CITY OF KYLE, TEXAS

Acceptance of 2017 CAFR and Independent Auditors' Report

The City management is pleased to present the Comprehensive Annual Financial Report (CAFR) for the City of Kyle for the fiscal year ended September 30, 2017.  Highlights of the City's financial position are provided below.

Article VIII, Section 8.13 of the City Charter requires that at the close of each fiscal year, an independent audit shall be made of all accounts of the City by a certified public accountant experienced in auditing cities.  The City Charter requires that the audit shall be completed on or before March 30th of each year and upon acceptance of the audit, summary thereof shall be published immediately in a newspaper of general circulation in the City and copies of the audit report shall be placed on file in the City Secretary's Office as a public record.

The Management's Discussion and Analysis (MD&A) section of the CAFR presents a narrative overview and analysis of the financial activities of the City of Kyle for the year ended September 30, 2017.  The analysis is intended to assist readers in focusing on key financial issues and changes in the City's financial position and in identifying any significant variances from the approved budget.

It is important to consider the information presented in the Management's Discussion and Analysis (MD&A) section of the annual report in conjunction with additional information that we have provided in the letter of transmittal as well as the financial statements provided in this report.

REPORT HIGHLIGHTS

• The independent auditors conducted their audit of the City’s financial statements in accordance with the auditing standards prescribed and accepted in the United States of America.

• The City's independent auditors, RSM US, LLP, Certified Public Accountant, issued an unqualified or "clean" auditors' report for the fiscal year ended September 30, 2017.  This is the highest or the best type of an independent auditors' report that can be issued on the financial statements of governmental entities in the United States of America including city governments.

• Based on the independent auditors' examination and audit of the City's financial records, the audit report states "the financial statements 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 Kyle, Texas as of September 30, 2017, 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."

• The City's Statement of Net Position for All City Funds for the fiscal year ended September 30, 2017 reported $263.1 million in assets, $99.3 million in liabilities, and a net position totaling $163.8 million.

• The City’s overall net position totaling $163.8 million as of September 30, 2017 is an increase of $26.5 million or 19.3 percent from the prior fiscal year.

• The ending fund balance in the City’s General Fund at September 30, 2017 totaled $13.8 million.  This is $3.3 million or 31.4 percent higher than the prior fiscal year.

• Revenue and transfers-in for the City’s General Fund for fiscal year ending September 30, 2017 from all sources totaled $23.5 million (GAAP basis).

• Expenditures and transfers-in for the City’s General Fund for fiscal year ending September 30, 2017 totaled $20.2 million for all municipal government functions including transfers-out *(GAAP basis).

For detailed information, a copy of the transmittal letter from the City Manager and the City’s Director of Finance to City Council is attached.  A complete copy of the City's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2017 is available on the City's website.