The compilation and release of the City’s Comprehensive Annual Financial Report (CAFR) is one of the core functions of the Finance departments Accounting Division and is one of the most comprehensive reports released by the City on an annual basis.  The CAFR recently reviewed by the Pearland City Council covers the fiscal year ending September 30, 2017, and is a ‘snapshot’ for that year-end time of the City’s overall financial position and provides a detailed look at all city finances, funds, component units, statistics, and much more.  The CAFR was presented to and reviewed by Council by city staff and the independent audit firm of Whitley Penn LLP.

The report is based on audited financials, and the City has received an unmodified or “clean” opinion; which is the highest level of assurance that the financial statements accurately depict the City’s financial status.   The CAFR is utilized by financial advisors, rating agencies, citizen groups, underwriters, and others interested in the City’s financial health.

The City’s CAFR has received national recognition with the Certificate of Achievement from the Government Finance Officers Association (GFOA) of the United States and Canada for the past 40 years for excellence in clear and complete governmental financial reporting.  Pearland is one of just 198 Texas cities that earned the Certificate. 

Council acceptance and approval of the CAFR recognizes the City of Pearland’s high standards in financial reporting. The report’s numerous acknowledgments are the culmination of months of hard work and integrity of the staff.

According to Cynthia Pearson, Director of Finance, “The City is fortunate to have Rick Overgaard, Assistant Director of Finance, and Tom March, Controller, leading our team of professional accountants that ensure that we are operating at the highest level of competency on a daily basis.”

The City maintains 50 funds with a total operating budget of $288 million and maintains a credit rating of Aa2 from Moody’s, and AA from both Standard & Poor’s and Fitch. In addition, Pearland has earned four of the five Transparency stars available from the State of Texas for its efforts to exceed State requirements reaching the highest level of disclosure, including posting of budgets, financial reports and check registers online. 

A few financial highlights from the City of Pearland CAFR for the year ending September 30, 2017, are:

• The City has a net position of $731.2 million.  That is, assets and deferred outflows of resources of the primary government of the City exceeded its liabilities and deferred inflows as of September 30, 2017. Of this amount, $655.0 million is invested in capital assets, net of related capital debt and $74.3 million restricted for capital improvements, debt service, community development projects, public safety, and economic development.
• At the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $122.3 million, an increase of $6.9 million in comparison with the prior year. Increases are seen in the Capital Projects Fund of $12.2 million, Tax Increment Reinvestment Zone #2 Fund of $1.1 million, and the Development Authority of Pearland Corporation of $2.4 million. Approximately $107.9 million of the $122.3 million is considered restricted and primarily consists of $36.8 million for economic development and $59.2 million attributable to unspent bond proceeds for capital projects.
• As of September 30, 2017, the unassigned fund balance for the General Fund was $11.3 million or 14% of total General Fund expenditures. The total fund balance for the General Fund is $14.4 million or 18% of General Fund expenditures.
• The City’s long-term liabilities increased by $49.7 million due to the issuance of new debt financing for public investments such as roads and facilities that have long-term use.

The CAFR is available for your review on the Finance Department webpage.

More about GFOA and the Certificate of Achievement

The GFOA is a nonprofit professional association serving approximately 18,000 government finance professionals throughout North America. The CAFR is judged by an impartial panel to meet the high standards of the program including demonstrating a constructive “spirit of full disclosure” to clearly communicate its financial story, and motivate potential users to read it.  The CAFR is submitted and feedback provided each year for continuous improvement, in addition to the Certificate consideration. 

The Certificate of Achievement for Excellence in Financial Reporting is the highest form of recognition in the area of governmental accounting and financial reporting.  Attainment represents a significant accomplishment by the local government policy leaders and its management, and the CAFR will be submitted again this year.  To receive recognition, the City must comply with the highest standards for disclosure and provide pertinent trend information beyond that which is required by the Governmental Accounting Standards Board (GASB).