22 City of Irving YEAR IN REVIEW

Each year, the city releases the Year in Review document to provide residents with an overview of the achievements, highlights and accomplishments from that year.

Launched the Irving Ambassadors Program to increase engagement and build resident relationships. Completed year four of Irving 360 Civic Academy.

Sold city-owned land for the development of the Heritage Square project, a 194-unit residential project promoting downtown revitalization.

Completed Senter Park renovations, including improvements to the racquetball court, restrooms, ADA accessibility and more.

Added two clinicians and a police officer to the Mental Health Response Team and a new domestic violence field clinician to the Family Advocacy Center.

Created a Homelessness Outreach Team to reduce crime stemming from homelessness in Irving. Completed the fifth year in the Road to the Future initiative and improved 312 Roads – 145 Center Line miles.

Keep Irving Beautiful won the 2022 Keep Texas Beautiful Governor’s Achievement Award –Keep Texas Beautiful/TxDOT

Irving ranked #9 in the 125,000–249,999 population category of the Top-Ten Digital Cities – Center for Digital Government’s 2022 Digital Cities Survey

City Secretary’s Office received the Award of Excellence – Texas Municipal Clerks Office

Awarded a Certificate of Achievement for Planning Excellence – Texas Chapter of the American Planning Association

Irving Convention & Visitors Bureau received five Adrian Awards –Hospitality Sales & Marketing Association International

Municipal Court received the Municipal Traffic Safety Initiative Award – Texas Municipal Courts Education Center

Municipal Court received the Texas Employer Traffic Safety Award – National Safety Council

Irving Community Television Network won nine awards – National Association of Telecommunications Officers and Advisors

Irving Community Television Network won 17 awards – Texas Association of Telecommunications Officers and Advisors

Communications Department received the Award of Excellence –Texas Association of Municipal Information Officers

Fleet Department received Leading Fleets Top 50 Award –Government Fleet Magazine

Fleet Department received DFW Clean Cities Silver Award –North Central Texas Council of Governments

Irving Archives and Museum received the John L. Nau, III Award of Excellence in Museums – Texas Historical Commission

Irving Archives and Museum awarded a National Award of Excellence – American Association for State and Local History

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On the Cover

Commissioned by Ben H. Carpenter, the Mustangs of Las Colinas is a realistic bronze sculpture of nine wild mustangs galloping across a stream. The centerpiece of Williams Square was completed in 1984 and designed by African wildlife artist Robert Glen to reflect the state’s natural, untamed past.