Management’s Discussion and Analysis
Financial Highlights
- The assets of the Town of Lakewood Village exceeded its liabilities at the close of the most recent fiscal year by $4,170,534 (net position). Of this amount $1,101,824 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.
- As of the close of the current fiscal year, the Town of Lakewood Village’s governmental funds reported ending fund balance of $336,947, a decrease of $2,872,542 in comparison with the prior year. Of this balance, $263,585 is available for spending at the government’s discretion (unassigned). Unassigned fund balance represents 51 percent of general fund expenditures, and 51 percent of total governmental fund expenditures. At the close of the current fiscal year, the Town of Lakewood Village’s governmental funds had a current ratio of approximately 2:1, based on the current assets of $643,535 and current liabilities of $317,092.
Governmental Activities:
- During the year revenues decreased by $40,172 (4%), primarily due to fewer reimbursed expenses.
- Expenses for the year increased by $83,517 (16%), primarily due to debt service
Business-type Activities:
- Charges for services increased by $23,045 (5%) during the year primarily due to water sales, while expenses increased by $76,541 (24%).
Economic Factors and Next Year’s Budgets and Rates
COVID-19
In sharp contrast to the rest of the country, the Town has experienced strong positive increases in economic activity during 2021. As a true bedroom community, the town has no brick and mortar commercial enterprises and thus did not suffer any adverse economic consequences due to mandatory closings. Rather, due to online purchasing from work-at-home residents, sales tax collections rose by more than 20 percent to all-time record amounts. Additionally, building starts have increased, and nearly all vacant lots have recently been purchased for new homes.
We experienced a record breaking increases in appraised property values of 27.2 percent which was among the highest in the state. Our typical year-on-year taxable value increase is 7 to 9 percent.
Residential Development Inside the Town
In 2021, the Town approved several developer agreements First Texas Homes is expected to break ground on a 140 unit single-family development in early 2022. The Town is also finalizing a new custom home development with 80 single-family lots that is scheduled to begin in the first quarter of 2022.
Residential Development in Lakewood Village Extraterritorial Jurisdiction
In 2021 the Town reached agreement with Taylor/Morrison and Corson-Cramer Development for a 290 unit single-family residential development. The Town agreed to create a Public Improvement District in the Town's ETJ and not annex the property. In return, TM/CCD agreed to pay the Town a fee of $ 1.5 million, building inspection fees, and utility tap fees. The PID will also pay for the proportionate share of the required water and sewer improvements.
Tax Rates
The Town's Maintenance and Operations (M&O) rate is currently $0.25 per $100 and will continue to remain unchanged since the Town's incorporation in 1977. In 2019 the Town Council determined that the Phase Two Road Replacement Project was appropriate. In April 2020, the Town issued $4,500,000 in Certificates of Obligation. In response the town adopted a debt servicing rate of $0.20. This adopted I&S rate will collect 63 percent of our debt payment, with the remaining 37 percent derived from our general fund operating surplus. Our overall tax rate of $0.45 remains substantially lower than our surrounding cities which average $0.60 and provides us with additional financial flexibility.
Request for information
This financial report is designed to provide a general overview of the Town of Lakewood Village’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of the Mayor, 100 Highridge, Lakewood Village, Texas 75068.